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Валгрин Ко. Message Board

  • wildbill15 wildbill15 Mar 25, 1998 9:17 PM Flag

    More on the sale of LTC facility

    As a pharmacist who works in the retail setting,it appears that the sale of the long term care assets was probably a good
    thing. I think they probably sold it to boost cash levels so that they can build more stores and more stores at a faster clip since
    the CVS boys bought Arbor drugs. Maybe they feel this will only get them ahead of plan faster. I have several friends who work
    in the long term care facilities and they all have one thing in common: they hate it. You are relying on Medicaid and Medicare
    remimbursements for all of your cash flow. Any one who has tried to bill and get paid fairly is walking on a slippery slpoe. Addtionally,
    there are over 40+ companies in this area and even though there is some consolidation, it won't happen rapidly due to the fact
    that there are people in nursing homes in every state, so trying to consolidate an operation of let's say an operation in Florida
    with Arizona isn't likely to happen. You will have regional consolidations where it is demographically and logistically feasible,
    but the bottom line is that this is highly fragmented business. Walgreens is going to focus on their core-store business(i.e.
    getting back to the basics of making cash at the drug store level).