RAD inches closer to profitability
WHAT IT MEANS AND WHY IT’S IMPORTANT — Thursday’s results marked the fifth consecutive quarter in which Rite Aid increased its same-store sales. And at the rate it’s currently going, there’s a good chance the country’s third-largest retail pharmacy chain soon could become profitable, even though it expected to post losses in 2013, albeit even smaller losses than in 2012.
(THE NEWS: Rite Aid announces fourth quarter, fiscal year 2012 earnings. For the full story, click here.)
At the core of the chain’s strong performance lies its Wellness+ loyalty card program, not to mention initiatives like the Wellness store format. Announcing its third quarter 2012 earnings in December 2011, president and CEO John Standley appeared less than impressed with the performance of the new stores and speculated that it was the presence of Wellness Ambassadors that made a big difference. This quarter, however, the stores have seen a noticeable rise in comps, particularly at the front end.
But one significantly influential issue is the ongoing dispute between Walgreens and Express Scripts. Rite Aid — like most other pharmacy retailers — has sought to benefit from the flood of ESI patients now unable to fill their prescriptions at Walgreens, and it has been largely successful with a 3.7% improvement in adjusted EBITDA coming from ESI script transfers. Analysts expect further increases in EBITDA if the Walgreens-ESI dispute remains unresolved.
At the same time, the dispute and the ESI-Medco merger have renewed speculation about an acquisition of Rite Aid by Walgreens. Neither Rite Aid’s executives nor Edward Kelly, the Credit Suisse analyst who originated the latest round of speculation, mentioned it during the retailer’s earnings call Thursday, but Kelly has continued to support the idea. "[Rite Aid’s] stock could benefit from continued M&A speculation as we believe a takeout by Walgreens makes sense — especially in light of the recently concluded ESRX/MHS transaction," Kelly wrote in a report following the call.
But Guggenheim Partners analyst John Heinbockel disputed the notion, having already written that such an acquisition would present too great a risk for Walgreens, considering that it could lower Walgreens’ bond rating and create a headache in terms of the costs of converting stores and closing others, not to mention the Deerfield, Ill.-based chain’s relative lack of experience in large-scale acquisitions and the conservatism of its board.
And overall, Rite Aid doesn’t look like a chain that’s trying to set itself up for acquisition. Under the leadership of Standley and chairman Mary Sammons, the company has pursued organic growth and has been reaping the benefits in the form of growing sales and smaller losses.
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Dollar General strengthens commitment to military community
GOODLETTSVILLE, Tenn. — Dollar General has pledged its support of the White House’s Joining Forces initiative, which promotes private sector employment for members of the military community.
This commitment is a continuation of the company’s efforts to extend job opportunities to those who have served or are serving our country, the company said. In 2011 alone, Dollar General hired more than 3,500 veterans, guardsmen and reservists. The company’s coast-to-coast network of 10,000 stores and 11 distribution centers provides a career path to begin and grow their careers.
"Dollar General will continue to hire from the military community as we expand our company by 625 stores and 6,000 jobs this year," said Bob Ravener, EVP and chief people officer at Dollar General. "We appreciate the attributes members of the military community bring to Dollar General, which mirror our focus on serving others."
The Joining Forces commitment comes on the heels of several successful job fairs hosted by Dollar General in collaboration with the California National Guard and ESGR in the central valley earlier this year. More military job fairs are being planned throughout California, and in other states where Dollar General has a presence.
Dollar General is the winner of the 2011 Military Officers Association of America Distinguished Service Award and was recognized in GI Jobs magazine’s list of Most Military Friendly Employers.
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Take Care Clinics’ Medicare wellness visits spell opportunity for retail clinics
WHAT IT MEANS AND WHY IT’S IMPORTANT — The news that Take Care Clinics now are offering wellness services for Medicare enrollees clearly demonstrates that there’s an opportunity for retail clinics to fill gaps in care, and promote wellness and better patient outcomes.
(THE NEWS: Take Care Clinics offering Medicare wellness visits. For the full story, click here.)
As part of the Patient Protection and Affordable Care Act passed last year under healthcare reform, Medicare now offers preventive wellness visits to millions of seniors enrolled in Medicare Part B and select Medicare Advantage plans. Yet, according to CMS, only a little more than 6% of eligible seniors actually are taking advantage of this opportunity to receive screenings to help them stay well.
Why? Because of a combination of low awareness that they even have the option and a lack of access — not all physician’s offices will provide the services. And even if a patient’s physician does offer the wellness visit, how quickly could that patient get an appointment to see the doctor? After all, it is no secret that this country already is grappling with a physician shortage.
That’s why it is important that Take Care Health Systems now is stepping up to the plate to offer these patients convenient access through its more than 360 clinic locations that have convenient hours and no requirement for an appointment. Clearly this is yet one more indication that retail-based health clinics — and the healthcare professionals that work in them — play a significant role in today’s healthcare system.
I'm not sure this is a good idea. I applaud the concept of helping Medicare Beneficiaries fully utilize their benefits, especially those at no cost to them. However, as an NP providing the Annual Well Visits I worry this might be confusing for many patients. I am just hoping there is plenty of education regarding exactly what this benefit is and an attempt is made to get this service provided by the PCP first. If, like mentioned in the article the PCP is not providing the service or if there is a long wait to schedule the service then thank goodness for retailers that provide this AWV!! Anyone else out there share my concerns?