Walgreens 2011 Annual Report Download - page 6

• Walgreens is the nation’s leading provider of home infusion and a
major provider of specialty pharmacy services, providing cost-effective
solutions for patients who need infused medication, including chemotherapy,
respiratory services and oxygen at home or in other ambulatory settings.
• As well, Walgreens is the nation’s leading operator of hospital outpatient
pharmacies, serving 137 health systems nationwide. We are also the
largest and most comprehensive manager of worksite health and
wellness centers on employer campuses, with more than 350 locations
across the country.
As we expand affordable health care choices, we also seek fair, acceptable
and predictable reimbursements for the value we provide. Last year,
Walgreens sought to renew our contract with pharmacy benefit manager
Express Scripts to continue serving its network in 2012 and beyond. We
offered a number of cost-saving proposals, including controlling prescription
reimbursements. However, negotiations have been unsuccessful as
Express Scripts set forth terms, including reimbursement rates that were
below the industry average cost to provide a prescription, that were not in
the best interests of our Company, our customers, our employees or our
shareholders. Walgreens began informing health plans and patients that we
plan not to be part of the Express Scripts network after December 31, 2011,
when our contract with Express Scripts expires. We are moving forward
with relationships for partners that value the choice, cost-effectiveness,
convenience and service we provide and want to ensure their patients
continue to have access to Walgreens.
My Walgreens for everyone in America
When we hear consumers using the phrase “My Walgreens,” we are
delighted to be part of their lives and their communities, and to know
they have a deep personal connection with our people and our stores.
Becoming My Walgreens in every community across America is a lofty
goal. But with our expansive network of stores, expanding health care
services and commitment to creating a satisfying customer experience,
we can own the strategic territory of “well” – where health and
happiness come together – in every community we serve.
With this aspiration, last year we took a fresh look at our Plan to Win
in light of our progress, the initiatives we completed, and the new strategic
challenges and opportunities before us. We refined, sharpened and
crystallized our vision into five strategies, and took important steps
to execute each strategy.
Transform our traditional drugstore to a retail health and daily living destination
As we complete the refresh of our stores, Walgreens is also moving
forward to completely redefine – even revolutionize – the drugstore
experience, setting us apart in our industry, and establishing
My Walgreens as a destination for consumers to satisfy a broad
range of health and daily living needs.
We are bringing together all our transformational strategies developed
over the past three years to pilot exciting new concept stores for
Walgreens, combining enhancements in our pharmacies and health
clinics, our improved CCR merchandising, our learning from Duane
Reade, and new e-commerce techniques and technologies from our
multi-channel strategy.
Through calendar year-end 2011, we will have converted or opened
20 of these new concept stores in the Chicago area, as well as our
22,000 square-foot “flagship” Duane Reade store at 40 Wall Street
in New York City, and we have begun expanding the pilot to
Indianapolis, Indiana. Customers, employees and community leaders
visiting these stores have reacted with delight. In turn, we are applying
what we learn from these new concept stores to enhance Walgreens
health and daily living offerings in our stores across the country.
Advance community pharmacy
Building on our industry leadership in pharmacy-based health services,
we plan to expand our reach beyond traditional community pharmacy,
coordinate and integrate with national, regional and local health systems,
and play an expanded role in delivering affordable health care.
With regard to health systems and physician groups, we are moving
quickly to establish closer relationships with premier partners in markets
nationwide. Last year, we joined with Northwestern Memorial Physicians
Group of Chicago to undertake a new coordinated health care program
to improve patient outcomes. In addition, our Take Care Clinics
joined with Memorial Health of Jacksonville, Florida, and with Ochsner
Health Systems of New Orleans to increase opportunities for clinical
collaboration and improve patient access to high-quality, convenient,
affordable health care options.
We entered into an agreement with Johns Hopkins Medicine to promote
collaboration on population-based research and to jointly review and
develop protocols to improve outcomes for patients with chronic diseases.
Together, we will explore the development of new models for improving
care for individuals. This will include the creation of new educational and
training programs for Walgreens 75,000 health care service providers.
Expanding our preventive health care services, Walgreens last year added
testing for total cholesterol and HDL (high-density lipoprotein), blood
glucose and A1C at more than 1,600 pharmacies in 33 states. Each test
includes a free blood pressure reading and personal consultation with a
Walgreens pharmacist.
In fiscal 2011, we began working with the National Foundation for
Infectious Diseases to educate the public and health care professionals
regarding flu prevention resources, and joined with Families Fighting
Flu, a non-profit organization that comprises families and health care
practitioners, to heighten flu awareness and encourage vaccinations
for children and families.
Illustrating our expanding role in health care, the Care Continuum
Alliance recently welcomed Walgreens among its newest members, noting
our “work to promote healthful lifestyles and empower consumers to
reduce risk aligns with [the Alliance’s] mission to improve care quality
and value, particularly for people with or at risk of chronic disease.” Our
participation will help Walgreens learn more from other members regarding
strategies to improve health care outcomes and reduce avoidable care
costs for our customers and patients.
Outstanding customer experience through enhanced employee engagement
Becoming My Walgreens for everyone in America means providing the
consumer more than the products and services, choice, convenience,
savings and multi-channel access that they demand. We must also offer
an experience that gives the consumer a sense of delight and connection
with Walgreens and our people.
For most of our history, Walgreens core strength has been our conve-
nient locations on the best corners in America. Today, we are building
on the strength of our locations to make each Walgreens a place that
consumers prefer because we provide an outstanding – even memorable
– shopping experience.
That starts with our people, who work hard every day to provide best-in-class
customer service. Our customer and patient satisfaction continues to
improve as we work to create a sustainable competitive advantage by
delivering memorable customer interactions. To this end, we began
our “Well Cared For” initiative to strengthen employee engagement
by setting new standards, providing training and developing leadership
skills. As well, in 2012 Walgreens plans to introduce a nationwide
customer-loyalty program truly differentiated from our competitors.
Last May, the courageous, caring response by Walgreens team members
to the devastating tornados that tore through Joplin, Missouri, illustrated
their incredible spirit of customer and community service. Of our three
stores in Joplin, one was destroyed, one sustained broken windows and
roof damage, and the third, which was not affected, we converted to a
24-hour location. A Red Cross triage unit to help residents was set up
under the canopy of our damaged building, and employees used store
stock to provide the Red Cross nurses with needed resources, such as
antiseptic, glucose machines, test strips, blood pressure machines,
crutches, batteries and flashlights. This location became one of the
hub triage centers in the city.
Page 4 2011 Walgreens Annual Report