Physicians and Outpatient Care

In July 2020 Walgreens Boots Alliance invested about $1 billion in VillageMD, a Chicago company founded in 2013 to put independent primary-care doctors into value-based contracts. The plan was to open doctors' offices next to Walgreens stores, where the clinics would earn a share of Medicare Advantage premiums by keeping seniors healthy and the stores would gain pharmacy traffic. In October 2021 Walgreens paid about $5.2 billion more to take roughly 63% of VillageMD and set a goal of 1,000 "Village Medical at Walgreens" clinics. In January 2023 VillageMD bought Summit Health–CityMD for about $8.9 billion, with about $3.5 billion from Walgreens and about $2.5 billion from Cigna.

Within two years the strategy reversed. Clinics closed by the hundred and VillageMD left several markets. Walgreens recorded impairments of about $12.4 billion pre-tax in fiscal 2024 (about $5.8 billion attributable to Walgreens) and about $3.0 billion more in fiscal 2025; Cigna took a ~$1.8 billion impairment in early 2024. When Sycamore Partners took Walgreens private in August 2025, VillageMD was separated to be sold in pieces. Walmart announced the closure of all 51 of its health centres in April 2024. Amazon, by contrast, bought One Medical, a membership-based primary-care practice founded in 2007 by physician Tom Lee, for about $3.9 billion ($18 a share), closing in February 2023. One Medical had built a strong consumer brand on a roughly $199 annual fee, same-day appointments and an app, but had never made a profit as a public company: it lost about $254.6 million in 2021. This chapter explains why primary care attracts so much capital and returns so little of it.