The nation’s two largest drugstore stalwarts are planning their next bold move — delivering care for treating routine illnesses with nurse practitioners inside their brick-and-mortar retail facilities. As providers move toward value-based care and lower-cost outpatient services, changes in the industry are afoot and poses major threats to health systems across the country.

As medical care providers move away from fee-for-service medicine to value-based care and lower-cost outpatient services, the outline of the threat to hospitals begin to take shape for health system leaders across the country.

As retail sales have declined, Walgreens and CVS have moved quickly into healthcare from their historic role of filling prescriptions beyond the pharmacy counter and treating routine maladies with nurse practitioners in their retail centers to more services. They are partnering more closely with health insurance companies (namely, Aetna’s recent acquisition of CVS) that will funnel more patients to outpatient healthcare services inside the stores that will make them direct competitors of U.S. hospitals and health systems.

“CVS has more than 1,100 retail MinuteClinics compared to 800 five years ago and 400 a decade ago.CVS was opening 100 clinics per year 10 years ago, and that has slowed because they are now focusing on expanding healthcare services in the clinics as well as their stores generally. The same goes for Walgreens.”

Following suite, Walgreens has increased its medical imprint in its retail facilities and even lobbied state legislatures to administer vaccines in retail locations. The scope of the intentions does not end there. In particular, Walgreens aims to administer physician services such as x-rays and urgent care needs. Further, Walgreens has partnered with MedExpress offering an interior door connecting the two facilities (retail and urgent care services) at 15 selected locations nationally. The test markets include: Las Vegas; Dallas; Minneapolis; Omaha, Nebraska; two cities in West Virginia; and Martinsville, Virginia.

While these programs are still nascent, the first focus on three primary patient populations: those patients with any of five chronic diseases: diabetes, hypertension, hyperlipidemia, asthma, and depression.

Finally, CVS and Aetna have outlined patients undergoing transitions in care and high-risk patients as areas of focus according to a earnings call. The analyst goes onto say, “By extending our new health care model more broadly in the marketplace, patients will benefit from earlier interventions and better connected care leading to improved health outcomes.”\