Rick Gates: The ECAPS Potential for Walgreens

Kevin Houlihan sits down with Walgreens Chief Pharmacy Officer Rick Gates to discuss the evolving role of pharmacies in expanding access to care. They explore how reimbursement, federal reform, and industry alignment will shape the future of clinical services in pharmacy. The conversation covers why pharmacists are uniquely positioned to fill healthcare gaps, especially in rural communities, and how the profession can move beyond dispensing medications toward preventative and care-based services. Rick also shares practical advice for pharmacy leaders on advocating for reform, negotiating reimbursement, and advancing the profession together.

Learn how to be reimbursement-ready on day 1 for ECAPS at our knowledge hub for pharmacy industry professionals: https://www.workflowservices.com/ecaps

Transcript

Introduction

SPEAKER_01 0:05

Hey everyone, welcome back to the ECAPSWatch podcast. I'm Kevin Hoolihan, the CEO at Workflow Services. Today, I'm very excited to have Rick Gates join me. Rick is the chief pharmacy officer at Walgreens and chairman of the board at NACDS. He's been with Walgreens for nearly 31 years, beginning his career as a community pharmacist. In his role, Rick focuses on enterprise clinical strategy and expanding payer reimbursed clinical services across the Walgreens pharmacy network. And he's passionate about enabling pharmacists to practice at the top of their education. Improve outcomes and patient engagement nationwide. Rick, thanks so much for joining me today. Excited for the conversation. And Rick, we really appreciate your partnership and leadership at a high level. I'd love to start off with your perspective on where the industry is heading regarding additional clinical services in the pharmacy.

SPEAKER_00 0:59

Yeah, you know, and I think that's a great question because, you know, as you look at where we sit today, a lot of what we're still tied to is really product in stores. And I think what we really need to do as a profession is start to fill in the healthcare gaps that we're seeing. And that can be in rural markets, that can be with primary care shortages and everything else that we're starting to see across all the communities that we're in. There's such an opportunity for us to really let pharmacists step into what they're educated to really serve patients for and serve a bigger need. The challenges that we have, though, it comes down to reimbursement and other types of things. And I think that's where we'll probably wait into a lot of our conversation, Kevin, today. But, you know, I think we're starting to see that uh pan out. You know, rural health transformation and what's been announced by the government recently, the administration is a step into really starting to solve for it. But we've really got to solve for both state and federal ways that we can get reimbursement for the services that pharmacists can actually provide and the outcomes that they ultimately will get for their patients as well.

SPEAKER_01 1:54

Yeah, so a theme that we've had with a lot of guests on the podcast is although eCAPS passing will open up, you know, arguably the largest payer for a category of services, there are still opportunities today. And so one of the things that a lot of our guests have talked about is ECAPS is great. You should keep your eye on it. Um, we're all optimistic that it's going to happen, but don't wait around. Can you talk a little bit about how you're thinking about services today and your sentiment around that? How do you think about what to do today versus what to keep your eye on for the future?

State vs National Models

SPEAKER_00 2:27

Yeah, you know, what's interesting about it, and I think, you know, we we play the role as a large national player, you know, and so we look at ourselves as a large uh network of independent pharmacies because we are in communities all across America. That that's that's a good thing, and it's a challenge when it comes to the services and service expansion. And let me explain that because, you know, uh we are in states, and I can actually spin up services based off of state scope of practice or whatever it looks like in that state. And I think those are all great things. But a lot of times what we have challenges with is our payers that we have are national. And so when you look at a payer that's national, I think like in I Healthcare or others, they're trying to look at consistent services for their members as they go state to state. And so sometimes it may seem like it makes a lot of sense in a state, but we may limit be limited by payers that we can actually go to and contract for some of those services. And so there are some challenges as you look at it, is trying to be consistent in what we do. And we want to have a consistent kind of experience for our patients that come into our stores each and every day. So, you know, I tie eCamps being important because the more that we can open up a national platform that I can then train at national scale and give a consistent experience for anybody that walks into our Walgreen stores, whether you're in Florida, California, or here in Illinois where I am, that's probably the easiest thing for us to do. Doesn't mean we stop, though. So I mean, you look at states like Idaho or others, we have to be very thoughtful on, you know, what do we want to do? Where do we want to contract, and how do we really think about training and getting the right execution on these services for our patients and making sure it's a good experience, not just for the patient, but also for our team members and our stores. What I think is challenging when it comes to some of the states, though, is we have to also think as a profession, how do you contract in those states? And so what ECAPS does is it gives a more broad standard by which payment kind of gets tied to a percentage of um physician uh fee schedule, right? When you go into states, there's not really a standard that you're going off of. And so sometimes you'll end up uh kind of negotiating against other providers. And I think that makes it more challenging of saying what's a reasonable uh reimbursement when it comes to services that we're actually providing. And so I think there is some challenges when you look at it from a state-based perspective on, you know, uh how's uh pharmacy A uh really negotiating their reimbursement versus us versus somebody else? And you kind of get it back into negotiating against yourselves as a profession, which is what has been the challenge when it comes to dispensing and medications as well. So I know I kind of said a lot at you there, but I think what's really important to think about, you know, we have to think about an ecosystem and how do we actually think about not only locally within a state, but how that kind of manifests out over the nation. And then how do we not kind of shoot ourselves in the foot in the near term by contracting things that probably aren't fair reimbursement until we get to a place where we can actually have a broader discussion of what's fair reimbursement for the profession as a whole from a federal-based perspective.

SPEAKER_01 5:22

So there's a couple big themes in there that I would love to dig into a little bit more. The first is the difference from state to state. And this is something that we think about all the time, and you're talking about. I think what I'm hearing hearing you say though is although it can be different from state to state, that doesn't mean you wait until it's all the same. Yeah. Because one of the things that we've seen is showing success for one kind of care, uh, for one kind of access to care in one state can help bolster the argument across other states, right? And so do what you can where you can, and there's a huge opportunity to impact a lot of uh patients and customers and also evolve a business. You agree with that? I do.

SPEAKER_00 5:57

I do that the the one nuance I'd put to that is you you have to really understand what consumers are wanting us to serve uh when it comes to some of those solutions. And so, said differently, uh if you just launch a bunch of cash pay things in a state, what we've seen historically is patients are assuming that their healthcare services are going to be covered on their insurance. And so we have to be very careful on how you either price it or that you go and get the services and it's easy to communicate to consumers so that they're not really trying to understand why they would come to a pharmacy versus not. And so I do think leaning in at a state-based level to get expertise and to get uh continuity on what you're doing to expand it nationally for us is actually a very, very uh smart way of doing it. Uh, it's just like a big pilot for us if you think about it that way. But those are important things for us to do, you know, and I think we do it a lot when it comes to uh state-based health plans, like uh Blue Cross Blue Shield of said state, right? Whatever state. And so though those are easy to kind of tie into or Medicaid in a state itself, because then you're really tied within the geography of the borders of a state and you can go within your platform in that state itself and then learn to say, how can we actually expand this across other states? But, you know, it's hard for us when I look at having 50 different um offerings in 50 different states. And so we do try to find where I can do consistent things across maybe 10 states or 15 states, or I have, you know, five to 10 key states that really serve the most of our patients, and those are the ones you'd want to go into. So we are always thoughtful on trying to get into those. So a Texas, a Florida, an Illinois, California, some of those big states where we can do these things or where we really want to lean in and see what we can do.

Pharmacy Filling Care Gaps

SPEAKER_01 7:37

Yeah. Um, I always love asking my guests about stories of what you're hearing about the impact that you can have in your customers and patients' life by expanding access to care. And sometimes that's formal in terms of services that you might be building under, you know, medical coverage, and other times it's informal and just you know, meeting the patients where they are. Have you seen you you have a bunch of different roles that we talked about in the beginning and a pretty exciting range of perspectives? What have you seen out there? How how can this make a difference in just care delivery in the country?

SPEAKER_00 8:06

Yeah, you know, I I think that's actually where we can have the biggest impact is if you look at all the communities that we're in that they don't have um uh care. You know, I I think the stats that that you may have heard me say before, but I think you know, uh I think it's 9% of physicians practice in rural settings where I think it's over 25% of uh Americans actually live there. And so you think about the impact or the lack of care that a lot of those uh communities are getting, and I think pharmacy can play a huge part of that. And so, you know, I think those are the areas where you think about expansion, testing, test or treat, those types of things, and you hear things where people wouldn't get actual care before, or they would actually end up trying to get into hospitals that are not close to them, and pharmacy can really step forward and solve for it. You know, I think when I talk to pharmacists, they're more excited to do care-based programs than ever before. And I think when it comes to the simple things, like even getting people on therapy and making sure that they stay on therapy to start with, the simple things that pharmacists should be doing just have huge impact to care. And so, you know, how we launch programs now and looking at when somebody starts nudotherapy on something that we know if they stay on the second and third um course of therapy, they are gonna stay on it long term and stay adherent. Those stories that you hear from our pharmacists every day, having a phone call, understanding why patients fall off those therapies, and then really saying, you're gonna have a hard time for the first two weeks. This is what you're gonna see, but you've got to get through through the 30 days, and then you're gonna actually get uh better adherence from that point forward. Those stories I hear all the time when I'm out in stores. Uh, I think what we have to do though is enable uh our practitioners to have the time to do that. And I think that's the other challenge that we have in the industry as well, is reimbursement makes it challenging from some of those things, but we've got to lean forward and really uh advance care in the ways that we can.

SPEAKER_01 9:51

Well, this is a thing that you and I have talked about before. I think uh reimbursement and time. You talked about having the time to do these things, are so closely linked and arguably actually the same thing, right? Reimbursement offers more opportunity to support the staff that you need to be able to provide these kinds of services. And so I think that's part of the reason it's so critical. You brought up something a little bit earlier on that I think would be useful to go back to about some of the challenges and potential pitfalls in dealing with contracting um for services. It's not something we've talked a lot about on the podcast, but I would be curious on your perspective on your advice to the industry on how to navigate that and make that as smooth as possible as we move forward and expand access to care through pharmacies.

Reimbursement Challenges

SPEAKER_00 10:32

You know, I just think it goes back to um that there are standards for pricing that comes across. And that's what that's where federal reform, I think, helps because it does set a standard by which you can kind of anchor off of. I would just say when we look at it uh as we go state to state or even payer to payer, we're we're trying to pin ourselves to uh physician-based reimbursement uh for the services they provide, understanding that we can do it uh a lot of times at scale more broadly and across more patients, and we can do it at a lower cost. And we're okay actually saying we'll do a lower cost, but we need to make sure that we're not just pinning random uh values, if you will, into what we'd be willing to accept as a profession going forward without pinning it to something that can be more durable in what we're doing. And so, you know, I look at a state like in Idaho that has, you know, broad, you know, you can basically um practice it at what your education is, and as long as you have contracts, you can go and do it. My my fear is we have people out there that are contracting on what sounds good today, um, and saying, you know, this this service will take$20 versus something else and not actually pinning it to a fee schedule that we could say as we pivot into a more of a federal-based solution that would actually be uh a durable based reimbursement for us going forward. Uh, worst thing that we can do, and we've seen it over time, is you negotiate against yourself each and every year, right? And so instead of saying that you're gonna put more investment into driving more and better outcomes, which means your reimbursement should actually get better year over year because you're actually driving more value in an ecosystem. What's happened with reimbursement for prescriptions is you're fighting against yourself each and every year to say we're trying to take costs out of the system to uh kind of parallel what you're seeing in reimbursement. If we do the same when it comes to services, we're just gonna be negotiating against ourselves each and every year, trying to maintain what we have. You've got to really start to pin it to something that you can say will change as time goes forward, we'll be uh recognized as there's more costs that may be into it because you have uh the cost of your infrastructure, you have your cost of your people and your resources and everything else. And generally they know that those costs go up every year. So your reimbursement should go up every each and every year. And that's where I think we just have to be very thoughtful when you're negotiating in the States on how you set that up to be durable going forward.

COVID Changed Expectations

SPEAKER_01 12:47

And so that's really just a change in mindset, right? And this is a mindset that's more about recognizing the pharmacist as a provider in these services rather than dispensing. And there's other historical precedents to look against that, but realizing that it's a different kind of business in a lot of ways it's the same. And one of the things that we're passionate about is making it simple so that the patient understands that they can come to the pharmacy for these types of care that really make sense at the pharmacy, but then not having to worry about exactly how it works and we can take care of dealing with your medical insurance if there's something that's covered or whatever the case may be. Um, but recognizing from the operations of a business that this is a new and different thing, that we want to feel we want to feel consistency for the patient, but it's a different way to look at part of your operations.

SPEAKER_00 13:34

Right. And I think it's it's understanding what customers are comfortable with. And quite honestly, I think I think COVID changed the game for what consumers will get comfortable with going into pharmacies. And it's not that we didn't do things like vaccines and testing before, we didn't do it at the scale that we did during COVID. And I think that kind of opened patients' eyes to say, oh, that can be easy, that can be convenient, they can actually care for me in a way that I used to only go to physicians for or in urgent care or wherever, right? And so I think that there's a different permission that we have now. We just have to really think about how do we open up and continue to lean into the things that consumers are looking for. And I think that they're wanting us to help them make it easy for them going forward. And then I think once they understand that we can build for that, make it easy for them, uh, create the scheduling ecosystem, whatever it is we're trying to do, I think consumers will actually run towards that more than not.

SPEAKER_01 14:23

Is there something that you've seen that's been surprising? Things that consumers have been really um excited to adopt uh in terms of access at a pharmacy that you were surprised by. I mean, we all saw the graphs and and the information about vaccine delivery, but you know, eCAPS is around respiratory test to treat. What else has been out there that you've seen that is has been kind of shocking?

Expanding Clinical Services

SPEAKER_00 14:46

You know, I I don't know if there's anything that that's shocking. I think sometimes we still hold ourselves back. And so when you wade into services that we can provide, it's easier to go to like the the simple test and test and treat and those things. And I think they're great. And don't get me wrong, I'm not saying it's the wrong thing that we should be doing. But but you know, pharmacists are highly trained uh professionals, right? If you think about the impact that they can have on diabetes, right? And so um when you go into testing of things like A1C and then actual therapy changes that you can actually do with them to keep patients on the right therapy to get their A1C in the right areas, we know that that actually drives down healthcare costs long term. And so why we're not leaning forward into uh broader um ecosystems where we can have a bigger impact is where we should be going at the end of the day. And so I think it's easier for us to kind of take a step and kind of take a little bit of ground and say and prove out what we can do. There's going to be a point at which I don't think there's gonna be enough providers across the country. And that's not just pharmacists, that's gonna be nursing, that's gonna be uh primary care physicians that can solve the patient's needs in these highly complex areas. And I think we've got to kind of lean forward and get comfortable saying that we can do this and we can prove out that um the therapy monitoring that we can do and therapy changes that we can do really have a huge impact uh for patient care.

SPEAKER_01 16:05

Yeah, and I would say one of the things that's been awesome for us to see is just the um the value that providing preventative, I would call them clinical services to patients through the pharmacy can can really provide. I mean, you know, you know, some of the at-home cancer screening stuff that we're doing, changing people's lives, right? Like really having an impact. And there's just something so special that we continue to see in the data and the experience that we all read in the statistics about the role that the pharmacy plays in the community and meeting the patient where they are and having that important conversation at the right time, just because they're seeing the pharmacist so much more frequently. I think there's a bigger scope of the slightly more complex kinds of clinical services, especially in the preventative bucket, that can really change the industry and have huge outcomes for patients, but also that flows down through the insurance companies and businesses and providers and that whole thing. So I get really excited about it.

SPEAKER_00 17:01

And I just want to jump on that real quick because I I think you know there's a trust factor. And you you kind of used that before. And I think it can be from a simple thing we're trying to get somebody to follow through on a test. And so thank colorectal screenings are an at home test for that, right? Yeah. So we've worked with some of our payer partners, and we've actually gone and used our our in-store pharmacist and uh call center pharmacist, and they use their resources to reach out to patients to just to educate them and make them not afraid to do this. There are places where pharmacy can lean in and help educate and bring down barriers or uncertainty of care. And it kind of really goes across an entire gamut. And so we really have to think about where's the most impactful places that pharmacists can kind of play that role. And then how do you kind of lean forward and really drive that care? And so that's just one example. But yeah, it's a simple example where I think it happens more than people understand. And I think that's a place where they're a trusted resource, and we we should lean into that more effectively.

SPEAKER_01 17:58

But and we see it in the data. We see that when the pharmacy teams are engaged, it it it provides a sense of support and also maybe accountability, and people are uh, you know, can really make an impact on how compliant people are to a bunch of different sorts of things, but in addition, making sure that they do those screenings that they really should be doing. So I don't know, there's a bunch of regional things that we see. I like to tell the story we have some of our partners that are doing anti-nausea medication prescription because they live in a touristy coastal destination. I do think that's a little bit different than what you've been talking about, which is really focus on things that can have a broad appeal. That's great for those sorts of pharmacies and those communities, but to really drive the industry forward, I think thinking about those broad things that can really drive outcomes is an important thing. Can you share, based on how you're thinking about things in your organization, what would you tell the rest of the industry who may not have quite the footprint you have, or maybe they do, but what would you encourage them to do today? Um rather than you know, continuing to watch the eCAPS podcast and talk to your legislator and get them uh that's important.

SPEAKER_00 19:05

Yeah, that's important stuff too.

SPEAKER_01 19:06

Yeah, it's important stuff.

SPEAKER_00 19:08

Yeah.

SPEAKER_01 19:08

Um, what else can you do as a pharmacy in your business today to continue to expand access to care?

Industry Alignment

SPEAKER_00 19:17

Yeah, yeah, you know, I I think there's a couple of things. And and I'll I'll give a couple examples here. We've got to speak uh with one voice in in the industry. And and why I say that is when we talk with associations in each state, we talk with individual pharmacy, we talk with legislators, we talk uh with uh independence, chains, everything else, right? And and the the challenge I think we have is that a lot of times when we go and advocate, we're not as consistent when we advocate uh into state legislatures and or or uh uh from a federal perspective. And and what what you see with physicians and we see with nursing is they are hyper-focused, they know exactly what they want, they are consistent at how they do it, and they're not going in asking for different things when they go and talk to their legislators. Um, and I don't think we actually do a really good job of that. And so I'd say it doesn't matter what size of pharmacy you are, let's just all make sure that we know what we're trying to solve for and that we're consistent in our messaging and we are all going and using the same voice and the same vernacular to try to get things across the line. There have been times that that I know that we've gone uh through whether it's any CDS or Walgreens on our own. And what we hear is that it could be independents are saying something different or associations are saying something different, or what we're trying to advocate for really isn't gonna help us. We think in the way that we want to. Um, and it makes it challenging for us to get things across the finish line. Um, I always give examples. So the example I'll give is uh remember during reform uh back in the day, and uh everyone was like, we got to get during reforms across. And you know, what we said is you have to get during reforms, but you also have to have the right uh measures on the back end so that you can actually prove out quality and make sure that you have measures tied to quality outcomes that we could then get paid for appropriately. Well, we got during reforms across, and what happened is all the funding that payers went to that had funding for these programs that were forced to do it went away because you didn't have the measures on the back end of it. And so we kind of shot ourselves in the foot in that process. And so when I look at what we can all do together, it is gonna be let's find those things within a state that we want to expand uh as a profession, right? And say what's good for pharmacy and then say if we're all aligned to whatever it is, is it gonna be oral contraceptives? I don't know. Is it gonna be something different? Whatever that is, we should all go and say, let's advocate together. And then let's make sure that once we get this across the finish line, that we then all go and work with payers and say, how do we as a profession go back to payers and make sure that we as a profession are reimbursed appropriately? And then let us go out and make the best solution for consumers. Then you can go back and compete with consumers and say, this is why you should come to us for what the profession can actually do for you. And I don't think that's what we're doing, right? And if we go back to competing. Just on convenience and convening, competing on what we can do for uh a patient and showing outcomes, that's where we win. Right now we're competing on just the little uh bits and pieces of how the legislation looks and not making sure that we're driving the profession forward as a whole. And I think that's kind of what's holding us back if that if that makes sense. And I know I probably went into a little bit of a rabbit hole there, but I I just get I get exhausted by us not just saying let's just drive the profession forward and then let's invest in our platforms and consumers will choose where they want. And we all want consumers to have choice. And I think that's how pharmacy is going to be best going forward.

SPEAKER_01 22:37

Yeah. So one so I think it's really valuable to take a step back and make sure that as an industry and as independent um, you know, participants in that industry focus our folks are focused on the right thing. I do a lot of downhill ski coaching. I have for since I was in college and my daughter's team and all that sort of thing. And one of the things that I've learned in coaching is it's hard to focus on anything other than what you're saying. So if you talk about the things you don't want to do, it's hard to not do the things you don't want to do. It's really valuable to think about where you want to be. Go to you know, go to the place you want to be. Can you give a quick summary again of rather than like, let's not get focused on the wrong thing, what is the right thing? If you could, if you could choose, if you could wave your magic wand, what is the message that you want right now? Which is here's the the direction we all want to be going together, and here's the vision of where we're heading towards that that does make sense that we can have consistency around.

SPEAKER_00 23:32

Well, I I I think it goes back to, you know, uh it seems like where consumers are most uh wanting pharmacy to lean in uh into it's gonna be in the more simple services to make it easier for them to get in the store. So I do think testing and test and treat are probably the next natural extension of where we should go um and get consistency across where that is. Now, whether that's oral contraceptives or whether that's strep or that's flu or whatever it's gonna be, I think those are those are kind of different flavors of a similar kind of offering that we could put out into consumers. And so I do feel like we should be leaning into where consumers are saying they want to go. And oh, by the way, you can start to prove outcomes by saying that yes, you might increase utilization as a payer when it comes to more tests being provided, but you're also deflecting urgent care and ER visits down the road. So you can start to have a conversation about how that utilization investment is actually deflecting costs down the road. Same thing that we did with vaccines, right? It's preventative care. You're actually keeping people from getting sick so they're not getting all those other costs that are coming down the road. So a very similar approach on how we could talk to it from a payer perspective, but it's also what consumers are saying they would actually do when they felt comfortable going into pharmacies to do. So I think that's that's the first place that'd be the easiest one for us to really expand into if that if that makes sense. So I was trying to simplify something that could be more consistent across what we're doing.

SPEAKER_01 24:55

And one of the things that I am excited about and I really believe is that consumer preference is gonna evolve much more quickly than many people think, right? I just really think it's gonna happen um once the offering is there more broadly. Any last stories or thoughts that you want to share with the audience about um anything that you're focused on or access to care in pharmacies or the future of the eCAPS legislation or any any uh narratives uh for the listeners and viewers?

SPEAKER_00 25:23

No, I I would just go back to kind of where what I was saying before. And I think a lot of it is I think you know, we're we're excited. I think, you know, I can speak for NACS, but I'll speak for Walgreens uh in particular, you know. Uh yes, we're a national uh brand, uh, you know, but you know, I'm I'm a pharmacist. You know, I started my career working in stores in in Phoenix, Arizona. My last store that I had was Fountain Hills, Arizona. So anybody that's been there, it's a great place, right? Um, I knew every customer that walked in, I knew every patient, I knew their grandkids, I knew when they went on vacation. Um, I was part of that community, and that's that's why I wanted to be in pharmacy. I started as an independent pharmacist uh uh when I when I was in pharmacy school. And and to me, I think that there's just a magic to what we can still do as a profession. So let's put aside how many stores we have. We we all practice in communities. And I think as long as we're focused on driving what's most important to that community. So your example of anti-nause pills in an area that's there, that that's important for that community. And I think the the more that pharmacists can do that are really gonna impact those patients that they're serving, that's where we should be. And so, you know, as I look at it going forward, I think that we all want to lock arms and just say, how do we advance the profession itself? Everything else is gonna work out if we figure out ways to do that. And I think that's what you'll see myself in Walgreens, and I think you'll see NACDS say is let's just make sure we're consistent in what we do. And I think there's just so much more that we can do for all of our patients and all the communities that we're in.

SPEAKER_01 26:48

Yeah. Well, thanks for the work that you're doing. You're doing great work, and it's I think it's benefiting everyone, and we're excited for it. So, so keep it up. Thank you for that. Um, thanks also for being a guest today. It was great to have a conversation. Um, look forward to to continuing to see what happens. I think we're all going to be watching everything that's going on. And thanks for pioneering and being out in the communities doing what you're doing.

SPEAKER_00 27:10

Of course, great, great to be with you, Kevin, and uh nice to see you again.

SPEAKER_01 27:13

All right, and to the viewers, we'll see you on the next episode of the ECAPS watch.