Walgreen Company (WAG), CVS Caremark Corporation (CVS): The Halo Effect of EHRs in Drugstores

Although pharmacy sales are strong, shoppers aren’t making as many purchases from the rest of the store. Therefore, slowly turning its pharmacies into “lifestyle hubs” could be the key to boosting Walgreen’s long-term top line growth.

CVS Caremark Corporation (NYSE:CVS) and Allscripts Healthcare Solutions Inc (NASDAQ:MDRX)
CVS Caremark Corporation (NYSE:CVS), on the other hand, partnered with Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) to replace its proprietary EHR system at its retail clinic, MinuteClinic, last February. The system, AllScripts MyWay, gives CVS Caremark Corporation (NYSE:CVS) the ability to provide more seamless treatments for patients. Last October, Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) announced that it would unite all of its small physician EHR software, including MyWay, into a single product, Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) Professional EHR.

MinuteClinic offers most of the same services as Walgreen’s Healthcare Clinics, although CVS Caremark Corporation (NYSE:CVS) doesn’t offer massage services, wine, coffee, or sushi at any locations. However, CVS Caremark Corporation (NYSE:CVS)’ goal is the same — to streamline patient operations via a larger EHR service, to keep them coming back to the stores, and to hopefully boost front-end same-store sales in the process.

Last quarter, CVS’ same-store sales inched up 0.4% year-on-year. Same-store sales at its pharmacy rose 1.9%, but front-end same-store sales declined 0.4%.

The Foolish bottom line
Although Walgreen and CVS are both reporting steady growth in their retail pharmacy businesses, thanks to rising demand for generic drugs, both companies must find new ways to boost their front-end same-store sales going forward. For now, both companies are looking toward EHR companies like Greenway Medical Technologies, Inc. (NYSE:GWAY) and Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) to help them improve services at their clinics — which could boost same-store sales in the future by increasing store traffic.

The article The Halo Effect of EHRs in Drugstores originally appeared on Fool.com is written by Leo Sun.

Leo Sun has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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