Bartell discussion (specific) from Seattle Times

[storewanderer]

OK, so perhaps then it is just for Aetna only plans (since you note that the other ones are served by Caremark).

Only knowing the one I have dealt with, it has never been an issue, but it makes sense they offer other options as well .

You are lucky, someone negotiating for your plan has stopped the forced use of CVS from happening.

[Romr123]

I have no direct knowledge, but employers absolutely can mix/match PBMs and claims processors. As it's time to re-sign-up for 2024 health care, I was shopping off-exchange as our plan was discontinued for next year and we were force-placed into a slightly narrower network plan for 2024. There are so many permutations of employers just within Blue Cross/Blue Shield of Michigan: each of the big 3 auto makers had their own plan or two, the state of Michigan, various union plans, union retiree plans, Meijer employees, and on and on and on. Multiply this over 2 other big not-for-profits in Michigan (Health Alliance Plan and Priority Health) and also the for-profits (Ambetter, Molina, etc etc etc) and then mix with a dash of "ERISA self-insured plan" and you as an employer can get anything your creative heart desires written into your plan.

[storewanderer]

I have no direct knowledge, but employers absolutely can mix/match PBMs and claims processors. As it's time to re-sign-up for 2024 health care, I was shopping off-exchange as our plan was discontinued for next year and we were force-placed into a slightly narrower network plan for 2024. There are so many permutations of employers just within Blue Cross/Blue Shield of Michigan: each of the big 3 auto makers had their own plan or two, the state of Michigan, various union plans, union retiree plans, Meijer employees, and on and on and on. Multiply this over 2 other big not-for-profits in Michigan (Health Alliance Plan and Priority Health) and also the for-profits (Ambetter, Molina, etc etc etc) and then mix with a dash of "ERISA self-insured plan" and you as an employer can get anything your creative heart desires written into your plan.

The options are definitely there... overwhelmingly so. That is also part of the problem. A lot of employers are confused and overwhelmed at renewal time, there are so many options. A good broker/agent can help but they are difficult to find and even then you worry they are presenting you only what pays them the best commission and not necessarily ALL available options. Talk to multiple brokers during renewal time and it gets even more confusing.

It shouldn't be this difficult. But the other side of why it is so difficult is because they've jerked the doctors around so much when it comes to reimbursements, and on the doctor side there are various "networks" the doctors sign up with and have to agree to rate schedules that pay let's say fair reimbursements for some procedures and total joke reimbursements for other procedures and if a doctor disagrees they may lose access to an entire giant "group" in a given area such as the entire school district, entire county employees, etc. These insurance companies know all this and form the reimbursements accordingly.

It is a disgusting tangled up mess.

[ClownLoach]

They may own Aetna, but there is no restriction on getting your prescriptions elsewhere, as I know someone who has that insurance and gets everything from the local supermarket chain pharmacy. Some things are 30 days at a time, others are 90 days, even one that is $180 for that 90 days (one of the brand names with no generic option, I have seen prices for it over $1,000 with those "coupon" offerings).

No clue what they do with the Caremark side, but it isn't an impact for someone with Aetna.

This depends on the Aetna plan. There are absolutely Aetna plans that are serviced under Caremark that basically twist the user's arm into using CVS.

These health plans are all different, function differently, depending on employer/group/region/state. With as many different rules and restrictions as these health insurers have and so many different plans I am sure the administrative side of all that is a big reason why the pricing is so out of control.

There are numerous non-Aetna health plans that I had to choose from at my last employer, from multiple vendors, that used Caremark and you were absolutely forced to go to CVS. You basically could only get a 7 day supply of up to 4 drugs twice a year at a non CVS location and it was so expensive you were better off finding one of those freebie services like GoodRX. The company knew how bad it was so they has a separate discount card for Walmart pharmacies unrelated to the Caremark coverage. I have seen Blue Cross, Blue Shield, Anthem, and Cigna plans that these companies cobbled together where everything prescriptions was Caremark. Very few employers use one vendor for everything now especially when they're self insured like most mega-corporations that just hire one of these companies to negotiate their costs down. It's all mix and match because nobody has a cheaper overall option to keep it all under one umbrella anymore.

Apparently if the employer wants to have non CVS coverage outside of the occasional emergency as described above it costs them substantially more. I do recall that they had a special prescription option for Oregon and Washington at one point because of the relative lack of CVS locations but after they acquired the Target pharmacies that option was dropped. I do recall it was pretty expensive for the employee, like a $25 extra charge per paycheck on top of the fortune they had to pay.

[SamSpade]

Another report, more of a remembrance, really, of the Bartell Store #1. I definitely gleaned some new information from the report, though.
Seattle Times (via archive.today)

[ClownLoach]

Another report, more of a remembrance, really, of the Bartell Store #1. I definitely gleaned some new information from the report, though.
Seattle Times (via archive.today)

Bartell clearly was a bad match for Rite Aid based on this statement of most of sales being front of house. Rite Aid was focused on killing front of house sales under the last CEO with the dreadful store of the future format devoid of product.
Couple that with absolutely insane shrink (a drugstore shrinking a million dollars a year?!! Absolutely nuts unless that was in retail $ not cost which is unlikely). I don't recall Bartell doing much in the way of loss prevention activities like lock up cages or empty box cards outside of small electronics. Then they built a new warehouse? No wonder they were in financial trouble. Then the bad marriage with Rite Aid...

I never thought I would say this, but maybe CVS is the answer. If, and it's a big if, CVS were to apply the same approach they took with Longs Hawaii, then they would have a good chance to be successful in acquiring the Bartell stores. Longs is still carrying a different assortment with much higher front end sales in Hawaii; I wish they had kept the same approach in California but as we know they made those systemically CVS standard stores. We can all criticize them but the Longs stores still "feel different and unique" from the boring CVS assortment. The Hawaii stores still have a larger food department, local merchandising and local vendors, etc. They also demonstrate their ability to run stores where pharmacy isn't the priority including the various Las Vegas strip locations that run sans pharmacy entirely and are just branded "CVS". They would be seen as saviors instead of invaders if they came in and offered the Rite Aid buyers a fair purchase price for the entire PNW division and operated it under the Bartell banner and model. Sure, they would convert house brand and systems to CVS but so what? The front end is what made the money for Bartell and they do know how to do it right when they are pressed hard enough (again Hawaii, Vegas strip).

[storewanderer]

Another report, more of a remembrance, really, of the Bartell Store #1. I definitely gleaned some new information from the report, though.
Seattle Times (via archive.today)

Bartell clearly was a bad match for Rite Aid based on this statement of most of sales being front of house. Rite Aid was focused on killing front of house sales under the last CEO with the dreadful store of the future format devoid of product.
Couple that with absolutely insane shrink (a drugstore shrinking a million dollars a year?!! Absolutely nuts unless that was in retail $ not cost which is unlikely). I don't recall Bartell doing much in the way of loss prevention activities like lock up cages or empty box cards outside of small electronics. Then they built a new warehouse? No wonder they were in financial trouble. Then the bad marriage with Rite Aid...

I never thought I would say this, but maybe CVS is the answer. If, and it's a big if, CVS were to apply the same approach they took with Longs Hawaii, then they would have a good chance to be successful in acquiring the Bartell stores. Longs is still carrying a different assortment with much higher front end sales in Hawaii; I wish they had kept the same approach in California but as we know they made those systemically CVS standard stores. We can all criticize them but the Longs stores still "feel different and unique" from the boring CVS assortment. The Hawaii stores still have a larger food department, local merchandising and local vendors, etc. They also demonstrate their ability to run stores where pharmacy isn't the priority including the various Las Vegas strip locations that run sans pharmacy entirely and are just branded "CVS". They would be seen as saviors instead of invaders if they came in and offered the Rite Aid buyers a fair purchase price for the entire PNW division and operated it under the Bartell banner and model. Sure, they would convert house brand and systems to CVS but so what? The front end is what made the money for Bartell and they do know how to do it right when they are pressed hard enough (again Hawaii, Vegas strip).

It is probably too late for Bartell. Had Rite Aid not bought them they probably would have gone under also given what has happened in Seattle as Bartell was already sounding the alarm about issues in Seattle in 2019 and then when the work from home thing happened with COVID that completely killed traffic in downtown Seattle and I am not sure Bartell could have sustained itself through that given its heavy reliance on sales volume from those downtown stores. Bartell also had some serious technology issues- for example they never upgraded to EMV Chip Card acceptance for credit/debit (that was something Rite Aid had to handle).

You can add the Navarro units around Miami to the "different type of CVS/way higher front end sales" bucket too.

The problem is Bartell was never even close to being as productive as a Longs, Navarro, or Las Vegas Strip CVS. They ran mostly small low volume stores, even lower volume than Rite Aid in most cases. They had a really nicely curated merchandise mix and the stores "felt" nice, they had a unique feel/personality and the mood in the stores was always comfortable. Bartell was like an east coast CVS with a personality/more unique/interesting merchandise mix and a nicer atmosphere (better music, etc.). Those downtown Seattle units were busier stores but Rite Aid has busier stores like that too.

This is not a case where Rite Aid bought something that was running circles around the typical Rite Aid in performance. There is a reason Rite Aid ended up with Bartell and not CVS or Walgreens... that reason is Bartell's performance...

[buckguy]

There has certainly been far too much consolidation in the pharmacy business, but I think it really comes down to the state of the prescription drug industry in the US. Insurers (both private and governmental) don't pay well for a lot of drugs, meaning it's hard to make a profit. PBM's like Caremark are obviously pushing their own pharmacies. Some megaplayers like Walmart and Costco might run the entire pharmacy as a loss leader or break-even. Throw in some online pharmacies to siphon off customers, and you have a very difficult environment for all but the very largest players.

The only way out of this might be for the government to start regulating reimbursement rates paid by insurance companies to pharmacies. Without that, the smaller companies will continue to get squeezed until we have a duopoly.

Given that many medium-to-large metro areas were dominated by 1 or 2 chains before the consolidation of chains went into high gear, it's not surprising that we have a duopoly. Independents have not been a factor in many metro areas in decades and even long ago, tended toward niches like home medical equipment or compounding. In some ways, it's surprising that the reimbursement system and the low margin on prescriptions hasn't changed the market more.

I was looking at the recent lists of Rite-Aid closures and one of them is a store that goes back to the mid-50s as a Gray Drug and was the only drug store other than a couple small ones in a nearby hospital and medical building for many years. It was replaced with a modern Rite-Aid when the shopping center was redeveloped and the area around it has gone from being a community-type shopping center that couldn't support a Woolworth in its early days to a hub with several big boxes, even though the area hasn't changed much in population or demographics since the 60s. What is different is that there is actually more competition---the hospital has a bigger pharmacy now and Giant Eagle and Target have pharmacies across the street. There also are Walgreen and CVS stores within a couple miles in areas that serve the same residential areas, and Marc's less than a mile away. In this case, there's actually more competition than in the old days, but it's also different. There are lots of big box-centric shopping areas that probably have similar dynamics---many newer suburban areas are configured with stores where the pharmacy is a break even or even loss making traffic draw.

[veteran+]

Navarro's in Miami is quite unique within the Drug Store landscape.

It's also quite NOISY!

[BillyGr]

They also demonstrate their ability to run stores where pharmacy isn't the priority including the various Las Vegas strip locations that run sans pharmacy entirely and are just branded "CVS".

Not surprising that they do good with those, since they had similar stores here in NY in several of the shopping malls years ago.
Likely with the thinking that most people wanting to get a prescription didn't want to deal with going into a mall to do so.

I think most are gone now, but more due to most of the malls they were once in not being malls any longer, or having little traffic overall than anything that CVS did or didn't do.