Rite Aid Partners with HPN to Enhance Health Alliance Program - Analyst Blog

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Rite Aid Corporation ( RAD ) has entered into an agreement with California-based healthcare services provider, Heritage Provider Network (HPN) to introduce its newly started Rite Aid Health Alliance program to the latter's chronic and poly-chronic patients across Southern California. This is considered Rite Aid's largest partnership since the company launched its Health Alliance program earlier this year.

The partnership agreement facilitates the patients of HPN suffering from chronic and poly-chronic diseases to receive pharmacy care at select Rite Aid stores where HPN physicians and Rite Aid pharmacists will work together toward improving overall health of the patient. We believe the recent strategic move will help Rite Aid in bringing more customers to its stores which will ultimately boost its top-line.

Nine affiliates of HPN namely Desert Oasis Health Care; Coastal Communities Physician Network; Lakeside Medical Group; Bakersfield Family Medical Center; Sierra Medical Group; High Desert Medical Group; Heritage California ACO; Regal Medical Group as well as Affiliated Doctors of Orange County will be participating in the Rite Aid Health Alliance program.

Rite Aid Health Alliance is Rite Aid's health management arm, under which it works together with different healthcare providers to offer holistic care to patients suffering from chronic or poly-chronic health problems. Including the new Southern California region, Rite Aid Health Alliance is currently available at the company's Buffalo, NY; Greensboro, NC; and Hershey, PA area pharmacies.

Started in March this year, Rite Aid has been aggressively focusing on expansion of its Health Alliance program across all its stores. In April, the company successfully acquired Boston-based Health Dialog Services Corporation from Bupa Ltd., a London-based healthcare company.

Health Dialog engages in providing coaching, analytics and support to make decisions in the healthcare industry. Rite Aid which competes with China Nepstar Chain Drugstore Ltd. ( NPD ) is currently operating this company as a wholly owned subsidiary.

We believe that the integration of Health Dialog will help Rite Aid expand its Rite Aid Health Alliance across all its stores. The move is expected to attract more customers to its drugstores.

Rite Aid is the third largest drugstore retailer in terms of number of stores after Walgreen Co. ( WAG ) and CVS Caremark Corp. ( CVS ). Rite Aid's sustained focus on enhancing pharmacy and clinical services through the recently initiated Rite Aid Health Alliance or its Wellness+ customer loyalty program, along with the remodeling of its wellness stores bode well for future growth. We believe that such measures will enable the company to broaden its customer base and boost the top and bottom lines.

However, the stock currently carries a Zacks Rank #4 (Sell) as the company's recently reported earnings of 4 cents per share for the first quarter of fiscal 2015 has shown a steep decline from the comparable year-ago period's earnings of 9 cents.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: RAD , CVS , WAG , NPD

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