Large companies have been spending the last several years getting into—and sometimes subsequently shrinking—their footprint in the healthcare business. Some of them, such as pharmacy retailers like CVS and Walgreens, could be considered “healthcare adjacent” because of their pharmacy component, which is already considered healthcare. As discussed below, these entities have been entering the healthcare space in a few different ways—although primarily through the expansion of primary care and clinic services. This blog provides a high-level overview of how and where these expansions have taken place, how Costco’s latest venture differs from others, and considers important questions for policymakers that these shifts raise.

Both Walgreens and CVS began providing “direct-to-consumer” retail healthcare clinic services within their stores in 2013 and 2016, respectively. Over time, Walgreens expanded the ability of its clinics to provide not just primary care but services for people with chronic health conditions in 2013. Then, in 2020/2021, they created a partnership with an entity known as VillageMD to staff and run hundreds of their healthcare clinics. The growth of these clinics has reversed in recent years, with many closings happening across the country after the company was acquired by private equity firm Sycamore Partners in 2025. As of August 2026, Walgreens was still operating in the neighborhood of 8,000 clinics nationwide.

In the case of CVS, it began providing primary care clinic services in 2016 through the acquisition of MinuteClinic. According to its website and the National Retail Federation, CVS grew to be the largest provider of “retail” healthcare in the US. Perhaps more significant for CVS was its acquisition in 2018 of Aetna health insurance company. The intent of the merger was to provide more coordinated care to a larger share of the population, building on Aetna’s and CVS’s respective strengths. Additionally, in 2023, CVS acquired Oak Street Health, which focuses on helping older adults stay healthy through routine primary care like vaccinations and screenings.

But the growth of these large entities may slow. Just this week, it was reported that CVS plans to split its insurance and pharmacy businesses. David Joyner, the current chairman and CEO of CVS Health, noted of the reason behind the move that “each company will have greater flexibility to adopt the technologies that best fit its needs, improve efficiency and more effectively adapt to the regulatory and other dynamics.” This kind of decision may therefore draw in part from broader public concerns that the size of such entities may result in further scrutiny on the insurance side of their business.

Other big retail companies, such as Walmart and Amazon, have also launched healthcare services. Walmart was operating health clinics as well, but began discontinuing and closing retail clinic services in 2024 because of financial losses. Currently, however, they still provide pharmacy services as well as preventive and health insurance coverage services. Amazon, on the other hand, dramatically expanded its footprint in 2023 when it partnered with One Medical to offer AI-powered in-person and virtual care options with various health systems across the US.

Another way these companies are entering the healthcare space is through partnerships with or acquisition of existing healthcare companies. The latest company to do so via a strategic partnership is Costco, a large wholesale membership company known for selling groceries and other items such as gasoline, eyeglasses, and pharmacy products, at lower cost. In August 2026, Costco announced a partnership with the SCAN Group, which, according to SCAN’s website, provides new ways to deliver evidence-based patient-centered care to older adults. SCAN, a not-for-profit, has several companies that provide everything from healthcare for the unhoused, in-home care, insurance coverage, and primary care—all focused on older adults. They operate in states such as California, Nevada, Texas, Washington, and New Mexico.

What is different about Costco’s arrangement compared to CVS, Walgreens, Amazon, or Walmart is threefold: Costco’s venture into healthcare is (1) not-for-profit, (2) focused on the aging/senior population, and (3) delivering services in the long-term care space such as care management and insurance products (including a Medicare Advantage plan).

With all these nontraditional entities entering the healthcare space in various forms, there are important questions for policymakers and regulators to consider. These include:

• What are the goals of these entities that are more recently entering the healthcare space versus traditional healthcare providers?
• What is the impact of these entities on the healthcare marketplace?
• What is the impact of these healthcare entities on health outcomes for people, and is this a good or bad development generally?
• What other role should government play as it relates to these changes?

What are the goals of these entities that are more recently entering the healthcare space versus traditional healthcare providers?

The goals of these companies’ ventures into healthcare are not always explicitly stated. For some, the goal was to expand customized consumer experiences. Presumably, each saw a need/demand by customers for more services. For others, entering healthcare may be part of an overall business growth strategy. Still, for others, it may be about integrating care and moving toward value-based outcomes. In the case of Costco, it is targeting a specific market (the aging population) in a different way (insurance). Given the footprint of these entities in healthcare, policymakers may want to consider what is in the best interest of the public good and whether such organizational ventures are resulting in positive or negative impacts—or perhaps a little of both. This leads one to ask a few more questions…

What is the impact of these entities on the healthcare marketplace?

The entry of these entities is seen as disruptive to the traditional healthcare system. But disruption may be viewed as both a positive and negative development for the industry. Disruption can force innovation and broaden choice. At the same time, it is possible it may shift where and from whom consumers access healthcare. One such example is the company created by Mark Cuban, Cost Plus Drugs, which is meant to disrupt the pharmacy industry and lower costs for consumers. Developing a rubric and measures by which to gauge impacts on things such as quality, cost, and outcomes in health should be a consideration for policymakers. Policymakers may also choose to allow new marketplace entrants to see if there might be a positive impact, such as more choice of providers by consumers or a better consumer experience. Monitoring these impacts may be difficult, but some states have started such efforts by better understanding who is entering the market. They are doing so by requiring the reporting of what are known as “material transactions” (i.e., purchases or acquisitions between businesses of a certain amount). Ultimately, if a venture is not needed, is not sustainable, or is done suboptimally, consumers may “vote with their feet” and choose not to use the service.

What is the impact of these healthcare entities on health outcomes for people? And relatedly, is this a positive development generally?

Many of the objective analyses on the entry of nontraditional companies into healthcare have focused on market impacts and not necessarily overall outcomes for consumers. This is, in part, because population health impact is harder to track. But the individual companies that have entered healthcare have done their own monitoring of outcomes. For example, CVS reports that they saw an average reduction in A1C of 1.9 percent (i.e., lower blood sugar, which reduces harm from Type 2 Diabetes) through their Transform Diabetes Care initiative and a 44 percent reduction in hospital admissions through Oak Street Health, which provides primary and specialty care for older adults. One broader positive impact has been on increasing access—primarily to primary care and pharmacies—although many companies have pulled back on their in-person retail clinics. Policymakers could consider requiring any entities in healthcare, including those considered to be nontraditional, to report all the same quality measures that traditional providers do. These measures are largely overseen nationally by the National Committee on Quality Assurance. States also mirror these quality and outcome reporting requirements with their state-based quality measurement systems, such as New York’s Quality Assurance Reporting Requirements.

What other roles should government play as it relates to the growth of nontraditional healthcare providers?

Traditional healthcare (e.g., hospitals, nursing homes, federally qualified health centers, etc.) is highly regulated. To bill for services, providers must enroll in programs to get a National Provider Identifier (NPI number) and be credentialed. In some cases, companies may do this themselves, while others have chosen to buy or partner with entities that are already enrolled providers.

In the case of Costco’s latest venture with SCAN to serve the 65+ year-old Medicare population, the service being offered is itself different because it is a Medicare insurance product. These products have regulations governing participation, marketing practices, and compliance. Should any of the aforementioned companies decide to serve the Medicaid population, which is primarily lower-income individuals or people with disabilities, the regulatory requirements may vary by state because this program is jointly administered by the federal and state government.

Conclusion

As this blog reflects, a growing number of companies that are not traditional healthcare providers have been entering the healthcare marketplace. As discussed, there are new ways companies are entering this space (from retail healthcare to pharmacy to insurance for aging services), and there are potential pros and cons to this development. To ensure that the entry of these companies into healthcare is a more positive development, policymakers may want to consider more evenly applying regulatory requirements and oversight across the marketplace. They may also want to more closely monitor impacts on access to services, costs, and outcomes for consumers to the same degree as is done for traditional providers. In the meantime, it will be interesting to watch how and to what extent these larger retail companies evolve in the healthcare marketplace.

ABOUT THE AUTHOR(S) Courtney Burke is a senior fellow for health policy at the Rockefeller Institute of Government.