Hy-Vee Inc.’s merger with Exemplar Care medical clinics completed in January will be an entry point for the West Des Moines-based grocery store into subscription-based primary and urgent health care clinics.

For Hy-Vee, the agreement allows it to continue to expand its footprint in the health care industry through joint ownership of medical clinic company Exemplar Care, whose headquarters are in Des Moines.  

The new partnership opens the door for Hy-Vee into primary and urgent care with a model that focuses on personalized care and aims to increase access while also driving down costs for patients, Dr. Daniel Fick, Hy-Vee chief medical officer, said. 

According to the Exemplar Care website, the membership cost for adults 19 and older is $89 per month but $75 for people 65 and older with Medicare; $69 per month for spouses; $29 per month for children and dependents up to 26; and $216 for a family consisting of two adults and two or more children/dependents.

“The model for this type of primary care is a direct primary care model, so that is you pay a membership fee every month, and that entitles you to use the clinic as often as you’d like,” Fick said. “You have a provider, and you can see them as much or as little as you need. It’s not based on your health insurance. Many people have it in addition to their health insurance. It allows you to come in and be seen without all the complications of insurance.” 

As part of the agreement, Exemplar Care medical clinics will be renamed Hy-Vee Health Exemplar Care, offering direct primary care and 24/7 urgent care (where available). Fick said the change in name will take effect in the coming months.

Fick and Exemplar Care’s leadership team, including founder and physician Jon Van Der Veer, will manage the clinics. 

“In addition to the membership with Hy-Vee Health Exemplar Care, we also have urgent care,” Fick said. “Our members can use the urgent care visit for free. So in addition, 24/7, as much as you need to come in for an urgent care issue, you can come in there. We do procedures, we have an X-ray machine, we can do lab work, and that’s all free for the membership. And the good news is from the urgent care side, that particular part of it, you can also use insurance if you’re not a member but you need to use the urgent care.” 

Exemplar Care’s two clinics are located in West Des Moines and Ankeny, with a third ready to debut in Bondurant. Hy-Vee has more than 285 locations across eight Midwestern states: Iowa, Illinois, Missouri, Kansas, Nebraska, South Dakota, Minnesota and Wisconsin.

“We actually received keys today [for the Bondurant site], so in a week or so, it should be up and running,” Van Der Veer said Feb. 12.   

Less than a month after reaching the agreement with Hy-Vee, Van Der Veer said he was in Omaha, exploring potential sites for more clinics. 

“One of the most exciting things from the Exemplar Care side and going into this partnership was being able to grow our footprint with our model of care, which is focused on price transparency, affordability, access and convenience,” Van Der Veer said. 

“Hy-Vee being in a much larger geography gives us an opportunity to grow into that footprint and bring our model into those markets,” he said. “Some of the markets already have similar-type things, but we just do things a little bit differently.”

Van Der Veer said initially, they’re looking at potential sites in Kansas City, Omaha and a couple of other spots in Iowa, “just in the general Hy-Vee footprint.” 

Existing retailers establishing and expanding their presence in health care industry markets is a growing trend. Federal Bureau of Economic Analysis data released in September 2023 showed that health care spending in the U.S. rose in 2022 to more than $4.3 trillion. 

Within the last two years, CVS acquired Oak Street Health, a senior-care primary care provider, and health tech company Signify Health in deals totaling nearly $19 billion, according to CVS Health news releases; the Associated Press reported in February 2023 that Amazon closed on a $3.9 billion buyout of primary care startup One Medical; and Walgreens’ VillageMD announced in January 2023 that it completed its sale of Summit Health-CityMD for $8.9 billion.

Hy-Vee’s presence in the health care industry spans more than 50 years, according to the company’s website. The retailer operates more than 275 pharmacies across the Midwest. It formed its own pharmacy benefit manager, Vivid Clear Rx, in an attempt to combat rising drug prices in 2020 and started a low-cost telehealth and online pharmacy provider called RedBox Rx. 

“Just like many places, I think you’re going to see continuing consolidation of health care into smaller groups, smaller numbers but part of much larger groups,” Fick said. “I think you’ll see independent primary care probably moving to the way of more ownership of larger systems and larger groups. I think Iowa, in general, like much of rural America, continues to have challenges in both primary care and specialist recruitment.” 

The grocery store chain also opened Hy-Vee Health Infusion Care centers last year in West Des Moines and Chicago to provide infusion therapy to patients with chronic conditions.

According to Fick, access is a key component to Hy-Vee’s health care strategy.

“Physicians tend to migrate to where the population is, so it’s always a challenge in rural America to recruit and retain medical providers, including physician assistants, nurse practitioners and physicians and surgeons,” Fick said. “It’s probably the biggest challenge we have. We, in rural America, provide great health care, great personal care; it’s just a challenge to sometimes fill those spots and locations.”