Building on its increasing primary care focus, Humana Inc. is testing a new retail-based primary care approach with Walgreens. Through a joint effort, Humana subsidiary Partners in Primary Care (PiPC) will furnish primary care and other services in two retail spaces in the Kansas City, Mo., area beginning this fall.

The “neighborhood” approach will feature “health navigation” through which Humana representatives will be available in the stores to assist seniors in accessing numerous health-related services.

Despite the Walgreens deal involving only two stores, Citi Research securities analyst Ralph Giacobbe observed that it is in line with the “test and observe” strategy around potential interest in a retail model/combination (as opposed to a full-scale transaction such as a sale) that Humana indicated it was following during investor meetings with Citi in June.

Likewise, in a June 19 research note from RBC Capital Markets, LLC, securities analyst George Hill said RBC views the partnership as “consistent with our expectation that Walgreens will continue to pursue partnerships for vertical integration strategies that push into health insurance and primary care.”

Moreover, he suggested that Walgreens will be able to use “a partnership model to offer competitive services to an integrated CVS-Aetna,” referring to CVS Health Corp.’s pending acquisition of Aetna Inc.

Evercore ISI analysts Ross Muken and Michael Newshel noted that “any larger scale retail-MCO programs will take years of investment and depend on influencing patient behavior without backlash, and that the structure would have to solve for how to balance the capital investment and risk of failure on the retailer side with the cost savings generated on the MCO side.”