Here’s what Kroger stands to gain from its new partnership with Myriad Genetics (KR)

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Grocery store chain Kroger announced it’s teaming up with Salt Lake City-based genetic testing company Myriad Genetics to bring the company’s GeneSight test to select members of Kroger’s employee health plan, per MedCity News.

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Myriad’s GeneSight test screens an individual for genetic markers that would indicate a more favorable response to certain behavioral health medications. The pilot program will be available at nearly 500 Kroger pharmacies to Health Plan members who’ve been unsuccessfully treated with one or more antidepressant medications.

Here’s what it means: Kroger is experimenting with Myriad’s genetic screening for Health Plan members to reduce the cost of providing health coverage to its massive workforce.

Kroger is struggling to secure its financial footing — and claims inefficiencies in its health plan are part of the problem. The grocery giant employed over 450,000 people as of February 2019, making it one of the largest private employers in the US, and in its Q1 2019 earnings call, Kroger CFO J. Michael Schlotman highlighted the costs of providing coverage for such a large workforce as hurting the company’s bottom line, saying, "Our financial results continue to be pressured by inefficient health care and pension costs."

And in a press release, Kroger Health President Colleen Lindholz called depression — which affects over 17 million people in the US — the No. 1 cause of disability and lost productivity in the country. Lindholz also claims only 40% of people reach depression remission after their first attempted medication. If Kroger can use GeneSight to match employees with the treatment most genetically likely to produce positive results, it could see valuable savings thanks to a more rapid and efficient treatment process.

The bigger picture: Kroger is looking to expand its healthcare offerings to consumers as well, presenting a holistic view of health that emphasizes what the company knows best — groceries.

Genetic screening, like what’s offered by Myriad, isn’t the only way that Kroger is looking to improve health outcomes. It’s also interested in disease prevention and management, for example.

Lindholz said that her goal as president of Kroger Health is to decrease the number of prescriptions filled for each person at Kroger pharmacies, and to instead put an emphasis on the idea of "food as medicine": For example, the grocery giant is working with population care management company AssureCare to develop an IT framework that would give patients a more comprehensive picture of their health by allowing them to combine purchasing and nutritional data from their Kroger loyalty card with their prescription info and medical records.

I (Zach) think that a growing interest in social determinants of health (SDOH) among insurers offers a big opportunity for Kroger to diversify revenue streams through healthy food delivery. Given insurers’ recent interest in addressing SDOH — or how issues like a lack of access to healthy food can affect clinical outcomes — now is an ideal moment for Kroger to consider how delivering fresh produce could be a reimbursable healthcare solution.

With everyone from Blue Cross Blue Shield to Lyft exploring how to treat food insecurity, Kroger could only benefit from pushing its way into the conversation.

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