Retail makes its case, telehealth and voice tech dominate: 6 takeaways from HLTH19

https://www.healthcaredive.com/news/retail-makes-its-case-telehealth-and-voice-tech-dominate-6-takeaways-from/566548/

Headlines at HLTH 2019 included a peek behind the curtain at the secretive healthcare division of tech giant Google from ex-Geisinger CEO David Feinberg, Uber’s newly inked deal with Cerner and a preventive health push by Facebook sparking renewed data privacy concerns.

On the government side, outgoing head of CMS’ innovation center Adam Boehler suggested industry will be pleased with his replacement and CMS Administrator Seema Verma promised further Medicaid deregulation and “humility” in government.

But the four-day conference last week also covered some broader themes, including retail’s presence in the industry, the rise of telehealth and voice tech and the challenges of interoperability. Here are six of the biggest takeaways from Las Vegas.

Retail still defining its role in healthcare

Executives from Walmart and CVS taking to the main stage at HLTH to tout their initiatives.

Walmart’s VP of transformation, Marcus Osborne, talked up the company’s first health superstore in Dallas, Georgia, which opened this fall. The center provide patients with primary care, dental care, vision care and psychiatric and behavioral health counseling, with the goal of providing an integrated healthcare experience in the traditionally underserved area. Lab services and imaging are available on-site, as are nutrition and fitness classes.

“When you give consumers options, they engage more,” Osborne said. “The healthcare system is designed to be complex when it should be simple.”

A primary care visit at Walmart Health Center costs a flat fee of $40. For an adult, getting a dental checkup and cleaning costs $50, and an eye appointment is $45. Therapy services are $1 per minute.

The store pits the Bentonville, Arkansas-based retailer directly against CVS Health, which is expanding its own health-focused clinics, called HealthHUBs, to 13 new markets by the end of next year.

Brick-and-mortar behemoths’ attempts to position themselves as the front door to healthcare are spurred by the increasing push of consumerism in healthcare.

“With the emergence of this retail health consumer, we’ve got to make healthcare more integrated than it’s been for several years now,” CVS CEO Larry Merlo said.

Limits of consumerism

But engagement is notoriously tricky, and consumerism can only take the industry so far. Healthcare startups providing a new way of accessing or managing care, like digital chat startups allowing consumers to talk via text with a remote physician or chronic care management companies, are struggling to establish trust with the consumer.

Hank Schlissberg, president of care manager Vively Health, a subsidiary of DaVita that assumes full risk for its population, compared the sea change in the industry to what’s happened with companies like AirBnB.

“I sleep in someone else’s bed. I shower in their shower. And we’ve convinced ourselves that’s totally normal,” he said. “All I want to do is provide people with free healthcare. And convincing people of that is much harder than we expected.”

Natalie Schneider, VP of Digital Health for Samsung, agreed, telling Healthcare Dive consumers are “routinely irrational” and don’t act in their own best interests. But “we’re seeing policyholders, health plans and others in healthcare not only account for this irrationality, but also capitalize on it” through incentives like providing a reward immediately following a healthy behavior.​

The wearables trend is a key example, experts said. Payers and providers alike are increasingly turning to the tech in an effort to engage consumers in wellness, fitness and preventive care activities. However, the ROI of trackers, whether from Apple Watch, Fitbit, Samsung or others, is still unproven.

“We’ve seen a lot of technologies and they’re often not that smart and very rarely wearable,” Tom Waller, who heads up the R&D lab of athleisure retailer lululemon, said. “We’re still patiently waiting for that perfect contextualization of data that will give us both a physical and emotional insight, and that we can use to augment an existing behavior to nudge someone in the right way.”

“At the end of the day, these patients are consumers, and consumers have been trained over the last 10 years to decide what quality they want, to decide when they want it and how they want to get it,” Robbie Cape, CEO of primary care startup 98point6, said. “Healthcare hasn’t caught up to that.”

Execution could stymie looming interoperability rules

Two rules to halt information blocking from HHS are expected to be finalized any day now. Despite the regulatory pressure, industry is “still a ways from true interoperability,” said Ed Simcox, CTO and acting CIO of HHS, due to a slew of factors like a lack of economic incentive for EHR vendors.

The rules would impose a slate of new requirements on healthcare companies. Payers in federal programs would have to provide their 125 million patients with free electronic access to their personal health data by the end of next year; healthcare companies would have to adopt standardized application programming interfaces allowing their disparate software systems to communicate; and any player found information blocking could be fined up to $1 million per violation.

Google Cloud’s director of global healthcare solutions, Aashima Gupta, warned that although the government might mandate new standards, that doesn’t mean industry will be able or willing to immediately adhere to them.

Additionally, the government is still playing catch-up to technology, and interoperability is no different, Pranay Kapadia, CEO of voice-enabled digital assistant Notable, told Healthcare Dive. The rules are the “right thing to do, and then there’ll be an evolution of it, and then there’ll be another evolution of it.”

​”This problem is much bigger than big tech or government or health systems or innovators,” Gupta said. “It’s an ecosystem problem. No player can do it alone.”

Despite the private sector’s uncertainly, Don Rucker, the head of the Office of the National Coordinator for Health IT, said interoperability had fostered price and business model transparency in every other U.S. industry over the past few decades.

“Healthcare is just about the last one to resist,” Rucker said. “I don’t think that will be much longer.”

Telehealth and voice tech: the belles of the ball

Telehealth was unsurprisingly a big focus at HLTH, with themes touching on expansion to complex care needs, followup visits and chronic care management and barriers like state physician licensure.

It’s an “efficiency mechanism” that can help a lot in areas like primary care, Teladoc COO David Sides told Healthcare Dive.

Voice-enabled tech was another focus of chatter in Las Vegas. The technology, which allows physicians free use of their hands while enabling them to take notes or write a script, for example, is currently experiencing heavy hype from industry and Silicon Valley as a way to streamline the heavy EHR and documentation requirements on physicians.

Talking is an “important element to how people interface with things,” Notable’s Kapadia said. “You have to think of things from a human perspective.”

Suki also announced at HLTH it expanded its relationship with Google’s cloud computing business. The digital assistant’s CEO, Punit Soni, told Healthcare Dive industry could expect to hear about two “very, very large deployment announcements” with health systems in the near future as providers become more comfortable levering the software to cut down documentation time for clinicians.

Solving for social determinants, preventive health

A slew of players rolled out initiatives targeting social determinants of health in Las Vegas.

​Uber Health is now available for providers to schedule non-emergency rides for their patients via Cerner’s EHR platform in a bid to provide better access to transportation for underserved populations. The one-year-old NEMT division of San Francisco-based Uber has roughly 1,000 partnerships across payers, healthcare tech companies and providers such as Boston Medical Center.

“You need to develop a benefit that serves the needs of your distinct population,” Jami Snyder, director of Arizona’s Medicaid and CHIP programs, said. The state recently partnered with ride-hailing company and Uber rival Lyft to provide rides for eligible Medicaid beneficiaries.

Kaiser Permanente rolled out a food insecurity initiative to connect eligible California residents with CalFresh, the state’s supplemental nutrition assistance or food stamp program. The integrated, nonprofit health system plans to reach out via text and mail to more than 600,000 Kaiser Permanente health plan members with a goal of getting 100,000 enrolled in CalFresh by spring 2020.

If the program is successful, Kaiser plans to expand it to the rest of the country, CEO Bernard Tyson, noting “healthcare across the ecosystem of health plays a very small part” in outcomes. “Things like behavior, genetics and where you live has a bigger impact.”​

On the preventive health side, Facebook launched a consumer health tool. Users plug in their age and sex in return for targeted heart, cancer and flu prevention measures, with information supplied by healthcare groups like the American Cancer Society.

The pilot for the $7 billion tech behemoth will be evaluated for six months to a year before being expanded to other preventable conditions to make consumers their “own health advocates,” Freddy Abnousi, Facebook’s head of health research, said. “The lion’s share of health outcomes is driven by social and behavioral variables.”

CVS is similarly working to combat SDOH factors by leveraging its reams of consumer data, Firdaus Bhathena, the retail pharmacy giant’s CDO, told Healthcare Dive. If someone doesn’t pick up their prescription, “there’s a number of ways we can engage with them,” including by text message or speaking to services in the local town, to see if transportation to the pharmacy, a lack of funds or some other issue is stopping the person from receiving the medication they need.

Funding disruption

Much of the industry runs today like non-healthcare companies ran 50 or 60 years ago, according to entrepreneur Mark Cuban.

“For that reason, they’re ripe for disruption,” Cuban said at HLTH.

Investors and startups alike are taking note. Venture capitalists, eager to fund new medical solutions and methods of care delivery, pumped $26.3 billion into more than 1,500 healthcare startups in just the first 10 months of 2018.

Providers looking to invest in new solutions or acquire startups are looking for a relatively mature corporate structure and an alignment with existing priorities in-house, according to Dan Nigrin, SVP and CIO at Boston Children’s Hospital.

“It starts with our organizational strategy,” agreed Rebecca Kaul, VP at the MD Anderson Cancer Center. An attractive startup presents “something that really drives change,” she said. “If you’re pitching a solution that isn’t at a given time part of our strategy, it may not be the right time for us to connect.”

Highmark Health CEO David Holmberg told Healthcare Dive its physicians lead system-wide conversations in what areas need investment. “Ultimately, that’s how you’ll get things to scale.”

Intermountain Healthcare is similarly interested in ways to manage and inject value into its operations. “We’re not interested in point solutions,” Dan Liljenquist, SVP of the Salt Lake City-based nonprofit provider said, adding he deletes and blocks emailed pitches he receives. “We’re interested in technologies that obviate the need for clinical interventions, that help people solve their own problems, and the way to do that is not a point solution but in a systemic, creative way.”

Payers have similar priorities and seek out companies to invest in that could provide value down the road. Cigna Ventures, which recently invested in precision medicine company GNS Healthcare, looks for new tools across the areas of insight and analytics, digital health and retail and all-around care delivery and enablement, for example.

“We’re looking for companies that are innovative and looking to solve important problems,” Tom Richards, global strategy and business development leader at Cigna, told Healthcare Dive, noting most companies start with a more focused solution and then expand.

For example, chronic disease platform Omada Health, which raised $50 million in a 2017 funding round led by Cigna Ventures, started with diabetes, but has since expanded its care management services to hypertension, Type 2 diabetes and behavioral and mental health.

 

 

 

 

 

New Hampshire AG rebuffs Partners acquisition

https://www.modernhealthcare.com/mergers-acquisitions/new-hampshire-ag-rebuffs-partners-acquisition?utm_source=modern-healthcare-daily-dose-tuesday&utm_medium=email&utm_campaign=20190924&utm_content=article6-readmore

New Hampshire officials opposed Partners HealthCare‘s continued expansion into the state, claiming that the health system’s proposed acquisition of Exeter Health Resources would diminish competition.

Partners’ Massachusetts General Hospital’s plans to acquire Exeter (N.H.) Health Resources, an independent system that includes a hospital, a physician group, home health and hospice agency, and a real estate management subsidiary. Exeter would merge with Dover, N.H.-based Wentworth-Douglass Hospital, which Mass General acquired in 2017, to create NewCo, a New Hampshire not-for-profit entity. NewCo was also the name used for the first iteration of what is now Beth Israel Lahey Health.

After a year-long review by the Consumer Protection and Antitrust Bureau, Attorney General Gordon MacDonald said the combination would violate state law requiring free and fair competition.

“New Hampshire patients already pay some of the highest prices for health care in the country,” he said in prepared remarks. “Based on our investigation, we have concluded that this transaction implicates our laws protecting free and fair competition and therefore threatens even higher health care costs to be borne by New Hampshire consumers.”

The AG’s Charitable Trusts Unit report followed a notice of intent to take civil enforcement action issued on Sept. 13 by the Consumer Protection and Antitrust Bureau.

Partners officials said they look to continue talks with the attorney general to allay antitrust concerns.

“We remain fully committed to seeing this transaction through and are confident that the Attorney General’s Office will ultimately determine that our affiliation will pass antitrust review based on the thorough review that the expert economists have completed on this proposal,” Dr. Peter Slavin, Massachusetts General Hospital president, said in prepared remarks.

In a public forum last year, Exeter officials said that the new regional health system would bolster their electronic health record capabilities and streamline care, offer scale to grow services, and enhance care quality.

Economists counter that hospital consolidation often inflates prices thanks to reduced competition and that so-called efficiencies don’t often reach expectations.

Under the deal, NewCo would be substituted as the sole member of Exeter Health Resources and Wentworth-Douglass Hospital. Mass General would become the sole member of NewCo, giving it significant control over the governance and operations, which is a matter of “considerable interest to this state,” the report said.

Exeter Hospital, a 100-bed hospital with outpatient programs in surgery, radiation, oncology and cardiac catheterization, and Wentworth-Douglass Hospital are within 18 miles of each other and provide similar inpatient and outpatient services, according to the report. Both Exeter and Wentworth-Douglass own a significant number of physician practices, such as Exeter’s 140-doctor group that offers primary care, pediatrics, orthopedics, gastroenterology and other specialties. Within the seacoast region, there are a limited number of healthcare entities of size and breadth similar to Exeter and Wentworth-Douglass that also own physician practices, the report said.

“Should EHR, WDH and MGH take further steps to consummate the transaction despite the objection set forth in this report, the Charitable Trusts Unit will bring judicial proceedings and seek injunctive relief,” New Hampshire authorities said in the report.

Partners has continued to try to expand into neighboring states, with varying success. The Boston-based integrated health system was targeting an entry point into the Rhode Island market through a deal with Care New England, adding Lifespan to the proposed talks early last year. It later dropped Lifespan and ultimately nixed the entire deal in June.

Establishing a presence in Rhode Island was an emphasis of Dr. David Torchiana, former president and CEO of Partners. Torchiana retired in April, making way for Dr. Anne Klibanski, who took on the interim CEO role in February and officially became the system’s first female chief executive in June.

Partners has been criticized for its high prices stemming from higher than average inpatient and academic medical center utilization. Beth Israel Deaconess Medical Center and Lahey Health said that a significant driver behind their merger late last year was to keep Partners in check.

Partners reported operating income of $309.9 million on operating revenue of $13.31 billion in 2018, up from $52.6 million in operating income on $13.37 billion of operating revenue in 2017, according to Modern Healthcare’s Health System Financials database.

Through three quarters of its fiscal 2019, Partners reported operating income of $450 million on total operating revenue of to $10.4 billion. That was up from $275 million of operating income on $10 billion of total operating revenue over the same period the year prior.

 

 

 

Hospital Giant Sutter Health Faces Legal Reckoning Over Medical Pricing

Hospital Giant Sutter Health Faces Legal Reckoning Over Medical Pricing

Economists and researchers long have blamed the high cost of health care in Northern California on the giant medical systems that have gobbled up hospitals and physician practices — most notably Sutter Health, a nonprofit chain with 24 hospitals, 34 surgery centers and 5,000 physicians across the region.

Now, those arguments will have their day in court: A long-awaited class-action lawsuit against Sutter is set to open Sept. 23 in San Francisco Superior Court.

The hospital giant, with $13 billion in operating revenue in 2018, stands accused of violating California’s antitrust laws by leveraging its market power to drive out competition and overcharge patients. Health care costs in Northern California, where Sutter is dominant, are 20% to 30% higher than in Southern California, even after adjusting for cost of living, according to a 2018 study from the Nicholas C. Petris Center at the University of California-Berkeley cited in the complaint.

The case was initiated in 2014 by self-funded employers and union trusts that pay for worker health care. It since has been joined with a similar case brought last year by California Attorney General Xavier Becerra. The plaintiffs seek up to $900 million in damages for overpayments that they attribute to Sutter; under California’s antitrust law, the award can be tripled, leaving Sutter liable for up to $2.7 billion.

The case is being followed closely by industry leaders and academics alike.

“This case could be huge. It could be existential,” said Glenn Melnick, a health care economist at the University of Southern California. If the case is successful, he predicted, health care prices could drop significantly in Northern California. It also could have a “chilling effect” nationally for large health systems that have adopted similar negotiating tactics, he said.

The case already has proved controversial: In November 2017, San Francisco County Superior Court Judge Curtis E.A. Karnow sanctioned Sutter after finding it had intentionally destroyed 192 boxes of documents sought by plaintiffs, “knowing that the evidence was relevant to antitrust issues.” He wrote: “There is no good explanation for the specific and unusual destruction here.”

Antitrust enforcement is more commonly within the purview of the Federal Trade Commission and U.S. Department of Justice. “One of the reasons we have such a big problem [with consolidation] is that they’ve done very little. Enforcement has been very weak,” said Richard Scheffler, director of the Nicholas C. Petris Center. From 2010 to 2017, there were more than 800 hospital mergers, and the federal government has challenged just a handful.

“We feel very confident,” said Richard Grossman, lead counsel for the plaintiffs. “Sutter has been able to elevate their prices above market to the tune of many hundreds of millions of dollars.”

Or, as Attorney General Becerra put it at a news conference unveiling his 2018 lawsuit: “This is a big ‘F’ deal.”

Sutter vigorously denies the allegations, saying its large, integrated health system offers tangible benefits for patients, including more consistent high-quality care. Sutter also disputes that its prices are higher than other major health care providers in California, saying its internal analyses tell a different story.

“This lawsuit irresponsibly targets Sutter’s integrated system of hospitals, clinics, urgent care centers and affiliated doctors serving millions of patients throughout Northern California,” spokeswoman Amy Thoma Tan wrote in an emailed statement. “While insurance companies want to sell narrow networks to employers, integrated networks like Sutter’s benefit patient care and experience, which leads to greater patient choice and reduces surprise out-of-network bills to our patients.”

There’s no dispute that for years Sutter has worked aggressively to buy up hospitals and doctor practices in communities throughout Northern California. At issue in the case is how it has used that market dominance.

According to the lawsuit, Sutter has exploited its market power by using an “all-or-none” approach to contracting with insurance companies. The tactic — known as the “Sutter Model” — involves sitting down at the negotiating table with a demand: If an insurer wants to include any one of the Sutter hospitals or clinics in its network, it must include all of them. In Sutter’s case, several of its 24 hospitals are “must-haves,” meaning it would be almost impossible for an insurer to sell an insurance plan in a given community without including those facilities in the network.

“All-or-none” contracting allows hospital systems to demand higher prices from an insurer with little choice but to acquiesce, even if it might be cheaper to exclude some of the system’s hospitals that are more expensive than a competitor’s. Those higher prices trickle down to consumers in the form of higher premiums.

The California Hospital Association contends such negotiations are crucial for hospitals struggling financially. “It can be a great benefit to small hospitals and rural hospitals that don’t have a lot of bargaining power to have a larger group that can negotiate on their behalf,” said Jackie Garman, the CHA’s legal counsel.

Sutter also is accused of preventing insurers and employers from tiering benefits, a technique used to steer patients to more cost-effective options. For example, an insurer might charge $100 out-of-pocket for a procedure at a preferred surgery center, but $200 at a more expensive facility. In addition, the lawsuit alleges that for years Sutter restricted insurers from sharing information about its prices with employers and workers, making it nearly impossible to compare prices when selecting a provider.

Altogether, the plaintiffs allege, such tactics are anti-competitive and have allowed Sutter to drive up the cost of care in Northern California.

Hospitals in California and other regions across the country have watched the success of such tactics and taken note. “All the other hospitals want to emulate [Sutter] to get those rates,” said Anthony Wright, executive director of the advocacy group Health Access.

A verdict that finds such tactics illegal would “send a signal to the market that the way to compete is not to be the next Sutter,” said Wright. “You want them to compete instead by providing better quality service at a lower price, not just by who can get bigger and thus leverage a higher price.”

Along with damages, Becerra’s complaint calls for dismantling the Sutter Model. It asks that Sutter be required to negotiate prices separately for each of its hospitals — and prohibit officials at different hospitals from sharing details of their negotiations. While leaving Sutter intact, the approach would give insurers more negotiating room, particularly in communities with competing providers.

Consolidation in the health care industry is likely here to stay: Two-thirds of hospitals across the nation are part of larger medical systems. “It’s very hard to unscramble the egg,” said Melnick.

California legislators have attempted to limit the “all or nothing” contracting terms several times, but the legislation has stalled amid opposition from the hospital industry.

Now the courts will weigh in.

 

 

 

Trial approaching in Sutter Health antitrust case

https://www.modernhealthcare.com/legal/trial-approaching-sutter-health-antitrust-case?utm_source=modern-healthcare-daily-finance&utm_medium=email&utm_campaign=20190923&utm_content=article1-readmore

Spurred in part by the Affordable Care Act, hospitals across the country have merged to form massive medical systems in the belief it would simplify the process for patients.

But a simpler bill doesn’t always guarantee a cheaper bill.

That’s a key issue in an antitrust lawsuit against one of California’s largest hospital systems set to begin Monday.

About 1,500 self-funded health plans have sued Sutter Health, a system that includes 24 hospitals across Northern California. The case has dragged on since 2014, but it picked up steam last year when Attorney General Xavier Becerra filed a similar lawsuit. The cases have been combined and jury selection begins Monday. Opening arguments are scheduled for October.

The lawsuit alleges Sutter Health gobbled up competing medical providers in the region and used its market dominance to set higher prices for insurance plans, which means more expensive insurance premiums for consumers.

Becerra points to a 2018 study that found unadjusted inpatient procedure prices are 70% higher in Northern California than Southern California. The lawsuit notes Sutter Health’s assets were $15.6 billion at the end of 2016, up from $6.4 billion in 2005.

“We never meant for folks to use integration to boost their profits at the expense of consumers,” Becerra said.

It’s rare for antitrust lawsuits of this size to go to trial because the law allows for triple damages — a prospect that often spooks companies into settling outside of court to avoid an unpredictable jury. Health plans in this case are asking for $900 million in damages, meaning Sutter Health could take a nearly $3 billion hit.

Atrium Health, a North Carolina-based hospital system, settled a similar anti-trust lawsuit with the federal government last year. And CHI Franciscan, a health system based in Washington state, also settled similar claims in March that had been brought by the state.

But Sutter Health is fighting the case. The company says the lawsuit is not about its prices, but about insurance companies who want to maximize their own profits. Sutter Health officials insist the company faces fierce competition, vowing to detail in court the expansion of other health systems in the San Francisco Bay Area and the Sacramento Valley.

Four Sutter Health hospitals had operating losses in 2018, totaling $49 million.

“The bottom line is that this lawsuit is designed to skew the healthcare system to the advantage of large insurance companies so they can market inadequate insurance plans to Californians,” said Sutter Health Director of Public Affairs Amy Thoma Tan.

At issue are several of Sutter Health’s contracting policies that Becerra says have allowed the company to “thoroughly immunize itself from price competition.”

One way insurance companies keep costs down is to steer patients to cheaper health care providers through a variety of incentives. Becerra says Sutter Health bans insurance companies from using these incentives, making it harder for patients to use their lower-priced competitors.

Becerra also says Sutter has an “all or nothing” approach to negotiating with insurance companies, requiring them to include all of the company’s hospitals in their provider networks even if it doesn’t make financial sense to do so.

The case was originally filed by a trust of Northern California’s largest unionized grocery companies in 2014. A representative for the trust said it was “unknowingly forced to pay Sutter’s artificially high prices.”

But the company says these contracting practices are designed to protect patients. People often are unable to pick which hospital they go to in a medical emergency, which can lead to surprise bills when they learn a hospital or doctor was not in their network.

Jackie Garman, lawyer for the California Hospital Association, said these contracting practices are standard at a lot of hospitals. If the lawsuit is successful, she said it could “disrupt contracting practices at a lot of other systems.”

But the consequences of not bringing the lawsuit could be greater, Becerra said.

“We are paying every time we allow an anti-competitive behavior to drive the market,” he said.

 

 

 

Walmart tests dentistry and mental care as it moves deeper into primary health

https://www.cnbc.com/2019/08/29/walmart-is-piloting-health-clinic-at-walmart-health-in-georgia.html

GP: Walmart Pharmacy 120912

Key Points
  • Walmart is opening up a new health clinic, called Walmart Health, in Georgia.
  • The company has previously opened clinics inside retail locations in Texas, South Carolina and Georgia.
  • At the new clinic, the company will offer hearing tests, 60-minute counseling sessions and vision tests.

Walmart, the world’s biggest retailer, is moving deeper into the primary care and mental health market, opening a new clinic called Walmart Health in Georgia.

The company recently updated its website with a link to Walmart Health, describing its “newest location in Dallas, GA.” It also went online with the site “Walmarthealth.com,” where patients can set up appointments. Walmart is testing the concept with the initial clinic and could open more in the future, according to people familiar with the matter who asked not to be named because the plans are confidential.

The Dallas location, which is set to open its doors next month, will give patients access to comprehensive and low-cost primary care, including for mental health issues. The clinic is in a separate building next door to a Walmart store to give a sense of privacy for patients.

The website indicates that first appointments are available on Sept. 13, and the company will offer primary care, dental, counseling, labs, X-rays and audiology, among other services. Sean Slovenski, who Walmart recruited from Humana, is leading the clinic efforts, the people familiar said.

Walmart is already one of the largest pharmacy companies in the U.S., offering in-store sections for prescription drugs in almost all of its 4,700 locations across the U.S. The company said health and wellness, which includes pharmacy, clinical and optical services, accounted for about 9%, or $36 billion, of its roughly $332 billion in U.S. sales last fiscal year.

The company hasn’t previously offered mental health services, but it did lease space in one of its Texas stores to a third-party behavioral health company in 2018 because of a shortage of professionals in the region. That experience has helped inform the company’s view of how it can have a bigger impact in the space, the people said.

A Walmart spokesperson confirmed the opening of the clinic.

“Walmart is committed to making healthcare more affordable and accessible for customers in the communities we serve,” the representative said. “The new Walmart Health center in our Dallas, Georgia, store will provide low, transparent pricing for key health services for local customers. We look forward to sharing more details when the facility opens next month.”

Primary care is a newer market for Walmart and puts it in competition with a different set of companies, ranging from large health systems to emerging businesses like One Medical, Circle Medical and Forward. Walmart’s distinct opportunity is that roughly 140 million people visit its stores every week, and it has about 1.5 million U.S. employees spread across cities of all sizes, including in rural areas where there’s a shortage of health-care services.

vs. the new Walmart Health

“I would put this in the broad category of retailers looking for services that give them opportunity for growth,” said Tom Lee, the founder of One Medical and CEO of primary care start-up Galileo Health, in an interview. “In-store concepts have had mixed success and this is an attempt to try something more standalone.” Lee said he wasn’t aware of Walmart’s plans.

Walmart has previously offered what it calls Care Clinics in Texas, South Carolina and Georgia, but these are incorporated into existing retail stores rather than its own site. The cost of an appointment varies from $59 to $99, although the company accepts many of the largest health insurance plans.

The new clinic will have on-site health providers, including nurses, to offer consultations, immunizations and lab tests, people familiar with the matter said. Added services include hearing tests, 60-minute counseling sessions and vision tests.

Amazon, Walmart’s rival, has also been making a bigger push into health. CNBC previously reported the company has been opening primary care clinics at its main office in Seattle. It acquired online pharmacy PillPack for about $750 million in 2018 in a bid to go deeper into prescription medication and take on companies like CVS and Walgreens.

Walmart has a culture of piloting new ideas in smaller settings, including testing delivering groceries inside of customers’ homes and experimenting with artificial intelligence at a Neighborhood Market store in Levittown, New York. If it can prove the model works, the company typically looks to scale the offerings across its locations.

 

 

 

The fight over the future of our most expensive drugs

https://www.axios.com/the-fight-over-the-future-of-our-most-expensive-drugs-034b6e4d-b596-4f48-9b53-6e2c267e01e3.html

An illustration of a hammer and a concrete pill.

The market designed to create competition for biologics — typically our most expensive drugs — has been slow to take off, but some experts say that even its best-case scenario doesn’t do enough to lower drug prices.

Why it matters: While wonks debate the future of biosimilars in policy journals and on editorial pages, the argument is reflected in the political divide over whether enhanced drug competition or price regulation is the best way to address drug prices.

The big picture: Congress created the pathway for biosimilars to come to market knowing that they’d look different than small-molecule generics, and even their most ardent supporters say biosimilars will never achieve the steep discounts that generics do.

  • That’s because biosimilars are much harder to make than normal generics, meaning that drug companies have to charge enough to make their endeavor worthwhile.
  • Nevertheless, the Biosimilars Council says on its website that biosimilars could lead to more than $54 billion in savings over the next decade. A recent analysis by the Pacific Research Institute found that biosimilars could save $7.2 billion a year under the most optimistic modeled scenario.

Yes, but: Some experts are arguing that that’s not enough, and that biosimilars aren’t the best way to control biologic prices.

  • Last week, Memorial Sloan Kettering Cancer Center’s Peter Bach and MIT’s Mark Trusheim published an editorial in the Wall Street Journal arguing that biosimilars don’t produce enough savings and that the resources spent developing them would be better used to bring new, innovative drugs to market.
  • Bach and Trusheim proposed that the government instead regulate the price of older biologics after they’ve been on the market for a certain period of time, which they wrote could save around $50 billion a year.

The other side: Former FDA Commissioner Scott Gottlieb wrote an editorial in the WSJ yesterday in response, arguing that Congress should speed up the use and development of biosimilars instead of regulating prices.

  • “Among other dangers, [price regulation] could trigger shortages of the drugs. It would also discourage investment in manufacturing, as few drugmakers would want to produce complex drugs in perpetuity for little profit,” Gottlieb writes.

The bottom line: This argument isn’t just for the academics. The leading Democratic presidential candidates are also arguing for drug price regulation, a major shift left for the party.

  • “Price regulation may be a tough sell in some quarters, but it’s the best way to keep the promise of America’s extraordinary pharmaceutical industry alive,” Bach and Trusheim write.