Late last week, retail giant Walmart announced its plan to acquire national telemedicine provider MeMD, for an undisclosed sum. According to Dr. Cheryl Pegus, Walmart’s executive vice president for health, the acquisition “complements our brick-and-mortar Walmart Health locations”, allowing the company to “expand access and reach consumers where they are”.
MeMD, founded in 2010, provides primary care and mental health services to five million patients nationally. The acquisition extends Walmart’s health delivery capabilities beyond the handful of in-store and store-adjacent clinics it runs, and follows the launch of its own Medicare Advantage-focused broker business, and partnership with Medicare Advantage start-up Clover Health to offer a co-branded insurance product.
Walmart has been climbing the healthcare learning curve for several years, building on its sizeable retail pharmacy business, and seems to have hit on a successful formula in its latest in-person clinic model, which includes primary care, behavioral health, vision, and dental services. The retailer plans to add 22 new clinic locations by the end of this year, and its new telemedicine offering will allow it to expand its virtual reach even further.
The MeMD acquisition alsorepresents a new front in Walmart’s head-to-head competition with Amazon, which launched its own national telemedicine service earlier this year. That service, Amazon Care, is targeted at the employer market, and right on cue, Amazon announced its first customer sale last week—to Precor, a fitness equipment company.
Both retail giants are slowly circling the $3.6T healthcare industry, targeting inefficiencies by deploying their expertise in convenience and consumer engagement.Incumbents beware.
Federally-subsidized childcare centers took care of an estimated 550,000 to 600,000 children while their mothers worked wartime jobs.
When the United States started recruiting women for World War II factory jobs, there was a reluctance to call stay-at-home mothers with young children into the workforce. That changed when the government realized it needed more wartime laborers in its factories. To allow more women to work, the government began subsidizing childcare for the first (and only) time in the nation’s history.
An estimated 550,000 to 600,000 children received care through these facilities, which cost parents around 50 to 75 cents per child, per day (in 2021, that’s less than $12). But like women’s employment in factories, the day care centers were always meant to be a temporary wartime measure. When the war ended, the government encouraged women to leave the factories and care for their children at home. Despite receiving letters and petitions urging the continuation of the childcare programs, the U.S. government stopped funding them in 1946.
Before World War II, organized “day care” didn’t really exist in the United States. The children of middle- and upper-class families might go to private nursery schools for a few hours a day, says Sonya Michel, a professor emerita of history, women’s studies and American studies at the University of Maryland-College Park and author of Children’s Interests/Mothers’ Rights: The Shaping of America’s Child Care Policy. (In German communities, five- and six-year-olds went to half-day Kindergartens.)
For children from poor families whose father had died or couldn’t work, there were day nurseries funded by charitable donations, Michel says. But there were no affordable all-day childcare centers for families in which both parents worked—a situation that was common for low-income families, particularly Black families, and less common for middle- and upper-class families.
The war temporarily changed that. In 1940, the United States passed the Defense Housing and Community Facilities and Services Act, known as the Lanham Act, which gave the Federal Works Agency the authority to fund the construction of houses, schools and other infrastructure for laborers in the growing defense industry. It was not specifically meant to fund childcare, but in late 1942, the government used it to fund temporary day care centers for the children of mothers working wartime jobs.
Communities had to apply for funding to set up day care centers; once they did, there was very little federal involvement. Local organizers structured childcare centers around a community’s needs. Many offered care at odd hours to accommodate the schedules of women who had to work early in the morning or late at night. They also provided up to three meals a day for children, with some offering prepared meals for mothers to take with them when they picked up their kids.
“The ones that we often hear about were the ‘model’ day nurseries that were set up at airplane factories [on the West coast],” says Michel. “Those were ones where the federal funding came very quickly, and some of the leading voices in the early childhood education movement…became quickly involved in setting [them] up,” she says.
For these centers, organizers enlisted architects to build attractive buildings that would cater to the needs of childcare, specifically. “There was a lot of publicity about those, but those were unusual. Most of the childcare centers were kind of makeshift. They were set up in church basements or garages.”
Though the quality of care varied by center, there hasn’t been much study of how this quality related to children’s race (in the Jim Crow South, where schools and recreational facilities were segregated, childcare centers were likely segregated too).At the same time, the United States was debuting subsidized childcare, it was also incarcerating Japanese American families in internment camps. So although these childcare facilities were groundbreaking, they didn’t serve all children.
Subsidized Childcare Ends When War Ends
Ruth Pease opened the Little Red School House in 1945 in response to the country’s request for help in meeting the child care needs of the post-war community.
When the World War II childcare centers first opened, many women were reluctant to hand their children over to them. According to Chris M. Herbst, a professor of public affairs at Arizona State University who has written about these programs in the Journal of Labor Economics, a lot of these women ended up having positive experiences.
“A couple of childcare programs in California surveyed the mothers of the kids in childcare as they were leaving childcare programs,” he says. “Although they were initially skeptical of this government-run childcare program and were worried about the developmental effects on their kids, the exit interviews revealed very, very high levels of parental satisfaction with the childcare programs.”
As the war ended in August 1945, the Federal Works Agency announced it would stop funding childcare as soon as possible. Parents responded by sending the agency 1,155 letters, 318 wires, 794 postcards and petitions with 3,647 signatures urging the government to keep them open. In response, the U.S. government provided additional funding for childcare through February 1946. After that, it was over.
Lobbying for national childcare gained momentum in the 1960s and ‘70s, a period when many of its advocates may have themselves gone to World War II day care as kids. In 1971, Congress passed the Comprehensive Child Development Act, which would have established nationally-funded, locally-administered childcare centers.
This was during the Cold War, a time when anti-childcare activists pointed to the fact that the Soviet Union funded childcare as an argument for why the United States shouldn’t.President Richard Nixon vetoed the bill,arguing that it would “commit the vast moral authority of the National Government to the side of communal approaches to child rearing over against the family-centered approach.”
In this case, “family-centered” meant the mother should care for the children at home while the father worked outside of it—regardless of whether this was something the parents could afford or desired to do. World War II remains the only time in U.S. history that the country came close to instituting universal childcare.
A recently retired health system CEO pointed us to a working paper from the National Bureau of Economic Research, which indicates that leading an organization through an industry downturn takes a year and a half off a CEO’s lifespan.
It’s not surprising, he said, thatgiven the stress of the past year, we will face a big wave of retirements of tenured health system CEOs as their organizations exit the COVID crisis. Part of the turnover is generational, with many Baby Boomers nearing retirement age, and some having delayed their exits to mitigate disruption during the pandemic.
As they look toward the next few years and decide when to exit, many are also contemplating their legacies. One shared, “COVID was enormously challenging, but we are coming out of it with great pride, and a sense of accomplishment that we did things we never thought possible.
Do I want to leave on that note, or after three more years of cost cutting?” All agreed that a different skill set will be required for the next generation of leaders. The next-generation CEOs must build diverse teams capable of succeeding in a disruptive marketplace, and think differently about the role of the health system.
“I’m glad I’m retiring soon,” one executive noted. “I’m not sure I have the experience to face what’s coming. You won’t succeed by just being better at running the old playbook.” Compelling candidates exist in many systems, and assessing who performed best under the “stress test” of COVID should prove a helpful way to identify them.
Uber Health is partnering with e-prescription startup ScriptDrop in a deal expanding the ride-hailing giant’s prescription delivery footprint from a few cities to dozens of U.S. states.
Uber first forayed into medication delivery in several metro areas in August through a deal with digital delivery marketplace NimbleRx, as the pandemic caused a surge in patient demand for the service.
With this latest deal, Uber’s hundreds of thousands of drivers will be accessible to pharmacies using ScriptDrop in 37 states across the U.S. ScriptDrop, a third-party tech platform connecting patients and pharmacies with couriers nationwide, will pay Uber for the cost of each delivery.
But the San Francisco-based company is also hoping the crowded but lucrative at-home prescription drug delivery market will be profitable, following mounting losses last year as the coronavirus pandemic pummeled ride-hailing companies.
Growth in Uber’s delivery business has outpaced plummeting ridesharing revenue during COVID-19. In fourth quarter earnings released February, Uber’s gross bookings in its mobility business were down 50% year over year, while gross bookings in its delivery segment were up 130%.
This latest deal suggests Uber is doubling down on delivery, banking that demand for at-home drug delivery remains high beyond COVID-19.
ScriptDrop integrates with a pharmacy’s software system to provide same-day shipping medication delivery options, and also has a consumer-facing portal for drop-offs. As of today, Uber is integrated with ScriptDrop via an application programming interface, and will become the default option for select pharmacies depending on location and driver availability, the companies said.
ScriptDrop doesn’t share the exact number of U.S. pharmacies working with its platform, but a spokesperson told Healthcare Dive they partner with thousands. ScriptDrop clients include prominent pharmacies like Albertsons, Kmart and Safeway; pharmacy systems such as PDX and a number of courier companies, health systems and insurers.
The partnership is operational in 37 states as of today, including California, Florida, New York and Texas. Uber and ScriptDrop have additional plans for near-term expansion, in some cases in new states in the next couple of weeks, the spokesperson said.
Uber first launched consumer-facing prescription delivery in several U.S. cities through the Uber Eats app, in the partnership with NimbleRx. That’s grown from a pilot in Seattle and Dallas to cities including New York, Miami, Austin and Houston, with more metro areas to come, according to Uber.
Prescription drug delivery companies have reported skyrocketing utilization during COVID-19. Columbus, Ohio-based ScriptDrop has said delivery volume jumped 363% from February to April last year, while revenue tripled between October 2019 and October 2020. The startup announced a $15 million funding round in October to drive growth, bringing its total funding to $27 million since launching in 2017.
Partially as a result of COVID-19 tailwinds, the prescription tech sector, which includes e-prescription vendors like NimbleRx and ScriptDrop, is expected to grow at a compound annual growth rate of 16%, the quickest of the enterprise health and wellness segments, according to a February report from Pitchbook.
Despite consumer demand for at-home prescription delivery, it’s a crowded market. Most major pharmacies, including CVS Health and Walgreens, have hustled to build out their delivery networks in the past few years, facing potential disruption from outside entrants, notably Amazon.
Amazon is expanding its virtual care pilot program, Amazon Care, to employees and outside companies nationwide beginning this summer in a major evolution of its telehealth initiative, as the COVID-19 pandemic continues to drive unprecedented demand for virtual care.
Amazon will also offer its on-demand primary care service to other Washington state-based companies and plans to expand its in-person service to Washington, D.C., Baltimore and other cities in the following months, the e-commercebehemoth announced Wednesday.
Amazon Care launched 18 months ago as a pilot program in Washington state offering free telehealth consults and in-home visits for a fee for its employees and their families.
Dive Insight:
The nationwide expansion, and the potential of the e-retailer’s heft and technological know-how leveraged in the medical delivery space, threatens existing telehealth providers and retail giants like CVS Health and Walgreens that maintain their own networks of community health clinics.
Amazon Care has two main components: urgent and primary care telehealth with a nurse or doctor via an app, and in-person care, along with prescription delivery, to the home. The Seattle-based company says it will offer the gamut from preventative care like annual vaccinations, to on-demand urgent care including COVID-19 testing, to services like family planning.
Amazon plans to roll out the virtual care offering for its employees and third party companies nationwide this year, but in-person services will only be available shortly after in Washington state and near its second headquarters in Washington, D.C., and Baltimore, a spokesperson said.
Making Amazon Care available to outside companies puts Amazon in direct competition with virtual care giants like Teladoc, Amwell and Doctor on Demand, which bring in a sizable chuck of their revenue through deals with employer and payer clients.
Amazon is in discussions with a number of outside companies on supplying Amazon Care, the spokesperson said.
It’s unclear what differentiates the virtual care offering alone from other vendors. Most telehealth platforms are available to consumers right now at little to no cost and offer relatively short wait times, though Amazon contends it provides free access to a medical professional in 60 seconds or less and will eventually link telehealth with in-home care across the U.S.
The timing for the broader U.S. rollout couldn’t be better for Amazon, as telehealth has seen exponential growth during the COVID-19 pandemic. As a result of historic consumer demand and investor interest, virtual care giants have spent billions to gobble up market share and build out their suite of services.
The race to offer end-to-end telehealth offerings has resulted in a flurry of recent M&A, the most notable deal being Teladoc’s $18.5 billion acquisition of chronic care manager Livongo last year. In February, Cigna’s health services arm Evernorth also bought vendor MDLive for undisclosed amount. The insurer plans to sell MDLive’s telehealth offerings to third-party clients and offer it to beneficiaries. And just on Tuesday, telemedicine company Doctor on Demand announced plans to merge with clinical navigator Grand Rounds to try and better coordinate virtual care.
Shares in publicly traded telehealth vendors dove following Amazon Care’s announcement Wednesday. As of late morning, Teladoc’s stock had dropped 7.4%, while Amwell was down 6.7%.
But heft doesn’t necessarily translate to disruption in healthcare.Earlier this year, Amazon, J.P. Morgan and Berkshire Hathaway disbanded their venture to lower healthcare costs after three years of stagnancy. One reason was a failure for its initiatives to take precedence at its three separate parent companies, all pursuing their own avenues to cut costs.
Now going at it alone, Amazon has a slew of independent initiatives to reshape the U.S. healthcare industry. The $386 billion company bought and launched its own online pharmacy, PillPack, a few years ago, and also partnered last year with employer health provider Crossover Health to offer employee primary care clinics. Currently, Amazon and Crossover operate clinics in 17 locations across Arizona, California, Kentucky, Michigan and Texas.
However, though Amazon Care does give patients the option to fill prescriptions through Amazon Pharmacy, it operates independently of the other services. It remains to be seen how Amazon Care could tie in with these other businesses, but the answer to that question could have major ramifications for current market leaders.
UnitedHealth Group, both the nation’s largest health insurer and largest employer of physicians, just announced plans to continue to rapidly grow the number of physicians in its Optum division.
This week CEO Dave Wichmann told investors in the company’s fourth quarter earnings call that Optum entered 2021 with over 50,000 employed or affiliated physicians, and expects to add at least 10,000 more across the year.(For context,HCA Healthcare, the largest for-profit US health system, employs or affiliates with roughly 46,000 physicians, and Kaiser Permanente employs about 23,300.) Optum is already making progress toward its ambitious goal with the announcement last week that the company is in talks to acquire Atrius Health, a 715-physician practice in the Boston area.
As was the case with other health plans, United’s health insurance business took an expected hit last quarter due to increased costs from COVID testing and treatment, combined with rebounding healthcare utilization. Optum, however, saw revenue up over 20 percent, which drove much of the company’s overall fourth quarter growth.
Expect United, and other large insurers, flush with record profits from last year, to continue to expand their portfolio of care, digital and analytics assets(see also Optum’s recently announced plan to acquire Change Healthcare for $13B) as they looks to grow integrated insurance and care delivery offerings.
It’s part of what we expect to be a 2021 “land grab” for strategic advantage in healthcare, as providers, health plans, and disruptors look to create comprehensive platforms to secure long-term consumer loyalty.
Haven began informing employees Monday that it will shut down by the end of next month, according to people with direct knowledge of the matter.
Many of the Boston-based firm’s 57 workers are expected to be placed at Amazon, Berkshire Hathaway or JPMorgan Chase as the firms each individually push forward in their efforts, the people said.
One key issue facing Haven was that each of the three founding companies executed their own projects separately with their own employees, obviating the need for the joint venture to begin with, according to the people, who declined to be identified speaking about the matter.
Haven, the joint venture formed by three of America’s most powerful companies to lower costs and improve outcomes in health care, is disbanding after three years, CNBC has learned exclusively.
The company began informing employees Monday that it will shut down by the end of next month, according to people with direct knowledge of the matter.
Many of the Boston-based firm’s 57 workers are expected to be placed at Amazon, Berkshire Hathaway or JPMorgan Chase as the firms each individually push forward in their efforts, and the three companies are still expected to collaborate informally on health-care projects, the people said.
The announcement three years ago that the CEOs of Amazon, Berkshire Hathaway and JPMorgan Chase had teamed up to tackle one of the biggest problems facing corporate America – high and rising costs for employee health care – sent shock waves throughout the world of medicine. Shares of health-care companies tumbled on fears about how the combined might of leaders in technology and finance could wring costs out of the system.
The move to shutter Haven may be a sign of how difficult it is to radically improve American health care, a complicated and entrenched system of doctors, insurers, drugmakers and middlemen that costs the country $3.5 trillion every year. Last year, Berkshire CEO Warren Buffett seemed to indicate as much, saying that were was no guarantee that Haven would succeed in improving health care.
One key issue facing Haven was that while the firm came up with ideas, each of the three founding companies executed their own projects separately with their own employees, obviating the need for the joint venture to begin with, according to the people, who declined to be identified speaking about the matter.
Coming just three years after the initial rush of fanfare about the possibilities for what Haven could accomplish, its closure is a disappointment to some. But insiders claim that it will allow the founding companies to implement ideas from the project on their own, tailoring them to the specific needs of their employees, who are mostly concentrated in different cities.
The move comes after Haven’s CEO, Dr. Atul Gawande, stepped down from day-to-day management of the nonprofit in May, a change that sparked a search for his successor.
Brooke Thurston, a spokeswoman for Haven, confirmed the company’s plans to close and gave this statement:
″The Haven team made good progress exploring a wide range of healthcare solutions, as well as piloting new ways to make primary care easier to access, insurance benefits simpler to understand and easier to use, and prescription drugs more affordable,” Thurston said in an email.
“Moving forward, Amazon, Berkshire Hathaway, and JPMorgan Chase & Co. will leverage these insights and continue to collaborate informally to design programs tailored to address the specific needs of our individual employee populations and locations,” she said.
Better leadership is needed on both ends of the chain, expert says.
The U.S. drug supply chain works well in the middle, but the beginning and end leave much room for improvement, according to Stephen Schondelmeyer, PharmD, PhD, of the University of Minnesota in Minneapolis.
“When a manufacturer imports a drug into the U.S. and sells it to wholesalers and then it goes to group purchasing organizations and through hospital institutional systems, that system works very well,” Schondelmeyer said last week at a public workshop of the National Academies of Science, Engineering, and Medicine’s Committee on Security of Medical Product Supply Chain. “But where problems occur is when the API [active pharmaceutical ingredient] is not being produced or is not available, or is not shipped to the finished dose manufacturer to make enough.” With the current “just in time” manufacturing system, “inventories may only last a month” before supplies dry up, he said.
Leadership on this issue “is certainly needed at the top, but also needed at the end,” said Schondelmeyer, who is co-principal investigator of the Resilient Drug Supply Project at the university’s Center for Infectious Disease Research and Policy.
For example, he said, “I routinely meet with groups of pharmacy directors at major hospital systems. I have heard stories from pharmacy directors … who have said they had remdesivir allocated by their state; it showed up in their hospital’s lab. Nobody in the lab knew what it was or why it arrived, and it sat there for several days before they figured out this was a drug and pharmacy should be managing this … You can run a marathon, but if you don’t finish the last 200 yards, you don’t finish the marathon, and that’s what happened with remdesivir.”
“We need to be predicting not only demand changes but what things can create a supply disruption, because a lot of shortages we have are from supply disruption,” Schondelmeyer said. In the COVID-19 era, this could include unexpected political moves such as export bans — such as those recently put in place in India and the United Kingdom — which could mean that “we could find whole categories of drugs not available in the U.S., and we don’t have the capacity to replace that supply, in the short run at least,” he said.
Pharmaceuticals are a very unique market, he added. “We established a pharmaceutical market based on monopolies when drugs first come on the market, via intellectual property, and even later on, when you’re down to two or three generics they function like an oligopoly. We have a marketplace that has extreme asymmetries of information, where people selling a drug know a lot more than people buying the drug. We have to establish an infrastructure to understand the pharmaceutical market and the flow of products so we can correct the market when it’s not working.”
“Our current system of fixing drug shortages is a ‘fail and fix’ system,” he said. The list of shortages “is a list of products that have already failed. I think we should have a system that has supply chain maps that identify critical stages — even pre-API — that can suggest where we might have a failure, and do something before the failure occurs. I suggest we move from ‘fail and fix’ to ‘predict and prevent.'”
Schondelmeyer said he and his colleagues are trying to build such supply chain maps, “but really the government should be doing that … I don’t fault the FDA; the FDA may or may not be the right place to do that.” But more agencies and other players need to be involved because “no one player in the market can solve this problem alone.”
Schondelmeyer displayed percentages of various drug types that were in shortage. Among 156 “critical acute care drugs” — those that must be used within hours or days of an illness’s onset to avoid serious outcomes or death — the FDA found 25.6% were in shortage, while the American Society of Hospital Pharmacists (ASHP) found that 41.7% of them were in shortage, “and this was even before COVID-19,” he said. Among a list of 40 “critical COVID-19 drugs,” the FDA has listed 45% of them as being in shortage, while the ASHP rated 75% as being in shortage. “Most were in short supply even before COVID-19 hit,” he added. “These are alarming levels of shortage and they have persisted.”
Many people suggest that the supply chain problem can be solved by moving manufacturing for particular drug products from overseas to a U.S. plant, but that doesn’t quite solve the problem, said Schondelmeyer. “If we manufactured our entire supply of drugs in the U.S., it doesn’t solve the problem if you put all the manufacturing in one facility and it gets wiped out by a hurricane,” he said, recalling what happened when a hurricane hit Puerto Rico, the home of several medical product manufacturers. “Hospitals were scrambling to get things like normal saline. So simply bringing production back to the U.S. but concentrating it in one place doesn’t solve the problem — it just moves the problem.”
Khatereh Calleja, president and CEO of the Healthcare Supply Chain Association, agreed. “We’ve got to focus on this very issue of geographic diversity,” Calleja said. “Otherwise we’re creating a risk when we create that concentration.”
When people are discussing the supply chain, having a common language among institutions is also important, said Chris Liu, director of enterprise services for the state of Washington, “In hospitals, ‘conservation’ of PPE [personal protective equipment] means something different at every hospital you go to,” he said.
Another thing that needs to be taken on is the vulnerability of drug precursors, said James Lawler, director of international programs and innovation at the University of Nebraska’s Global Center for Health Security. “It’s one thing if the plant that makes the final small-molecule antibiotic … is in the U.S., but if all the precursor chemicals they require to synthesize that product come from overseas, you haven’t necessarily fixed your supply chain vulnerability.”
Sam’s Club partnered with primary care telehealth provider 98point6 to offer members virtual visits.
Seven details:
1. Sam’s Club now offers members access to telehealth visits through a text-based app run by 98point6.
2. Members can purchase a $20 quarterly subscription for the first three months; the regular sign-up fee is $30 per person. After the first three months, members pay $33.50 every three months.
3. The subscription gives members unlimited telehealth visits for $1 per visit. The service has board-certified physicians available 24 hours per day, seven days a week.
4. Members can also subscribe for pediatric care.
5. Physicians can diagnose and treat 400 conditions including cold and flu-like symptoms as well as allergies. They can also monitor chronic conditions including diabetes, depression and anxiety.
6. Members can use the app to obtain prescriptions and lab orders as well.
7. Sam’s Club has around 600 stores in the U.S. and Puerto Rico and millions of members.
“Offering access to telemedicine was on our roadmap in the pre-COVID world, but the current environment expedited the need for this service to be easily accessible, readily available and most of all, affordable,” said John McDowell, vice president of pharmacy operations and divisional merchandise at Sam’s Club. “Through providing access to the 98point6 app in a pilot, we quickly realized that our members were eager to have mobile telehealth options and we wanted to provide this healthcare solution to all of our members as a standalone option.”
HENRY KOTULA 