Category Archives: Primary Care Strategy

The Misadventures of Primary Care

Posted on by • Posted in Amazon Care, Amazon Clinic, Amazon Pharmacy, Amazonification of Healthcare, CVS Health, Health System, Hospital, Hospital Industry, Primary Care, Primary Care Delivery Model, Primary Care Strategy, Primary Care Workforce, Private Equity, Walgreens, Walmart • Leave a comment

https://www.kaufmanhall.com/insights/thoughts-ken-kaufman/misadventures-primary-care

Innovation in the American economy over the past 30 years has been nothing short of stunning—one remarkable technological advance after another. Industry by industry and product by product, corporate innovation has profoundly changed the way we navigate our economic and consumer lives. From this context of technological and innovative change came the corporate belief that healthcare could be “significantly improved” through the same application of aggressive corporate strategy and innovation.

So along came Walmart, Walgreens, CVS, and Amazon with all the resources in the world and with the best intentions to contemporize primary care.

The goals of all this were front and center: change the definition of the healthcare gatekeeper, lower costs, improve quality, and create a much more consumer-friendly care experience. Yet here we see that American business has proven—once again—that the best intentions, the smartest ideas, and a lot of money are still no guarantee of commercial success. How quickly the corporate retail re-invention of primary care all came apart.

Between 2017 and 2022, retail clinic claims grew 200%, spiking particularly during the pandemic, according to Healthcare Finance. And yet now, Walmart has abandoned its primary care strategy, Walgreens is pulling back significantly—even after announcing significant expansion plans as little as a year ago—and CVS is facing uncertainty after a leadership shakeup.

Under corporate leadership and strategy, primary care has become a catalog of woes. Let’s unpack that catalog.

Walmart opened its first health center in 2019, offering a range of basic services with prices posted. At first, it focused on patients who could pay cash, but eventually evolved to accept a range of insurance plans. Walmart brought a level of strategic aggression to its primary care initiative by announcing in 2023 it would nearly double the number of clinics it operated. But in an abrupt about face, the megaretailer shuttered all 51 primary care locations in April, citing an unsustainable business model with an inability to maximize revenue and adequately control expenses.

Walgreens, on the other hand, opted to invest in existing providers. In 2020 and 2021, Walgreens spent $6.2 billion on the primary care clinic chain VillageMD, establishing it as the majority owner. In 2022, Walgreens sunk another $3.5 billion, through a mix of debt and equity, into VillageMD’s $8.9 billion acquisition of Summit Health. Walgreens, like Walmart, suffered for its primary care investments. The company was forced to take a $5.8 billion write-down on Village MD in the second quarter of this year.

During an October 15 earnings call, Walgreens CEO Tim Wentworth said the company “is reorienting to its legacy strength as a retail pharmacy-led company,” according to the Wall Street Journal. “We are in the early stages of a turnaround that will take time.” And that comment came with the potential closure of 1,200 Walgreens retail locations, following on the heels of 160 primary care clinic closures earlier this year.

CVS, too, has not been immune to primary care turbulence, as CVS Health CEO Karen Lynch was forced to step down last month after presiding over an expansion of healthcare clinics but then closing dozens of them in California and New England. CVS’s strategic approach revolved around its $10.6 billion acquisition of Oak Street Health in 2023 and its intention to expand primary care in 1,100 MinuteClinics. That strategy now seems to be up in the air with the departure of Ms. Lynch. The CVS board is now suggesting an approach that may involve a spinoff of its insurance and pharmacy benefits manager units, Aetna and Caremark.

Amazon, however, at the moment shows no signs of abandoning its foray into primary care. Rather than focusing its efforts on solely brick-and-mortar locations, Amazon organized its primary care strategy around the 2023 $3.9 billion acquisition of One Medical, a concierge-style service designed to facilitate both in-person and virtual visits. While Amazon’s primary care strategy remains somewhat opaque, it seems to revolve around partnering with employers and health systems to cultivate primary care patient loyalty through a membership program that builds on the Amazon Prime brand.

Each company took a slightly different approach to primary care, but all four planned to leverage their exceptional size to achieve profitability.

Interestingly, scale has not been sufficient to solve the challenges of primary care. American Medical Association President Bruce A. Scott wrote recently: “If retail giants can’t make today’s care delivery model work financially, how on earth can physicians in private practice?” It’s no wonder the ongoing shortage of about 20,000 primary care physicians is expected to persist. A recent AAMC report found that by 2036, that number could double.

Primary care has been unsuccessful as a transactional business; retailers sell goods at a set price and send customers on their way. In healthcare, payment models are nowhere near as straightforward. Patients, particularly in areas where access to care is limited, may have continuous, rather than episodic, needs. All of this complexity has seemed to add up to higher costs and lower margins. Primary care seems to require a much more complex business model, one robust enough to remain patient as that business model experiments with various approaches or is vast enough to offset losses with other lines of revenue.

So where does all of the above lead us? Are there any useful conclusions or lessons to be learned? Maybe so.

  1. Primary care is an essential component of any hospital system of care. Done right, it acts as both an important gatekeeper and as a trusting component of the continuity of healthcare service.
  2. At the moment, there is not enough primary care to meet the demand. Stories abound of patients whose longtime primary care physicians retire and said physicians cannot be replaced without a great effort—or often not at all.
  3. Right now, the economics of primary care don’t work as a standalone service. Many have tried and—regardless of whether they were big or small, for profit or not-for-profit—this essential patient-centered service can only operate when subsidized by a larger enterprise. Walmart, Walgreens, and CVS have all tired of those subsidies.
  4. The overall healthcare system and its quality of care and delivery is significantly damaged by the current state of primary care. Too many patients receive delayed diagnosis and treatment and slow or little necessary follow-up. Patients that should be seen in the office are instead funneled to the emergency room. Care, of course, remains well-intentioned but often is instead inconsistent and chaotic. Conditions that might have been deftly managed instead become chronic.
  5. All this leads to the importance of not giving up on primary care. Patients prefer to be seen in the primary care ecosystem. They tend to trust that level of care and attention. Patients also prefer to be seen in-person when they are feeling particularly poorly, and they appreciate prompt answers about concerning health issues. What this all suggests is that we are at a moment when hospitals need to double down on the primary care dilemma. Primary care needs to be examined as an essential component of the overall enterprise-wide strategic plan both clinically and—especially—financially.

Corporate America, with all of its economic power and resources and scale, has found primary care to be a confounding and, so far, unsuccessful business model. So, after all of the recent noise and promises and slide decks, the problem and promise of primary care is back in the mission-driven hands of America’s not-for-profit hospitals—exactly where it should have been all along.

Walmart Health’s Demise is Emblematic of the Nation’s Primary Care Conundrum

Posted on by • Posted in Cost Management, Cost Reduction, Health Insurance Industry, Health System, Primary Care, Primary Care Delivery Model, Primary Care Strategy, Private Equity, Retail Clinic, Retail Healthcare, Walmart, Whole-Person Health • Leave a comment
Walmart Health’s Demise is Emblematic of the Nation’s Primary Care Conundrum

Walmart’s announcement on April 30 that it was pulling the plug on Walmart Health stunned the healthcare ecosystem. [1] Few saw it coming.

Launched amid much fanfare in 2019, Walmart Health has operated 51 health centers in five states, with a robust virtual care platform. Walmart’s news release noted that “the challenging reimbursement environment and escalating operating costs create a lack of profitability that make the care business unsustainable for us at this time.” Despite its legendary supply-chain capabilities, expansive market presence and sizable consumer demand for affordable primary care services, Walmart couldn’t make its business model work in healthcare.

Just two weeks earlier with much less fanfare, and in stark contrast to Walmart, the big health insurer Elevance announced it was doubling-down on primary care. On April 15, Elevance issued a news release detailing a new strategic partnership with the private-equity firm Clayton, Dubilier & Rice (CD&R) to “accelerate innovation in primary care delivery, enhance the healthcare experience and improve health outcomes.” [2]

What gives? Why is Elevance expanding its primary care footprint when the retail behemoth Walmart believes investing in primary care is unprofitable? The answer lies at the heart of the debate over the future of U.S. healthcare. As a nation, the United States overinvests in healthcare delivery while underinvesting in preventive care and health promotion.

Enlightened healthcare companies, like Elevance, are attacking this imbalance aggressively.

Elevance isn’t alone. Other large health insurers — including UnitedHealthcare, CVS/Aetna and Humana — and some large health systems (e.g., AdventHealth, Corewell Health and Intermountain Healthcare) are investing in primary care services to support what I refer to as 3D-WPH, shorthand for “democratized and decentralized distribution of whole-person health.”

3D-WPH is the disruptive innovation that is rewiring U.S. healthcare to improve outcomes, lower costs, personalize care delivery and promote community wellbeing. It is an unstoppable force.

Transactional Versus Integrated Primary Care

Across multiple retail product and service categories — including groceries, clothing, electronics, financial services, generic drugs and vision care — Walmart applies ruthless efficiency management to increase consumer selection and lower prices. Consistent with the company’s mission of helping its customers to “save money and live better,”

Walmart Health provided routine, standalone primary care services at low, transparent prices. Despite scale and superior logistics, Walmart could not deliver these routine care services profitably.

Here’s the problem with applying Walmart’s retailing expertise to healthcare:

While exceptional primary care services are rarely profitable in their own right, they can reduce total care costs by limiting the need for subsequent acute care services. Preventive care works. Companies that invest in primary care can benefit by reducing total cost of care.

Unfortunately, few providers and payers practice this integrated approach to care delivery. Most providers rely on their primary care networks to refer patients for profitable specialty care services. Most payers use their primary care networks to deny access to these same specialty care services.

This competition between using primary care networks as referral and denial machines dramatically increases the intermediary costs of U.S. healthcare delivery. Patients get lost as these titanic payer-provider battles unfold, even as costs continue to rise, and health status continues to decline.

Whole-Person Health Works

A growing number of payers and providers, however, are recalibrating their business models to lower total care costs by integrating primary care services into a whole-person health delivery model.

In its news release, Elevance described its strategic partnership with CD&R as follows:

The strategic partnership’s advanced primary care models take a whole-health approach to address the physical, social and behavioral health of every person. The foundation of the new advanced primary care offering will be stronger patient-provider relationships supported by data-driven insights, care coordination and referral management, and integrated health coaching. It will also leverage realigned incentives through value-based care agreements that enable care providers, assist individuals in leading healthier lives, and make care more affordable.

“We know that when primary care providers are resourced and empowered, they guide consumers through some of life’s most vulnerable moments, while helping people to take control of their own health,” said Bryony Winn, president of health solutions at Elevance Health, in the news release. “By bringing a new model of advanced primary care to markets across the country, our partnership with CD&R will create a win-win for consumers and care providers alike.”

Whole health personalizes and integrates care delivery. I would suggest that transactional and fragmented primary care service provision cannot compete with 3D-WPH.

For all its strengths, Walmart Health is not positioned to advance whole-person health. Primary care service provision without connection to whole-person health is a recipe for financial disaster. Walmart Health’s demise confirms this market reality.

Moreover, whole-person health is not rocket science. The Veterans Health Administration (VA) has practiced 3D-WPH for more than 15 years. [3] It achieves better outcomes at two-thirds the per capita cost of Medicare with a much sicker population. [4]

Countries with nationalized health systems practice whole-person health expansively. With one-third the per capita income and one-fifth the per capita healthcare expenditure, Portugal has a life expectancy that is more than five years longer than it is in the United States. [5] Portugal achieves better population health metrics than the United States by operating community health networks throughout the country that combine primary care and public health services.

The VA, Portugal and numerous other organizations and countries prove the thesis that investing in primary care lowers total care costs and improves health outcomes. The evidence supporting this thesis is both compelling and incontrovertible.

Solving Healthcare’s Primary Care Conundrum

Economists refer to a circumstance when individuals overuse scarce public goods as a tragedy of the commons.

Public grazing fields highlight the challenge posed by such a circumstance. [6] It is in the financial interest of individual ranchers to overgraze their herd on a public grazing field. Overgrazing by all, however, would obliterate the grazing field, which is against the public’s interest.

Societies address these “tragedies” by establishing and enforcing rules to govern public goods.

U.S. healthcare, however, reverses this type of economic tragedy. Advanced primary care services represent a public good. All acknowledge the benefits and societal returns, yet few providers and payers invest in advanced primary care services. Providers don’t invest because it leads to lower treatment volumes. Payers don’t invest because primary care’s higher costs trigger higher premiums, prompting their members to switch plans.

We can’t solve the primary care conundrum until we enable both providers and payers to benefit from investments in advanced primary care services. Fragmented, transactional medicine, even when delivered efficiently, is not cost-effective. Walmart Health discovered this economic reality the hard way and exited the business.

By contrast, Elevance is reorganizing itself to overcome healthcare’s reverse tragedy of the commons. They are betting that offering advanced primary care services within integrated delivery networks will both lower costs and improve health outcomes. Healthcare’s future belongs to the companies, like Elevance, that are striving to solve the industry’s primary care conundrum.

Why Walgreens’ US Health President Is ‘Bullish’ on the Role of Retail in Healthcare

Posted on by • Posted in Consumer Care Consumption Patterns, Consumer Engagement, Consumer Experience, Consumer Marketing, Consumer Preferences, Consumerism, Convenience, Convenient Access, Patient Experience, Patient Satisfaction, Primary Care, Primary Care Delivery Model, Primary Care Strategy, Retail Clinic, Retail Healthcare, Retail Pharmacy, Value Proposition, Walgreens • Leave a comment

During a fireside chat at AHIP 2024, Mary Langowski, executive vice president and president of U.S. healthcare at Walgreens Boots Alliance, said she sees a bright future for retail in healthcare.

Retailers are facing several headwinds in healthcare in 2024. Walmart and Dollar General both recently ended healthcare endeavors, and CVS Health is reportedly looking for a private equity partner for Oak Street Health (which it acquired in 2023). VillageMD, which is backed by Walgreens, is shuttering numerous clinics.

Still, Mary Langowski, executive vice president and president of U.S. healthcare at Walgreens Boots Alliance, sees a strong future for retailers in healthcare.

“I happen to be very bullish on the role of retail in healthcare and frankly, having a very central role in healthcare,” she said. “And part of that is because over 80% of people want health and wellness offerings in a pharmacy and in a retail setting. Consumers want the ease, they want the convenience of it. And those are important things to keep in mind, that demand is there.”

Langowski, who joined Walgreens in March, made these comments during a Tuesday fireside chat at the AHIP 2024 conference held in Las Vegas. She added that what the industry is seeing is not an “evolution” of whether retailers will exist in healthcare, but a shift around what the “right model is going to be.” 

“We really think that if you take our core assets, … we can be a really good partner to not just one provider entity but many, many provider entities and payers across the United States,” Langowski said. “We’re everywhere. We’re in the community, we’re digitally inclined. I think a strategy for us is less capital-intensive, capital-light and very scaled models.”

She also told the health plans in the audience that she wants to collaborate more. She said she sees retail as a “really critical entry point” in the healthcare system.

“We have people using their pharmacists two times more than any doctor and Medicare patients see us eight times more than their physician,” Langowski declared. “We’re not doing enough together to take advantage of those moments where we can engage people and we can create interventions way earlier in their healthcare disease state.”

Langowski noted that insurers are under a lot of pressure, including rising costs, regulatory issues and challenges contracting with providers. However, Walgreens’ assets are “highly complementary” to insurers’ assets, she said. 

“We aren’t going to do what you do. You don’t do what we do, but we work really well together,” she said. “And what it will take is being clever about the commercial and economic model and I believe there are multiple ways to create win-win scenarios where everybody does well. Most importantly, patients get healthier and they have a much better and much more seamless experience with the system.”

Walmart’s Primary Care Failure Is Important and a Problem

Posted on by • Posted in Chronic Care Management, Primary Care, Primary Care Delivery Model, Primary Care Strategy, Retail Clinic, Retail Healthcare, Rural Health, Wall Street, Walmart • Leave a comment

https://www.kaufmanhall.com/insights/thoughts-ken-kaufman/walmarts-primary-care-failure-important-and-problem

On August 8, 2014, Walmart announced it would expand on its existing five primary care centers to a total of 12 by the end of the year. These centers would offer more extensive services than those provided in Walmart walk-in clinics, including chronic disease management.

On September 13, 2019, Walmart announced it was opening the first expanded Walmart Health center, which would provide patients with primary care, laboratory, X-ray, EKG, counseling, dental, optical, and hearing services, with the “goal of becoming America’s neighborhood health destination.”

On April 30, 2024, Walmart announced it would close all 51 of its health centers in five states, as well as its virtual care services. “The challenging reimbursement environment and escalating operating costs create a lack of profitability that make the care business unsustainable for us at this time,” Walmart said.

Make no mistake, this announcement is a big deal.

Walmart is the largest retailer in the world, with about $650 billion in annual revenue, 10,500 stores in 19 countries, and 2.1 million employees—nearly 1.6 million in the U.S. alone. Healthcare services were an important corporate goal for Walmart, a goal the company pursued with significant financial investment and talented executives. Walmart’s healthcare strategy was carefully mapped out, with an expanding set of services tested in various formats and locations in Walmart’s formidable geographic and online presence.

Of course, one of Walmart’s goals was to create profit for the company through its foray into healthcare.

However, Walmart’s primary care strategy also held great promise for improving the health of the people Walmart serves, as well as reducing overall healthcare costs. A recent study by researchers at the University of Chicago Booth School of Business and University of Chicago Medicine, focusing on more than 500,000 Medicare beneficiaries, found that regular primary care visits were associated with fewer risk-adjusted ED visits and hospitalizations, lower risk-adjusted expenditures, and greater cost savings. According to the study, results improved as the regularity and continuity of care increased, both of which potentially would have been facilitated by the highly accessible and affordable primary care that Walmart aimed to deliver.

These benefits to patients and communities would have been especially powerful in rural America. Walmart plays a central role in the rural ecosystem, both as an economic and a social center. Ninety percent of the population is located within 10 miles of a Walmart.

Four thousand of Walmart’s stores are located in HRSA-designated medically underserved areas. In a time when rural healthcare providers are struggling to remain viable and healthcare deserts are becoming more problematic, Walmart had a unique opportunity to be, as the company itself said, “the front door of healthcare for all Americans.”

That enormous opportunity to tackle one of the most significant and persistent problems in American healthcare has now been lost.

Walmart is a corporation with a great history, a great reputation, great resources, and great operational abilities. If any company could make primary care work effectively and efficiently on a large scale in this country, it should have been Walmart.

But, after nearly two decades of trying, Walmart couldn’t succeed as a healthcare provider.

We can draw at least three important conclusions from Walmart’s healthcare failure.

  1. Healthcare as a cash business is a very difficult business model. Like other retailers, Walmart focused on healthcare as a cash business, providing high-volume, low-price services that consumers would pay for largely out-of-pocket. Walmart’s healthcare failure strongly indicates that, even with Walmart’s U.S. footprint of 4,615 stores and 255 million weekly customers, the company could not generate the volume necessary at acceptable price points to make cash healthcare profitable.
  2. It is unbelievably hard to work around the fundamental reimbursement model of American healthcare. Unable to make healthcare as a cash business work, the company ran smack into America’s unfriendly reimbursement system as its source of revenue. For Walmart as for many other healthcare providers, the predominant payers were Medicare and Medicaid, which, as every hospital executive experiences every day, do not pay at rates sufficient to cover costs—not a workable situation for a profit-oriented company in a capitalistic economy.
  3. Even a behemoth like Walmart could not manage around the current healthcare expense-to-revenue problem. Walmart is a company with all the tools any company could ask for to drive down operating expenses. It has the potential for economies of scale other companies could only dream of. It has processes for logistical efficiency that are viewed world-wide as a model of excellence. Yet even Walmart was unable to solve that most basic of healthcare economic problems: expenses—including labor, supplies, and drugs—are rising faster than revenue. Relatively few healthcare providers are able to achieve a positive margin in this environment, and for those that do achieve a margin, it is usually razor thin.

Obviously, healthcare’s business fundamentals are hard, and now we can see they are hard not only on traditional healthcare providers but also hard on a $650 billion retail company. These business fundamentals are unlikely to change anytime soon.

Walmart’s primary care failure is not only a disappointment for Walmart, but also for the healthcare ecosystem at large. What Walmart was trying to do was important, and that was establish a comprehensive retail system of primary care. Although Walmart’s effort, at least for the moment, has not worked, this is unlikely to be the end of the line. Hospitals and health systems will continue to experiment, will continue to apply their unique visions, their considerable talents, and their enormous dedication to the goal of finding primary care solutions that work for their communities.

As the Walmart failure demonstrates, the challenge is incredibly difficult. But the game must not be over.

Third time’s not the charm for Walmart’s healthcare delivery ambitions 

Posted on by • Posted in Competition, Disruption, Outpatient Care, Primary Care, Primary Care Delivery Model, Primary Care Strategy, Retail Clinic, Retail Healthcare, Walmart • Leave a comment

https://www.kaufmanhall.com/insights/blog/gist-weekly-may-10-2024

With Walmart’s announcement last week that it plans to shutter its Walmart Health business, this week’s graphic takes stock of the company’s healthcare delivery journey over nearly the past two decades.

In about 2007, Walmart launched “The Clinic at Walmart,” which leased retail space to various third-party retail clinic companies, and then later health systems, to provide basic primary care services inside Walmart stores, with the ambition of eventually becoming “the largest provider of primary healthcare services in the nation.”

However, low volumes and incompatible incentives between Walmart and its contractors led most of these clinics to close over time. In 2014 Walmart partnered with a single company, the worksite clinic provider QuadMed, to launch “Walmart Care Clinics.” These in-store clinics offered $4 visits for covered Walmart employees and $40 visits for the cash-paying public. Despite these low prices, this iteration of care clinic also suffered from low volumes, and Walmart scrapped the idea after opening only 19 of them. 

The retail giant’s most recent effort at care delivery began in 2019 with its revamped “Walmart Health Centers,” which it announced alongside its goal to “become America’s neighborhood health destination.” 

These health centers, which had separate entrances from the main store, featured physician-led, expanded primary care offerings including X-ray, labs, counseling, and dental services. As recently as April 2024, Walmart said it was planning to open almost two dozen more within the calendar year, until it announced it was shutting down its entire Walmart Health unit, which included virtual care offerings in addition to 51 health centers, citing an unfavorable operating environment. 

Despite multiple rebranding efforts, consumers have thus far appeared unwilling to see affordability-focused Walmart as a healthcare provider. 

Almost two decades of clinic experimentation have shown the company is willing to try things and admit failure, but it remains to be seen if this is just the end of Walmart’s latest phase or the end of the road for its healthcare delivery ambitions altogether.

Walmart announces closing of clinics and virtual care

Posted on by • Posted in Primary Care, Primary Care Strategy, Retail Clinic, Retail Healthcare, Retail Pharmacy, Virtual Care Strategy, Virtual Health Storefront, Virtual Healthcare, Walmart • Leave a comment

https://www.healthcarefinancenews.com/news/walmart-announces-closing-clinics-and-virtual-care?mkt_tok=NDIwLVlOQS0yOTIAAAGSzraKE5ynKelzJqN_u6PkS2uiDa7kDhU8buZUg2FuUp8WbSLrwsIS6LTs5r1vnMTtXeXfGhlUj3HuY2B-390Y8ldBKzh1mYa3OKZNPISlq1s

Walmart is closing Walmart Health and Walmart Health Virtual Care, saying the business model was not profitable nor sustainable. 

The Walmart Health centers opened in 2019.

“Through our experience managing Walmart Health centers and Walmart Health Virtual Care, we determined there is not a sustainable business model for us to continue,” the company said by statement. “The decision to close all 51 health centers across five states and shut down the virtual care offering was not easy.”

WHY THIS MATTERS

Walmart said the challenging reimbursement environment and escalating operating costs created a lack of profitability.

It does not yet have a specific date for when each center will close, but would share that information “as soon as decisions are made.”

Its priority, Walmart said, was “ensuring the people and communities who are impacted are treated with the utmost respect, compassion and support throughout the transition. Today and in the coming days, we are focused on continuity of care for patients and providing impacted associates with respect and assistance as we begin the closing process of the healthcare centers.”

The clinics will continue to serve patients while they are open.

“Through their respective employers, these providers will be paid for 90 days, after which eligible providers will receive transition payments,” Walmart said.

All associates are eligible to transfer to any other Walmart or Sam’s Club location. They will be paid for 90 days, unless they transfer to another location during that time or leave the company, Walmart said. After 90 days, if they do not transfer or leave, eligible associates will receive severance benefits.

“We understand this change affects lives – the patients who receive care, the associates and providers who deliver care and the communities who supported us along the way,” Walmart said. 

THE LARGER TREND

Moving forward, Walmart said it would take what it has learned to provide health and wellness services across the country through its nearly 4,600 pharmacies and more than 3,000 vision centers. Both have been in operation for 40 years.

“Over the past few years, the importance of pharmacies has continued to grow, and we have expanded the clinical capabilities of the services we provide,” Walmart said. “We continue to offer immunizations and have grown to provide testing and treatment services, access to specialty pharmacy medication and care, as well as other essential services such as medication therapy management and a variety of health screenings. With more than 4,000 of our stores in medical provider shortage areas, our pharmacies are often the front door of healthcare.”

Walmart said it plans to launch more services such as the Walmart Healthcare Research Institute and health programs to join its fresh food and over-the-counter offerings.

Among the country’s largest grocers, Walmart plans this year to introduce a line of premium food called Bettergoods to compete against Trader Joe’s and Whole Foods, according to The Wall Street Journal.

However, share prices last week fell for Walmart and Kroger after Amazon unveiled a low-cost grocery delivery program, according to Seeking Alpha. Amazon is expanding its fresh-food business through a delivery subscription benefit in the United States for its Prime members and customers using an EBT (electronic benefits transfer) card. It outlined the $9.99 monthly plan last Tuesday, according to the report. Share prices for Walmart were down 1.55% as of this morning.

Nurse practitioners fueling primary care workforce growth

Posted on by • Posted in Advanced Practice Providers (APP), Cost Management, Cost Reduction, Health System, Hospital, Hospital Industry, Labor Spend Management, Nurse Practitioners, Primary Care, Primary Care Delivery Model, Primary Care Strategy, Team-Based Care, Team-Based Care Models • Leave a comment

https://mailchi.mp/fc76f0b48924/gist-weekly-march-1-2024?e=d1e747d2d8

In this week’s graphic, we highlight how the primary care provider workforce has evolved over the past decade in both the pursuit of team-based care models and value-based care, as well as in response to rising labor costs and physician shortages.

In 2010, physicians made up more than 70 percent of the primary care workforce. But over the next 12 years, the number of primary care providers nearly doubled, largely driven by immense growth of nurse practitioners in the workforce. 

As of 2022, more than half of primary care providers were advanced practice providers (APPs), who continue to have a strong job outlook across the next decade (especially nurse practitioners).This shift has been beneficial to many provider organizations.

In a study from the Mayo Clinic, the return on investment was positive across a variety of APP practice models, especially in procedural-based specialties but across both independent practice models and full care team models as well. 

APPs also receive similar patient experience scores as their physician counterparts. 

Continued integration of APPs in team-based care models remains a key strategy for health systems seeking to improve access while lowering costs, especially in primary care.

Cano Health files for bankruptcy

Posted on by • Posted in Bankruptcy, Disruption, Disruptive Technology, Financial Stewardship, Financial Viability, Financially Distressed, Innovation, Medicare Advantage, Primary Care, Primary Care Delivery Model, Primary Care Strategy, Private Equity • Leave a comment

https://mailchi.mp/1e28b32fc32e/gist-weekly-february-9-2024?e=d1e747d2d8

On Sunday, Miami, FL-based Cano Health, a Medicare Advantage (MA)-focused primary care clinic operator, filed for bankruptcy protection to reorganize and convert around $1B of secured debt into new debt.

The company, which went public in 2020 via a SPAC deal worth over $4B, has now been delisted from the New York Stock Exchange. After posting a $270M loss in Q2 of 2023, Cano began laying off employees, divesting assets, and seeking a buyer. As of Q3 2023, it managed the care of over 300K members, including nearly 200K in Medicare capitation arrangements, at its 126 medical centers. 

The Gist: 

Like Babylon Health before it, another “tech-enabled” member of the early-COVID healthcare SPAC wave is facing hard times. While the low interest rate-fueled trend of splashy public offerings was not limited to healthcare, several prominent primary care innovators and “insurtechs” from this wave have struggled, adding further evidence to the adages that healthcare is both hard and difficult to disrupt.

Given that Cano sold its senior-focused clinics in Texas and Nevada to Humana’s CenterWell last fall, Cano may draw interest from other organizations looking to expand their MA footprints.

Walmart partners with a health system and insurer in Florida

Posted on by • Posted in ACA, Complex Care, Complex Care Coordination, Innovative Care Models, Narrow Network, Primary Care, Primary Care Strategy, Retail Clinic, Retail Healthcare, Retail Pharmacy • Leave a comment

https://mailchi.mp/f12ce6f07b28/the-weekly-gist-november-10-2023?e=d1e747d2d8

On Tuesday, Walmart Health announced deals with nine-hospital system Orlando Health and Ambetter from Sunshine Health, a Centene subsidiary offering Affordable Care Act exchange plans, to become a preferred provider in the Ambetter Value Plan. 

Walmart Health’s 23 Florida-based centers will provide primary care services and care coordination in a narrow-network health plan that includes Orlando Health. The Ambetter Value Plan is available in seven counties, covering the Orlando, Tampa, and Jacksonville areas.

While this partnership is limited to Florida, Walmart Health operates 48 centers in five states, with plans to open dozens more locations and expand into three additional states next year. 

The Gist: With a strong foothold and customer base in states that haven’t expanded Medicaid, Walmart Health centers are well positioned to be part of low-cost, narrow-network plans targeted at individuals who don’t qualify for Medicaid, or who were recently removed from the program. 

While Walmart Health already works with major insurers, this first-ever network partnership with a health system is a notable step forward for Walmart, advancing its healthcare delivery business beyond meeting basic primary care needs into more complex care coordination. 

While other large retail and pharmacy chains have opted to buy their way into the primary care space, Walmart is thus far building its own retail store-based clinic enterprise, with plenty of room to scale. 

Amazon announces One Medical membership discount for Prime members

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On Wednesday, e-commerce giant Amazon announced that its 167M US-based Prime members can now access One Medical primary care services for $9 per month, or $99 per year, which amounts to a 50 percent annual discount on One Medical membership. (Additional Prime family members can join for $6/month or $66/year.) 

One Medical, which Amazon purchased for $3.9B last year, provides its 800K members with 24/7 virtual care as well as app-based provider communication and access to expedited in-person care, though clinic visits are either billed through insurance or incur additional charges. Amazon also recently started offering virtual care services through its Amazon Clinic platform, at cash prices ranging from $30 to $95 per visit. 

The Gist: After teasing this type of bundle with a Prime Day sale earlier this year, Amazon has made the long-expected move to integrate One Medical into its suite of Prime add-ons, using a similar pricing model as its $5-per-month RxPass for generic prescription medications.

At such a low price, Amazon risks flooding One Medical’s patient population with demand it may struggle to meet. But if Amazon can scale One Medical, while maintaining its quality and convenience, it may be able to make the provider organization profitable. 

Known for its willingness to take risks and absorb financial losses, Amazon is continuing to build a healthcare ecosystem focused on hybrid primary care and pharmacy services that delivers a strong consumer value proposition based on convenience and low cost.