Category Archives: Primary Care Strategy

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

Posted on by • Posted in Affordability, Amazon, Amazon Care, Amazon Clinic, Amazon Pharmacy, Consumer Focus, Consumer Marketing, Consumer Value Proposition, Consumerism, Convenient Access, Innovative Care Models, Primary Care, Primary Care Strategy, Urgent Care, Urgent Response, Virtual Care Strategy, Virtual Healthcare, Virtual Office, Virtual Visit • Leave a comment

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

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. 

Walmart reportedly exploring purchase of ChenMed

Posted on by • Posted in Market Consolidation, Mergers & Acquisitions, Primary Care, Primary Care Delivery Model, Primary Care Strategy, Walmart • Leave a comment

https://mailchi.mp/e1b9f9c249d0/the-weekly-gist-september-15-2023?e=d1e747d2d8

Bloomberg reported this week that retail behemoth Walmart has engaged in talks to acquire a majority stake in ChenMed, a closely held value-based primary care company based in Miami, FL.

The deal would significantly expand Walmart’s primary care footprint and capabilities, adding to the 39 Walmart Health centers slated to be in operation by the end of this year. 

ChenMed, which operates 120+ clinics across 15 states, delivers primary care to complex Medicare Advantage beneficiaries, taking risk for the total cost of care, and has grown its membership by 36 percent annually across the last decade. It has remained privately owned by the Chen family, but recently revamped its leadership structure and tapped UnitedHealth Group (UHG) veteran Steve Nelson to run operations. ChenMed has an expected value of several billion dollars, a price that could be driven upwards if other bidders express interest. Bloomberg’s sources emphasized that the deal could still be weeks away and that no terms have been finalized.

The Gist: Should this purchase go through, it might change Walmart’s status as a “sleeping giant” in healthcare. 

ChenMed’s primary care model and strong foothold in the Southeast would dovetail with Walmart’s store clinic footprint and its 10-year partnership with UHG to drive value-based care adoption in that region. 

With ChenMed competitors Oak Street, One Medical, and VillageMD now backed or owned by some of Walmart’s biggest competitors, Walmart may view ChenMed as its best opportunity to scale its primary care footprint through a large acquisition. 

However, much of ChenMed’s success to date has been attributed to its strong culture and track record of physician recruitment and retention—something a large company like Walmart may have challenges preserving.  

Searching for new hope in primary care

Posted on by • Posted in Consumer Centered Medical Home, Consumer Experience, Consumer Loyalty, Consumer-Centric, Consumerism, Physician, Physician Acquisition, Physician Burnout, Physician Coverage, Physician Leadership, Physician Network, Physician Practice Valuation, Physician Shortage, Physician Specialist, Physician Staffing, Primary Care, Primary Care Loyalty, Primary Care Strategy • Leave a comment

https://mailchi.mp/377fb3b9ea0c/the-weekly-gist-august-4-2023?e=d1e747d2d8

A physician who has led the primary care enterprise for a large health system for over twenty years told us he’s never seen physician morale as low as it is now:

“Burnout is bad across the board for all specialties, but I’m having a really hard time finding the bright spots for primary care”.

We recalled a recent survey of primary care physicians that confirmed his observations, with 61 percent of doctors stating that primary care is “crumbling”. But it struck us that we’ve been seeing these kinds of dire surveys about the state of primary care for the entire quarter-century we’ve been doing this work.

What’s different now?


He posited one critical change. Ten years ago, during the heyday of accountable care, primary care was central to health system strategy. Systems were devoting resources to converting practices to patient-centered medical homes. “We felt like primary care was at the heart of transforming health systems, and that we were finally getting resources to help patients,” he shared.

“Now it feels like the health system has moved away from ‘value’, the focus is all on specialists and growing procedure volume again, and we’re being treated as a cost center and told to cut staff and up our referral targets.”

We agree. Although large independent primary care groups continue to command record valuations, overall, the transition to value has slowed, and work burden has increased given staffing shortages.

Where could optimism come from now?

We both agreed that workflow innovations to ease documentation burden and help the transition to virtual care appear closer to reality than ever before.

And the increased focus on “consumerism” has many systems recognizing that primary care is the first—and principal—touchpoint for most patients and will be key to winning consumer loyalty.

Oak Street Health unveils expansion plans to open centers in 4 new states

Posted on by • Posted in CVS Health, Medicare Advantage, Primary Care, Primary Care Delivery Model, Primary Care Strategy, Vertical Consolidation, Vertical Integration • Leave a comment

https://www.fiercehealthcare.com/providers/oak-street-health-unveils-expansion-plans-4-new-states

Less than a month after CVS Health acquired Oak Street Health, the primary care provider plans to expand into four more states.

The company plans to open value-based primary care centers in Little Rock, Arkansas; Des Moines and Davenport, Iowa; Kansas City, Kansas and Richmond, Virginia, beginning this summer.

Oak Street Health will operate centers in 25 states by the end of the year.

The provider also aims to open new centers in existing markets this year with additional centers planned for Arizona, Colorado, Georgia, Illinois, Indiana, Louisiana, New York, Ohio and Pennsylvania.

CVS finalized its $10.6 billion acquisition of the Medicare-focused primary care company in early May, picking up, at the time, about 169 medical centers in 21 states. 

The acquisition significantly broadens CVS Health’s primary care footprint and the retail pharmacy giant said the deal will improve health outcomes and reduce costs for patients, particularly for those in underserved communities.

CVS folded the company into its newly created healthcare delivery arm. The company also recently finalized its $8 billion acquisition of home health and technology company Signify Health.

The two deals will help advance the health giant’s push into value-based care and mark its latest moves to get further into healthcare services. 

Oak Street specializes in treating Medicare Advantage patients and its network of clinics is expected to grow to over 300 centers by 2026.

The provider says it developed an integrated care model that incorporates behavioral healthcare and social determinants support and patients can access care in-center, in-home and through telehealth appointments.

Oak Street Health says it has reduced patient hospital admissions by approximately 51% compared to Medicare benchmarks, and driven a 42% reduction in 30-day readmission rates and a 51% reduction in emergency department visits. 

“One of the most critical ways we advance our mission to rebuild healthcare as it should be is by bringing our high-quality primary care and unmatched patient experience to more older adults across the country,” said Mike Pykosz, Oak Street Health’s CEO. “We look forward to meeting and caring for new deserving patients in Arkansas, Iowa, Kansas and Virginia, as well as the opportunity to create meaningful jobs for those passionate about improving health outcomes for patients and bridging health equity gaps in their communities.”

The CVS-Oak Street Health deal marks the latest example of vertical integration in healthcare. In addition to operating thousands of pharmacies and MinuteClinics, CVS also is the parent company of major health insurer Aetna and pharmacy benefit manager CVS Caremark.

Physician Arms Race

Posted on by • Posted in Health Insurance Industry, Market Consolidation, Market Power, Market Trends, Medicare Advantage, Physician Arms Race, Primary Care, Primary Care Delivery Model, Primary Care Strategy, Private Equity, Vertical Integration • Leave a comment

https://mailchi.mp/d62b14db92fb/the-weekly-gist-february-10-2023?e=d1e747d2d8

After rumors of a possible deal first surfaced in early January, CVS Health announced on Wednesday that it has entered into a definitive agreement to acquire value-based primary care provider Oak Street Health for $10.6B. The Chicago-based company will join CVS’s recently formed Health Care Delivery organization, bringing with it roughly 600 physicians and nurse practitioners working at 169 senior-focused clinics in 21 states. This move is the latest by CVS to expand its care offerings, following its $100M investment last month in primary and urgent care provider Carbon Health, and its $8B acquisition of in-home evaluation company Signify in September.

The Gist: If this deal goes through, CVS will have the key pieces of the national primary care physician network it needs for a value-based care platform focused on Medicare Advantage—although how they will combine Oak Street’s clinics with retail-based HealthHUBs and other primary care assets remains unclear.

The fact that CVS is paying about a 50 percent share price premium shows how competitive the market for large physician organizations has become, driving up bidding prices such that only cash-rich payers, pharmacies, and retailers can afford them as they seek to emulate UnitedHealth Group’s Optum strategy.

Of note, the same day CVS announced the deal, Aetna competitor and erstwhile investor in Oak Street, Humana announced a five-year network partnership with Oak Street competitor ChenMed.

We’ll be watching for whose strategy proves most effective as we enter the next phase of the physician arms race between vertically-integrated payers, and the emphasis shifts from how many providers are employed to how they’re integrated and deployed.