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

GP: Walmart Pharmacy 120912

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

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

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

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

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

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

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

A Walmart spokesperson confirmed the opening of the clinic.

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

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

vs. the new Walmart Health

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

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

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

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

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




Anthem again irks docs with latest changes to reimbursement

Anthem is again ruffling the feathers of providers, this time over a new reimbursement policy denying payment for certain follow-up office visits the same day a procedure is performed. 

The policy could impact many specialists and primary care doctors. Dermatologists are particularly upset over the change, which they call punitive and unnecessary with the potential to disrupt patient care.

“It is a nuisance. It makes absolutely no sense,” George Hruza, a practicing dermatologist and president of the American Academy of Dermatology, told Healthcare Dive.

It’s the latest in a string of controversial policies from Anthem. The Blue Cross payer that insures 40 million people has taken steps to rein in costs by enforcing different payment policies based on site of care and other factors. 

In the past several years, the Indianapolis-based for-profit said that it would no longer pay for emergency room visits if patients show up with minor ailments like the common cold. It also stopped paying for certain imaging tests at outpatient facilities owned by hospitals due to the unexplained wide variation in costs compared with freestanding imaging centers.

And this year, Anthem cut rates paid to hospital-based labs in an attempt to align them with independent labs, a strategy that garnered extensive discussion on lab giant Quest Diagnostic’s second quarter earnings call.

Anthem contends the latest change to office visit payments will prevent duplicative billing for similar visits. The change took effect March 1, according to a previous provider alert. Anthem told Healthcare Dive it’s an update to its claims systems and does not describe it as a new reimbursement policy.

Despite conversations with Anthem, Hruza said his organization hasn’t been given an explanation on what triggered the change and whether it actually addresses a problem or an abuse of the system. He said he understands the need to cut healthcare costs, but wonders how much savings the change will generate as some of the visits are below $100.

The payer proposed an almost identical change last year but later decided to pull it back after intense pushback from the American Medical Association and other provider groups. The newer policy is worse because doctors would receive no payment, and it’s more narrowly tailored to the same diagnosis, Hruza said.

‘Appropriate settings’

Anthem argues the policy is needed to move care to more cost-efficient settings.

“Our efforts to help achieve that goal include a range of initiatives that, among other things, encourage consumers to receive care in the most appropriate setting and also help promote accurate coding and submission of bills by providers,” Anthem said in a statement to Healthcare Dive.

Hruza is worried the latest iteration would cause patients delays in care.

He gave the example of a patient with acne prescribed a medication. He would want to see them for a follow-up in a few weeks. At that second appointment, if he saw the treatment wasn’t working well, he might prescribe a different medication. At the same time, he may drain an acne cyst, a minor procedure. That would trigger a denial, he said, because of the two visits revolving around the same diagnosis with the same-day procedure.

AMA is aware of the policy and has had meetings with Anthem about its concerns, a source for the organization that represents the nation’s doctors told Healthcare Dive.

For providers, the big fear is the change will result in unjustified claim denials and encourage other payers to adopt similar measures. Hruza said there is no recourse for contracted providers, particularly those that work in smaller practices, when these changes are made, given Anthem’s size as the nation’s second-largest insurer.

As deductibles rise and patients are shouldering a greater burden of the cost of care, insurers may be feeling the pressure from employers to wring out costs from the provider side, Sabrina Corlette, a research professor at the Center on Health Insurance Reforms at Georgetown University, told Healthcare Dive.

“Employers are getting more and more wise to the fact that the reason we have a cost problem in this country is because of provider prices,” Corlette said. 




How tech-infused primary care centers turned One Medical into a $2 billion business

Image result for How tech-infused primary care centers turned One Medical into a $2 billion business

Key Points
  • One Medical is now valued at close to $2 billion.
  • The company is signing on hospitals as partners, expanding geographically and adding services for mental health.
  • One investor says it can be “the Starbucks of primary care.”

Two years after leaving the traditional health-care world to lead primary care upstart One Medical, Amir Dan Rubin now faces a clear challenge. With competition heating up, he needs to rapidly expand the business into new areas without sacrificing the luxe service that patients have come to expect.

Founded in 2007 by physician-turned-entrepreneur Tom X Lee, One Medical has become popular in and around its hometown of San Francisco by providing on-demand care and easy mobile booking and by selling its services to big companies who offer access as a perk to employees. Google and SpaceX are among those employers, according to a person familiar with the matter who asked not to be named because the relationships are confidential.

One Medical is taking on a chunk of the $3.5 trillion health-care industry, which is riddled with inefficiencies, impersonal care and old technologies that don’t talk to each other and leave patients struggling to find and track their medical records. The company is trying to modernize the whole process, and asks patients to pay a $199 annual membership fee.

“The vision and the focus is to delight millions,” said Rubin, in a recent interview at One Medical’s San Francisco headquarters. “In health care, almost every stakeholder group is frustrated and so we looked to solve a lot of these needs simultaneously by starting from scratch and putting the member at the center of the experience.”

One Medical has 72 clinics in seven states, and Rubin said he’s focused on pushing into new areas. The company is opening locations in Portland, Oregon, as well as Orange County, California, and Atlanta. It’s also partnering with health systems Providence St. Joseph (in Portland and Orange County) and Advocate Aurora (in Chicago), which should lead to more referrals from doctors at those hospitals. Three more Southern California locations are slated to open this month in close collaboration with the University of California San Diego.

Keeping doctors happy

To fuel its growth, One Medical raised $220million last year in a funding round led by private equity firm Carlyle Group, bringing total capital raised to more than $400 million, which includes early money from Google Ventures (now GV) and venture firm Benchmark. The latest financing valued the company at about $1.5 billion, according to two people familiar with the matter. That valuation has subsequently edged up to closer to $2 billion based on secondary market transactions, said one of the people, who asked not to be named because the terms are private.

Overall, One Medical says it has 4,000 employers now offering the service as a benefit. But there’s a growing number of emerging competitors bidding for these contracts. They include Premise Health, Paladina, Iora Health, and Crossover Health.

One key piece to One Medical’s strategy is to make it an appealing place for doctors to work. It’s not uncommon for physicians in the U.S. to see 30 or more patients a day and keep visits to less than 10 minutes. One Medical limits doctors to 16 a day. The company also built its own medical records technology from the ground up to help doctors manage patient relationships, a big change from the existing systems that medical professionals say aren’t user friendly.

Providing a service that’s attractive to tech companies gives One Medical a big leg up in going after businesses.

“Historically, you’ve seen a lot of health-care services providers lag behind other consumer-facing industries, and that’s held them back with employers,” said Brian Marcotte, president and CEO of the National Business Group on Health, which represents employers. “They’ve done a better job at One Medical. You can feel it’s different when you walk in the door.”

One Medical is also adding mental health and pediatric services. Its providers are training to treat patients with anxiety and depression, and its clinics have started offering group counseling sessions. Kimber Lockhart, One Medical’s chief technology officer, said these group experiences have proven very popular in tests at various clinics.

Tech for patients

Lockhart’s tech team, with occasional advisory help from the doctors on staff, developed an app — Treat Me Now — for patients to get advice on whether to see a doctor or stay at home. It also has an online appointment scheduling system, and a video tool for patients to consult with physicians.

Even with One Medical’s efforts to apply elements of Silicon Valley into its business, the reality is that it runs a health-care operation, which is expensive to manage and comes with high administrative and overhead costs and loads of regulation. So investors have been told to remain patient about a potential IPO.

Steve Wise, a One Medical backer from Carlyle, addressed the road to profitability in a recent interview, when he explained the long-term vision.

“You wouldn’t think a firm like us would invest in a venture-style company that still loses money,” he said. “But it’s a space we know well and we believe in. We want to be the Starbucks of primary care. ”

WATCH: Here’s how One Medical is trying to improve patient experiences




Out-of-pocket costs rising even as patients transition to lower-cost care settings

Patients saw increases of up to 12% in their out-of-pocket responsibilities for inpatient, outpatient and ED care in 2018.

A new TransUnion Healthcare analysis has found that most patients likely felt a bigger pinch to their wallets as out-of-pocket costs across all settings of care increased in 2018. The new findings were made public yesterday at the 2019 Healthcare Financial Management Association Annual Conference in Orlando.

The analysis reveals that patients experienced annual increases of up to 12% in their out-of-pocket responsibilities for inpatient, outpatient and emergency department care last year.

In 2017, the average inpatient cost was $4,068; the average outpatient cost was $990; and the average emergency department cost was $577.

In 2018, the average inpatient cost was $4,659; the average outpatient cost was $1,109; and the average emergency department cost was $617.


There are certain factors that are influencing this trend, according to Jonathan Wiik, principal of healthcare strategy at TransUnion Healthcare.

“Patients are becoming more aware that emergency care is expensive and somewhat inefficient,” Wiik said. “No one wants to go to the emergency room unless we have to, because we don’t want to deal with the time there or the expense. They aren’t the best place to get primary or even urgent care.”

Another factor, he said, is that providers realize the emergency department is a care setting of last resort for many. Providers want to make sure that have room in the ED for cases that are real emergencies, so they’re essentially curating their patients, steering patients to the most cost effective settings possible — often primary care, which is the least expensive setting.

Noting that the biggest annual increases were in inpatient and outpatient care, Wiik said that was largely a function of utilization and just a general wariness, in addition to the fact that most EDs have pretty flat contracts. Financial communication with patients is also an issue.

“Most people can’t afford the average out-of-pocket, so providers are really trying to educate patients as early as they can about those costs,” said Wiik. “Emergency care is a really hard place to educate people on finances, let alone collect on them.”


The analysis found that, during a hospital visit, patients are likely experiencing cost increases that continue the trend of higher out-of-pocket costs. About 59% of patients in 2018 had an average out-of-pocket expense between $501 and $1,000 during a healthcare visit. This was a dramatic increase from 39% in 2017. Conversely, the number of patients that had an average out- of-pocket expense of $500 or below decreased from 49% in 2017 to 36% in 2018.

And with out-of-pocket costs increasing, the trend toward consumerism is growing as more patients, payers and providers transition to lower cost settings of care.

One example: Inpatient care, traditionally the most expensive healthcare option, has seen a leveling off with the percentage of price estimates remaining at 8% between 2017 and 2018. The percentage of outpatient services estimates, generally about one-quarter of the cost of inpatient services, rose in that same timeframe from 65% to 73%.

“Patients are likely seeing more providers and payers recommending that they take advantage of cost-effective healthcare options, which brings down costs for all parties,” said Wiik. “This is especially important as costs continue to rise in all areas of healthcare, particularly in inpatient, outpatient and emergency department services.”

This is having an impact on providers, payers and patients, he said.

“Let’s pretend Joanna had an MRI in her head, and that ran $3,200. That might have been paid by Blue Cross Blue Shield, and $100 out of Joanna’s pocket. Now Joanna’s paying $300. Most patients don’t look up how much the MRI’s going to be. They just get the bill later and try to figure it out. I think the patient portion of the bill is going to be in the 35, 40% range very soon. What that means is we’re quickly approaching half of the bill coming from the patient and half from the payer. That’s not insurance anymore, that’s a bank account.”

A recent Kaiser Family Foundation study indicated that 34% of patients are finding it difficult to pay their deductible before insurance kicks in. In addition to patients being challenged to make payments, the trend is that providers are also feeling the pressure of increased denial rates and write-offs, which is increasing bad debt.

Considering these factors together — increased out-of-pocket expenses, a patient’s challenge to make payment, and increased denial rates — collecting payments from all payers is critical for providers. In order for providers to ensure they receive payment for the patient-care services rendered, it is vital that they implement strategies that maximize reimbursements.



A look at the changing ROI of employing doctors

A recent report from Merritt Hawkins provided an opportunity for us to test out a new, interactive tool for data visualization this week. The recruiter surveyed hospital Chief Financial Officers about the “return on investment” (ROI) they expect from employing physicians. The report compared average salaries paid to key specialties with the anticipated “downstream” revenue each physician is expected to produce for the hospital or health system.

To explore the data, click on the graphic below—you’ll be able to see where each specialty ranked, and (by clicking between tabs), see how the expected ROI has changed since the last time the survey was conducted in 2016. We’ve grouped the doctors into three categories: primary care; medical specialists; and proceduralists.

A few interesting highlights from exploring the data: employed physician salaries rose for every single specialty across the past three years. While specialists may bring in more revenue per doctor, primary care physicians continue to have the highest return on investment of physician salary dollars.

But take a look at the change in size of the bubbles, representing ROI, between 2016 and 2019. ROI remained pretty stable for both adult primary care and the specialists who support high-margin services like orthopedics, neurosurgery and obstetrics.

In contrast, the highest ROI growth is seen in pediatrics and psychiatry—suggesting systems are finding new ways to link these specialties to downstream services. Let us know what you think of this interactive tool, and what other kinds of analysis you think might be interesting using it. (We think it’s pretty nifty.)