How major retailers are trying to change the way America consumes health care

Illustration: Sarah Grillo/Axios

Amazon, Walmart, CVS, Dollar General and other major retailers are making their way into healthcare delivery, driving a customized consumer experience powered by digital health products.

What is going on: At their core, these companies bring together several technology-enabled services: urgent care, primary care, home care and specialty care, pharmacy and, in some cases, full integration with an insurer.

  • “Convenience is really at the heart of those plays. They’re trying to get the patient’s attention when they already own that consumer,” Caroline Hoffman, head of emerging business at Thirty Madison, a virtual specialty care company.

Why it matters: A more user-friendly portal to the health system could lead to more involved patients and better access to care in disadvantaged areas. It could even provide a sustainable model for cost-effectively providing better care for less money.

  • But the retailers’ forays are sparking growing antitrust and privacy concerns, as well as fears of further erosion of the doctor-patient relationship once seen as central to coordinated care.

What they say: “If you fast-forward 10 years, people won’t believe how primary care was administered,” Amazon CEO Andy Jassy said in a recent announcement about the company’s acquisition of concierge drug supplier One Medical for $3.9 billion.

  • With that deal, which closed last month, Amazon brought in an on-demand virtual healthcare services platform, more than 125 locations, and a share of the Medicare Advantage business.

Send the news: Yesterday, Best Buy Health launched a hospital-to-home service program with Atrium Health of North Carolina. The tech retailer bought Current Health, the remote patient monitoring company, in 2021. Best Buy said it will provide patient education, its home care platform and devices, and technical support through specially trained Geek Squad agents.

  • It came on the heels of Walmart Health announced last week that it plans to nearly double the footprint of its in-store clinics, which provide primary, behavioral health vision and dental care. In the fall, Walmart also signed a 10-year Medicare Advantage deal with UnitedHealth Group.
  • In January, CVS Health announced a plan to buy Oak Street Health, a primary care group focused on Medicare patients. The pharmacy giant already owns insurer Aetna, pharmacy operator CVS-Caremark, home care company Signify Health, and healthcare service brands MinuteClinic and HealthHUB.
  • Also in January, Walgreens-backed primary care company VillageMD secured increased investment in primary care, specialty care and urgent care, augmenting plans to open more than 500 full-service doctor’s offices at Walgreens locations.
  • Other companies such as Rite Aid, Albertson’s and Dollar General have launched health care programs.

Between the lines: Amazon, CVS and Walmart have made some of the most drastic moves, combining their massive retail footprints with assets such as primary care or emergency room locations, pharmacies and some sort of relationship with insurers, experts say.

  • “They all buy every drug,” Robert Pearl, a Stanford University professor and former CEO of The Permanente Medical Group, told Axios.
  • “Medicine as we know it will be very different, assuming they are successful. They are big companies, they are smart companies.”

Be smart: Depending on the retailer, patients may be able to access virtual healthcare services, book appointments, and fill prescriptions through an app.

  • They can receive same-day care, receive preventive services such as vaccines, and pick up their medications at the store. A health professional can walk them through shopping aisles and guide them through the purchase of healthy foods and wellness products.

In the first wave of this trendretailers were more focused on urgent care or one-time visits for vaccines, said Jacob Effron, a director at Redpoint Ventures.

  • “The criticism that could have been leveled at that is that patients can just go for that ad hoc care and not have an ongoing relationship with a GP,” he said.

  • Retailers have been investing in end-to-end primary care in recent months. “That’s what makes me more and more excited about their role because there’s only so much you can do as the urgent care provider and so much more you can do when you understand that longitudinal relationship between the doctor and a patient over the course of the time,” said Effron.

Between the lines: Each of these companies is also clearly targeting a highly lucrative segment of healthcare: Medicare Advantage. More than half of eligible seniors are now covered by private Medicare.

  • Medicare Advantage is attractive because its payment models focus on rewarding health care providers for wellness and prevention care. Payments are capped, so there is an incentive to use integrated care to keep people healthy rather than providing services when they are sick.
  • For some retailers, it’s similar to the Kaiser Permanente model, where the payer and provider are completely aligned, Pearl said. But the retailers could create an HMO on steroids.
  • “Why has Kaiser Permanente never really expanded nationally? It’s very hard to get enough residents in a local area to supply it. You can’t hire enough specialists, enough doctors,” he said. “The beauty of the retail giants is how big they are. If you get every Amazon Prime member to join, they immediately have enough volume to set up a well-functioning system.”

What to watch: How these companies evolve.

  • Amazon has been mostly virtual in its offerings until now, Effron said. “It begs the question, will they do a similar model to what some of these others have done and put clinics in Whole Foods?”

It comes down to: This still constitutes a very small segment of healthcare – and may not solve the medical system’s major problems.

  • “These players ultimately need to deliver the same or better results at a lower cost in order to be in-network and recommended by both payers and employers,” Hoffman said.
  • And, she said, they can certainly increase access. “It remains to be seen if they can really bend the cost curve,” she said.

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