Health Tech

Attention, Walmart Patients

By KIM BELLARD

When Walmart announced earlier this summer that it was opening an insurance agency to sell Medicare-related products and services plans, I thought, “that’s it?”  When Walmart announced later in the summer that it was partnering (first with Microsoft, then with Oracle) in the bid to buy TikTok, I thought, “well, isn’t that interesting?”  And when Walmart announced a few days ago that it was partnering with Clover Health to offer Medicare Advantage plans, I thought: “it’s about time.”

You know Walmart.  265 million people (worldwide) shop at its stores each week.  Ninety percent of Americans live within 10 miles of a Walmart store.  It is estimated that 95% of Americans shop at Walmart during the year.  In over 200 U.S. markets, it accounts for at least 50% of grocery sales.  It is the fifth largest pharmacy chain by revenue. 

And Walmart has been shaking up healthcare for some time.  Way back in 2006, it introduced its $4 Prescriptions program that upended pharmacy pricing.  In 2008, it started offering in-store retail clinics, initially in partnership with hospitals and now operates on its own

Last year it started offering standalone clinics – Walmart Health – that went far beyond typical retail clinics.  They feature primary care, dental, lab and imaging, plus vision and audiology, and are starting to rapidly expand their footprint, aiming for 22 locations, in multiple states, by the end of 2021.  Patients can go online to view prices of services and book appointments. 

Then-President of Walmart U.S. Health and Wellness Sean Slovenski declared, “We’re bringing people into the health care system that have not traditionally been in it and identifying their needs.  We’re kind of creating an entire new market of customers.”  Commenting on the clinic’s low-cost, disclosed-in-advance prices and all-in-one services, Mr. Slovenski said: “We didn’t set out to disrupt healthcare. We set out to meet the needs of our customers at Walmart.”

To help its customers use technology in their health care journey, earlier this year it acquired technology from CareZone that “helps individuals and families manage medicine and chronic illness for each member of the household.”  They can also scan insurance cards or prescription drug labels. 

Walmart is beefing up its clinics by a new deal with Oak Street Health.  Marcus Osborne, Senior Vice President, Walmart Health said: “As we grow Walmart Health locations in other markets, we think Oak Street Health’s innovative value-based healthcare model will help us continue to deliver on our live better promise at these locations.”

Not to be outdone, Walmart subsidiary Sam’s Club just announced it is going nationwide on a collaboration with telehealth provider 98point6 that it piloted in September 2019.  It offers a subscription service that features unlimited $1 telehealth visits.  “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, Pharmacy Operations and Divisional Merchandise, Sam’s Club. 

Walmart hasn’t been content to just offer health care services; it has been active on the payor front too.  In 2010, it partnered with Humana to offer a Medicare Part D plan, which it still offers.  For its own employee health program, it has had a Centers of Excellent program for over twenty years, and has tested ACOs, bundled payments, and value-based purchasing.  A couple years ago there was much discussion about a Walmart-Humana merger/acquisition, which did not pan out – yet. 

Which brings us to the Clover Health partnership, called LiveHealthy.  Clover Health President & CTO Andrew Toy said:

The Walmart brand is synonymous with the best value and low prices, and that’s exactly what we’re doing at Clover.  By offering affordable insurance plans with an open network  of doctors and hospitals, we are democratizing high-quality care and bringing it to individuals and communities that have previously been overlooked by other insurers.

LiveHealthy will start out in eight Georgia counties, with a network of 31 hospitals and 8,000 clinicians – including Walmart Health locations.  The plan is being billed as “Clover-powered,” but follows the Walmart value approach – zero premium, “free” primary care visits, lab tests, and preventive dental services, not to mention $100 every quarter to spend on OTC items at Walmart. 

In the scheme of things, Clover Health has a small membership/footprint.  Its main strength is its technology, specifically Clover Assistant that “gives your primary care doctor a complete view of your overall health and sends them care recommendations that are personalized for you, right when you’re in the appointment,” using “data, clinical guidelines, and machine learning to surface the most urgent patient needs.”

I’ve always wondered why Walmart hadn’t pursued partnerships with/acquisitions of managed Medicaid plans, such as Centene or Molina Healthcare (both of which are actively pursing their own acquisitions).   Clover Health’s website says: “Clover proudly serves many low-income and often overlooked communities, which is core to the company’s mission of bringing healthcare to people who are most in need and commonly ignored by other insurers.”  That dovetails quite nicely with serving a Medicaid or dual eligible (Medicare and Medicaid) population. 

Lest anyone think Walmart is solely focused on healthcare, there is:

  • The aforementioned interest in TikTok, which Walmart believes “will provide Walmart with an important way for us to expand our reach and serve omnichannel customers as well as grow our third-party marketplace, fulfillment and advertising businesses.”  It would especially boost Walmart’s presence for younger audiences.
  • The introduction of Walmart+, it’s answer to Amazon Prime that some analysts think could lead to 10 million subscribers by the end of 2021.  It includes unlimited free delivery on more than 160,000 items.
  • Its surging online sales, which have nearly doubled in the last quarter, especially for online groceries.  “You see Amazon following behind Walmart on this,” Edward Yruma, a retail analyst at KeyBanc Capital Markets, told The New York Times.

Walmart U.S. CEO John Furman believes: “The demand definitely tells us that Americans are looking for access to quality care, and we think Walmart — its footprint — should be a part of that.”  Maybe “Walmart” doesn’t carry the same cache as, say, “The Mayo Clinic” when it comes to healthcare, but its brand for value and convenience is hard to match, and that may be enough to make it a force in healthcare. 

Pundits spend a lot of time wondering what Amazon will do in healthcare, when.  It is, indeed, taking some interesting steps, but no one should be overlooking what Walmart is doing. 

Or soon will be.

Kim is a former emarketing exec at a major Blues plan, editor of the late & lamented Tincture.io, and now regular THCB contributor.

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