Doctor Walmart will see you now

"Large retailers like Walmart and Amazon venture into healthcare, addressing rising costs and convenience for patients, reshaping the industry."

“Large retailers like Walmart and Amazon venture into healthcare, addressing rising costs and convenience for patients, reshaping the industry.”

"Large retailers like Walmart and Amazon venture into healthcare, addressing rising costs and convenience for patients, reshaping the industry."

With his long white coat, stethoscope, soothing demeanor, and quirky enthusiasm for “population health management” and “patient-centered medicine,” Ronald Searcy is the ideal primary care physician. The Walmart he works at in northwest Arkansas is one of the few in the country that have exam rooms, a dentist’s office, a phlebotomy lab, and an x-ray room. Since 2019, Walmart has opened 32 “health centres” across five states, and the company plans to more than double that number and expand into an additional two states by 2020.

Walmart isn’t the only large company expanding into the medical field. Earlier this year, Amazon acquired One Medical, a concierge medical service with locations across the country. Dollar General, a discount store, is testing out a partnership with DocGo, a mobile medical clinic, in three locations around the Volunteer State. Both Walgreens and CVS offer extensive primary care services in their stores. One of the largest providers in the country, cvs MinuteClinic saw more than 5.5 million patients last year and earlier this year purchased Oak Street Health, a primary care provider with a focus on the elderly with locations in 21 states. The medical industry expects what? Like the United States’ healthcare system, the solution is both straightforward and intricate.

Put simply, the answer is financial. In 2021, the United States spent 18% of its GDP on health care, which was significantly higher than the rich country average of 10% and double the ratio of countries like South Korea with healthier and longer-living populations. Over the following eight years, American spending is projected to increase at a rate of 5.4% annually (chart below), exceeding economic growth and accounting for over 20% of GDP by 2031. Federal health care programs for the poor and elderly, Medicaid and Medicare, will shoulder a sizable portion of those costs.

The complexity arises from the evolution of insurance payment models and consumer expectations, especially those of Medicaid and Medicare. Insurers come first. The norm is the fee-for-service model, in which insurers pay doctors per office visit or procedure. Very simple. The problem is that it encourages more medical care to be used, but it doesn’t care much about the results (doctors are paid the same whether or not their patients improve).

However, between 2016 and 2021, spending on “alternative payment models” in health care increased from 29% to 40%. Most payers anticipated growth in alternative payment models by 2022, particularly those that reward physicians for patient health. As a result of the ACA, the concept of “value-based care” (vbc) has emerged. By sharing savings when a patient with a chronic illness follows her treatment plan and avoids hospitalization, this system incentivizes doctors to keep their patients healthy rather than pay them for each procedure they perform. Companies are placing their financial hopes on the new model.

Basic healthcare retailers often stake their business on repeat customers. According to the most recent Accenture Consumer Pulse Survey, more than 90% of respondents would trust a retailer with their medical data, and nearly one-third of consumers (and more than one-third of those between 18 and 35) would consider seeking medical care from a grocery store or big-box retailer. 75% of Americans live within 5 miles of a Dollar General, and 90% live within 10 miles of a Walmart, leading retailers to feel that trust and convenience are a winning combination.

Technology improves vbc by facilitating doctor-patient communication and providing additional health metrics for insurers to use in physician evaluations. Patients can view their medical records, appointments, and prescription refills through the Walmart Health and OneMedical applications. Each organization refers customers to its own in-house pharmacy. Care for a patient is managed and coordinated by their primary care physician. Vbc could persuade insurers to withhold referrals and necessary care in an effort to keep costs down. If the patient’s condition worsens, they will additionally cover the costs.

Negative risk is notoriously difficult to manage. Proactive care and patient involvement are required for vbc, but even with a smartphone, this comes at a high cost. In addition to the necessary investment in technology, providers may also need to make frequent phone calls and in-person visits to their patients. Businesses that make mistakes eventually collapse. Those that get it right stand to gain a larger slice of the massive sums of money that circulate through America’s wasteful health-care system.

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