Walmart, Amazon & More: Orthopedic Surgeons on Outside Forces in Healthcare

This article originally appeared in Becker’s Spine Review on September 23, 2021.

Amazon, Walmart and Walgreens have all taken steps into healthcare, but their lasting impact remains to be seen. Two orthopedic surgeons told Becker’s how they feel about the companies’ hand in healthcare.

Question: How will outside forces such as Amazon and Walmart affect healthcare in the U.S?

Note: Responses were edited for style.

David Jacofsky, MD:  Amazon and Walmart will certainly be forces within the healthcare environment in the future. However, the role they play in healthcare will be in areas where they can truly be the disrupter, and they may learn through a series of controlled failures.

Amazon and its two healthcare reform partners, Berkshire Hathaway and JPMorgan Chase announced in 2018 that they were uniting to form Haven Health. This sent ripples through the healthcare world, but ultimately, the effort was abandoned. The failure was not surprising to everyone, because their joint effort only drove some evolutionary change to the current healthcare system, and it did not meaningfully disrupt it in any way. That is, they primarily simply looked for strategies to negotiate deeper discounts from providers, lower the cost of pharmacy and provide more telehealth options. Haven Health seemingly did not fully appreciate the complexities of healthcare, as it is a unique environment where the perceived consumer, namely the patient, is not generally responsible for the bulk of the costs of care even though they are often the decision maker.

Additionally, physicians drive much of the value in healthcare, or lack thereof, and unless a model incentivizes them for value, it is hard to move the needle. Likewise, incentives of payers, patients, hospitals and providers may be maligned in many of these models, which makes traction difficult. Therefore, the traditional Amazon model of providing data to end consumers to make cost-effective decisions might not make total sense in healthcare. This is further complicated by the fact that there does not generally exist national datasets with standardized definitions and attribution models, such that value is clear to a patient or employer and such that data science can be applied to the datasets in traditional ways.

Walmart has taken a different approach and has leveraged their legacy in bricks and mortar. Walmart has been especially aggressive in healthcare since launching Walmart Health, an in-store clinic in a rural Georgia store opened in 2019, and expanding the program to 15 locations at the end of last year with ongoing expansion. These stores offer primary care, labs, radiographs, EKG, counseling, dental, optical, hearing, nutritional services and health insurance education and enrollment. In addition to bricks and mortar, Walmart recently announced that it would be acquiring telehealth provider MeMD.

Walmart and Amazon are not alone in this quest. Dollar General, Walgreens,and CVS have similar goals. Many large companies are making huge investments into data acquisition related to healthcare. Again, there are many issues and unique challenges associated with data integrity, disparate data sources, data accuracy, data definitions and privacy rules that are created in healthcare compared to other retail industry data and analytics. Nonetheless, these companies have deep data science resources to leverage and over time are likely to better understand how to build improved predictive models and analytics for accurately defining value from improved data sources.

Without a doubt, our healthcare system is ripe for and in need of, innovation and disruption. These large players have access to nearly unlimited capital, established brands and market reach and unmatched retail industry expertise which will in some way certainly make them a formidable force in the healthcare industry in the future. Exactly how and where may remain a question, but disruption by these large players is inevitable. The winners and losers in that game remain the outstanding question.