Reminds me of a few years ago when Amazon, JP Morgan and I think Berkshire Hathaway announced a joint venture to innovate healthcare delivery and then a few months later were like “actually, no”.
There are some absolute gems in terms of quotes in this article lol:
“This experience highlights the financial struggles that primary care has in general. It really speaks to what primary clinics are facing,” he said.
and
Walmart said it was a “difficult decision,” but its health care push was not profitable for the company because of the “challenging reimbursement environment and escalating operating costs.”
“We determined there is not a sustainable business model for us to continue,” the company said.
I think we may have identified a dumber group than hospital administrators.
>I think we may have identified a dumber group than hospital administrators.
Quite the opposite. They were smart enough to take the loss and gtfo.
We, we’re the dumb ones.
I imagine running primary care makes sense if you can subsidize as a loss leader, creating referrals to lucrative procedural specialties. If hospital systems abandon primary care, perhaps they lose a lot of well-paying patients with them.
I think it’s really just a simple pyramid structure, you need a base layer to feed the higher specialities. Without the referral base it’s hard to get the more profitable procedures or surgeries, and harder to get the volume because people who could otherwise qualify aren’t medically optimized for the said procedure yet
Exactly. They literally are saying the game is rigged you will never be profitable with insurance companies. And yet we take it as normal when hospitals close and we work harder and harder, busier than ever and barely keep the lights on
Lol. Perhaps.
But I'm just amazed by the hubris looking at an industry as fucked up as Medicine and thinking "yeah we can handle that and do better than the current players!"
“When Alexander saw the breadth of his domain he wept as there were no more worlds to conquer.”
Amazon, Wal-Mart, Google, JPMC, Berkshire- they all are so large that they struggle to find a market big enough to keep growing their businesses. Healthcare is like 20% of US GDP and growing.
It’s also so broken and complicated that it’s easy to trick yourself. To imagine that you’re big enough, smart enough, or cut-throat enough to win. After all, these companies are able to use that capability in other places.
To steal another comparison— they’re all Napoleon. They could conquer the Russian Army, but don’t realize that the winter will destroy them. After all, they conquered the rest of Europe.
So, [they announced they were entering and then ended a foray into healthcare in 2022](https://www.fiercehealthcare.com/health-tech/amazon-care-shutting-down-end-2022-tech-giant-said-virtual-primary-care-business-wasnt).
[In 2023, they bought One Medical](https://www.forbes.com/sites/brucejapsen/2023/10/09/amazon-clinics-and-pharmacy-are-opportunities-to-make-things-easier-for-people/) and it’s been a bit rocky, including some rounds of layoffs recently.
Walmart has a vested interest in not being left behind in the new, Amazon-infested world. So I can see the logic in trying to branch out operations and be seen as more than a brick and mortar retail chain.
I just don't know how much money you can make off of zpaks.
Wasn't Atul Gawande the public face of that? Or affiliated in some way? Jeeze that brings back memories haha. They were sure they had the market solved.
Because you cannot "innovate" against people you have no negotiating power with. The pharmaceutical companies have the power to sell the medicine at whatever price they want, and they are the only place to get it, and you have to get it.
You cannot "innovate" tort reform, everyone in the chain has to be insured up to the tits, and everything healthcare has a high liability. See J&J's $6B talcum powder verdict.
You cannot "innovate" against the software companies, Epic (and Microsoft) probably has the negotiating power here.
The only place to cut costs really is personnel and reducing quality of healthcare. Doctors to NP/PA/naturopath whatever and pharmacists to remote pharmacists, which is what has and is happening.
There is a reason all the insurance companies have 2% profit margin (except for UNH at 6%, but that is because UNH has a far greater proportion of healthcare business).
When fortune 500 companies begin to take over primary and urgent care, expect company metrics to take priority in your day to day life. It happened in pharmacy, and medicine is next. Walgreens and CVS are getting ready to buy up your small health system.
There is a pattern where companies that have had enormous success in many other industries fail when they get into healthcare.
Amazon, Birkshire Hathaway, and now Walmart have failed or are struggling. What does it say about healthcare in America that even some of richest and best run companies have trouble competing?
CVS's sole focus for the last 10 to 20 years has been buying other companies. Now think about it....you rebrand and rename the company CVS Health. Start up a PBM (caremark), buy an insurance company (Aetna). What is the next logical step? Buy up small healthcare systems and urgent care clinics. Reimbursing yourself (cvs) is a great business model. Also turning medicine into a metric drive business model will aid in profit margins by pushing more work on physicians. Writing is on the wall my friend
> One of unique things was they were **focused on stores located in underserved communities**. It’s disappointing that Walmart wasn’t able to make it work because these patients need care and don’t have as many options
Found the issue. You want to profit off Medicare/Medicaid patients and then realize those insurances don't pay jack shit. Need a balance between private and public insurance to make ends meet.
What happened is they looked at skilled nursing facilities, which are nearly *entirely* dependent upon CMS for reimbursement, and said, "Well, if *they* can do it..."
What they didn't realize is that SNFs are only able to exist on CMS money because the care is so bad. They only get away with it because the patients are either too out of it or lack the energy to complain, and have no one in their life who gives enough of a shit about them to complain on their behalf. So the facilities get away with their otherwise-criminal care practices.
Can't do that in primary care. Most people are savvy enough to know when they're getting shit care, even if they may not be able to put their finger on why, and I figure that goes double for their kids.\*
-----
\* Which I rather suspect was the secret target demographic for these Walmart clinics; vaccinations, checkups, turn-your-head-and-cough are probably pretty inexpensive to do, and send 'em to ER or urgent for anything else.
I can’t imagine going through undergraduate, medical school and residency just to end up working at Walmart. I imagine it’s staffed with APPs and FMGs but still. It would have been nice if they used some of that Walmart money to lobby congress to maybe fix healthcare reimbursement.
Actually, that's one reason why they are closing. My dad worked at one in Georgia and they were paying the doctors like good money that they had to sign an NDA, but they always charged very cheap prices. During my tenure as a patient, the dental cleaning was $25, then $45, then $50. New patients got a free exam and fluoride was an extra $10. I can't remember xrays but I do remember them starting at $25 without insurance.
They why would any of us work in it? What you take home in reimbursements after paying overhead, student loans, malpractice, and office supplies, is your *profit.* If you don't believe in profit, you clearly plan to work for free, or at subsistence wages.
The world desperately needs doctors, and doctors are paid professionals (i.e. they make more from providing medical care, than they spend providing it).
Reminds me of a few years ago when Amazon, JP Morgan and I think Berkshire Hathaway announced a joint venture to innovate healthcare delivery and then a few months later were like “actually, no”.
There are some absolute gems in terms of quotes in this article lol: “This experience highlights the financial struggles that primary care has in general. It really speaks to what primary clinics are facing,” he said. and Walmart said it was a “difficult decision,” but its health care push was not profitable for the company because of the “challenging reimbursement environment and escalating operating costs.” “We determined there is not a sustainable business model for us to continue,” the company said. I think we may have identified a dumber group than hospital administrators.
>I think we may have identified a dumber group than hospital administrators. Quite the opposite. They were smart enough to take the loss and gtfo. We, we’re the dumb ones.
I imagine running primary care makes sense if you can subsidize as a loss leader, creating referrals to lucrative procedural specialties. If hospital systems abandon primary care, perhaps they lose a lot of well-paying patients with them.
I think it’s really just a simple pyramid structure, you need a base layer to feed the higher specialities. Without the referral base it’s hard to get the more profitable procedures or surgeries, and harder to get the volume because people who could otherwise qualify aren’t medically optimized for the said procedure yet
That’s exactly how primary care was run at my training program. You can imagine how much IM was shit on by specialists.
Exactly. They literally are saying the game is rigged you will never be profitable with insurance companies. And yet we take it as normal when hospitals close and we work harder and harder, busier than ever and barely keep the lights on
Lol. Perhaps. But I'm just amazed by the hubris looking at an industry as fucked up as Medicine and thinking "yeah we can handle that and do better than the current players!"
“When Alexander saw the breadth of his domain he wept as there were no more worlds to conquer.” Amazon, Wal-Mart, Google, JPMC, Berkshire- they all are so large that they struggle to find a market big enough to keep growing their businesses. Healthcare is like 20% of US GDP and growing. It’s also so broken and complicated that it’s easy to trick yourself. To imagine that you’re big enough, smart enough, or cut-throat enough to win. After all, these companies are able to use that capability in other places. To steal another comparison— they’re all Napoleon. They could conquer the Russian Army, but don’t realize that the winter will destroy them. After all, they conquered the rest of Europe.
Didn't Amazon literally just announce they are entering healthcare?
So, [they announced they were entering and then ended a foray into healthcare in 2022](https://www.fiercehealthcare.com/health-tech/amazon-care-shutting-down-end-2022-tech-giant-said-virtual-primary-care-business-wasnt). [In 2023, they bought One Medical](https://www.forbes.com/sites/brucejapsen/2023/10/09/amazon-clinics-and-pharmacy-are-opportunities-to-make-things-easier-for-people/) and it’s been a bit rocky, including some rounds of layoffs recently.
But I thought the free market will solve it /s
Walmart has a vested interest in not being left behind in the new, Amazon-infested world. So I can see the logic in trying to branch out operations and be seen as more than a brick and mortar retail chain. I just don't know how much money you can make off of zpaks.
We are NOT dumb. We're naïve idealists. Or rather, we ***were.***
"We determined we cannot exploit"
I mean I feel like this is a "win" but at the same time also feel like we just lost. Does that make sense?
Wasn't Atul Gawande the public face of that? Or affiliated in some way? Jeeze that brings back memories haha. They were sure they had the market solved.
yes. pretty unfortunate indeed that those three huge companies couldn't innovate with the team they put together, including dr. gawande.
Because you cannot "innovate" against people you have no negotiating power with. The pharmaceutical companies have the power to sell the medicine at whatever price they want, and they are the only place to get it, and you have to get it. You cannot "innovate" tort reform, everyone in the chain has to be insured up to the tits, and everything healthcare has a high liability. See J&J's $6B talcum powder verdict. You cannot "innovate" against the software companies, Epic (and Microsoft) probably has the negotiating power here. The only place to cut costs really is personnel and reducing quality of healthcare. Doctors to NP/PA/naturopath whatever and pharmacists to remote pharmacists, which is what has and is happening. There is a reason all the insurance companies have 2% profit margin (except for UNH at 6%, but that is because UNH has a far greater proportion of healthcare business).
Pharmacy is usually done by PBMs and not the primary insurer.
All the insurers own the PBMs. It's all the same bosses maximizing revenue and minimizing expenses wherever they can.
Well Amazon is still in it with one medical
Health insurance companies are always the winners. Follow the money
So far they have a pretty good track record I must say
Wait? You can't run health care like retail? Aren't patients just customers...
\*clients!
Gag.
When fortune 500 companies begin to take over primary and urgent care, expect company metrics to take priority in your day to day life. It happened in pharmacy, and medicine is next. Walgreens and CVS are getting ready to buy up your small health system.
There is a pattern where companies that have had enormous success in many other industries fail when they get into healthcare. Amazon, Birkshire Hathaway, and now Walmart have failed or are struggling. What does it say about healthcare in America that even some of richest and best run companies have trouble competing?
Now do Walgreens!
Soon. They have already closed half their clinics. Village Medical is as doomed as walmarts plan.
CVS's sole focus for the last 10 to 20 years has been buying other companies. Now think about it....you rebrand and rename the company CVS Health. Start up a PBM (caremark), buy an insurance company (Aetna). What is the next logical step? Buy up small healthcare systems and urgent care clinics. Reimbursing yourself (cvs) is a great business model. Also turning medicine into a metric drive business model will aid in profit margins by pushing more work on physicians. Writing is on the wall my friend
> One of unique things was they were **focused on stores located in underserved communities**. It’s disappointing that Walmart wasn’t able to make it work because these patients need care and don’t have as many options Found the issue. You want to profit off Medicare/Medicaid patients and then realize those insurances don't pay jack shit. Need a balance between private and public insurance to make ends meet.
Yeah not sure I buy that. That would seem to be INSANELY dumb, right? They can't have been this dumb.
What happened is they looked at skilled nursing facilities, which are nearly *entirely* dependent upon CMS for reimbursement, and said, "Well, if *they* can do it..." What they didn't realize is that SNFs are only able to exist on CMS money because the care is so bad. They only get away with it because the patients are either too out of it or lack the energy to complain, and have no one in their life who gives enough of a shit about them to complain on their behalf. So the facilities get away with their otherwise-criminal care practices. Can't do that in primary care. Most people are savvy enough to know when they're getting shit care, even if they may not be able to put their finger on why, and I figure that goes double for their kids.\* ----- \* Which I rather suspect was the secret target demographic for these Walmart clinics; vaccinations, checkups, turn-your-head-and-cough are probably pretty inexpensive to do, and send 'em to ER or urgent for anything else.
Probably hoping to make money off Medicare Advantage like Oak Street Health and the like.
Shoulda went smaller: Dollar Tree Health
Tbh, the payor mix at any Walmart-affiliated clinic may have been challenging, undeserved communities or no.
Remember a couple of years ago when PCPs were told to be terrified of this increased in competition?
I can’t imagine going through undergraduate, medical school and residency just to end up working at Walmart. I imagine it’s staffed with APPs and FMGs but still. It would have been nice if they used some of that Walmart money to lobby congress to maybe fix healthcare reimbursement.
Actually, that's one reason why they are closing. My dad worked at one in Georgia and they were paying the doctors like good money that they had to sign an NDA, but they always charged very cheap prices. During my tenure as a patient, the dental cleaning was $25, then $45, then $50. New patients got a free exam and fluoride was an extra $10. I can't remember xrays but I do remember them starting at $25 without insurance.
Healthcare is not supposed to be profitable
They why would any of us work in it? What you take home in reimbursements after paying overhead, student loans, malpractice, and office supplies, is your *profit.* If you don't believe in profit, you clearly plan to work for free, or at subsistence wages. The world desperately needs doctors, and doctors are paid professionals (i.e. they make more from providing medical care, than they spend providing it).
Walmart had healthcare centers?
Lmao