In another example of giving consumers more direct access to medical laboratory tests, Walmart believes that convenience and lower prices can help it capture market share
Retail giants continue to add healthcare services—including medical laboratory testing—to their wares. It’s a trend that pressures hospital systems, clinical laboratories, pathology groups, and primary care providers to compete for customers. And, while in most instances competition is good, many local and rural healthcare providers cannot reduce their costs enough to be competitive and stay in business.
This is true at Walmart (NYSE:WMT), which recently opened its second “Health Center” in Georgia and announced prices for general healthcare services 30% to 50% below what medical providers typically charge, reported Modern Healthcare.
The services offered at the new Walmart Health Center in Calhoun, a suburb of Atlanta, include:
Primary care
Dental
Counseling
Clinical laboratory testing
X-rays
Health screening
Optometry
Hearing
Fitness and nutrition
Health insurance education and enrollment
A Walmart news release states, “This state-of-the-art facility provides quality, affordable and accessible healthcare for members of the Calhoun community so they can get the right care at the right time … in one facility at affordable, transparent pricing regardless of a patient’s insurance status.”
The fact that Walmart posts “Labs” on the Health Center’s outdoor sign may indicate the retail giant considers easy access to clinical laboratory testing a selling point that will draw customers.
“By offering clinical laboratory testing in support of primary care and urgent care, Walmart may be able to lower prices for lab tests in any market that it enters,” said Robert Michel, Editor-in-Chief of Dark Daily and its sister publication The Dark Report, and President of The Dark Intelligence Group.
The sign above on the exterior of Walmart Health Centers lists the services offered. By advertising “Labs” Walmart is confirming that growing numbers of consumers want to order their own lab tests and that the availability of lab tests gives its medical clinic a competitive advantage. (Photo copyright: Modern Healthcare.)
Healthcare Transparency and Lower Prices
The 1,500 square-foot free-standing Walmart Health Centers offer more services than the in-store Care Clinics installed in other Walmarts throughout Georgia, South Carolina, and Texas. For its healthcare services, Walmart established partnerships with “on-the-ground” health providers to offer affordable services.
“We have taken advantage of every lever that we can to bring the price of doing all of this down more than any hospital or group practice could humanly do. Our goal, just like in the stores, is to get the prices as low as we can,” Sean Slovenski, Senior Vice President and President of Walmart Health and Wellness, told Bloomberg Businessweek.
Some of the clinical laboratory prices prominently posted in the building and noted on the Health Center online price list include:
Meanwhile, the average cost to visit a primary care doctor is $106, according to Health Care Cost Institute data cited by Business Insider, which noted that Walmart’s rates “could be a steep mountain for traditional providers to climb.”
However, Rob Schreiner, Executive Vice President of WellStar Health System in Northern Georgia told Modern Healthcare that “Walmart will offer a cheaper alternative for working-class families who may not have health insurance and may not have an established relationship with a primary care provider.”
Convenient Access to Quality Healthcare Services a Major Draw
At a freestanding Walmart Health Center, people can park near the entrance and walk a few steps to the entrance, rather than traversing aisles to a Care Clinic inside a Walmart Supercenter. And for many customers, finding a Walmart Health Center may not be as complicated or stressful as visiting doctors’ offices.
That seems to be Walmart’s goal—not simply using the Health Centers to increase traffic in its stores, Slovenski said. “We are trying to solve problems for our customers. We already have the volume,” he told Forbes. “We have the locations and the right people. We are creating a supercenter for basic healthcare services.”
Walmart’s arrangement with local healthcare providers differs from traditional primary care clinics staffed by doctors who are practice owners, or who are employed by nearby hospitals and health systems.
“The whole design of the clinic is curious to most of the doctors here [in Dallas, Ga.],” Jeffrey Tharp, MD, Chief Medicine Division Officer, WellStar Medical Group, told Modern Healthcare. “We are advocating integration into our network, for instance with patients who need a cardiologist coming from Walmart to WellStar.”
Clinical laboratory leaders may want to explore partnerships with Walmart and other retailers that are developing healthcare centers to deliver primary care services in places where masses of people shop for everyday items. Especially given that these big-box retailers remain open during healthcare crises like the COVID-19 pandemic.
Experts say Amazon could be planning a roll-out of healthcare services to its Prime members and others
Clinical laboratory leaders will want to note that the Telehealth and home healthcare industries have expanded with the launch of Amazon Care, a virtual medical clinic and home care services program from global retailer Amazon.com, Inc. (NASDAQ:AMZN).
Amazon is piloting Amazon Care as a benefit for its 53,000
Seattle-area employees and their families, according to published reports. Could
this indicate the world’s largest online retailer is moving into the primary
care space? If so, clinical laboratory leaders will want to follow this
development closely, because the program will need clinical laboratory support.
Amazon has successfully disrupted multiple industries in its
corporate life and some experts speculate Amazon may be using its own employees
to design a new medical delivery model for national roll-out.
The S&P report goes on to state, “In as little as five years, the Seattle-based e-commerce company could interlink its system of capabilities and assets to launch various healthcare products, insurance plans, virtual care services, and digital health monitoring to a broader population. The rollout would be part of a larger plan by Amazon to deliver convenient, cost-effective access to care and medications across the U.S., likely tied to Amazon’s Prime membership program, according to experts.”
Modern Healthcare reported that Amazon Care services include telemedicine and home visits to employees enrolled in an Amazon health insurance plan.
Experts contacted by S&P Global Market Intelligence
suggest Amazon:
Plans a “suite of customized health plans and
services for businesses and consumers;”
May offer health services to its five million
seller business and more than 100 million Amazon Prime members; and
Sees healthcare as a growing market and wants
greater involvement in it.
How Amazon Care Works
Amazon Care offers online, virtual care through a
downloadable mobile device application (app) as well as in-person home care for
certain medical needs, such as:
Colds, allergies, infections, and minor injury;
Preventative consults, vaccines, and lab tests;
Sexual health services; and
General health inquiries.
Becker’s Hospital Review reported that once a participant downloads the Amazon Care app to a smartphone or tablet and signs up for the program, he or she can:
Communicate with healthcare providers via text
or video;
Plan personal visits if needed;
Set payment methods in their user profile; and
Receive a “potential diagnosis” and treatment
plan.
The graphic above is taken from the S&P Global Market Intelligence report, which states, “Amazon is one of several tech firms vying for a share of the healthcare market where national spending is expected to reach $6.0 trillion by 2027, up from $3.6 trillion in 2018, according to the Centers for Medicare and Medicaid Services.” (Graphic copyright: S&P Global Market Intelligence.)
“The service eliminates travel and wait time, connecting employees and their family members to a physician or nurse practitioner through live chat or voice,” an Amazon spokesperson told CNBC, “with the option for in-person follow-up services from a registered nurse ranging from immunizations to instant strep throat detection.”
The “mobile health nurse” may also collect clinical laboratory
specimens, the Verge
reported.
Amazon has partnered with Oasis Medical Group, a family primary care practice in Seattle, to provide healthcare services for Amazon Care patients.
Paving the Way to Amazon Care
The Healthcare Financial Management Association (HFMA) compares Amazon’s piloting of Amazon Care to similar healthcare projects that studied population health by first involving employee health plans.
HFMA’s analysis noted that Amazon Care is similar to Haven, a patient advocate organization based in Boston and New York that was created in 2018 by Amazon, JPMorgan Chase, and Berkshire Hathaway to lower healthcare costs and improve outcomes for participating companies.
Tech Crunch reported that in 2018 Amazon also purchased PillPack for nearly $1 billion and integrated its prescription delivery services into Amazon Care.
More recently, Amazon acquired Health Navigator and plans to bring those offerings to Amazon Care as well, CNBC reported. Founded in 2014, Health Navigator provides caregivers with symptom-checking tools that enable remote diagnoses.
Should Telemedicine Firms Be Nervous?
Dark Daily recently reported on Doctor on Demand’s launch of its own virtual healthcare telehealth platform called Synapse. The e-briefing also covered Doctor on Demand’s partnership with Humana (NYSE:HUM) to provide virtual primary care services to the insurer’s health plan members, including online doctor visits at no charge and standard medical laboratory tests for a $5 copayment.
So, should telemedicine firms be concerned about Amazon competing in their marketplace? Business Insider predicts Amazon will need time to beef up its medical resources to serve people online and in-person through Amazon Care.
But that’s the point of Amazon’s pilot, isn’t it? What comes
from it will be interesting to watch.
“Meanwhile, telemedicine firms can ink strategic
partnerships and strengthen their existing payer relationships to safeguard
against Amazon’s surge into the space,” Business Insider advised.
It remains to be seen how medical laboratory testing and reports
would fit into an expanded Amazon Care health network. Or, how clinical laboratories
will get “in-network” with Amazon Care, as it grows to serve customers beyond
Amazon’s employees.
As Dark Daily recently advised, medical laboratory leaders will want to ensure their lab’s inclusion in virtual care networks, which someday may include Amazon Care.
These virtual office visits use artificial intelligence and text messaging to allow real physicians to diagnose patients, write prescriptions, and order clinical laboratory tests
Clinical laboratories may soon be receiving test orders from physicians who never see their patients in person, instead evaluating and diagnosing them through a smartphone app. In response to major changes in the primary care industry—mostly driven by consumer demand—mobile app developers are introducing new methods for delivering primary care involving smartphones and artificial intelligence (AI).
Medical laboratories and pathology groups should prepare for consumers who expect their healthcare to be delivered in ways that don’t require a visit to a traditional medical office. One question is how patients using virtual primary care services will provide the specimens required for clinical laboratory tests that their primary care providers want performed?
Two companies on the forefront of such advances are 98point6 and K Health, and they provide a glimpse of primary care’s future. The two companies have developed smartphone apps that incorporate AI and the ability to interact with real physicians via text messaging.
Virtual Primary Care 24/7 Nationwide
Dark Daily has repeatedly reported that primary care in America is undergoing major changes driven by many factors including increasingly busy schedules, the popularity of rapid retail and urgent care clinics, consumer use of smartphones and the Internet to self-diagnose, and decreasing numbers of new doctors choosing primary care as a career path.
Writing in Stat, two physicians who had just completed internal medicine residencies, explained their own decisions to leave primary care. In their article, titled, “We were inspired to become primary care physicians. Now we’re reconsidering a field in crisis,” Richard Joseph, MD, and Sohan Japa, MD, cited factors that include long hours, low compensation in comparison with specialty care, and deficiencies in primary care training. At the time of their writing they were senior residents in primary care-internal medicine at Brigham and Women’s Hospital in Boston.
They also pointed to a decline in office visits to primary care doctors. “Patients are increasingly choosing urgent care centers, smartphone apps, telemedicine, and workplace and retail clinics that are often staffed by nurse practitioners and physician assistants for their immediate health needs,” they wrote.
One solution to declining populations of primary care physicians is a smartphone app created by Seattle-based 98point6. The service involves “providing virtual text-based primary care across the entire country, 24/7 of everyday,” explained Brad Younggren, MD, an emergency physician and Chief Medical Officer at 98point6, in a YouTube interview. “It’s text-based delivery of care overlaid with an AI platform on top of it.”
The service launched on May 1, 2018, in 10 states and is now available nationwide, according to press releases. 98point6 offers the service through individual subscriptions or through deals with employers, health plans, health systems, and other provider organizations. The personal plan costs $20 for the first year and $120 for the second, plus $1 per “visit.”
Subscribers use text messaging to interact with
an “automated assistant” that incorporates artificial intelligence. While
messaging, they can describe symptoms or ask questions about medical topics.
“After the automated assistant has gathered as many
questions as it deems necessary, it hands [the information] off to a
physician,” Younggren said. In most cases, all communication is via text
messaging. However, the doctor may ask the subscriber to send a photo or participate
in a video meeting.
The doctor then makes a diagnosis and treatment plan. Prescriptions can be sent to a local pharmacy and the subscriber can be referred to a clinical laboratory for tests. LabCorp or Quest Diagnostics are preferred providers, but subscribers can choose to have orders sent to independent labs as well, states the company’s website.
Younggren claims the company’s physicians can resolve more
than 90% of the cases they encounter. If, however, they can’t resolve a case, they
can refer the patient to a local physician. And because most of 98point6’s
interactions with subscribers are text-based, that messaging serves as reference
documentation for other doctors, he said.
“We’ve set out to dramatically augment the primary-care physician with deep technology by delivering an on-demand primary-care experience,” Robbie Cape (above), CEO and co-founder of 98point6, told Modern Healthcare. (Photo copyright: Seattle Business Magazine.)
The 98point6 physicians are full-time employees and work with the company’s technologists to improve the AI’s capabilities, Younggren said. The company claims its doctors can diagnose and treat more than 400 conditions, including: allergies, asthma, skin problems, coughs, flu, diabetes, high blood pressure, and infections. For medical emergencies, subscribers are advised to seek emergency help locally.
98point6 also can function as a front end for interacting
with patients in health systems that have their own primary-care doctors,
Younggren said. The company’s health system clients “don’t actually have a good
digital primary care front end to deliver care,” he said. “So, we can
essentially give them that, and then we can also get some detailed
understanding of how to coordinate care within the health system to drive
patients to the care that they need.” For example, this can include directing the
patient to an appropriate sub-specialist.
Leveraging Patient Data to Answer Health Questions
K Health in New York City offers a similar service based on its own AI-enabled smartphone app. The app incorporates data gleaned from the records of more than two million anonymous patients in Israel over the past 20 years, explained company co-founder Ran Shaul, co-founder and Chief Product Officer, in a blog post.
The software asks users about their “chief complaint” and
then compares the answers with data from similar cases. “We call this group
your ‘People Like Me’ cohort,” Shaul wrote. “It shows you how doctors diagnosed
those people and all the ways they were treated.”
The K Health app is free, but for a fee ranging from $14 for a one-time visit to $39 for an annual subscription, users can text with doctors, the company’s website states.
Unlike 98point6, K Health’s doctors are employed by “affiliated physician-owned professional corporations,” the company says, not K Health itself.
“The doctor you chat with will discuss a recommended treatment plan that may include a physical exam, lab tests, or radiology scans,” states K Health’s website. “They may send you directly for some of these tests, but others will require you to visit a local doctor.”
These are just the latest examples of new technologies and
services devised to help patients receive primary care. How a patient who uses
a smartphone app gets the necessary clinical laboratory tests performed is a
question yet to be answered.
Clinical laboratory leaders will want to watch this shift in
the delivery of primary care and look for opportunities to serve consumers who
are getting primary care from nontraditional sources.
However, research published in JAMA Internal Medicine suggests outpatients with primary care doctors have better healthcare experiences and receive “significantly more” high-value care. These findings come on the heels of a Kaiser Family Foundation (KFF) Health Tracking Poll which revealed that 26% of 1,200 adults surveyed did not have primary care physicians. And of the millennials polled (ages 18-29), nearly half (45%) had no primary care provider.
Why is this important? High-value care include many
diagnostic and preventative screenings that involve clinical laboratory
testing, such as colorectal and mammography cancer screenings, diabetes, and
genetic counseling.
And, this is where clinical laboratories can help.
In the Millennial’s World, Convenience Is King
Millennials are Americans born between the early 1980s to
late 1990s (AKA, Gen Y). And, as Dark
Daily reported, they value convenience, saving money, and connectivity.
Things they reportedly do not associate with traditional primary care
physicians.
According to the KFF poll:
45% of 18 to 29-year-olds,
28% of 30 to 49-year-olds,
18% of 50 to 64-year-olds, and
12% of those age 65 and older, have no
relationship with a primary care provider.
Thus, it’s not just millennials who are not seeing primary
care doctors. They are just the largest age group.
When this many people skip visits to primary care doctors, medical
laboratories may see a marked decline in test volume. Furthermore, shifting
consumer preferences and priorities means clinical laboratories need to reach
out and serve all healthcare consumers, not just millennials, in new and
creative ways.
“We all need care that is coordinated and longitudinal,” Michael Munger, MD, FAAFP, a family physician in Overland Park, Ks., and President of the American Academy of Family Physicians, told the Washington Post. “Regardless of how healthy you are, you need someone who knows you.” (Photo copyright: American Academy of Family Physicians.)
Consider Changes in
Lab Business Model
Dark Daily advises
clinical laboratory leaders to consider changes in how they do business to
better serve busy consumers. Here are a few ways to appeal to people of all
ages who seek value, fast service, and connectivity:
Offer walk-in testing with no appointments.
Create easy-to-navigate online scheduling tools.
Enable patients to request tests without doctors’ orders as the lab’s market allows.
Make results quickly available and in easy-to-understand reports.
Post test results online for patients to securely access in patient portals.
Make it easy to interact with personnel or receive information through lab websites.
Use social media to promote the lab and respond to online reviews.
Younger Americans Do
Not Perceive Value of Primary Care
The JAMA researchers studied 49,286 adults with primary care and 21,133
adults without primary care between 2012 and 2014. The methodology entailed:
39 clinical quality measures,
Seven patient experience measures, and
10 clinical quality composites (six high-value
and four low-value services).
“Americans with primary care received significantly more
high-value care, received slightly more low-value care, and reported
significantly better healthcare access and experience,” the JAMA authors
wrote.
Healthcare Dive notes that the JAMA study may be the first time researchers have substantiated the higher value of primary care, which generally provides services for:
Cancer screening (colorectal and mammography),
Diagnostic and preventive testing,
Diabetes care, and
Counseling.
“Poor primary care supply or access may be hurdles, or some
Americans do not perceive the potential value of primary care, particularly if
they are younger … and healthier,” the JAMA
researchers noted.
The study found that “Only 60% of outpatient antibiotic
prescriptions dispensed in the United States are written in traditional
ambulatory care settings [defined as medical offices and emergency departments].
Growing markets, including urgent care centers and retail clinics, may
contribute to the remaining 40%.”
A Washington Post analysis of this JAMA study reports that “nearly half of patients who sought treatment at an urgent-care clinic for a cold, the flu, or a similar respiratory ailment left with an unnecessary and potentially harmful prescription for antibiotics, compared with 17% of those seen in a doctor’s office.”
This drives home the importance of having a primary care
doctor.
“Antibiotics are useless against viruses and may expose patients to severe side effects with just a single dose,” notes Kevin Fleming, Chief Executive Officer of Loyale Healthcare, a healthcare financial technology company, in its analysis of the earlier JAMA study. “Care that’s delivered on a per-event basis by an array of unrelated providers can’t match the continuity of care that is achievable when a patient receives holistic care within the context of a longer-term physician relationship,” he concluded.
Clinical laboratory leaders and pathologists are advised to
regularly engage with primary care physicians—not just oncologists and other
specialists—and keep them informed on what the lab is doing to better attract
millennials and develop long-term relationships with them based on their values.
Clinical laboratory leaders will want to pay close attention to a significant development in Maryland. The state’s All-Payer Medicare program—the nation’s only all-payer hospital rate regulation system—is broadening in scope to include outpatient services starting Jan. 1. The expanded program could impact independent medical laboratories, according to the Maryland Hospital Association (MHA), which told Dark Daily that those labs may see hospitals reaching out to them.
The Centers for Medicare and Medicaid Services (CMS) and the state of Maryland expect to save $1 billion by 2023 in expanding Maryland’s existing All-Payer Model—which focused only on inpatient services since 2014—to also include primary care physicians, skilled nursing facilities, independent clinical laboratories, and more non-hospital settings, according to a CMS statement.
Healthcare Finance notes that it represents “the first time, CMS is holding a state fully at risk for the total cost of care for Medicare beneficiaries.”
Value of Precision Medicine and Coordination of Care to Clinical Labs
“If a patient receives care at a [medical] laboratory outside of a hospital, Maryland hospitals would be looking at ways to coordinate the sharing of that freestanding laboratory information, so that the hospital can coordinate the care of that patient both within and outside the hospital setting,” Erin Cunningham, Communications Manager at MHA, told Dark Daily. Such a coordinating of efforts and sharing of clinical laboratory patient data should help promote precision medicine goals for patients engaged with physicians throughout Maryland’s healthcare networks.
The test of the new program—called the Total Cost of Care (TCOC) Model—also could be an indication that Medicare officials are intent on moving both inpatient and outpatient healthcare providers away from reimbursements based on fees-for-services.
CMS and the state of Maryland said TCOC gives diverse providers incentives to coordinate, center on patients, and save Medicare per capita costs of care each year.
“What they are really doing is tracking how effective we are at managing the quality and the costs of those particular patients that are managed by the physicians and the hospitals together,” Kevin Kelbly, VP and Chief Financial Officer at Carroll Hospital in Westminster, told the Carroll County Times. “They will have set up certain parameters. If we hit those parameters, there could be a shared savings opportunity between the hospitals and the providers,” he added. (Photo copyright: LifeBridge Health.)
The TCOC runs from 2019 through 2023, when it may be extended by officials for an additional five years.
How Does it Work?
The TCOC Model, like the earlier All-Payer Model, will limit Medicare’s costs in Maryland through a per capita, population-based payment, Healthcare Finance explained.
It includes three programs, including the:
Maryland Primary Care Program (MDPCP), designed to incentivize physician practices by giving additional per beneficiary, per month CMS payments, and incentives for physicians to reduce the number of patients hospitalize;
Care Redesign Program (CRP), which is a way for hospitals to make incentive payments to their partners in care. In essence, rewards may be given to providers that work efficiently with the hospital to improve quality of services; and,
Hospital Payment Program, a population-based payment model that reimburses Maryland hospitals annually for hospital services. CMS provides financial incentives to hospitals that succeed in value-based care and reducing unnecessary hospitalizations and readmissions.
CMS and Maryland officials also identified these six high-priority areas for population health improvement:
Substance-use disorder;
Diabetes;
Hypertension;
Obesity;
Smoking; and
Asthma.
“We are going to save about a billion dollars over the next five years, but we are also providing better quality healthcare. So it’s going to affect real people in Maryland, and it helps us keep the whole healthcare system from collapsing, quite frankly,” Maryland Gov. Larry Hogan, told the Carroll County Times.
OneCare in Vermont, Different Approach to One Payer
Maryland is not the only state to try an all-payer model. Vermont’s OneCare is a statewide accountable care organization (ACO) model involving the state’s largest payers: Medicare, Medicaid, and Blue Cross and Blue Shield of Vermont, Healthcare Dive pointed out. The program aims to increase the number of patients under risk-based contracting and, simultaneously, encourage providers to meet population health goals, a Commonwealth Fund report noted.
Both Maryland’s and Vermont’s efforts indicate that payment plans which include value-based incentives are no longer just theory. In some markets, fees-for-service payment models may be gone for good.
Clinical laboratory leaders may want to touch base with their colleagues in Maryland and Vermont to learn how labs in those states are engaging providers and performing under payment programs that, if successful, could replace existing Medicare payment models in other states.
