|THIS WEEK IN HEALTHCARE
What happened in healthcare this week—and what we think about it.
A busy week for the usual suspects
On Tuesday, in a long-anticipated move that could signal its future healthcare intentions, online retailer Amazon launched a new telemedicine and home visit service for its Seattle-area employees called Amazon.care. For area employees who get their health coverage through Amazon (except, interestingly, those who are covered by Kaiser Permanente plans), the service offers no-charge telemedicine visits, in-home follow-up care from nurse practitioners, and home delivery of prescription drugs. Given that the service is only available to certain Amazon employees and their family members, it’s not clear why the company launched a public-facing website touting the new service, other than to test the waters across the broader industry for reactions to its pilot program. Although it appears on its face to be little more than a new virtual care and home visit benefit for employees (something many other firms offer), industry reaction was breathless, with many observers hailing the move as just the first step in the e-commerce giant’s inevitable disruption of American healthcare.
To our minds, more significant this week were two new steps taken by the planet’s largest retailer, Walmart, to lay the foundations for its imminent bid to remake our industry. Coming hard on the heels of this month’s unveiling of Walmart Health, a new clinic pilot in Dallas, GA, Walmart announced this week that it plans to offer discounted “bundles” of healthcare services to members of its Sam’s Club discount warehouse stores. The bundles, which will be available to Sam’s Club members in North Carolina, Michigan and Pennsylvania, will include cut-rate dental care, generic medications, and—in partnership with Seattle, WA-based virtual care company 98point6—telemedicine. Walmart’s membership platform is the perfect channel to test new ways of meeting consumers’ healthcare needs, as it allows the retailer to leverage longitudinal consumer data (and loyalty) to understand care needs. Also notable is that a portion of the Sam’s Club offering relies on Walmart’s partnership with insurer Humana, with whom it has been rumored to be in takeover talks.
Also this week, Walmart announced a new employee benefit of its own—one that may telegraph its concerns about staffing its future buildout of healthcare offerings. As part of its employee educational benefit package, it now plans to offer its 1.5M employees access to a range of bachelor’s degree and job-training programs in healthcare disciplines, in partnership with a number of universities. True to form, Walmart’s employees will be able to take advantage of these training programs for the everyday low price of $1. We have long wondered how Walmart planned to solve its “McDonald’s Shrimp Sandwich” problem with respect to clinical labor. (Q: Why doesn’t McD’s offer shrimp sandwiches year-round in all its restaurants? A: There aren’t enough shrimp in the ocean.) Low-cost retraining of its existing workforce is a clever way to approach the problem, and likely signals that Walmart is looking ahead to the day—which we continue to believe will be the ultimate game-changer in healthcare—when it scales its healthcare offerings to become the US’s de facto “Copper Plan”.
Bernie Sanders wants to eliminate medical debt
This week, Presidential candidate Sen. Bernie Sanders (I-VT) unveiled details of his plan to have the federal government wipe away the $81B dollars in medical debt reported to credit agencies. Sanders plan would strengthen consumer protections, by limiting collection practices and restricting the types of assets that can be seized and wages that can be garnished. Sanders also proposed instructing the Internal Revenue Service to review the billing and collection practices of nonprofit hospitals to ensure they are in line with charitable standards and suggested taking action against those who are not. Medical debt is a serious problem for many in this country, including those with insurance. According to a study in Health Affairs about 16 percent of credit reports included medical bills in collections, and the problem is likely larger because the study didn’t include debt paid off through other means. At a recent campaign stop in Nevada, a man struggling with more than $100,000 in medical debt told Sanders that he was so desperate he had considered suicide. The newly-announced plan extends Sanders’s already aggressive proposals to move to a single-payer, Medicare for All coverage system, and is likely to further raise the ire of industry interests. Sanders hasn’t detailed exactly how he plans to pay for his plan, other than alluding to raising corporate taxes as one possible source of funding.
BCBS of North Carolina CEO resigns, Cambia merger put on hold
This week health insurers Blue Cross Blue Shield of North Carolina (BCBS-NC) and Cambia Health Solutions announced a suspension of their planned merger. The decision was prompted by news of the arrest of BCBS-NC CEO Dr. Patrick Conway, slated to become CEO of the combined organization, after an alcohol-related collision in June. Last week it was publicly revealed that Conway had been charged with driving under the influence and child abuse (his two young daughters were in the vehicle). While the BCBS-NC board initially said it supported Conway’s leadership and would keep him on as CEO, that support wavered as new details emerged across the week, suggesting that key details about the incident may have been withheld from the Board and raising questions of an internal cover-up. Facing pressure from the state’s insurance commissioner, Conway resigned late Wednesday.
Formerly Director of the Center for Medicare & Medicaid Innovation (CMMI), Conway had pursued an aggressive agenda centered on moving BCBS-NC’s provider contracts to value-based payment, which gained the health plan national attention and set the pace for statewide transformation. The plan’s proposed merger with Cambia would have combined the two progressive Blues plans around a shared agenda of value-based care. Conway’s exit leaves a leadership vacuum within BCBS-NC, and raises questions among providers in the state about whether the insurer’s value agenda will continue apace. It will also likely intensify recent scrutiny on the plan’s relationship with state officials, and whether BCBS-NC received an advantage in the state’s Medicaid contracting process, the subject of a lawsuit filed last week by rival Aetna. On a personal note, we are saddened by news of Conway’s difficulties, having known him personally and professionally for many years. We wish well in recovery and hope that his legacy of advocacy for healthcare improvement continues on, and that his individual challenges can serve as a teaching moment as well.