Three Shifts in Healthcare Right Now

Today the Nashville Health Care Council invited Marcus Osborne to speak on consumerism in healthcare. He is VP of Health and Wellness Payer Relations at Wal-Mart. IT WAS EYE OPENING!

Key highlights:

· Three shifts in healthcare right now:

o Shift of risk to providers

o Shift of care out of hospitals

o Shift to consumerism – And consumers are driving change.

· Wal-Mart stats:

o 5,000 locations in U.S., opened 500 new locations in US last year

o 140 million transactions per year; ¾ of US population visited Wal-Mart average of 25 times last year; 60% of Americans visit Wal-Mart in an average week; average visit – 40 minutes

o #1 highest unit sales at Wal-Mart last year – bananas

o 25% of all groceries sold in US

o Wal-Mart customer profile matches U.S. customer in general, with higher index (%) of non-whites and MILLENIALS

· Millenials have wildly different consumer behavior from rest of population

· Consumers will engage if you deliver services simply and at the right price

o EXAMPLE: worked with a national employer who had offered a discount on cost of insurance for employees to take a risk health assessment, low participation. Wal-Mart identified that 40% of this employer’s workforce had engaged a health risk assessment at an in-store kiosk. CONSUMERS WANT TO ENGAGE HOW THEY WANT TO ENGAGE

· Look at what consumers do vs. what they say (Google, Facebook, Amazon research)

· Wal-Mart views itself as a pipeline to bring innovation to the masses.

· Healthcare at Wal-Mart:

o Pharmacy: 11% US pharmacy share (50% share held by Walgreens/CVS)

o OTC (over the counter) – 33% market share

o Ancillary Services – largest # optical centers in US; also hearing centers

o Clinical Services - access at low price

· Tried to test partnership with health systems to provide clinical services – but system ended up referring most patients from the Wal-Mart to their ED – when Wal-Mart’s goal is to reduce the price of care

· New Model – full primary care – (not including major diagnostic services) to address core health issues consumers face, 7 days/ week. $40 per visit- with additional testing, maxes out at $50. Provides chronic as well as urgent care. Wal-Mart associates go for $4/visit.

· Did some research among women – said they wanted to access quick pap smear/pelvic exam because it was too time consuming and costly to go to an OB/GYN to get a birth control prescription refill (and be able to refill it at Wal-Mart at the same time – ssh editorial). So they are offering these services in the model.

· If convenient, and the price is right, consumers will engage.

· They are trying to offer a full CVC (blood lab diagnostic) for $4 with faster results. Believe that not enough lab work is being done to identify health issues early enough to effectively manage them. If can get price low enough to do lots of tests, can keep people healthy. Theranos is being tested in Wal-Mart in AZ. Samsung is developing equipment to do 95% of labwork at $1- 2 per test.

· Over half of Americans don’t have a PCP, and half of the other half don’t have a relationship with their PCP (primary care physician). They will access convenient health care if offered at a reasonable price.

· Currently focused on resolving regulatory barriers to opening access to care.

· Teledoc service – 90% of cases resolved with a phone call to a physician – very satisfied consumers.

· Wal-Mart is also heavily investing in e commerce – half of all their Black Friday (day after Thanksgiving) sales were via MOBILE

· Focused on integrating physical/digital interaction.

· Health Partners in Minneapolis have a “smart” Virtual online clinic (virtuwell.com) – no provider interaction, just interactive questions that result in a diagnosis – all diagnoses are reviewed by physicians, and 99% are approved as is.

· When I want it, how I want it, at a low cost

· Disrupter – Part D Drug payment by Medicare

o Walmart began selling generics for $4/script to get the new business – disrupted pharmacy pricing, lowered cost

o Creation of preferred pharma networks – reduced variation in pricing – lowered cost

· ACA is a disrupter –

o Options are confusing to consumers, so Wal-Mart is working with vendors to help people find the right plan and understand their plan – consumer confusion is bad for retail – decision paralysis

o As consumers assume more cost of healthcare, Wal-Mart wants to be the provider of choice because they offer care in an easily accessible, convenient and low cost setting. And they believe people will come.

Susan Hassell

Vice President, Marketing and Corporate Communications

Quorum Health Resources, LLC

105 Continental Place
Brentwood, TN 37027

615-371-4860 Phone
615-371-4650 Fax

Creating a Sustainable Future for Healthcare Organizations