Do Patients Win (or Lose) When Amazon and Walmart Joust in Healthcare?

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By Eric M. Stone

The two heavyweights of retail – one a brick and mortar stalwart testing its online chops, the other an ecommerce pioneer creeping into the real word – seem destined to collide in a title bout for the healthcare crown. Recent news pronouncements and moves by each chart a path closer to direct contention for patient’s healthcare concerns. What will the world look like for patients when brands built on the promise of savings and price competition become meaningful alternatives to traditional medical care? 

Emphasis on Affordable Care

Both brands thrive on their reputation for being low-cost leaders where everything is immediately available – a philosophy that stands in stark contrast to most people’s understanding of healthcare, where the mantra often seems to be “the costlier, the better.” Two large companies committed to eliminating waste and inefficiency in service to lower prices would be welcomed by patients and advocates alike, or would it?

For Amazon, that means activating its world-class supply chain to reverse the high cost, poor outcome dynamics of modern healthcare in America. The juggernaut has demonstrated an unrelenting, almost maniacal commitment to distribution that cuts costs and delivers immediacy for today’s “now, now, now” generation. The result is “the everything store” with millions of products, nearly all perceived to be value priced by consumers and many of which can be on your doorstep in hours.

For Walmart, their existing reach and footprint makes them ideally suited to activate a trusted, available source of onsite clinical support for patients. And to be fair, Walmart already proved it has the beginnings of a robust healthcare rollout in the works. Today, shoppers can get free health screenings in some stores, pick up medicine at Walmart pharmacies, patronize in-store vision centers, and even visit urgent care resources. It’s easy to imagine going one step further and getting an annual physical or seeing a specialist while making a grocery run at your local Walmart.

That same physical footprint also makes them an attractive partner for healthcare innovators and incumbents alike, providing a clear path for upstarts to ramp up clinical care options within the Walmart network. Walmart’s bulk buying brand Sam’s Club could also provide a unique channel for potential sourcing of durable goods or other medical-related supplies that could out-save even Amazon. An important advantage given that the majority of its weekly 140 million visitors are likely seniors or lower income Americans on Medicare and Medicaid – customers that are price sensitive and in the market for care and the accoutrements associated with ongoing care.

A Disciplined Rollout

Both behemoths have proven themselves capable ramping up deliberately within sectors like banking and grocery in a way that might illuminate a similar path for healthcare.

In the case of Walmart, its addition of services like banking and eyecare could provide a replicable roadmap. In each case, Walmart tested initial efforts into these sectors to better understand customer behavior, service challenges, and – in the case of banking – regulatory concerns.

This deliberate evolution in the case of banking allowed Walmart to scale back its plans for a full-fledged bank once it encountered resistance. The brand revised its plans and pushed harder into card and other payment processing efforts instead. On the flip side, customer demand and strong performance for its vision centers led to an expanded rollout in stores around the country.

Walmart’s experiences in these cases will provide valuable lessons as they move deeper into the healthcare sector, perhaps offering a roadmap for how to pivot real-time while assessing customer demand and unforeseen obstacles.  

Amazon benefits from a similar playbook in testing with discipline new verticals and business initiatives. From hardware development efforts like Alexa for your everyday ailment inquiries to forays into grocery shopping with Whole Foods and its own cashier-less stores, the brand is willing to take calculated risks using focused, nimble – yet scalable – rollout strategies.

In both cases, these histories ensure that patients will have manageable ways to engage with each new provider and can trust that both will remain in the game for the long-term. This is important as patients often want to centralize their care with providers, especially when they arrive with reputations for easy access, quality services and lower costs.

“The Experience” Comes First  

As an entity, Amazon is all about consumer experience – speed, savings, reliability, service. It’s easy to imagine numerous partnerships and acquisitions behind its recent forays like PillPack to build a cohesive patient-facing healthcare ecosystem that delivers a speedy, convenient and affordable experience. Something sorely lacking most medical interactions today.

Obvious synergies within the existing Amazon universe could be combined or grown to produce a start-to-finish healthcare experience that includes tele-health, front door delivery of medicines and medical supplies, ride-sharing for doctor appointments, even healthy eating initiatives in support of wellness through their Whole Foods’ operation. And with their unparalleled big data insights into human behavior, they will eventually get to earlier intervention, prevention and co-treatments alongside the ever-hallowed medical professionals.

Walmart has an effective counterpunch for all of those. Its own sprawling empire makes it well suited to deliver those same experiences and even more under one roof. Plus, it has a head start with its health screenings and urgent care centers in some stores, mature pharmacy operations, and vision centers. When you consider that many people still like to see or speak with a medical professional as part of their care routine, Walmart might have an important brick-and-mortar advantage over Amazon and its necessary digital first approach.

The benefits of a healthcare disruptor that can deliver both patient and caregiver satisfaction and reduced costs is undeniable. But can they deliver better outcomes, earlier intervention, more holistic care? We want to get better quicker, cheaper, and with less effort – ideally with just two clicks. Will an Amazon – Walmart heavyweight fight lead to one winner, or will patients be the ultimate victor?

Eric M. Stone is the Chief Executive Officer and co-founder of Velano Vascular. A patient advocate and serial healthcare entrepreneur, Stone is a National Trustee of the Crohn’s and Colitis Foundation.

1 COMMENT

  1. Eric, thanks for your thoughts. I’m looking forward to the disruption you suggest is coming. However, recognizing that the social determinants of health represent about 90% of an individual’s health, it seems like we might be simply rearranging the deck chairs on the Titanic! Medical care, as currently delivered, represents a mere 10% of an individual’s health. And yet we spend about 18% of the GDP on that 10%, and 50% of that in the last six month’s of a person’s life!

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