Retail giants such as Walgreens and CVS Health and the Big Four tech companies — Alphabet (rebranded from Google), Amazon, Apple and Microsoft — are ramping up their healthcare pursuits as patients increasingly demand lower costs and convenient access to care.
Eight spine surgeons discuss why these large corporations see an opportunity to disrupt the healthcare market and why they’re skeptical about the long-term implications of these new players.
Ask Spine Surgeons is a weekly series of questions posed to spine surgeons around the country about clinical, business and policy issues affecting spine care. Becker’s invites all spine surgeon and specialist responses.
Next week’s question: How has competition evolved in your market over the last three years? What are you expecting in the future?
Please send responses to Alan Condon at email@example.com by 5 p.m. CDT Wednesday, Oct. 26
Editor’s note: Responses were lightly edited for clarity and length.
Question: How do you think Big Tech and retail giants will affect how healthcare is provided in America?
Alok Sharan, MD. NJ Spine and Wellness (East Brunswick, N.J.): At Tuck School of Business at Dartmouth College (Hanover, N.H.), I had the good fortune of studying under Elizabeth Teisberg, who co-wrote the book on value in healthcare with Michael Porter. Initially, Mr. Porter and Ms. Teisberg started out on their academic journey trying to understand why competition doesn’t work in healthcare in the same manner that it works in other industries.
While the answer to that question is complicated, it is clear that the new entrants to healthcare, i.e., Big Tech and retail giants, will certainly force a greater level of competition in the healthcare delivery sector. For traditional healthcare providers, i.e., hospitals and physicians, they will have to look at their fundamentals and figure out innovative methods to deliver care.
In other industries, competition forces individuals to look at the unmet needs of the customer, determine how to deliver that need in a unique manner, such that it gives a company or individual a competitive advantage. This is the essence of strategy. Big Tech and retail giants will force healthcare providers to fundamentally rethink their strategy to remain competitive.
Issada Thongtrangan, MD. Spine Surgeon at Microspine (Scottsdale, Ariz.): I think we have to be cautious. Pros are lower the cost of expenses and negotiate better reimbursement rates. Cons are less competitive and less autonomy as practices, physicians, etc will get bought or become employed. At the end of the day, I am afraid that they are in the business for profit and not quality care for patients. The relationship and communication will be like employer, employee and clients instead of the physician and patient. Time will tell.
Brian Gantwerker, MD. The Craniospinal Center of Los Angeles: The main point about Big Tech and retail entering healthcare is cost effectiveness. While these companies probably see two things when entering healthcare: making a lot of money in the space, because they see how much money insurance companies are making (albeit a different pie) and driving down costs for their own staff. Many people see big business as the way to run healthcare and save money. Although they are good at running businesses and making lots of money, what they do not understand is that it does not follow the same set of principles. People’s actual lives and wellbeing are involved; not a commodity. My prediction is there will be a lot of fuss and hoopla, but eventually, they will exit, having drained as much capital as possible and our patients will still be left paying more for less. I do not see this is a good thing. Only by putting patients’ priorities — not companies’ bottom line — first can we save money. It is a trillion dollar henhouse. Why would we invite an even bigger fox than big insurance to guard it?
This does not mean state or federal insurance as the rule, but as a supplement. Universal coverage should be the rule of the land. Single payer, however, puts way too much power into the hands of an insurance company that has become too big to fail, and is not the solution to the crisis, any more than letting companies run healthcare. Patients should be able to get care from a physician who is qualified to take care of them and can do a good job of it.
Vijay Yanamadala, MD. Hartford (Conn.) HealthCare: Included among the huge inefficiencies in healthcare today are unnecessary interventions that are driven by our fee-for-service structure. By multiple estimates in the literature, more than 50 percent of spine and total joint surgeries done in the U.S. may be avoidable if patients received proper nonoperative care. Marty Makary wrote about this problem extensively in his book, “The Price We Pay.” Walmart has already been affecting this for a decade through its Centers of Excellence program. By selecting sites throughout the country that emphasize outcomes-driven care and careful patient selection for invasive procedures like surgery, Walmart is able to cut down on unnecessary surgeries. This was covered recently by the Harvard Business Review.
As employers’ healthcare spend continues to skyrocket, solutions that reduce this spend in effective ways will become increasingly important in this space. Musculoskeletal solutions like Sword Health, which offers a digital musculoskeletal care program including digital physical therapy, are able to show a dramatic reduction in surgery utilization by expanding access to physical therapy, the least invasive therapy we know. These solutions are employer driven and are altering the way we deliver healthcare in America.
Every Big Tech company and retail giant is now engaged with healthcare in some way. Ultimately, the central question in healthcare has always been and always will be how do we deliver the right care to every person? That will be the north star metric to watch as we move forward.
Louis Levitt, MD. The Centers for Advanced Orthopaedics (Bethesda, Md.): Big tech, who are some of the largest employers in the country, and retail giants, who have the widest distribution of consumer-facing retail outlets, have much to gain by providing healthcare services that are more easily accessible and are delivered at the lowest price. For the largest employers, with musculoskeletal spending amongst the highest cost to these self-insurers, bending the cost curve becomes a priority. Recently, large companies like Amazon and Walgreens have turned to a digital solution to provide the initial care for their employees relying on physician extenders like athletic trainers, physician assistants and physical therapists to diagnose and start treatment. It is clear the intent is to exclude physician involvement as patients enter the clinical pathway. Through 1-800 numbers, employees can start treatment quickly and at a lower cost. Patient compliance is high and patient outcomes are allegedly favorable.
In a similar fashion, large retail giants like CVS and Walgreens, have turned the traditional pharmacy model into community health mini-clinics with care delivery by a pharmacist and nurse practitioners. Again, we understand the convenience of the corner drug store delivering care. However, questions have to be raised regarding the quality of care when the physician is removed from the clinical decision-making process. When does bending the cost curve and profitability replace good clinical medicine delivered by well-trained physician specialists?
Amazon Cares through a digital home care model recently collapsed under the burden of poorly trained physician extenders delivering healthcare. Even commercial insurance carriers like UnitedHealthcare, Aetna and Cigna have turned to simply denying all care recommendations by well-trained physicians as a means of cutting costs. They credential physicians as their care representatives and then refuse to approve recommended treatments. It is then up to patients and their physicians to fight for approval to diagnose and treat. Understanding that many will not take up the fight, consequently, the commercial carriers collect their insurance payments without providing care.
So, my perspective on Big Tech and large retailers on future healthcare delivery in their current models is at best skeptical with what I believe to be a huge disadvantage to consumers in the long run. Convenience, yes, is important. Reducing healthcare costs is also a noble goal. However, surrendering healthcare decisions to physician extenders, or para-medical professionals, and denying care recommendations in the service of excluding physician input, will never be in the best interest of the patient.
Managing effective and efficient treatments along musculoskeletal clinical pathways is the purview of the well-trained physician. No attempt should be made to compromise that position. Cutting corners to bend the cost curve is irresponsible. Focusing on profits will never replace compassionate patient care.
Christian Zimmerman, MD. St. Alphonsus Medical Group and SAHS Neuroscience Institute (Boise, Idaho): Current expectations is that we will see tech companies and large retailers continue to partner with providers to drive improved patient financial engagement and experience, paralleling the more expected retail-like experience for billing and healthcare payments. Specialist appointment scheduling is quarters in projection and cutting through the morass of healthcare delivery lacks the efficiencies of the retail market and its expectations.
Retail giants such as Walmart and Amazon have expanded clinical centers in a number of states, acquired multispecialty groups and digital medication management companies to bolster their “intellectual property” platforms as newer methods to lay claim in healthcare delivery (i.e., MeMD and CareZone).
With current financial losses of health systems and state-sponsored facilities being at near all-time highs, the messaging for immediate and dramatic change is resounding. An immediate change will be addressing the burdensome cost of staffing issues, followed by cost containment in an already fledging reimbursement landscape. Healthcare will rely/adopt on the experts of efficiencies that digital companies have touted since their inception.
Harel Deutsch, MD. Midwest Orthopaedics at Rush (Chicago): I think sophisticated buyers such as Big Tech and retail giants are looking for quality and data-driven results. They will be less cost sensitive on a per unit basis but will want to save money by having employees return to work quicker.
Brian Fiani, DO. Weill Cornell Medicine/NewYork-Presbyterian Hospital (New York City): The Big Four tech companies and retail giants in healthcare are Alphabet/Google, Amazon, Apple and Microsoft. These four companies have been targeting healthcare and are looking for tech-savvy partnerships with major healthcare organizations. Amazon in particular has been transforming pharmacy and moving into the medical supply distribution niche. Apple is continuing the pursuit of tracked health-related data as accessible features on its retail consumer products. Tracked data from health, pain and disease can then be transferred to healthcare providers for analysis and treatment plans. Such data could also be useful in medical research purposes as well. Alphabet/Google made a strong surge in its pursuit for the digital health sector when it acquired Fitbit. The company appears to be utilizing its cloud platform artificial intelligence for data storage and analytics. Lastly, Microsoft has a cloud platform named Azure and has a healthcare program designed to record and analyze medical information.
Patient care will always be at the forefront of the work at CAO. Dr. Louis Levitt spoke to Becker’s Spine Review about the impact of prioritizing profit over patient care and how big tech and retail giants are negatively affecting healthcare. Read the full article here: https://bit.ly/3VGXSOJ.