HLTH Shows a Three-Horse Race To Disrupt Healthcare: Amazon, CVS, and Walmart

At the inaugural HLTH conference earlier this month, 3,800 health leaders came together to discuss the future of healthcare. Central to the discussion was how to solve for the consumer experience. This may seem like a no-brainer given the great solutions available in all other corners of our lives, but putting the patient first remains a big gap in healthcare today.

In the face of subpar consumer healthcare experiences, we heard a lot of talk of disruptive plays to circumvent traditional players, who seem unable and unwilling to drive this type of change. While startups are certainly a strong force for change, supported by record-high funding levels, the industry is abuzz with consumer behemoths doing the disrupting. This includes Amazon, CVS, and Walmart.

All three benefit from having strong consumer brands and high NPS scores. All are household names with logical entry points into the market. All have huge reach and distribution, including physical retail stores. All are poised to disrupt healthcare by handing over the reins to the consumer.

Who will win this three-horse race?

Amazon is certainly a strong contender. Their ability to learn and execute new playbooks — repeatedly, consistently, and with market-changing results — is a huge strength. And also in stark contrast with the current state of healthcare. If Amazon can go from being a small online bookshop to becoming a market leader in cloud computing and home devices, what’s to stop them from stirring the pot in healthcare? Their experience in low-margin, operationally-intensive businesses, including their core retail business, will certainly help.

Even those betting against Amazon admit they are a harbinger of change, if only by drawing attention and applying pressure. Grand Rounds CEO Owen Tripp described this as the Oprah’s Book Club effect, wherein endorsement by a trusted celebrity can propel a book to the best sellers list. If sheer speculation of Amazon’s interest in the space can spur this level of intrigue and excitement, I can only imagine the havoc a serious play would wreak (in a good way).

Curious minds also want to know what Amazon will do in the partnership with Berkshire Hathaway and JP Morgan. While some point out the limited scale of the consortium, I wouldn’t be surprised if the partnership became a testbed for a more impressive nationwide rollout.

CVS and Walmart share some similar advantages, including a huge existing retail and pharmacy footprint. At HLTH, we learned that 75% of Americans live within five miles of a CVS and 95% of Americans shop at Walmart each year. This type of reach means these retailers are literally co-located with Americans in thousands of communities around the country. This is huge, and hands-down the real edge. Being up close and personal with their target audience, including their own employee population, means they have unparalleled insight into real consumer needs and motivations, not to mention consumer purchasing data.

It also means they are superbly positioned to form the type of trusting relationship required to spur individual behavior change. It’s one thing to send a newsletter, it’s another when you’re in the position to actually nudge people to take action because of your physical and relational presence in their lives.

When you are part of the community and in the business of healthcare, people don’t have to go out of their way to interact with you. They naturally bump into you in their daily lives.

It’s one thing to send a newsletter, it’s another when you’re in the position to actually nudge people to take action because of your physical and relational presence in their lives.

CVS Chief Medical Officer Troy Brennan discussed building a chassis for population health management focused on fragile patients with five chronic conditions (diabetes, hypertension, hyperlipidemia, asthma, and depression) representing disproportionate healthcare spend. Given that active patients spend four to six hours with their providers each year, at most, there’s certainly a role for supplemental care. CVS wants to capitalize on this and “shrink the distance between everyday life and healthcare,” leveraging their network of retail pharmacies and trained specialists. While Brennan didn’t mention the Aetna acquisition, if it happens, CVS would be well-positioned to integrate its pharmacies and MinuteClinics with health insurance and pharmacy benefits management, making CVS legitimately the front line of healthcare.

For now, Walmart seems to be approaching things through their position as the largest employer in the US. Their 1.6 million associates are very much a cross-section of America and their scale surpasses that of Amazon, JP Morgan, and Berkshire combined. For these employees, the company is increasingly focused on behavior change over traditional wellness initiatives like health assessments. David Hoke, Senior Director of Associate Health and Well-Being, discussed the company’s ZP Challenge, a community-based experience for employees to share their personal stories of health and life change. As he put it, “people learn from people, not information.” To date, 1 million Walmart associates have signed up for ZP.

Walmart is actively creating a culture of wellness as an employer, leveraging initiatives like ZP to drive behavior change and engagement. The company is also opening primary care clinics, delivering dental services, improving access to health screenings, and expanding on existing relationships with centers of excellence (COEs) and providers.

From a consumer-facing standpoint, Walmart is rumored to be in acquisition talks with Humana and PillPack, suggesting they, too, are looking to build out a more comprehensive healthcare stack, complete with pharmacies and health insurance.

In an industry that can be the antithesis of innovation, it’s exciting to see the injection of fresh energy from well-respected companies that have mastered the art of serving and delighting consumers. Regardless of who wins the race, having these competitors in the mix is sure to elevate everyone’s performance.

Still, it’s fun to speculate. If you had to pick a winner, who would it be? Take the poll or comment below.