A Learning Moment: Healthcare Companies Raise the White Flag Yet Leave a Treasure Trove of Lessons, Insights

?????????????? “Over-estimating Reach, Under-estimating Risk”

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The news that Walmart and Amazon are de-emphasizing or re-calibrating investments in health care clinics and services, including closing all health clinics throughout Walmart’s retail empire, signaled a major retreat from what many had predicted would be the salvation of a stubbornly broken health care system.

Much like Apple’s recent exit from the automotive industry – reports of over $20 billion invested in a completely new business model for a legacy industry – the announcements reverberated throughout the business, financial and health care industries.??????

The reasons are both practical and honest.? As Walmart stated, the costs became too unwieldy and unpredictable. Translation:? the retail giant could not tame an out-of-control health care system and generate profits on the scale needed to sustain the business.?

In Amazon’s case, the company earlier announced a major overhaul of its health business in an attempt to bring together its telehealth, pharmacy and primary-care services and contain losses at One Medical, which Amazon acquired for $3 billion in 2022.? The action has left both employees and patients frustrated and angry and again raised the specter of another tech company overreaching in a complex, highly regulated, industry.

These developments reinforce the view that companies and leaders need to be careful in venturing beyond their core business, especially in industries that are so fraught with difficulty and challenge as heath care and automotive.

In its statement, Walmart acknowledged the distress the move will have on patients and employees and pledged to do what’s right on their respective behalf. Amazon is also looking to do right by its patients by streamlining operations to make it easier for access and performance. And Apple is seeing its engineers and designers getting scooped up by automakers globally as they revamp their portfolios for an electric reality.

There will be in-depth postmortems, but probably the simple answer to what happened can be summed up as organizations, “overestimating reach and underestimating risk!”

While health care strives to transform every aspect of its processes, the core demands remain the same:

1)??????? Quality health care services and medicines to support life

2)??????? Access and equity for everyone

3)??????? Affordability

4)??????? Timeliness

5)??????? Clear, seamless information including diagnosis and prescribed regimen

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Walmart and Amazon understood the needs when they expanded their health care investment, and their entry had the potential to bring change to an industry desperate for it. Their exit shouldn’t be a cause to chastise companies for trying to take on enormous challenges.

Instead, the lessons from their experience should be used to inform and influence positive developments that are necessary to make health care work for everyone.? It must begin with an unraveling of the byzantine regulations and protocols hampering healthcare and the need for more seamless decision-making?on patient care and physician specialization.

Business, like life, is an on-going learning experience. It is wise to embrace all that is there and use it to fuel what’s next. ???????? ????

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?? ??Gary