Amazon is now offering discounted subscriptions to primary care. Ayesha Rascoe talks to healthcare writer Bruce Japsen about what ventures like these signal for patients.



AYESHA RASCOE, HOST:

Last week, Amazon announced a new benefit to its Prime members – a discounted subscription to One Medical. The tech giant closed its deal to buy the boutique primary health care chain in February, spending nearly $4 billion. Amazon isn’t alone in beefing up its health care business either. Pharmacies like CVS have minute clinics, and retail chains like Walmart are also rolling out similar practices. These ventures are often billed as ways to close the gaps in access to care, but these expansions are expensive and don’t get at the underlying shortage of doctors. So how much can they really help? Forbes senior contributor Bruce Japsen has covered the business of health care for decades, and he joins us now. Bruce, thank you for being here.

BRUCE JAPSEN: Thank you so much for having me.

RASCOE: So I know this is a big question to start with, but can you give us a brief overview of how the business of getting care has changed in recent years?

JAPSEN: Health insurance companies, they are the folks that pay for care. But what has changed in probably the last decade is health insurance companies have been buying and have been also becoming providers of medical care. So let’s just take CVS as one example. A few years ago, they bought Aetna, which is the nation’s third-largest health insurance company. Well, they want to have the Aetna members use their drugstore chains. So CVS was probably the leader in saying, hey, you know what? Amazon is kind of eating our lunch as a retailer. We got this 20% of our store that is emptying. We have to find a way to fill it with services. So they’ve been filling what used to be the not-so-used part of their stores with health care services.

RASCOE: Who’s most likely to use the service from Amazon?

JAPSEN: People who are younger, they just kind of want their care and they want it right away. And they don’t really care who gives it to them as long as they get the care. So when Amazon’s buying One Medical, One Medical has virtual care for sure in all 50 states. But Amazon also has over 200 clinics now, and I think they’re going to start expanding services. And then you have CVS and Walgreens doing more and more health care services in their stores. And, matter of fact, when you think about it, it has been a success. Most Americans got their COVID vaccinations at drugstores. You wouldn’t have even been able to do that five years ago.

RASCOE: You know, these ventures – buying these services for, you know, Amazon and what have you – they cost billions of dollars. So, I mean, is this a gamble for these companies?

JAPSEN: That’s a great question, and, yes, it is. I’ve been writing about health care a long time. If you have your own business and you’re a physician and somebody buys your practice, you’re not going to work as hard. You’re just not. You will go to work for somebody, and you’ll be 9 to 5, 6 to 8. And so historically, when physician practices sell to larger health systems, they make the assumption that that doctor is going to bring in a lot of tests and procedures and revenue. But then what ends up happening is that the productivity of the physician falls off.

What CVS and Walgreens and Amazon and Walmart are offering is saying, hey, we have customers. We know that they’ll come here for health care services, and they will come to see you. And, oh, by the way, we have information systems and relationships with health insurance companies and all sorts of stuff like that that will make it easier on you if you come to work for us. That remains to be seen if that’s going to work because it’s a huge amount of money. And let me just say this – VillageMD, which Walgreens buys – start-up – they have doctor practices. They’re rolling out hundreds of doctor practices – excuse me, clinics that they’re attaching to Walgreens across the country. One Medical, as we talked about, is the Amazon deal. Neither of those companies made money.

RASCOE: Well, I mean, as we’re talking about this, I mean, we’re talking about this because these are businesses. They are looking at the bottom line. What happens if they can’t turn a satisfying profit in health care?

JAPSEN: Yeah, you’re seeing that now. I think that these entities, they close stores all the time. You know, if there’s a neighborhood where there’s a store that’s underperforming, they will close them. And, you know, they have great intentions, but they will hopefully be very careful when they open these stores and move into markets where they think they can be a success because if they’re not, and the community starts to use them but maybe not as much as Walgreens and CVS and company want, there could be a situation where they would pull out.

RASCOE: That’s Forbes senior contributor and health care writer Bruce Japsen. Thank you so much for joining us.

JAPSEN: Thank you for having me.

RASCOE: And just to note, Amazon is one of NPR’s financial supporters.

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