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Developing a new healthcare business: Lessons from Walmart’s Care Accelerator

Danielle Bradnan, Research Associate
March 2, 2020

There is a mounting trend of companies outside of healthcare using digital innovations to develop new businesses in health. It is not an easy market to enter, but getting a piece of the $3.8 trillion U.S. healthcare market can be very lucrative for those who find success.

One recent example is Walmart, who is continuing its campaign in healthcare by offering a bundled healthcare benefits program dubbed “Care Accelerator” to its members. After a successful pilot program in a select few U.S. states, the program is now rolling out nationwide. The program includes four plans that range in price from an annual fee of $50 to $240 for a family of up to six members. These plans bundle services like discounts on dental, vision care, and hearing aids as well as free prescription drugs. The services discounted are strategically key, as they fill expensive gaps in many medical plans. Most notable in the bundled services, and the most hyped component of this rollout are unlimited $1 telehealth visits. Telehealth has seen increased interest but limited traction outside of mHealth for the past few years despite being touted as a viable solution for patients in healthcare deserts. Walmart's partnership with 98point6 is poised to change that.

What makes 98point6 a crucial part of WalMart’s healthcare plan?

98point6, a telehealth company that first hit Lux’s radar in 2017, leverages the increasingly popular subscription model of healthcare – offering unlimited service for an introductory rate of $20 for the first year and $120 for subsequent years, with each visit costing $1. The platform itself is a chat-based app that leverages chatbots for initial screening questions before putting a patient in touch with the physician. This reduces the overhead costs of a receptionist and nurse and allows physicians the ability to exclusively spend time on patients that need a physician for care.  However, it is also a model that is (mistakenly) undervalued in the face of competitors like Doctor On Demand, which uses the stereotype of telehealth, video conferencing. 

By partnering with 98point6, Walmart is able to enter the telehealthcare vertical with a solution that has one of the lowest overheads and can then pass those savings onto its customers by offering the telehealth services (bundled in with other offerings) for a low price. For comparison, the average cost to see a general physician with a copay in the U.S. is between $15 and $25, and without insurance, approximately 10 times that amount.  

LUX TAKE

Walmart's partnership choice of 98point6 is strong on two fronts. From a technology perspective, the solution is a simple, straightforward product that, while lacking in bells and whistles, is likely to be much more user-friendly and widely adopted than synchronous health solutions. From a strategic partnership perspective, 98point6 has been undervalued among its competitors, putting WalMart in a prime bargaining position to work with a company that is a "diamond in the rough."

By stealthily positioning itself as a telehealth provider in its own trademark "save money, live better" way, Walmart is likely to reap the benefits of a customer base that need healthcare solutions at more affordable prices through this partnership. Companies looking to make a play in healthcare should take a lesson from Walmart's playbook by finding differentiating technology partners and combining them with existing market and capital assets to form a unique value proposition. 

 

 

FURTHER READING:

- Executive Summary: Digital Transformation of the Global Healthcare Industry (Free Download)

- Blog: The Insurance Industry's Critical Role in Digital Technology Adoption

- Blog: Digital Opportunities Boom as Healthcare Spends Additional $750 Billion

- Tech Page: Digital Therapeutics (Members Only)

- Infographic: Challenges in the Healthcare Industry Today

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