By MATTHEW HOLT

In recent days and weeks, there have been three stories that have really brought home to me the inanity of how we run our health care system. Spoiler alert, they have the commonality that they all are made problematic by payment per individual transaction—better known as fee-for-service.

First, several health insurers who sold their reputation to Wall Street as being wizards at understanding how doctors and patients behave had the curtain pulled back to reveal the man pulling the levers was missing a dashboard or dial or three. It happened to United, Humana and more, but I’ll focus on Agilon because of this lovely quote:

“During 2023, agilon health experienced an increase in medical expenses attributable to higher-than-expected specialist visits, Part B drugs, outpatient surgeries, and supplemental benefits, partially offset by lower hospital medical admissions. While a number of programs have been launched to improve visibility, balance risk-sharing and enhance predictability of results, management has assumed higher costs will continue into 2024,” the company said in a statement

Translation: we pay our providers after the fact on a per transaction basis and we have no real idea what the patients we cover are going to get. You may have thought that these sharp as tacks Medicare Advantage plans had pushed all the risk of increased utilization down to their provider groups, but as I’ve be saying for a long time, even the most advanced only have about 30% of their lives in capitation or full risk groups, and the rest of the time they are whistling it in. They don’t really know much about what is happening out in fee-for-service land. Yet it is what they have decided to deal with.

The second story is a particularly unpleasant tale of provider greed and bad behavior, which I was alerted to by the wonderful sleuthing of former New Jersey state assistant director of heath benefits Chris Deacon, who is one of the best follows there is on Linkedin.

The bad actor is quasi-state owned UCHealth, a big Colorado “non-profit” health system. They have managed to hide their 990s very well so it’s a little hard to decipher how much money they have or how many of their employees make millions a year, but it made an operating profit last year of $350m, it has $5 BILLION in its hedge fund, and its CEO (I think) made $8m. It hasn’t filed a 990 for years as far as I can tell. Which is probably illegal. The only one on Propublica is from a teeny subsidiary with $5m in revenue.

So what have they been doing? Some excellent reporting from John Ingold and Chris Vanderveen at the Colorado Sun revealed that UC has been getting collection agencies to sue patients who owe them trivial amounts of money, and hiding the fact that UC is the actor behind the suit. So they are transparent on how much very poor people allegedly owe them, and come after them very aggressively, but not too transparent on how their “charity care” works. The tales here are awful. Little old ladies being forced to sell their engagement rings, and uninsured immigrants being taken to the ER against their will and given a total runaround on costs until they end up in court. Plenty more stories like it in a Reddit group reacting to the article.

What’s the end story here? UC Health gets a measly $5m (or a share of it) a year from all these lawsuits which is less than the CEO makes (according to a Reddit group—with no 990 it’s a little hard to tell).

Yes, all these patients are being billed or misbilled for individual procedures and visits. It makes people terrified of going to the doctor or hospital, and no rational health services researcher thinks that charging people a fee to use health care encourages appropriate use of care. Last month Jeff Goldsmith had an excellent article on THCB explaining why not.

Of course it goes without saying that if these patients were covered by some kind of a capitation, subscription or annual payment none of this cruelty or waste motion would be happening.

The final example is still going on.

Just over a year ago United HealthGroup, the $500bn market cap gorilla in America’s health care system, paid $13 Billion for Change Healthcare. Change was (and is) a giant in the business of revenue cycle management and claims processing. As Stat News’ Brittany Trang reports

Change ferries claims and payments between providers and insurers, and helps providers check on patients’ insurance information. Before Optum acquired Change in 2022, it served 1 million physicians, 39,000 pharmacies, 6,000 hospitals, and connected with 2,400 insurers.

United went to war with the DOJ and won in order to buy Change because it got them into the detailed flow of bills sent from providers (including pharmacies) to payers—presumably so they could get smarter about what’s going on out there. Well I suspect United is regretting it now. Last week Change got seriously hacked.

In response to the cyberattack last week, UnitedHealth unplugged Change’s connection to every hospital, medical office, and pharmacist that used it to execute one of those functions, whether those organizations interfaced with Change directly or through the complicated insurance claims bucket-brigade.

The complexity of the financial and clinical data flowing through Change is staggering even to those of us who had some idea what it did. But hospitals, doctors and pharmacies can no longer identify patients’ eligibility and more importantly can’t submit claims or get paid.

Why do we need “revenue cycle management” and “claims submission”?  Because of fee-for-service.

This is similar to the time in 2020 when Covid stopped hospitals and doctors seeing patients and submitting bills. Who was ok back then? Kaiser Permanente and other integrated “payviders” who get paid a flat amount per patient they take care of.

Plenty of other industries figure out a way around this. Netflix doesn’t charge per movie watched, my cable company charges me an outrageous amount for internet and TV and divvies it up among its suppliers, giving way too much to Fox News. Even phone companies have gone from pay per minute of each call to a bundled amount per month. Of course there are plenty of companies trying to unbundle this to charge more—as a soccer fan I am very conscious of this with different companies charging me to watch different competitions but none of them are charging per game watched!

But health care remains dead set on fee for service and there are plenty of companies like Change and those Colorado collection agencies that live precisely off this system. In the thirty plus years I’ve been looking at American health care none of the promise of value-based care has made fee-for-service less prevalent. In fact it’s usually just added to the complexity of it while using FFS as a base.

Why? Because in general, as Agilon and the other Medicare Advantage plans are discovering, if a provider gets paid for doing something to a patient, it’s pretty hard to stop them doing more of it.

Legendary Canadian health economist Bob Evans told me once that nothing that is regular is stupid. In other words if something keeps happening, there’s a reason behind it. In the case of fee-for-service in health care the reason is clear, and everyone—other than the dumbos paying for it–is in on the game. It’s just that the reason is stupid.

By MATTHEW HOLT

Humana is out with a report saying that its Medicare Advantage members who are covered by value-based care (VBC) arrangements do better and cost less than either their Medicare Advantage members who aren’t or people in regular Medicare FFS. To us wonks this is motherhood, apple pie, etc, particularly as proportionately Humana is the insurer that relies the most on Medicare Advantage for its business and has one of the larger publicity machines behind its innovation group. Not to mention Humana has decent slugs of ownership of at-home doctors group Heal and the now publicly-traded capitated medical group Oak Street Health.

Humana has 4m Medicare advantage members with ~2/3rds of those in value-based care arrangements. The report has lots of data about how Humana makes everything better for those Medicare Advantage members and how VBC shows slightly better outcomes at a lower cost. But that wasn’t really what caught my eye. What did was their chart about how they pay their physicians/medical group

What it says on the surface is that of their Medicare Advantage members, 67% are in VBC arrangements. But that covers a wide range of different payment schemes. The 67% VBC schemes include:

• Global capitation for everything 19%
• Global cap for everything but not drugs 5%
• FFS + care coordination payment + some shared savings 7%
• FFS + some share savings 36%
• FFS + some bonus 19%
• FFS only 14%

What Humana doesn’t say is how much risk the middle group is at. Those are the 7% of PCP groups being paid “FFS + care coordination payment + some shared savings” and the 36% getting “FFS + some share savings.” My guess is not much. So they could have been put in the non-VBC group. But the interesting thing is the results.

First up Humana is spending a lot more on primary care for all their VBC providers, 15% of all health care spend vs 6.6% for the FFS group, which is more than double. This is more health policy wonkdom motherhood/apple pie, etc and probably represents a lot of those trips by Oak Street Health coaches to seniors houses fixing their sinks and loose carpets. (A story often told by the Friendly Hills folk in 1994 too).

But then you get into some fuzzy math.

According to Humana their VBC Medicare Advantage members cost 19% less than if they had been in traditional FFS Medicare, and therefore those savings across their 2.4m members in VBC are $4 billion. Well, Brits of a certain age like me are wont to misquote Mandy Rice-Davis — “they would say that wouldn’t they”.

But on the very same page Humana compares the cost of their VBC Medicare Advantage members to those 33% of their Medicare Advantage members in non-VBC arrangements. Ponder this chart a tad.

Yup, that’s right. Despite the strung and dram and excitement about VBC, the cost difference between Humana’s VBC program and its non-VBC program is a rounding error of 0.4%. The $90m saved probably barely covered what they spent on the fancy website & report they wrote about it

Maybe there’s something going on in Humana’s overall approach that means that FFS PCPs in Medicare Advantage practice lower cost medicine that PCPs in regular ol’ Medicare. This might be that some of the prevention, care coordination or utilization review done by the plan has a big impact.

Or it might be that the 19% savings versus regular old Medicare is illusionary.

It’s also a little frustrating that they didn’t break out the difference between the full risk groups and the VBC “lite” who are getting FFS but also some shared savings and/or care coordination payments, but you have to assume there’s a limited difference between them if all VBC is only 0.4% cheaper than non-VBC. Presumably, if the full risk groups were way different they would have broken that data out. Hopefully they may release some of the underlying data, but I’m not holding my breath.

Finally, it’s worth remembering how many people are in these arrangements. In 2019 34% of Medicare recipients were in Medicare Advantage. Humana has been one of the most aggressive in its use of value-based care so it’s fair to assume that my estimates here are probably at the top end of how Medicare Advantage patients get paid for. So we are talking maybe 67% of 34% of all Medicare recipients in VBC, and only 25% of that 34% = 8.5% in what looks like full risk (including those not at risk for the drugs). This doesn’t count ACOs which Dan O’Neill points out are about another 11m people or about 25% of those not in Medicare Advantage. (Although as far as I can tell Medicare ACOs don’t save bupkiss unless they are run by Aledade).

I did a survey in 1997 which some may recall as the height of the (fake) managed care revolution. Those around at the time may recall that managed care was how the health insurance industry was going to save America after they killed the Clinton plan. (Ian Morrison used to call this “The market is working but managed care sucks”). At the time there was still a lot of excitement about medical groups taking full risk capitation from health plans and then like now there was a raft of newly publicly-traded medical groups that were going to accept full risk capitation, put hospitals and over-priced specialists out of business, and do it all for 30% less. The Advisory Board, bless their very expensive hearts, put out a report called The Grand Alliance which said that 95% of America would soon be under capitation. Yeah, right. Every hospital in America bought their reports for $50k a year and made David Bradley a billionaire while they spent millions on medical groups that they then sold off at a massive loss in the early 2000s. (A process they then reversed in the 2010s but with the clear desire not to accept capitation but to lock up referrals, but I digress!).

In the 1997 IFTF/Harris Health Care Outlook survey I asked doctors how they/their organization got paid. And the answer was that they were at full risk/capitation for ~3.6% of their patients. Bear in mind this is everyone, not just Medicare, so it’s not apples to apples with the Humana data. But if you look at the rest of the 36% of their patients that were “managed care” it kind of compares to the VBC break down from Humana. There’s a lot of “withholds” which was 1990s speak for shared savings and discounted fee-for-service. The other 65% of Americans were in some level of PPO-based or straight Medicare fee-for-service. Last year I heard BCBS Arizona CEO Pam Kehaly say that despite all the big talk, the industry was at about 10% VBC and the Humana data suggests this is still about right.

So this policy wonk is a bit depressed, and he’s not alone. There’s a little school of rebels (for example Kip Sullivan on THCB last year) saying that Medicare Advantage, capitated primary care and ACOs don’t really move the needle on cost and anyway no one’s really adopted them. On this evidence they’re right.

Matthew Holt is the Publisher of THCB and is still allowed to write for it occasionally.

Yes it’s time to talk Medicare Advantage (MA). It’s been a huge couple of weeks for the world of MA. On the commercial side, CVS bought the biggest pure play MA provider, Oak Street Health for $10bn. This pissed me off as if they paid $2 a share more I’d have made a profit on the stock I foolishly bought “on a dip” in 2021.

But this amazed many of us on THCB Gang, as they paid a huge premium and it works out to some $60k per patient. Now health care organizations have been overpaying for patient “lives” as long as I can remember–going at least as far back as Aetna nearly going out of business when it bought US Healthcare in 1996. So why is today’s incarnation of Aetna buying providers?

Well that’s to do with the regulatory side of MA. I have been on record since the very first post of THCB that Medicare FFS is an inefficient and expensive program–even if 80% of American hospitals say they lose money on it and have to charge commercial insurers more to make up for it. But while it’s possible to agree with George Halvorson that MA delivers better care at a lower cost than FFS Medicare, it is simultaneously possible to believe that MA costs more than it should. That’s because of aggressive RAF upcoding that’s been built both into home visits from companies like Signify and also into the EMRs doctors have been using to code MA members’ health status.

There are lots of proposals on how to fix this–including this one from Chenmed on how to change MA from paying for inputs (i.e how sick people are when they join MA) to outputs (how much better they got while in MA). But it’s clear that CMS is now officially coming after upcoding including full cross plan audits back to 2018. Even if not back to 2011. The MA plans will grumble about those past audits and tie CMS up in court but they know going forward the game is up

To make more money in MA they need to get hold and shake loose or frack some of the 85% of the premium that goes to provider organizations. Hence they are all getting into bed with them or buying them outright. UHG, Humana & now Aetna/CVS have been buying physician groups that serve MA populations at a quickening rate, and their goal is to put more of the 50% of seniors already into MA into those groups.

Will this save any money?  Well probably not, at least not yet. Humana has been reporting on the costs in its full risk capitated MA groups versus its FFS ones for a couple of years, and the difference is a rounding error. But the point is that the next war in Medicare Advantage is going to be what happens inside these plan-owned medical groups. So expect a lot more scrutiny of both costs, outcomes and patient experience within MA focused medical groups starting about now. 

By MICHAEL MILLENSON

Imagine a government program where private contractors boost their bottom line by secretly mining participants’ personal information, such as credit reports, shopping habits and even website logins.

It’s called Medicare.

This is open enrollment season, when 64 million elderly and disabled Americans choose between traditional fee-for-service Medicare and private Medicare Advantage (MA) health plans. MA membership is soaring; within a few years it’s expected to encompass the majority of beneficiaries. That popularity is due in no small part to the extra benefits plans can provide to promote good health, ranging from gym membership and eyeglasses to meal delivery and transportation assistance.

There is, however, an unspoken price for these enhancements that’s being paid not in dollars but in privacy. To better target outreach, some plans are routinely accessing sophisticated analytics that draw upon what’s euphemistically labeled “consumer data.” One vendor boasts of having up to 5,000 “certified variables for every adult in America,” including “clinical, social, economic, behavioral and environmental data.” 

Yet while companies like Facebook and Google have faced intense scrutiny, health care firms have remained largely under the radar. The ethical issue is obvious. Since none of this sensitive personal information is covered by the privacy and disclosure rules protecting actual medical data, it is being deliberately used without disclosure to, or explicit consent by, consumers. That’s simply wrong.

But a more fundamental concern involves the analyses themselves.

The claims of predictive accuracy have never been subjected to public third-party scrutiny examining possible bias or even basic effectiveness. Since more than half of all Black and Hispanic Medicare beneficiaries already choose MA plans, that’s a flashing warning sign.

The human and financial stakes – the government pays MA plans some $350 billion annually – are high. The failures of transparency urgently need to be addressed. 

A recent Federal Trade Commission (FTC) forum explored what’s been termed “surveillance capitalism.” FTC chair Lina Khan notes that Americans often “have limited insight into what information is being collected about them and how it’s being used, sold or stored.”

That’s particularly true here. Giant data brokers, privately-funded startups and others are using artificial intelligence (AI) techniques to uncover both patient risk factors and the best way to influence behavior.  For instance, an affiliate of billionaire Richard Branson’s Virgin Group said its analytics showed that Philadelphia Eagles fans would be likelier to join a disease management program if they were contacted by text rather than email.

The for-profit mining of consumer data for health purposes is a somewhat paradoxical outgrowth of public health research, which has long stressed the need to address so-called “social determinants of health” (SDOH). SDOH refers to the environment in which people are born, live, learn, work and play. Many health care organizations now use questionnaires to try to discover who has SDOH issues that might make them more vulnerable to later developing expensive medical problems.

But questionnaires are often completed partially, inaccurately or not at all. The data mining mavens believe they’ve found a better and more scalable solution. Because MA plans are paid a flat rate per member, effective SDOH interventions can yield both better health and a healthy return on investment. Moreover, the health systems and physician groups that actually provide care are increasingly signing contracts that incent wellness, both for Medicare patients and others. When you add in the renewed national attention to health equity, the result is an SDOH industry worth $18.5 billion as of July, 2021, according to one estimate.

While it’s difficult to identify which organizations use the data and how, specifics sometimes slip out. 

At a 2019 Department of Health and Human Services seminar, a physician executive at a New York City health system, explained how his group applies AI to information gathered from the electronic health record mixed with commercial data.

“For instance, if people don’t live near a bus stop or subway station and haven’t purchased an oil change or wiper blades, we can reach out to ask questions [about mobility],” said the system’s head of population health. That conversation required discretion, Fields added, since revealing why someone was contacted “would be creepy.” 

A Humana slide from that same seminar showed that its Grandkids-on-Demand program, which provides companionship and assistance to lonely seniors, was in part enabled by “consumer information from an external vendor.”

Meanwhile, United Healthcare’s Optum group has said it uses consumer data to “close gaps in care and reduce medical costs.” Separately, an Optum algorithm was identified in 2018 as being unintentionally biased against Black patients.

Humana and United enroll nearly half of all MA members, and in many U.S. counties control at least three-quarters of MA enrollees, according to the Kaiser Family Foundation. 

An overwhelming 81 percent of Americans believe they have little or no control over the data companies collect on them, according to a Pew Research Center poll. So what should be done about this secret health care surveillance? 

Government regulators could move to mandate transparency, but there’s a simpler path. United’s market-leading MA share has been powered by its long affiliation with AARP. As a senior advocacy group, AARP should immediately demand that United, and all MA plans, disclose their consumer data use. Perhaps that would prod insurers and providers to treat those in their care as genuine partners, not objects.

The Center for Medicare & Medicaid Services should similarly publicly ask MA plans to disclose. That call for “voluntarism” could be echoed by the members of Congress who introduced bipartisan legislation to strengthen data privacy and security. 

 But beyond disclosure, the government should demand that researchers be allowed to examine the assertion that the data miners are providing predictive accuracy without bias. This is crucial, and it can be done while protecting intellectual property rights. As one researcher put it, “We have to make sure this pays off both for the health care system and the patient.”

That’s exactly the right standard. I believe “big data” could provide a genuine leap forward in finding and helping individuals whose health is at risk. But good intentions are not good enough to protect consumers.  Health care decisions relying upon secret information secretly used is a risk vulnerable Americans should not have to take.

Michael Millenson is a consultant specializing in quality of care, patient empowerment and web-based health. He is President of Health Quality Advisors, and an adjunct associate professor of medicine at Northwestern University’s Feinberg School of Medicine

By MATTHEW HOLT

Humana is out with a report saying that its Medicare Advantage members who are covered by value-based care (VBC) arrangements do better and cost less than either their Medicare Advantage members who aren’t or people in regular Medicare FFS. To us wonks this is motherhood, apple pie, etc, particularly as proportionately Humana is the insurer that relies the most on Medicare Advantage for its business and has one of the larger publicity machines behind its innovation group. Not to mention Humana has decent slugs of ownership of at-home doctors group Heal and the now publicly-traded capitated medical group Oak Street Health.

Humana has 4m Medicare advantage members with ~2/3rds of those in value-based care arrangements. The report has lots of data about how Humana makes everything better for those Medicare Advantage members and how VBC shows slightly better outcomes at a lower cost. But that wasn’t really what caught my eye. What did was their chart about how they pay their physicians/medical group

What it says on the surface is that of their Medicare Advantage members, 67% are in VBC arrangements. But that covers a wide range of different payment schemes. The 67% VBC schemes include:

• Global capitation for everything 19%
• Global cap for everything but not drugs 5%
• FFS + care coordination payment + some shared savings 7%
• FFS + some share savings 36%
• FFS + some bonus 19%
• FFS only 14%

What Humana doesn’t say is how much risk the middle group is at. Those are the 7% of PCP groups being paid “FFS + care coordination payment + some shared savings” and the 36% getting “FFS + some share savings.” My guess is not much. So they could have been put in the non-VBC group. But the interesting thing is the results.

First up Humana is spending a lot more on primary care for all their VBC providers, 15% of all health care spend vs 6.6% for the FFS group, which is more than double. This is more health policy wonkdom motherhood/apple pie, etc and probably represents a lot of those trips by Oak Street Health coaches to seniors houses fixing their sinks and loose carpets. (A story often told by the Friendly Hills folk in 1994 too).

But then you get into some fuzzy math.

According to Humana their VBC Medicare Advantage members cost 19% less than if they had been in traditional FFS Medicare, and therefore those savings across their 2.4m members in VBC are $4 billion. Well, Brits of a certain age like me are wont to misquote Mandy Rice-Davis — “they would say that wouldn’t they”.

But on the very same page Humana compares the cost of their VBC Medicare Advantage members to those 33% of their Medicare Advantage members in non-VBC arrangements. Ponder this chart a tad.

Yup, that’s right. Despite the strung and dram and excitement about VBC, the cost difference between Humana’s VBC program and its non-VBC program is a rounding error of 0.4%. The $90m saved probably barely covered what they spent on the fancy website & report they wrote about it

Maybe there’s something going on in Humana’s overall approach that means that FFS PCPs in Medicare Advantage practice lower cost medicine that PCPs in regular ol’ Medicare. This might be that some of the prevention, care coordination or utilization review done by the plan has a big impact.

Or it might be that the 19% savings versus regular old Medicare is illusionary.

It’s also a little frustrating that they didn’t break out the difference between the full risk groups and the VBC “lite” who are getting FFS but also some shared savings and/or care coordination payments, but you have to assume there’s a limited difference between them if all VBC is only 0.4% cheaper than non-VBC. Presumably, if the full risk groups were way different they would have broken that data out. Hopefully they may release some of the underlying data, but I’m not holding my breath.

Finally, it’s worth remembering how many people are in these arrangements. In 2019 34% of Medicare recipients were in Medicare Advantage. Humana has been one of the most aggressive in its use of value-based care so it’s fair to assume that my estimates here are probably at the top end of how Medicare Advantage patients get paid for. So we are talking maybe 67% of 34% of all Medicare recipients in VBC, and only 25% of that 34% = 8.5% in what looks like full risk (including those not at risk for the drugs). This doesn’t count ACOs which Dan O’Neill points out are about another 11m people or about 25% of those not in Medicare Advantage. (Although as far as I can tell Medicare ACOs don’t save bupkiss unless they are run by Aledade).

I did a survey in 1997 which some may recall as the height of the (fake) managed care revolution. Those around at the time may recall that managed care was how the health insurance industry was going to save America after they killed the Clinton plan. (Ian Morrison used to call this “The market is working but managed care sucks”). At the time there was still a lot of excitement about medical groups taking full risk capitation from health plans and then like now there was a raft of newly publicly-traded medical groups that were going to accept full risk capitation, put hospitals and over-priced specialists out of business, and do it all for 30% less. The Advisory Board, bless their very expensive hearts, put out a report called The Grand Alliance which said that 95% of America would soon be under capitation. Yeah, right. Every hospital in America bought their reports for $50k a year and made David Bradley a billionaire while they spent millions on medical groups that they then sold off at a massive loss in the early 2000s. (A process they then reversed in the 2010s but with the clear desire not to accept capitation but to lock up referrals, but I digress!).

In the 1997 IFTF/Harris Health Care Outlook survey I asked doctors how they/their organization got paid. And the answer was that they were at full risk/capitation for ~3.6% of their patients. Bear in mind this is everyone, not just Medicare, so it’s not apples to apples with the Humana data. But if you look at the rest of the 36% of their patients that were “managed care” it kind of compares to the VBC break down from Humana. There’s a lot of “withholds” which was 1990s speak for shared savings and discounted fee-for-service. The other 65% of Americans were in some level of PPO-based or straight Medicare fee-for-service. Last year I heard BCBS Arizona CEO Pam Kehaly say that despite all the big talk, the industry was at about 10% VBC and the Humana data suggests this is still about right.

So this policy wonk is a bit depressed, and he’s not alone. There’s a little school of rebels (for example Kip Sullivan on THCB last year) saying that Medicare Advantage, capitated primary care and ACOs don’t really move the needle on cost and anyway no one’s really adopted them. On this evidence they’re right.

Matthew Holt is the Publisher of THCB and is still allowed to write for it occasionally.

By TORY WOLFF

Walmart (WMT) is in talks with Humana (HUM) about a relationship enhancement, possibly an acquisition. The two already know how to work together in alliances (narrow pharmacy network, marketing collaborations, points programs). If a new structure is needed, WMT and HUM must be considering a major expansion of scope or a set of operating models where contributions are difficult to attribute and reward (e.g. joint asset builds). What is on their minds? Beyond any interim incremental moves, what could be the endgame?

Catching convergence fever

Horizontal combinations among the top five health plans have arguably reached the regulatory “permissible envelope.” But provider combinations continue apace, enhancing ability to execute on value-based care to be sure, but also increasing negotiation leverage relative to payers. Further, Amazon’s (AMZN) interest in healthcare is gaining momentum but the specific goals are still mysterious, leaving many incumbents to imagine red laser dots are on their foreheads.

Accordingly, health plans are seeking defensible terrain in convergence combinations: CS & Aetna (CVS-AET), Cigna & Express Scripts (CI-ESRX), Anthem’s PBM insourcing and growing attention to CareMore (United Healthgroup [UNH] has been ahead of the curve as usual: but their recent SCA and DaVita medical group acquisitions have clarified for the market the scope of its ambitions for OptumCare). Of course, each of these moves just contributes to the uncertainty about the new competitive paradigm, driving more land grabs in response. I view the WMT-HUM discussions as part of these developments.

WMT as a “some assembly required” care delivery platform

WMT has a 4,500 site network covering over 90% of the US population. Its stores – most with enormous re-deployable space and easy accessibility – and, increasingly, its websites, are fixtures into the weekly routine of many (especially older) Americans.