There's a pervasive notion in America that no problem is so nettlesome it can't be fixed, or at least drastically improved, by private enterprise. Got a messy industry plagued by government bureaucracy? Just pull the pin on the grenade of capitalism and watch all that cumbersome red tape disintegrate before your eyes.
Then there's the American healthcare system, that monstrous web of public and private institutions bound together by an impenetrable wall of regulations that hardly anyone, least of all patients, can understand.
Over the past few years, we've seen America's titans of industry take bold swings at the almost incomprehensibly huge sector. (Americans spent a staggering $4.5 trillion a year on healthcare in 2022 — roughly twice the amount we spent on food, and well over a trillion more than we spent on housing.)
As it turns out, not even the mightiest of Corporate America can afford healthcare.
See here: Walmart said Tuesday it is closing 51 of its healthcare centers in six states and ending its virtual healthcare services, an abrupt reversal after years of investment. Walmart had believed it could use its massive financial scale and store base to offer convenient, low-cost services to patients in rural and underserved areas that lacked primary care options, my colleague Nathaniel Meyersohn reports.
But Walmart admitted the healthcare push wasn't profitable, citing the "challenging reimbursement environment and escalating operating costs."
Obviously, being good at retail doesn't automatically make you great at healthcare, but you'd like to think a company with Walmart's resources could, like, figure it out?
Walmart isn't the first (nor is it likely the last) to retreat from ambitious healthcare goals.
Back in 2018, Amazon got together with Warren Buffett's Berkshire Hathaway and JPMorgan Chase — a formidable trinity, to say the least — to launch a healthcare company they hoped would streamline services for patients and lower costs. The project, called Haven, folded after three years, never really making it out of the incubator stage.
When Jeff Bezos, Jamie Dimon and the Oracle of Omaha can't seem to get their arms around the problem, that's also not a great sign.
Separately, Amazon has cycled through other healthcare ventures that have struggled to come to fruition.
After the Haven debacle, Amazon rolled out a virtual health clinic called Amazon Care, but it pulled the plug in 2022 after struggling to attract customers. The same year, it acquired the primary care operator One Medical, and it has since been working to integrate that business with Amazon's telehealth and pharmacy operations. That's led to hundreds of layoffs, and, according to the Washington Post, employees are worried the notoriously frugal company may be prioritizing profits over patients.
Walgreens, after plowing billions into VillageMD primary care clinics in recent years, is now trying to stem losses by closing 160 clinic locations.
Bottom line: Healthcare is expensive, which makes it a tricky value proposition for publicly traded companies that need to, um, make a profit.
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