Strategy Catalyst hosted a webinar session, Ambulatory Disruption: Where is the Market Today? We discussed how the retail disruptor threat has mostly receded, but there are still competitive threats remaining in the ambulatory market. In particular, we reviewed three major companies still advancing their strategy despite headwinds: Amazon, CVS Health, and UnitedHealthcare (UHC).
Watch the session in the video above or hit "Download PDF" to see the slides.
Key Takeaways:
Amazon has been focusing on improving margins in One Medical and achieving ruthless efficiency. They are trying to grow One Medical margins by reducing consumer acquisition costs through Prime membership (to limited success); increasing reliance on APPs; and reducing dependence on large employers.
Optum is divesting (somewhat). Recent divestments have primarily been made within SCA and MedExpress as the company has also done larger-than-usual layoffs. Optum acquisitions have slowed and have been more limited as they face regulatory scrutiny around their financial relationship with UHC, impact of acquisition on rivals and consumers, and billing and documentation practices.
CVS Health is pushing forward despite governance woes. CVS is unlikely to break up even with CEO Karen Lynch’s recent exit and other executive changes. They are continuing to hope that they can drive a 3-4 times greater consumer lifetime value (LTV) if they engage members in their connected flywheel of services. They continue to seek an equity partner for Oak Street.
"So what” of the changes in the landscape from the past 6 months:
Payers are seeing tightening margins on MA and this is driving contractions in their payvider strategy.
The retail primary care model is not working– disruptors need risk or specialty pharmacy to make it work
With virtual urgent care fully commodified, D2C digital offerings offering ease of access (e.g., Hims & Hers) are finally making headwinds