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San Diego
Wednesday, May 22, 2024

Big Business Wants to Play in Health Care’s Sandbox

Mention Apple, Walmart and Google, and what comes to mind?

Probably consumer technology, retailing and web services. However, these companies and their peers also want to play more in the health care arena.

“Eighteen percent of the economy is health care. Everybody wants to get a piece of it if they can,” said Nathan Kaufman, managing director of Kaufman Strategic Advisors LLC of Rancho Bernardo.

To get into the medical space, big firms from outside medical circles often link up with established players.

Target Corp. has opened primary-care clinics in its big box retail stores. It chose Kaiser Permanente to supply nurse practitioners to its Southern California clinics, which now number 26.

There are five in-store clinics in the San Diego area. The latest to open was in Encinitas, in the fall of 2018.

There is plenty of basic medical work that a nurse practitioner can do. If needed, the practitioner can consult with a Kaiser doctor via a video link. “It’s pretty cool,” said Jane Finley, senior vice president and area manager for Kaiser Foundation Hospital Health Plan in San Diego.

Financial terms of the relationship with Target were not disclosed. But the relationship benefits both parties, Finley said. She added that the service might be expanded.

Clinic visitors do not have to be Kaiser members. The clinics accept other forms of insurance.

Target and Kaiser are not alone.

CVS Health chose Sharp HealthCare as its partner to staff clinics in its San Diego area CVS Pharmacy stores. The two parties have been working together for six years, said Jim Nuckols, chief marketing officer at Sharp HealthCare. One benefit, the executive said, is referrals to Sharp physicians.

Nuckols said Sharp is content with the arrangement.

Walmart offers services such as eyeglasses in San Diego, but is pursuing primary care in other markets. This fall the big retailer opened its first Walmart Health Center on the outskirts of Atlanta in Dallas, Georgia. It offers services such as labs, X-ray, EKG, dental services and counseling.

The Nontraditional Trend

The entrance of nontraditional players is among six major trends affecting the health care market in 2020, according to Deloitte, the Big Four accounting and consulting firm. Large technology and consumer-focused companies “have a deep understanding of consumers, data analytics and virtual care capabilities that could disrupt traditional business models,” wrote Steve Burrill, vice chairman and U.S. health care leader for the accounting and consulting firm, in a December blog post.

Amazon, Google, IBM and Microsoft are going after business storing hospital records in the cloud, the Wall Street Journal reported. The rewards from data storage are large and are considered worth fighting over. Microsoft recently received a $10 billion cloud storage contract from a big data user in an entirely different vertical market — the U.S. Department of Defense. Both Oracle and Amazon are disputing the win.

More than one big tech company has ventured beyond mere records storage to the study of medical data in its care — though critics have raised privacy and security concerns.

Dr. Christopher Longhurst, CIO at UC San Diego Health, and Kaiser’s Finley both spoke against sharing patient data with tech companies.

UC San Diego is willing to pilot new technology, said Longhurst, but the approach must be safe, respectful and secure. Patient data “should be treated like gold,” he said.

It’s up to the patient whether they want to share data with Apple, he said. Apple promotes its iPhone as a personal medical tool and its ability to link with medical record systems.

Can big tech companies be an asset when partnering with health systems? “I think the jury’s still out,” said Longhurst, who is also associate chief medical officer for quality and patient safety.

Another area of information technology — machine learning and artificial intelligence — is showing some promise, Longhurst added, particularly when it comes to office and clerical operations as well as interpreting images.

With respect to technology, “there is a constant question of build versus buy, or partner,” said Sharp’s Nuckols. “We’re evaluating that all the time.”

Such disruption is well and good, said Kaufman, the local health care consultant. Still, he said he is not sure it is the change that the health system needs.

Ten percent of all patients account for 67% of health care costs, he said. “We have to deal with that issue.”


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