Despite repeated attempts, corporations struggle to disrupt health care with direct-to-consumer approach

Walmart’s recent decision to discontinue its health care initiative is a notable yet unsurprising development in the ongoing quest by non-traditional players to navigate the intricate landscape of health care delivery. This move follows a familiar pattern, echoing the experiences of high-profile collaborations, such as the alliance between JPMorgan, Berkshire Hathaway, and Amazon, as well as the endeavors of technology giants like Microsoft and Google in the health care space. Despite their efforts, these direct-to-consumer entrants have consistently failed to make a lasting impact, raising questions about the motivations behind their forays into health care.

Complexities of health care delivery make for a tough market

To understand why retail giants like Walmart struggle in the health care market, it’s important to understand the complexities of health care delivery. Unlike the retail sector, where convenience and affordability reign supreme, health care is fundamentally different. Here, trust, continuity and expertise are paramount.

Understandably, consumers appreciate convenience and affordability, particularly in underserved areas like rural America, where Walmart often serves as a lifeline. In fact, 92% of those polled in a Health Care Insights Study listed convenience as an important factor when choosing a primary care provider. However, the need for quality health care transcends basic accessibility. It hinges on a deeply ingrained relationship with one's health care provider — a connection built on loyalty and consistency over time.

Retailers and large corporations excel in delivering products and services quickly and efficiently. Many offer the convenience of a one-stop shop, which is certainly appealing. However, when it comes to health care, the stakes are significantly higher, and the need for personalized care and professional experience is crucial. This creates a demand-side problem for non-traditional players trying to carve out a niche in the health care space.

Consumer expectations don’t align with new health care entrants' capabilities

The recurring failures of direct-to-consumer health care entrants, such as Haven, Microsoft HealthVault, and Google Health, highlight a fundamental mismatch between consumer expectations and the capabilities of these new players. Unlike other consumer goods and services, health care is not just a product to be sold; it is a deeply human experience that requires a personal touch.

Health care consumers expect their providers to possess a comprehensive understanding of their unique medical histories, needs and goals. Finding a doctor who meets those requirements is important to 82% of Everyday Health survey respondents, who ranked the task as more essential than finding a good attorney, financial adviser, real estate agent, or even childcare provider. They look for continuity in care, which fosters trust and confidence in their providers. Corporations, however, typically lack the infrastructure and expertise needed to deliver this level of personalized attention. Their business models are built on volume and efficiency, not the nuanced and customized care required of those who treat and support individuals on a personal level.

Multi-faceted solutions will fuel health care innovation

These repeated failures aren’t highlighting a lack of effort or innovation, but rather the need for a more sophisticated approach to transforming health care. The industry's complexities mean that solutions to the nation's health care challenges can’t be supplied solely by disruptive newcomers. While there's a pressing need for swift reform, efforts to spark it must also prioritize quality outcomes and cost-effectiveness.

Addressing the root causes of ineffective, inequitable health care requires a multifaceted strategy focused on improving overall patient well-being, reducing costs, and enhancing systemic efficiency. This journey demands time, patience, investment and hard work. It’s a tall order rife with setbacks, but there are signs the industry is making progress, one step at a time.

The path forward for health care professionals

Many health care professionals and innovators committed to changing the industry’s course are diligently maintaining a patient-centric focus and addressing barriers to quality care, such as the challenges posed by the current reimbursement model — a lesson Walmart learned the hard way. The reimbursement model is the driving force behind the health care system, so profitability issues, such as those experienced by Walmart, are often a direct result of these financial structures. While health care providers must operate within these constraints, they should look to align the model with accountability for outcomes, affordability and resourcefulness, especially in light of staffing shortages.

Walmart's exit from the health care market underscores the substantial challenges that non-traditional players face when attempting to disrupt this intricate industry. The setbacks experienced by retailers and tech companies alike should serve as lessons for other corporations considering a venture into the medical arena. Instead of launching their own direct-to-consumer offerings, these organizations can support reform by investing in health care-focused venture capital funds, startups, and research initiatives. They can also use their influence to advocate for policy changes and legislation.

Though the U.S. health care system is in need of significant improvement in cost-effectively achieving quality outcomes, the most effective approach involves implementing targeted, nuanced solutions specifically designed to tackle the unique complexities of health care delivery. Prioritizing patient-centric care, led by health care professionals rather than corporate interests, will establish a foundation for meaningful reform. With this critical framework in place, innovators can drive significant change, leading to a more efficient and equitable health care system for everyone.

Lucienne Marie Ide, M.D., PH.D., is the founder and CEO of Rimidi, a digital health company that supports health care providers in the delivery of remote patient monitoring and chronic disease management with EHR-integrated software, services, and connected devices.