| | | | |  | | By Ruth Reader, Shawn Zeller, Carmen Paun, Daniel Payne and Erin Schumaker | | | | | 
Walmart is retrenching on health care. | Justin Sullivan/Getty Images | Merely a year ago, it looked like major retail chains like Walmart, Walgreens, CVS and even Dollar General might use their enormous consumer footprints in the U.S. to make primary care more available, especially in rural areas. Now those retailers say health care is too tough a business to crack. “Lots of people think they can invest in health care, but it’s a very complex business and getting more complex all the time with new regulatory oversight by the FDA and tougher reimbursement policies,” said Michele Colucci, founder of the health-focused venture capital firm DigitalDx. Last week, Walmart announced its decision to close 51 of its health care centers along with its telehealth operations. Walmart isn’t the only retailer reevaluating primary care ventures. Walgreens has announced plans to shutter 160 VillageMD locations after taking a $5.8 billion loss on the clinics. When pandemic funding for vaccines and testing dried up, CVS’ mobile clinic partner, Carbon Health, suffered a massive cash loss and had to lay off workers and curb expansion plans. “[Primary care] doesn’t pay, and there isn’t necessarily a runway in the near term for it to pay without it being connected to a broader continuum of care,” Sara Vaezy, chief strategy and digital officer for Providence, a major health care provider. Even so: Some retailers are sticking it out, at least for now. Amazon, which acquired One Medical for $3.9 billion in 2022, is known for giving new ventures long time horizons to reach profitability. And last year, Aetna CVS bought elder care company Oak Street Health and home health firm Signify Health. Why it matters: Nearly a third of Americans lack access to regular primary care, according to a 2023 report from the National Association of Community Health Centers. “The problems with how we provide access to affordable care in rural communities are only going to get worse,” said Vaezy. What’s next? If the private sector can’t provide adequate access to care for certain populations, legislators should consider funding critical access hospitals in health care deserts, Vaezy said.
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Savannah, Ga. | Daniel Payne/POLITICO | This is where we explore the ideas and innovators shaping health care. Laws signed or under consideration in Massachusetts, Rhode Island, New York, Indiana, Connecticut and California, aimed at limiting corporate investment in medicine, have sparked a debate about the potential pitfalls and merits of private equity investment in health care, Modern Healthcare reports. Share any thoughts, news, tips and feedback with Carmen Paun at cpaun@politico.com, Daniel Payne at dpayne@politico.com, Ruth Reader at rreader@politico.com or Erin Schumaker at eschumaker@politico.com. Send tips securely through SecureDrop, Signal, Telegram or WhatsApp.
| | |  The cash price is going up, thanks to AI. | AP | An oddity of pharmaceutical pricing is that customers sometimes find paying cash at the drugstore counter is less expensive than using their insurance. But those savings may shrink thanks to artificial intelligence. Last week, the National Community Pharmacists Association re-upped its recommendation to members to take advantage of an AI tool from Redmond, Wash.-based Prescryptive Health that helps drugstores adjust their cash pricing to boost profits. How’s that? Prescryptive Health says its AI and data scientists can wade through proprietary competitive information about specific drugs and regional differences to come up with the best — and often higher — price. The company says nearly a third of drugstore customers pay cash, and the gross profit margin on cash sales when pharmacists used the tool was 54 percent last year. As of 2022, the average independent pharmacy’s gross profit margin is around 21 percent. The tool also saves time, according to a Prescryptive survey of pharmacists, which found most of them spend a few hours each week reviewing pricing data. Takeaway: Douglas Hoey, CEO of the NCPA, said in a release that members should take heed given the financial challenges they face with low insurer reimbursements.
| | | | LISTEN TO POLITICO'S ENERGY PODCAST: Check out our daily five-minute brief on the latest energy and environmental politics and policy news. Don't miss out on the must-know stories, candid insights, and analysis from POLITICO's energy team. Listen today. | | | | | | | | |  Major philanthropies are looking to help find solutions to intractable health problems. | AFP via Getty Images | Three major philanthropies are offering researchers in low- and middle-income countries $300 million to develop solutions to pressing issues, including climate and health, infectious diseases and nutrition. The Novo Nordisk Foundation, Wellcome and the Bill & Melinda Gates Foundation will each contribute $100 million for the next three years, the organizations said today. The money, which will be distributed mainly through grants, will go to: — Deepen the understanding of the impacts of climate change and ways to protect the health of vulnerable populations around the world — Advance detection of infectious diseases and develop vaccines to prevent their spread globally — Understand the relationship between nutrition, immunity, infectious diseases, noncommunicable diseases and developmental milestones To halve the number of deaths in children from the current 5 million a year, “there's a lot of mysteries that we need to solve, scientific mysteries, and they include understanding malnutrition,” Bill Gates said at the Novo Nordisk Foundation Global Science Summit in Denmark Monday. “Whether it's malnutrition or malaria, or inexpensive gene therapy, most of the kids in the world don't have all of the innovation and brilliance trying to help them out,” he said, adding that this is why kids are 20 times more likely to die in Africa than they are in rich countries. | | | | Follow us on Twitter | | | | Follow us | | | | |
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