March 29, 2021
Gary Bisbee 0:06
Healthcare leadership is hard work, but what if you could learn from the most brilliant and influential minds in healthcare and beyond? What would you ask them? Would you ask about politics, policy, or maybe leadership? On The Gary Bisbee Show, I’ll do just that. You’ll hear from healthcare’s most successful leaders and those experts who they listen to, as together we’ll explore how the healthcare economy is transforming.
Marcus Osborne is Senior Vice President of Walmart Health. Walmart and Amazon go back and forth as the largest retailer in the world. I believe that Walmart is ahead right now with 2020 revenues of roughly 525 billion and a current market cap of 375 billion. With nearly 4,800 stores in the US, if Walmart decided to provide health care in a big way, healthcare in the US would change forever. We’ll dig into Walmart’s health plans today with Marcus and providers on health insurers will be listening, I’m sure. Walmart Health is testing its health centers primarily in Georgia, but also in the more urban area of Chicago. The price of an adult primary care appointment is $40. We’ll explore what Walmart Health is learning, how satisfied customers are with the services and price, and what Walmart Health’s plans are for expansion. As the largest retailer in the world, Walmart obviously gets high marks for convenience and affordability. How can Walmart apply its general merchandising knowledge to health care? We’ll be exploring with Marcus in today’s conversation. Marcus served as an intern in the Clinton White House, went on to work for the Clinton Foundation, decided to attend Harvard Business School, and graduated with honors. He proceeded to join Walmart and we’ll now pick up his story approximately 14 years later. Marcus, we’re pleased to have you at this microphone.
Marcus Osborne 2:07
Thank you for having me.
Gary Bisbee 2:08
Why don’t we dig right into your background? You joined Walmart 14 years ago, but let’s go back to earlier days. What was life like growing up for you, Marcus?
Marcus Osborne 2:20
I grew up (1) as the son of two educators. My mom was a high school teacher. My father was a teacher and then eventually principal and superintendent. Then (2) I grew up in Frankfort, Kentucky, which is the capital. Most people seem to want to place the capital as Louisville or Lexington. In fact, it’s Frankfort. My sort of life was largely about school. When you have two educators for parents, you pretty much live in schools all the time. When you live in Frankfort, it’s all about politics, so from an early age I got involved on the political side of things.
Gary Bisbee 2:56
In a small world category, I did my administrative residency between my two years at Wharton at Appalachian Regional hospitals and spent time in Frankfort and a number of other cities around Kentucky. It’s a great place for sure. Off to college, what were you interested in studying in college?
Marcus Osborne 3:17
I was interested in everything. I went to a small liberal arts school called Transylvania. Most people seem to think it’s in Romania, but it is in Kentucky. It translates loosely “over the mountains” or “west of the mountains.” It was the first school west of the Alleghenies in the United States. When I was there, it’s a liberal arts school, so I valued the liberal arts. I wanted to learn a little bit about everything, but I majored in political science and minored in history. I had intended to go to law school. I think there were 11 political science majors the year I graduated, 10 of them went to law school and I was the 11th who didn’t. At the last minute, I decided it was not what I wanted to do, so I found myself graduating with a political science degree and a history minor and not quite sure what I was going to do with my life.
Gary Bisbee 4:07
You spent time in consulting, you spent time with the Clinton Foundation, and then off to Harvard Business School. What were your thoughts as you went through HBS about what you were going to do with your career?
Marcus Osborne 4:20
People will say, “Well, why did you go to business school?” They think it’s sort of obvious. “If you have the opportunity to go to Harvard Business School, you go Harvard Business School,” but I actually needed to go to business school. I was probably one of the few people in HBS who absolutely benefited from going to business school. As I mentioned, I graduated with a political science degree, and I went and worked in the White House and then went into management consulting, and I was advising companies on business strategy yet didn’t have the fundamentals of business. I didn’t understand finance or accounting. I didn’t understand the core fundamentals of marketing. For me, business school was about learning the fundamentals. There’s sort of a story when I was at the Clinton Foundation. As we progressed and had been successful in lowering the cost of HIV meds around the world, we had a lot of countries that were supporting us financially. They were willing to buy meds for other countries, so the Irish and Japanese and the Swiss and others were willing to buy meds for Haitians and South Africans. It was in the billions of dollars. There was a day that we were helping support these kinds of transactions, this movement of money. We were getting money from the Irish or the Swiss or Japanese and buying things from Indian manufacturers and shipping them to South Africa. Then, of course, there were four different currencies in play. We had to hedge against those currencies and I didn’t even know what “hedge” meant. I thought that was a good time to go to school. For me, HBS was not— A lot of people enter with an intention of “I’m trying to make some career change,” those kinds of things. I entered with the sole purpose of “I don’t know what I’m doing in business, I don’t understand the fundamentals, so it’s time for me to go back and get that base.” That’s what it was for me.
Gary Bisbee 6:05
Coming from a couple of educator parents, that would make sense that you’d actually go to graduate school to learn something.
Marcus Osborne 6:11
Gary Bisbee 6:13
Off to Walmart,—directly out of HBS, I believe—you were, again, somewhat unique. I would think most of your class went to Wall Street or Silicon Valley. Probably few went into retailing. Why did you go to Walmart, Marcus?
Marcus Osborne 6:27
You couldn’t be more right. I graduated from HBS in ’07 and that’s an important day because roughly a year afterward is when the global economic meltdown occurred. In hindsight, you could probably go back and see it. My section graduated with over 90 people and over 60 of them went into management consulting, financial services, hedge funds, venture capital, and private equity, those kinds of things. I looked at everybody going into it and I said, “You know, I want to go do something very different.” What is the opposite of hedge funds? What is the opposite of management consulting? My first job after I graduate from college was at the White House. There I experienced and understood the value and ability of platforms to drive impact. What attracted me to Walmart was it wasn’t a hedge fund. It was the exact opposite of a hedge fund and a real business. They were running something that was very real and tangible in people’s lives. It struck me as this unbelievably powerful platform where you go and are innovative and work hard. You can use that platform to drive significant impact. For me, that was what drove me to Walmart.
Gary Bisbee 7:42
How did you get into healthcare, then?
Marcus Osborne 7:44
It’s kind of ironic. I was in and out of health care. In management consulting, probably 20% of the work I did was health-related. Certainly, my Clinton Foundation work was healthcare-related. The running joke is I had to go to a retailer to get my degree in health care. When I joined it, there’s a business called the Health and Wellness Business. It had only been formally organized a couple years before, meaning Walmart had been the pharmacy business and the vision center business and had huge business in direct consumer health care when you think about OTC items and things like that. Those had all been different parts of the business. It had only been about a year, year and a half before I started that they were brought together and a formal Health and Wellness Business Unit was created. I was given the opportunity, I was asked, “Well, we think healthcare is gonna be a big opportunity. We think financial services is gonna be a big opportunity. We’d love to put you into the areas that are going to have an impact. What’s the most interesting to you?” In that moment, I chose health and wellness. Strangely enough, that’s all I’ve done at Walmart. I could tell you almost nothing about retail operations or retail logistics or merchandising. It’s been interesting experiencing healthcare through the lens of Walmart, both as a provider of services and products and also as the largest self-insured plan in the United States. It’s a really interesting way to experience healthcare.
Gary Bisbee 9:07
It’s interesting because you’re a little bit inside a little bit outside, so you have a terrific perspective I know those of us on the inside of healthcare have appreciated through the years. If you were not a Walmart executive, Marcus, what would you be?
Marcus Osborne 9:24
The running joke is I answer that depending on who I’m talking to. The joke to my friends is, if I weren’t a Walmart executive, I would be herding sheep in Ireland. That’s the one I’ve always loved to say is my answer. Given my background, there’s a reasonable shot I’d be a teacher. As I think about health care, if I weren’t at Walmart, I’d probably be wanting to help support those real disruptors and innovators that I see emerging that are going to bring about the real change and transformation in healthcare. It is coming, probably not coming as quickly as we’d like, so I’d probably be trying to create my own version of a digital health, AI-driven solution because I’m a believer in particularly that type of technology and the way it’s going to transform care for Americans and for the globe.
Gary Bisbee 10:09
It might be coming quicker than we think because the coronavirus pandemic has certainly changed a lot. Do you have any thoughts about that, Marcus?
Marcus Osborne 10:19
I do. I think there’s been a lot of conversation about this belief that COVID was transformative and sensitive because it changed the game. I actually don’t think it changed anything. COVID was more of an accelerant, meaning there were already these things that were occurring, it just put rocket fuel. One of them is in this movement into an emerging omnichannel reality in healthcare. There’s a little too much noise at the moment about telehealth but don’t read that as I’m against or anti-telehealth. I just don’t believe in telehealth in and of itself. I believe in telehealth solutions as part of an integrated omnichannel experience for consumers that combines more accessible care that’s physical in nature, telehealth, digital health, AI-driven care, care in the home, care in the community. If anything, COVID created an accelerant to that movement into an omnichannel care environment, certainly for consumers. The other thing that we’re not talking a lot about here, which I think is a mistake, is it also accelerated the desire of providers and professionals to want to participate in that omnichannel environment. There were a lot of physicians, for example, who were skeptical of working in a telehealth environment or working in a digital environment and then got exposed, and now all of a sudden, they themselves are more convinced. You’re seeing a lot of these providers and professionals raise their hand and say, “I want to now be part of this new omnichannel experience that we can create for patients for consumers.” That’s what COVID did. It accelerated our belief of what is possible, taking something that might have been five or seven years out and saying now it might be two or three years out. It’s moved the top of the mountain a lot closer to us.
Gary Bisbee 12:16
I think that’s right. Most crises accelerate existing trends, and this one certainly has done that. Why don’t we turn to Walmart Health? I’d love to get your thoughts about omnichannel in terms of Walmart Health. First, could you describe Walmart Health for us, please, Marcus?
Marcus Osborne 12:36
Two levels. The vision was about creating this omnichannel experience. Fundamentally, at its core, Walmart Health is about enabling people to get the basic care they need right now and to be able to afford it, to have it accessible for them, to have it be simple to engage with. What we see today is a system that—because of these challenges of affordability, because of these challenges that people talk about of convenience and accessibility, because of these challenges of people complaining about the complexity—we as Americans are deferring, delaying, or never getting the care we need. Walmart Health is about creating an experience that begins to address that. The first manifestation is opening physical sites. The physical sites are about bringing together an integrated set of services that are designed around the needs of consumers: primary care, behavioral health, social health, ancillary services (like dental and vision and hearing), access to community services (like fitness or nutrition or the life of baby programs), we’re even testing physical therapy in some sites. The goal is to bring those services that people need together, make them affordable. We do accept insurance, but even if you don’t have insurance or maybe you’re on a high deductible plan, you should still be able to afford care by making these things cost-effective and really convenient. That’s been the model, so we’ve started there with physical sites, but I think we’re on this journey to say, “What does that broader omnichannel experience look like?”
Gary Bisbee 14:14
We were doing a little research and found a quote from Sam Walton back in 1991. He said, “We’ve got to get the hospitals and doctors in line. We’ve got to get those charges under control.” The unfortunate thing is, I don’t know if any of that has changed, but maybe it will going forward, Marcus.
Marcus Osborne 14:33
It’s interesting you mention that. I think that’s a great quote. Here’s a guy who at the time was, if not the wealthiest person in the world, certainly one of the wealthiest, and he’s complaining about his own experience about how unaffordable care is and how it was impacting even his desire to get care. That sounds strange, but I think this is one where these challenges we see are universal. There isn’t an American who, if asked, won’t tell you that they didn’t get some care they needed because of some of these challenges. It is interesting.
Gary Bisbee 15:05
To the services of Walmart Health, is there any kind of urgent care type services? Or is it more just general primary care?
Marcus Osborne 15:16
As we look at the people coming in and what their needs are on the medical side of the house, there’s a reasonable percentage of people who come in that are coming in for urgent care needs. They’re coming in for the scrapes, breaks, and sprains, kind of things. They’re coming in with pinkeye or sinus infections or strep or flu. There is an urgent care component. I consider those part of the urgent care environment. Given that we have access to imaging, X-ray, EKG, and other things that enable us to support. The bulk of the visits we see are actually more for people who have a chronic illness, who are looking for support around their chronic illness. People who are looking for preventative or wellness needs. It’s a mix. It’s truly primary care in its fullest. The model we’re seeing play out is the primary care that people would talk about the local family doc who took care of everything. That’s what we want to be. We want to be able to have people come in and get their needs addressed, from an individual dealing with chronic illness to be supported longitudinally to somebody who just might have an episodic need.
Gary Bisbee 16:23
While you’re talking about chronic disease, I wanted to ask you about that because roughly half of the 70 million baby boomers are now on Medicare, so over the next 20, 25 years there will be another 35 million coming online. There’s going to be an increasing demand for chronic care. Do you think that’s a feature of Walmart Health? Or is it something that you’ll do if somebody presents themselves for it?
Marcus Osborne 16:50
It definitely is a feature and we’re already stepping into it. We launched, for example, our first formal disease-specific program focused on diabetics in tandem with our Chicago launch. That will certainly be a big part of it. Again, at the end of the day, we’re trying to address those core needs. I mentioned earlier that we’ve introduced physical therapy in couple of sites. The reason for that is, it was just an extraordinary fact that people who were coming in for primary care— Everybody’s filled out these questionnaires of “you’ve come in for whatever you’ve come in.” Maybe you come in to get your checkup or maybe you’ve come in because you’ve got a sinus infection, you’re not feeling well. Then you’re always asked, “Are there other things from a health perspective that you’re concerned about or are bothering you?” Musculoskeletal issues were huge. Knee pain, back pain, hip pain, shoulder pain, elbow pain. That was why we started to test and see how physical therapy services work. The same applies to chronic disease. We are seeing people come in and the rates are in line with rates of diabetes, the rates of cardiovascular illness or heart disease, or your other issues, so that’s going to be a big focus of Walmart Health. Our challenge is, how can you best address those needs as effectively, at the highest quality, and as efficiently as possible?
Gary Bisbee 17:46
Why don’t we turn to staffing? Are you developing your own staff, your own training programs? I know there’s a college that Walmart is running, but how are you dealing with the issue of staff, nurses, doctors, and others?
Marcus Osborne 18:38
For the key provider roles of the MDS and the nurse practitioners and the dentists and optometrists, we’re having to go and use a normal recruiting process and attract. We’re going to try to find novel ways to target those providers to find the ones who are really most interested in the work we’re doing. We are starting a process that you mentioned, Live Better U, which is a degree program that we actually created for our associates. A fun little fact for you: We went and did a survey that showed—out of the roughly one and a half million associates in the United States—somewhere between 60 to 80,000 of them already had existing degrees in healthcare, so there might be somebody who’s already a medical assistant or they had already been certified and had been working as a community health worker or had been a personal care assistant for an at-home care group. Some of them are more advanced. We were kind of surprised. We were finding nurse practitioners and nurses and hygienists and other people who were also working in Walmart overall. To your point, we are starting to use Live Better U as a way to identify associates who are inclined and really interested in the work we’re doing and support their education, support their process to become trained in some of these roles. CMA or as a tech in the optometry business or as a nutritionist or whatever it might be. There’s more to come there, but we have started a process to look at how we can develop our own pipeline of talent and professionals to support the bulk of our staffing needs.
Gary Bisbee 20:17
Is there any thought about developing relationships with local providers for the health systems or doctor groups to provide some care for the centers?
Marcus Osborne 20:29
We have started those conversations. There are opportunities to, as you mentioned, leverage the existing health systems that could be even to the point of thinking in tandem, employing primary care physicians or other providers and having them work within Walmart Health and the health systems. That is certainly going to be a focus of ours going forward. We have started down that path, but I think there’s more to come.
Gary Bisbee 20:55
Marcus, how about health plans? Any idea of working with specific health plans? Maybe for populations like Medicare Advantage or manage Medicaid, something like that?
Marcus Osborne 21:08
We’re already going down that path. I think about there being two buckets that we’re engaging with. One is the health plans themselves that are particularly in Medicare, Medicaid. The need there—and this is a journey that we’re on—is this desire to move Walmart Health into a more value-based care environment, to think about how we can operate and deliver care that’s longitudinal in nature, that is oriented to fee-for-value over fee-for-service. That is a journey we are on. We started this process of thinking about how what we’re doing could be packaged up and can become consumable for commercial groups for employers of all sizes. We’ve actually done some things there to think about how what we’re doing could help employers better address the health coverage needs or health care needs of their employees and their spouses and dependents. There’s going to be a lot more coming around work with health plans to create deeper partnerships there.
Gary Bisbee 22:13
How many of the consumers using the health centers are Walmart employees?
Marcus Osborne 22:20
On one hand, it’s a lot. When we look at the unit number, it’s an extraordinary number of associates and their families that are using it. On the other hand, because we’ve been fortunate to have really good volume— In fact, we just passed a big threshold for us. Now we can talk about having served hundreds of 1,000s of patients, but when you look at it today, associates make up 2, 3, 4% of the total volume. They are a huge percentage portion but, when you look at the overall numbers, we’re seeing a lot of them and, as you know, the best marketing is word of mouth. The more our associates use us, the more they’re telling their friends and family and the people they go to church within the community. We’re finding that our associates are proving to be our best marketing vehicle.
Gary Bisbee 23:12
One of the questions, Marcus, I have is about the data. Have you developed your own information system? Or will you be using the ones you purchase? Or how are you handling data from these encounters?
Marcus Osborne 23:28
We are bringing in standard electronic health records and clinical tools to help run the overall operation. As we think specifically about a larger, integrated data environment, it’s not just about the health information creative by you and Walmart Health. It could be what’s occurring in pharmacy. It could be that you have done a health screening on the Pursuant Health or Higi Kiosk. It could be that you showed up to a Walmart wellness day and got blood pressure done or you got your glucose or A1C or cholesterol checked or you had a BMI done. It could be about your behaviors in the store overall around your nutritional habits or your habits as they tie to your purchases that connect to sleep or exercise. Our point is that all of that is pertinent health information that, when brought together in the right way and organized the right way in which insights get generated the right way, you can really have a much deeper impact on somebody’s health, so that is a big piece. Our view on that is that it goes beyond the standard EHR approach, so some of this we’re actually having to invest in and create ourselves.
Gary Bisbee 24:43
You’re really moving from strictly healthcare to broader social determinants of care, which is terrific. As you expand the centers, where do you see competition from existing providers or from the Walgreens and CVSs of the world?
Marcus Osborne 25:00
This is probably going to be a strange answer. I hope all of them. I hope everybody’s trying to up their game. I hope everybody understands that the opportunity is to better serve consumers. When you do that, there’s volume to be had there. Not only can you do good, but you can also do well. To your question, I think some of the health systems are trying or will think about different approaches there. Even some of the health plans. Look at what United is doing with Optim, or what Humana and others are doing. I certainly believe CVS and Walgreens and Amazon and Kroger are all going to play a role. Then I fundamentally believe the technology guys, Google and Microsoft and others are going to have a role to play. I hope it gets crowded and more competitive with more compelling solutions. However, compared to what I’ve seen on the financial services side, there is less transformative action and thinking, so I hope that at some point in this sector—with both traditional and non-traditional players coming in—that we get as aggressive as we’ve seen the financial services industry getting around trying to create new consumer solutions.
Gary Bisbee 26:18
Somebody has to lead, Marcus, and Walmart certainly has the size. You all are being very creative as you go about doing it, so we look for good things coming out of Walmart in terms of your leadership role. This has been a great interview. I’d like to ask one final question, a little bit of an odd question, probably. What can the existing providers learn from Walmart Health and what you’re doing now?
Marcus Osborne 26:43
The biggest thing I think anybody can learn is that there is this equation of sorts: If your goal and your purpose is to help improve the health of Americans, you do that not by dumping lots of knowledge on people, but you do that by first and foremost helping people feel more engaged around their health. When they are more engaged, they feel more in control. When they feel in control, they feel empowered. When they feel empowered, they act. When they act, then things happen. What does that actually mean? I hear a lot of conversation where now you talk about how health systems or service providers or whatever will at least try to speak to things like Net Promoter scores and the like. They’ll say, “Oh, I’ve got a Net Promoter Score in the 40s.” Even if you have a reasonably good Net Promoter Score—maybe you have one of the 60s or 70s, or 80s—I think setting the bar and saying you’re in the consumer experience business, and that thinking about service and what it actually means to serve and deliver really great consumer experience. How can I deliver a service in healthcare that is akin to what Chick-fil-A delivers in fast food? How can I deliver in healthcare a service that is akin to what Four Seasons delivers in the hospitality industry? How can I deliver in healthcare like how Apple is delivering at retail? They have one of the highest Net Promoter scores in the Apple stores. My recommendation is to use them as a standard. Understand that you’re in the consumer experience business. If you create a phenomenal consumer experience that is built around health and still focused on delivering quality care, you will see significant health impact and health change on the population.
Gary Bisbee 28:42
Marcus, this has been a terrific interview. I think this is a good place to land. We really appreciate your time today.
Marcus Osborne 28:49
Thank you so much. It’s been a pleasure.
Gary Bisbee 28:52
New episodes will debut every Thursday. Join me in conversations to gain advice and wisdom from CEOs, presidents, and experts. Healthcare leadership is hard work, but it becomes more manageable as we learn from the remarkable lives and careers of our guests. I’ll see you there.