Sean Slovenski shares why he joined a testing startup, and what’s next for Walmart Health

When Sean Slovenski joined Walmart three years ago, it was no small task. His job would be to develop a new healthcare strategy for the retail giant. The idea was to roll out several “health centers,” clinics that feature primary care, dental, counseling and other preventative services at a low cost.

Now, Walmart Health is on track to have 15 open by the end of the year, and will pick up the pace next year, with a big expansion planned for Florida. But Slovenski won’t be leading that effort; he left the company in August to become CEO of testing startup BioIQ.

In the testing world, BioIQ is the equivalent of what Uber is to taxi companies, Slovenski explained. It doesn’t run its own tests, but has built a network of labs across the U.S.

Justin Bellante, BioIQ’s now COO, founded the company while pursuing his PhD in materials science at the University of California, Santa Barbara. The under-the-radar company in Atlanta currently has about 500,000 Covid-19 tests per day in its networks, and has built out a client base of the top 40 health insurers, state governments, and a portion of the Fortune 50.

From this point, Slovenski’s job will be to take the company to the next step. In a recent interview with MedCity News, he shared more about where he left off his work with Walmart and what’s next at his new role.

 

MedCity: Why did you leave Walmart?

Slovenski: My time was winding down at Walmart. I’d done the things that I do best and it was starting to become time to move on. I was trying to figure out the next step. I knew wanted to move into a smaller business. I knew I wanted to do something in diagnostics or the home care space, because I found those two areas were booming and lacking at the same time in the current world we’re living in.

I knew the founder of BioIQ, Justin (Bellante). He founded it in his dorm room 15 years ago and I’ve known him for a little over 10 years.

They’re growing like crazy… They’ve doubled in size in the last six months in people and quadrupled in size in revenue. They needed someone to come in and help them grow that and manage that, and at the same time, look at the options for the company around an IPO. We’re getting to the size and we’ve got a ubiquitous place we’re playing in, diagnostics and immunization, that we think the business is actually a good candidate.

…It’s a moment. I remember my last moment was the dot-com boom. One of the companies I had, it was an internet-based healthcare company back in the day. And I just missed the dot-com boom and it became the dot-com bust. But I remember what was going on and that feeling of electricity in the air. It feels like there’s that moment in time in healthcare right now, especially in this diagnostics and immunization space.

 

MedCity: Tell me more about how BioIQ works.

Slovenski: This is kind of Uber to the taxi companies. The taxi companies in this space would be LabCorp and Quest, and some of your traditional diagnostic companies. They own the drivers and the cars. They own the tests and laboratories that process them.

I think what’s happened over the last 10 to 12 years, those groups have consolidated. The volume never changed much and they got really comfortable.

And then Covid comes along and it becomes clear that they weren’t, as my mother would say, all that and a bag of chips. It leaves a big gap that — I think it’s pretty important to the country right now. BioIQ, they don’t own any tests or any laboratories. What they’ve spent the last 15 years quietly doing is building a network of laboratories across the country: rural hospitals, small regional laboratory groups, even some of the bigger ones like LabCorp or Quest.

We’ve built this amazing network that nobody else has. They’ve built the software systems and supply chain management systems. The entire process.

…Whether it’s Covid or traditional screening or diagnostics, we have the ability to flex our network across the country to get any test of any kind in anyone’s hands. Whether it’s at home, the doctor’s office, at a group setting like their employers, or these days, the parking lot of a Walmart, CVS or a Kroger.

 

MedCity: When you first joined Walmart in 2018, what were you tasked with doing? How did you come up with this idea for “healthcare supercenters?”

Slovenski: It literally was a blank sheet of paper. … I get to figure out how do you fit together all the pieces for what a company like Walmart can actually do, do well and do in a way that no one else could replicate.

(Walmart) mostly had dabbled and piloted over the course of seven or eight years, but had never really committed to any particular direction in any substantial way. When I joined, Amazon had just bought Pillpack and was threatening more in healthcare. CVS had bought Aetna they were threatening more in emerging retail and traditional healthcare. Walgreens was doing everything they could figure out to do. All the competition was in, and they had a strategy.

With Walmart’s footprint of 5,000 locations and half of America walking through their doors every single week, it sure seems like you ought to be able to do something meaningful.

We figured out what we can do: Offer the most basic things that most of their clientele can’t afford to do on a regular basis. Even if they’re insured, they can’t afford to use their insurance, so they just do nothing.

A mom walked in with her child and her family. It was the first time in over a decade that they as a family other than basic well care for their children were able to come in and get a pediatric visit for their child for $20 cash. They could have their kid seen for a sports physical, eye exam and maybe a quick x-ray… they can do that for $40. Where if they used their insurance, it would cost them $300. It’s substantial.

Luckily, we were able to figure out how to make it profitable. They’re not big profits, but Walmart’s whole model is to make a little bit of margin across lots and lots of stores, and that adds up.

 

MedCity: That was one of the big questions — these prices are low. How did you find that sweet spot where people can afford appointments while still having enough to run the business?  

Slovenski: First off, it was deciding that what we were trying to do was build a cash business, not an insurance-funded business. We wanted to disrupt healthcare. What drives healthcare? It’s whoever pays. And who typically pays? It’s the insurer.

How much money do we save not having to have three billing people, two collection agents, five coders for every doctor, just to bill insurance for half of what it costs us to deliver the service, and not get paid half of that for a year? It’s the pain that every doctor’s office feels. When you cut all of that garbage out, you just cut 45% of your costs in running the business completely out.

…Then, it’s because Walmart sells more stuff than most every other retailer and in some cases combined. Walmart sells more Band-Aids, they sell something like half of the Band-Aids in America. It’s insane.

So, you start chipping away. You can build them cheaper, you can operate them cheaper because you own the property that they’re sitting on, you cut out the insurer, and you start adding it all up and before you know it, you’re somewhere between 60% to 65% less expensive before you open the doors.

 

MedCity: How are you thinking about this fall in terms of a vaccine?

Slovenski: There are some things people do need to think about going into the fall and into early next year. Most people are waiting on a vaccine. The assumption is that when there’s a vaccine, everything can get back to normal; you don’t have to have Covid testing. What a lot of people don’t understand is the vaccines that may come out and get approved will be approved so early in their refinement cycle that they may only be 50% effective.

On top of that, because they haven’t taken the couple years it typically takes to refine an immunization, they need to be refrigerated differently. Most of the typical distribution methods, pharmacies, grocery stores, they don’t have the capacity to freeze or refrigerate the samples needed for the vaccines to the degree they need to be to be ultimately effective.

There aren’t quite enough needles and glass vials in the U.S. to house all the vaccine that is going to be needed for everybody. … Getting a vaccine is great, but that is only one tenth of the battle. The rest of the battle is refining it, being able to distribute it and getting it to the right people at the right time.

This interview has been edited for length and clarity.