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Walmart Wants To Be Your Health Care Provider

November 9, 2011 | FlaglerLive | 8 Comments

Walmart — the nation’s largest retailer and biggest private employer — now wants to dominate a growing part of the health care market, offering a range of medical services from basic prevention to management of chronic conditions like diabetes and heart disease, according to a document obtained by NPR and Kaiser Health News.

In the same week in late October that Walmart announced it would stop offering health insurance benefits to new part-time employees, the retailer sent out a request for information seeking partners to help it “dramatically … lower the cost of healthcare … by becoming the largest provider of primary healthcare services in the nation.”

On Tuesday, Walmart spokeswoman Tara Raddohl confirmed the proposal but declined to elaborate on specifics, calling it simply an effort to determine “strategic next steps.”

But by midafternoon Wednesday, the retailer issued a statement saying its own request for information was “overwritten and incorrect.” The firm is “not building a national, integrated low-cost primary health care platform,” says the statement by Dr. John Agwunobi, a senior vice president.

The information request begins with the exact wording that Agwunobi says is incorrect, saying Walmart “intends to build a national, integrated, low-cost primary care healthcare platform.” The request goes on to ask firms to spell out their expertise in a wide variety of areas, including managing and monitoring patients with chronic, costly health conditions. The goal it says is for Walmart to become “the largest provider of primary healthcare services in the nation.”

The document spells out a tight timeline. It was issued to an unknown number of “strategic partners” on October 21 and final vendor selection is set to take place on January 13.

Analysts said Walmart is likely positioning itself to boost store traffic — possibly by expanding the number of, and services offered by, its in-store medical clinics. The move would also capitalize on growing demand for primary care in 2014, when the federal health law fully kicks in and millions more Americans are expected to have government or private health insurance.

“We have a massive primary care problem that will be made worse by health reform,” says Ian Morrison, a Menlo Park, Calif-based health-care consultant. “Anyone who has a plausible idea on how to solve this should be allowed to play.”

In-store medical clinics, such as those offered by Walmart and other retailers, could also be players in another effort in the health law: encouraging collaborations of doctors and hospitals who want to win financial rewards for streamlining care and lowering costs. Such collaborations, known as “accountable care organizations,” might contract with in-store medical clinics, says Paul Howard, a senior fellow with the Manhattan Institute for Policy Research. He has studied retail clinics, some of which have recently expanded to offer services beyond simple tests and vaccinations, such as helping monitor patients with diabetes or high blood pressure.

Walmart’s request goes even further, asking possible partners to provide information on how they would oversee patients with complicated chronic conditions, including asthma, HIV, arthritis, depression and sleep apnea.

While Walmart’s efforts to partner with others on health care could help lower costs for some patients and increase access to primary care services, health policy experts also say it raises questions.

Will expansion of in-store clinics, for example, further fragment care in the U.S. by drawing patients away from their established primary care doctors?  Would patients who need specialists fall through the cracks? Will patients seen by nurses or physician assistants at in-store clinics have just as good outcomes as those seen by doctors in more traditional practices?


“Maybe Walmart can deliver a lot of this stuff more cheaply because it is an expert at doing this with other types of widgets, but health care is not a widget and managing individual human beings is not nearly as simple as selling commercial products to consumers,” says Ann O’Malley, a physician and senior health researcher at the Center for Studying Health System Change, a nonpartisan Washington think tank.

And will it save money?  Because primary care services are not the main driver of health care costs in this country, “I would be surprised if this were a model that could truly attack cost problems,” says O’Malley.

Whatever it does to health costs, it may also be a way to boost foot traffic and sales in Walmart stores, says Colin McGranahan, a retail analyst for Sanford C. Bernstein & Co.

“Their traffic has been declining for over two years and they’ve been losing market share,” McGranahan says. “If you get someone in the door, you can also sell them milk and a shotgun.”

CVS/Caremark, Walgreen’s, Kroger, Target and others have recently reinvigorated efforts to open in-store medical clinics. The first such in-store clinics opened in 2000, but growth took off later in the decade.

Until recently, Walmart was the nation’s leader in opening such clinics, but has dropped to third place with about 140 such clinics, well behind industry leader CVS Caremark’s nearly 550 Minute Clinics and Walgreen’s 355 Take Care clinics, according to data tracked by Tom Charland, CEO of Merchant Medicine, a Minnesota-based research and consulting firm. About 1,300 store-based clinics are open nationwide, he says.

They have different business models. Walmart leases space to independent vendors, for example, while CVS owns and staffs its Minute Clinics.  While a few centers operated by retailers have doctors on site, most hire nurse practitioners or physician assistants to provide the care.  In 2007, Walmart CEO Lee Scott announced the firm would open 400 clinics by 2010.

But early efforts backed by venture capital money faltered and the firm failed to reach that number, says Charland. Walmart then switched strategies and began leasing to hospital systems primarily and it began to grow again. Still, last month, the firm appeared to be struggling: Walmart opened three in-store clinics, but closed 10, says Charland.

“This is an industry where people haven’t figured out how to make money,” he says.  Hiring nurses isn’t cheap – and business can be seasonal:  more people come in during the cold winter months and business can slow to a crawl in the summer.  “My guess is the whole purpose of [Walmart’s] request for information is to find someone to help them because they’ve not been able to pull it off.”

CVS, which has run Minute Clinics since 2006, expects to break even for the first time this year, says Helena Foulkes, a CVS executive vice president in charge of strategy and marketing. It plans to keep opening clinics and is doing so at a clip of about 10 a month.

“We think the market will evolve so this will become a more important model,” says Foulkes.

–Julie Appleby and Sarah Varney, Kaiser Health News

Kristian Foden-Vencil of Oregon Public Broadcasting, and Chris Weaver, Sarah Barr, and Christian Torres of Kaiser Health News contributed to this story.

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Reader Interactions

Comments

  1. I. M. Agoste says

    November 10, 2011 at 2:19 am

    Hell, I don’t even want them to be my food provider, much less health care.

    That’s rich. Wal-Mart doesn’t pay its workers a decent wage so they can buy their own health care AND the company actually encourages employees to apply for SNAP benefits because the pay is so lousy.

  2. The Truth says

    November 10, 2011 at 8:13 am

    I don’t trust Walmart for anything I buy in my life, let alone my health care. If people think that healthcare from our government would be bad, you wouldn’t even want to see Walmart healthcare.

  3. Elana Lee says

    November 10, 2011 at 9:30 am

    Typically Wal-Mart is the last place I go to shop because of mass confusion, crowds, and so much merchandise from foreign countries (which is no different from other stores). But Wal-Mart may be on to something here. If they find a way to provide access to (quality) health care at an affordable price, and leave greedy insurance companies out of the loop, they might just offer their employees access to their own providers at an even greater discount. Granted, that’s a leap, but it would be good if they did. Also it will force prices down. Meaning the price of an office visit to a family practice physician. Remember back in the early 1980’s when an office visit used to be $20 or $30 ? No one billed insurance companies for a routine office visit. However when insurance companies started “covering” offfice visits, the cost mysteriously skyrocketed. I wonder why?

  4. Johnny Taxpayer says

    November 10, 2011 at 9:33 am

    I think it’s an interesting possibility… And why not let a private company like walmart try it out and see what the results are. If it works people will choose to go, if it doesn’t, people will choose not to. Seems like a no-brainer to me.

  5. blondie says

    November 10, 2011 at 10:07 am

    omg! I’d go to a veterinarian before I’d seek health care at Walmart!!!!!!!!!!!

  6. NortonSmitty says

    November 10, 2011 at 2:55 pm

    I don’t care for the way they integrate with our society. I just go there to keep up with the latest fashions.

  7. Riley says

    November 10, 2011 at 10:29 pm

    They have gotten away with screwing their employees all these years that they want the general public to also have a taste. It’s all about money!!!!!!!!!!!!!!!!!!

    They figured Rick Scott could make billions in the healthcare business, why not them.

  8. Begonia says

    November 11, 2011 at 5:38 pm

    CVS now has the Minute Clinic or whatever it’s called. Brings new meaning to one stop shopping. Norton, I starred in that video.

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