Inside This Issue - News
Walmart ponders next steps in health care delivery
November 21st, 2011
BENTONVILLE, Ark. – Walmart has set its sights on increasing its role in the U.S. health care system and is exploring the possibility of offering a wider range of services.
In late October the world’s largest retailer sent out a request for information from potential vendor partners to help it “dramatically lower the cost of health care.” The 14-page document asks firms to provide detailed information about their expertise in a wide variety of areas, including managing and monitoring patients with chronic, costly health conditions.
Analysts cited by NPR (National Public Radio) and Kaiser Health News, which were the first to report the initiative, said Walmart is likely positioning itself to boost store traffic, possibly by expanding the number of its in-store medical clinics and the services they offer.
The move would also capitalize on growing demand for primary health care in 2014, when the Affordable Care Act fully kicks in and 32 million more Americans are covered by government or private health insurance.
“We have a massive primary care problem that will be made worse by health reform,” Ian Morrison, a Menlo Park, Calif.-based health care consultant, told NPR. “Anyone who has a plausible idea on how to solve this should be allowed to play.”
After initial reports raised questions about the scope of Walmart’s ambitions, John Agwunobi, senior vice president at Walmart and president of health and wellness at Walmart U.S., moved to clarify matters.
“The RFI statement is overwritten and incorrect,” he said. “We are not building a national, integrated, low-cost primary care health care platform.” No other details were provided.
Walmart’s exploration of ways to raise its stake in primary care could take the growing trend of in-store clinics to a new level, according to those who have scrutinized the company’s request for information. Health care industry insiders contend that the walk-in clinics proliferating in drug stores, supermarkets and discount outlets are likely to play a greater role in health care going forward.
As health care reform kicks in during the next two years, there is expected to be a rise in the number of collaborations between doctors, hospitals and other providers in an effort to streamline care and lower costs. Policy analysts say that such collaborations, known as accountable care organizations, are likely to contract with in-store clinics.
Walmart’s request for information, however, goes even further. The company is asking possible partners to provide information about how they would oversee patients with complicated chronic conditions, including asthma, HIV, arthritis, depression and sleep apnea.
Health care industry participants noted that Walmart’s bid to offer more primary care is the retailing giant’s latest effort to drive the direction of the nation’s health care system. For instance, the company was one of the first to offer generic drugs at $4 for a month’s supply.
Analysts noted that because of its sheer size, Walmart could use its purchasing power to lower its costs on medical products and services.
Although many who have examined Walmart’s request for information said it could help lower costs for some patients and increase access to primary health care services, some groups expressed skepticism about the effort.
Glen Stream, president of the American Academy of Family Physicians, a longtime critic of in-store clinics, said Walmart’s proposal takes health care in the wrong direction by further fragmenting care. The academy insists that patients need a regular source of care from someone who knows their medical history.
Meanwhile, others expressed uncertainty that the approach the retailer seems to be considering can really work.
“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,” Ann O’Malley, a physician and senior health researcher at the Center for Studying Health System Change, a Washington-based think tank, told NPR and Kaiser Health News.
She added that from what she knows of Walmart’s intentions so far, there is little support for the idea that it will lower consumers’ health care costs because primary care services are not the main driver of this country’s health care costs.