Is Wal-Mart Leading the Charge on Health Reform?

ParikhLast Wednesday’s  headline in the Wall Street Journal may have surprised you.  It read:  “Wal-Mart Backs Drive to Make Companies Pay for Health Coverage.”  The article discussed Wal-Mart’s open support for an employer mandate requiring all but small businesses to provide care for its workers, a stance that other retailers have opposed for obvious reasons.

I’ve been following the story of Wal-Mart and health care reform for the past several years.  While some see this move as the company’s way of trying to level the playing field between it and other retailers, it nevertheless has taken several actions over the past decade to make health care more accessible and affordable.

Wal-Mart’s transformation began in 2006, when then CEO Lee Scott shook hands with Andy Stern, the head of the Service Employees International Union. In the past, such a handshake would have been unimaginable.  Wal-Mart had earned a reputation for failing to provide its workers with health care, and the SEIU was one its strongest critics.

That changed with rising health care costs.  Wal-Mart, like labor, recognized the need to provide affordable health care.  The Scott/Stern handshake was a call for affordable care for all Americans by 2012.

This handshake can be seen as a bookend to another handshake decades ago, described by Malcolm Gladwell in a 2006 New Yorker piece.  This first handshake was, like this one, between two powerful men representing labor and industry:

“The president of General Motors at the time was Charles E. Wilson, known as Engine Charlie. Wilson was one of the highest-paid corporate executives in America, earning $586,100 (and paying, incidentally, $430,350 in taxes). He was in contract talks with Walter Reuther, the national president of the U.A.W. The two men had already agreed on a cost-of-living allowance. Now Wilson went one step further, and, for the first time, offered every G.M. employee health-care benefits”

Thus, American health care: –employer based, brokered by private insurers, and provided by doctors on a fee-for-service basis.  The kind of care that has created the fragmented market that most of are a part of today.  The kind that has left 48 million Americans uninsured and millions more underinsured and just one illness away from bankruptcy.   The kind of health care that led Wal-Mart the SEIU and the Center for American Progress to write a letter to the White House today in support of change.

As reported in the Journal, Wal-Mart has taken sincere steps to provide health care to its employees.  Today, as a result of cutting the time of eligibility in half and increasing choices of plans, 52% of Wal-Mart U.S. employees are covered by the company.  That’s compared to 45% of the rest of the retail industry.

Wal-Mart hasn’t just stepped up to increase coverage for its employees–in 2005, it became the first company to offer $5 generic prescriptions–a breakthrough price for people who previously needed to decide between taking their meds or eating dinner.

Wal-Mart has also been in the lead in opening walk-in clinics in its stores. Although the recession seems to have slowed the initial enthusiasm for retail medicine, the idea, in principle, has the potential to offer convenience at a very affordable price for people who have minor ailments like sore throats.

Finally, Wal-Mart has also recently started offering an electronic medical record to doctors.  While it remains to be seen whether it will sell, you have to give credit to the big box retailer for taking the initiative.

Whether you like or loath Wal-Mart (and all of us seem to fall into one or the other category), its efforts to shape up American health care shouldn’t go unnoticed. In fact, I would dare “real” health care groups, like the American Medical Association, to show that they can match Wal-Mart’s initiative and drive to improve health care.  So far, all we’ve seen from the AMA in the past few weeks has been a lot of lip service trying to assure us that they’re on the side of reform while behind closed doors, the Association’s members are still fighting about its future.  And remember, the AMA represents at best 20-30% of doctors in this country, which is one reason why the New York Times’ Nicholas Kristof urged “President Obama, don’t listen to the A.M.A. on this issue. Instead, for starters, call your doctor!”

Livongo’s Post Ad Banner 728*90
Spread the love

Categories: Uncategorized

Tagged as: , , ,

28 replies »

  1. I don’t hate or love Wal-Mart, but I don’t think they should be in the business of shaping health care policy anymore than GM and Chrysler, or any other employer.
    If they want to sell drugs for $4 in order to increase store traffic, that is fine. If they want to become a discount health care provider through walk-in clinics, that is fine too. If they want to add EMRs to their line of discounted merchandise, that is great. It all serves the bottom line.
    Maybe their selfless involvement in health care policy is well intended, but the road to hell has always been paved with good intentions.
    The only valid connection I can see between health care and an employer is a federal tax on the pay check.

  2. Can Wal-Mart charge associates 2 separate deductibles and 2 separate out of pocket for their health insurance according with the new Mental Health Parity Act?

  3. What a lively debate! I just wrote on this very topic for Women’s Voices For Change, a news and information blog geared towards the needs and interests of women over 40, many of whom are addressing the health care concerns you confront in this post.
    “Wal-Mart Can Be Our Surprise Salvation: A Two-Part Discussion of The Retail Giant’s Health Care Reform Potential.”
    http://womensvoicesforchange.org/wal-mart-can-be-our-surprise-salvation-a-two-part-discussion-of-the-retail-giants-health-care-potential.htm

  4. I think Wal-Mart really wants to change its image as the greedy corporation. Whether they are sincere are not, providing good health care is a good way to show their critics that they sincerely want to change.

  5. I forgot to mention:
    McKesson sold whisky, later it sold milk, now it sells PACS, RIS, HIS, and a bunch of other stuff.
    They took the whisky part out of their history section recently, I believe.
    Why can’t Wal-Mart sell COWs? You do know what a COW does in a hospital, don’t you?
    The EHR Guy

  6. I heard McDonald’s and Wendy’s are going to compete for the PHR market.
    Coca-Cola and Pepsi are getting into the EMR segment.
    Can anyone verify this?
    Does this sound too facetious?

  7. like no if we get some affordable supperment help cover doctor visit ,,in stigler okla,,go to im63 disable cost it cost from 50.00 dallars to hunderand dallars with my medicare card i have one for 208.00dallars with my card im not pay it , i feel they or all been paid we in small early so no going check them out ,, i talk to people who dont have no insurance ,, ask they we pay 20..00dallars same doctorin stigler healt care for no insurance 1o..oodallars me with my card 20..oo to 50..oo dallars lois hill porum okla 918 484-2682

  8. NHS trust bankrupt, do a yahoo search and you get 234,000 hits. Go to the BBC or Guardian sites, hardly right wing, and search NHS and you get thousands of stories.
    For those specific stories
    http://www.dailymail.co.uk/news/article-1196997/Hospital-patient-shocked-dirty-ward-climbed-bed-clean-herself.html
    http://cp24.com/servlet/an/local/CTVNews/20090626/090626_BABY_PASSPORTS/20090626/?hub=CP24Home
    Grant why in the world would you not beelive these to be true? Your view of healthcare in the world must be terribly jaded and masked. Do you really now know these are every day stories in the supposedly perfect systems outside the US? If these shock you then you really need to open your eyes. These two are funny, if you knew the truth of that bad stuff that happens that isn’t so funny you would take off the tin foil hat.

  9. Nate: Please document the source of your tidbits on Canada/UK healthcare. This smacks of stories being bandied about on right wing talk radio. I don’t find them believable.
    Where did you get the figure that 75% of Americans receive “far better” care than Canadians and the British? Please document your source.

  10. Your pointing this out is appreciated. We have heard so many negative stories in the media about Walmart concerning health care for their employees over the years it is good to see that one of this nations biggest employers is stepping up to the plate.

  11. Keep in mind that 1/2 of Americans live within 5 miles of a Walmart. That simple fact, plus its low price strategy, makes Walmart a power capable of transforming the health care marketplace.

  12. “I’d prefer a rational universal health care system along the lines of the NHS in England or Canada”
    Last week Canada sends a premy to the US for lack of capacity at home and today I read about patients covered by NHS cleaning their own hospital wards becuase they are filthy. Are these systems really rational or is it some people perceptions of them all that is rational. Most American’s are not familar with either system and have no information to make such a judgement except that feed to them by those in America advocating reform.
    I have not visted either system but have made the effort to read about both from those that actually do live under them. Both are in equally or greater financial duress as our collective systems and neither are no where close to our private systems in sustainablity. 75% of Americans receive care far better then either of those systems while our uninsured and medicaid receive care far worse. I don’t agree with degrading the care of 75% of Americans so 25% can receive a modest improvement. I also don’t agree with modeling our change after systems that they themsevels are undergoing fundemental change to try and survive.

  13. Rahul: This is a very nice piece, one that points out how affordable health care solutions — none of them yet ‘systems’ — are cropping up at the margins of the incumbent markets for health care services. Wal-Mart is a participant, as you say. So is CVS MinuteClinic; medical tourism; worksite and onsite clinics; and discount medication services in Canada and Mexico.
    As more and more people are forced to leave the incumbent market because they have no health insurance, or are significantly under-insured, they swell the ranks of what Clay Christensen calls the “non-consumers.” They can’t afford the high price health care products and services (or their employers can’t afford the health benefits that pay for them, virtually the same thing), and this creates the opportunity for disruptive innovation to thrive — care without all the frills, but lower cost, more convenient, and with some self-management components built in.
    I realize that purchasing health care services is not the same as buying electronics or books: some significant portion of health care services are mandatory, not discretionary, purchases, e.g. emergency care for a broken arm or for a cancer.
    But the framework and theory may still apply to the portions of the health care offerings that are subject to consumerism, such as primary care, most medications, and many types of surgery.
    I’m not at all certain that I think this is the best way to reform health care, mind you. I’d prefer a rational universal health care system along the lines of the NHS in England or Canada, because I think this is the most socially just way to proceed. But we don’t seem to have that alternative in the near sights, do we?
    Regards, DCK

  14. I don’t hate or love Wal-Mart, but I don’t think they should be in the business of shaping health care policy anymore than GM and Chrysler, or any other employer.
    If they want to sell drugs for $4 in order to increase store traffic, that is fine. If they want to become a discount health care provider through walk-in clinics, that is fine too. If they want to add EMRs to their line of discounted merchandise, that is great. It all serves the bottom line.
    Maybe their selfless involvement in health care policy is well intended, but the road to hell has always been paved with good intentions.
    The only valid connection I can see between health care and an employer is a federal tax on the pay check.

  15. On-line Slate had a comment about Wal-Mart and health care services that I’ve never forgotten –
    …imagine the specter of Radiologists going hat-in-hand to Bentonville to do business with them…

  16. I most definitely do not loathe Wal-Mart. I think it is a remarkable company. I also think that its willingness to show some innovation in regard to healthcare practice and policy are laudatory. This latest pronouncement is a positive – admittedly within the narrow confined set by Democratic politicians and the Obama Administration.
    Wal-Mart’s support of the Dossia project and its effort to offer EMR/PM systems to physicians through Sam’s Club is innovative and to be applauded, despite any negative aspects to the effort.

  17. John R. Graham — For the episode I described, the hospital accepted the insurance as full payment. Even at 40%-50% of chargemaster rates, only very high income and wealthy people could handle an unforeseen medical bill of that magnitude even on the installment plan. If insurance does nothing else, it must cover catastrophic and high cost events. High deductible plans are fine by me and should work satisfactorily for the upper half of the income distribution. For the lower half, it’s more problematic.
    If it were up to me, everyone would have catastrophic coverage along with cost-effective preventive care and we would focus our efforts on sharply reducing wasteful utilization of healthcare services through strategies including implementing interoperable electronic records, comparative effectiveness research, bundled pricing for expensive surgical procedures, much more extensive use of living wills and advance directives and tort reform including protecting doctors from lawsuits based on a failure to diagnose a disease or condition as long as evidence based protocols were followed and allowing health courts to resolve the remaining disputes rather than juries.

  18. “Why is it the insured assume the uninsured chose this status?”
    Becuase all the studies and the FACTS show it to be true. Your basing your beliefs on the narrow scope of your life. I assure you in a year I speak with 100 times the uninsured that you do. Almost half of the uninsured are eligibile for Medicaid and CHOOSE to not enroll, that fact alone disproves your argument.
    “In 2007, one-third of the uninsured were in
    families with annual incomes of less than $20,000”
    Do you have any studies or any data to back up your beliefs? While your personal sitution is important and needs to be considered I am not going to spend 1.6 trillion on you. I can buy you and the other 5 million people that truly can’t afford insurance a great policy for far less then 1.6 trillion, and not screw up my own coverage in the process.

  19. I’ll make two separate comments on this.
    First, with respect to the agreement between Charlie Wilson of GM and Walter Reuther of the UAW, the union originally wanted taxpayers to fund national health insurance. The company’s response was: No, that smacks too much of socialism for our taste. We will provide you with very generous and comprehensive health insurance not only during your working years but in retirement as well. At the time, GM was king of the hill and foreign competition was non-existent in the aftermath of World War II. The arrangement worked OK for about four decades but it ultimately became a key factor that drove the GM and Chrysler into bankruptcy.
    Second, with respect to healthcare costs more generally, it is episodes of care that include services performed in a hospital setting, even on an outpatient basis, that are killing us. Last winter, one of my colleagues fell on the sidewalk while walking to work on needed a hip replacement. The bill for the hospital stay, the surgery and rehabilitation came to about $130K at list price of which insurance paid about half. The surgeon’s bill alone for was $17K for a procedure that took a little over two hours. Try paying that bill (at list price) without health insurance. Even the most routine hospital based outpatient procedures can easily cost several thousand dollars.

  20. “My daughter had an initial physical at a new PCP last month which cost nearly $700 including “routine” lab work and immunizations, and this is only preventive care. Imagine if someone in my family were truly sick.”
    One asks: was the lab work needed or simply a rote set of order by the PCP. It is this sort of unexamined, reflexive spending that needs to be reviewed. Barring a viable reason for the lab work (to confirm a diagnosis or chart a chronic condition), then was it needed? It may be time for patients to start asking doctors whether the things they routinely order “just because” are really things worth paying for out of one’s own pocket.
    For that matter, the underlying rationale of the standard physical for otherwise healthy adults should also be considered. How much money do we spend on annual physicals that typically detect nothing, but cost mightily.
    How many office visits do patients endure for items that could be covered more conveniently — and with less cost — over the phone or by email?
    Health care reform, to work, must look at each aspect of what we spend with a clear eye and ponder: does this produce value sufficient to justify the price.

  21. Nate: Most of the uninsured, “choose” to be uninsured because we can’t afford the insurance premium. Two thirds of the uninsured work, either at one full time time job, mostly for small business that can’t afford health insurance or in multiple part-time jobs where we don’t qualify for coverage.
    Many of the uninsured have exhausted COBRA and find they are unattractive risks for private insurance because of age, gender or health status–having the dreaded “pre-existing” condition. Many also lose coverage when a spouse qualifies for Medicare and find their employer’s or former employer’s coverage has changed.
    Having the “choice” and finding that the premiums available are more than my mortgage, utility payment, car payment and auto insurance combined or 20+% of my adjusted gross income, I am uninsured. Yep, its a choice I wish I could afford.
    Why is it the insured assume the uninsured chose this status? Perhaps the young invincibles do but I know too many parents who are paying the health insurance premiums for these folks because they are terrified their children might get hurt or sick.
    What the uninsured want is the opportunity to afford the same coverage our Congressmen and Senators have.

  22. As I see it, Walmart is trying to be a low-cost provider of health care. this is very upsetting to higher cost incumbents.
    Look at their strategy in pharmacy. Wal-Mart keeps leveraging its scale and logistics to undermine the traditional retail drug distribution business. Every one of the company’s major pharmacy initiatives – the $4 program; the cost-plus Caterpillar deal; the new mail order pilot program in Michigan – seeks to offer a lower-cost option for consumer fulfillment of prescriptions. Wal-Mart has two big advantages in this generic drug price war: a low cost of dispensing and a willingness to accept lower-than-normal (for a pharmacy) profits on generic scripts.
    Competition works. The other pharmacy providers are being forced to adapt and try new things. For an example, see “Is Walgreens planning a direct-to-payer deal?” at http://www.drugchannels.net/2009/05/is-walgreens-planning-direct-to-payer.html

  23. Those who don’t have health insurance understand what is involved when they have to make choices between keeping their homes and paying their bills, or buying costly health insurance for their families.
    As the evidence in MA suggests (kudos to PBS for a nice job of pointing this out), a family making $60K per year (well above the poverty level and totally outside of Medicaid eligibility limits) has to really struggle to afford costlyhealth insurance coverage given the high cost of living (housing, utilities, taxes) in MA. Most of those living in the Northeast face similar decisions as fewer and fewer employers offer health insurance. And if someone in the family has any type of adverse health history or chronic medical condition, forget about affordability unless you’re part of a large employer group.
    My daughter had an initial physical at a new PCP last month which cost nearly $700 including “routine” lab work and immunizations, and this is only preventive care. Imagine if someone in my family were truly sick.
    Affordability and access to health care issues are not going to be eased any time soon unless major players including large employer groups like WalMart step to the table and demand that the government take steps to improve the situation. I fully agree with the Obama administration’s position that not taking action threatens even greater economic distress for this country.

  24. “Wal-Mart had earned a reputation for failing to provide its workers with health care, and the SEIU was one its strongest critics.”
    Don’t forget SEIU showed their rank hypocrisy when they hired minimum wage workers to picket Wal Mart in the 100+ degree summer heat, not only did they not have healthcare they didn’t even supply them with water. It was ok though because the higher paid Wal Mart workers that had at least some healthcare options took care of them, good thing for evil corporations or someone might have got heat stroke…and being uninsured who knows what would have happened to them.
    “The kind that has left 48 million Americans uninsured and millions more underinsured and just one illness away from bankruptcy.”
    Rahul this comment is terribly disingenuous. 48 million Americans are not LEFT uninsured. KFF and countless other studies show 40+ million of them CHOOSE to be uninsured, either by not enrolling in free insurance already offered them or making enough money to afford insurance and choosing not to buy it. There are only roughly 5 million people that are LEFT uninsured.
    One illness away from BK, really doctors charge that much to treat a cold now? 80% of Americans have no to minimal claims, more would be able to pay off claims from most illnesses over a couple years. The hyperbole you’re injecting is unneeded. Need to tone it down and discuss facts not rare conditions that effect a small percentage of the population and most likely because of their own mistakes. If someone has to file BK because they didn’t want to sign up for Medicaid I’m not going to lose any sleep over it. It doesn’t take 1.6 trillion to insure the 5 million people that need help.

Leave a Reply

Your email address will not be published. Required fields are marked *