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Walmart Wants To Be Nation’s Biggest Primary Care Provider

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 confidential company document.

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.”

The 14-page request asks firms to spell out their expertise in a wide variety of areas, including managing and monitoring patients with chronic, costly health conditions. Partners are to be selected in January.

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.

This story is part of a reporting partnership that includes NPR and 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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Bryan G. Laura, M.D.
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Bryan G. Laura, M.D.

If Walmart wants to be the largest provider of primary care services I’m sure they can do it. I’m also sure they will discover that primary care is nothing more than a loss leader for their retail market as it is for specialty health care. If Walmart wants to make a profit providing primary health care then it sould look no further than Capital Hill and attempt to terminate the influence the AMA-RUC has on CMS and HHS. In fact, if Walmart could undo the AMA-RUC influence over CMS and HHS it probably would not have to think about providing… Read more »

Peter1
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Peter1

““Now, Gallup reports that from the first quarter of 2010 (when Obama signed Obamacare into law) to the third quarter of this year, 2 percent of American adults lost their employer sponsored health insurance. In other words, about 4.5 million Americans lost their employer-sponsored insurance over a span of just 18 months. ” Gee, I thought the ACA didn’t take affect til 2014. Could it be job/business losses not ACA? Maybe you could give us the link so that you’re just not quoting some right-wing-rant site. A fuller version of the medical device tax instead of your hate spittle spewing… Read more »

Nate Ogden
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Nate Ogden

How are people like you allowed to vote? No ACA took effect when it was passed. Is your head really so far up your A$$ you didn’t know that? You haven’t heard anything about mini meds being outlawed, guarantee issue for children, kids covered till 26, essential benefits, no lifetime max, escalting annual caps, none of that?

We need to start revoking voting rights of those to ignorant to contribute meanfully.

Nate Ogden
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Nate Ogden

Not relevant since that is the choice of employee.

BS, you wish it wasn’t relevant becuase you got caught looking stupid again. How can you bash Wal Mart for X number of employees not being insured then claim its not relevant that the employees declined the coverage offered them. Only in Liberalism can you make such asine arguments.

Peter1
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Peter1

“Where in your endless propoganda reposting do you have a single study showing how many Wal Mart employees declined coverage or declined a split shift job that would make them eligibile?”

Not relevant since that is the choice of employee.

“We didn’t have an affordability problem until government promised to make it affordable”

Sure Nate everyone had affordable coverage and access before evil government.

http://www.staysmartstayhealthy.com/health_care_history_inthe_united_states

Nate Ogden
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Nate Ogden

“Sure Nate everyone had affordable coverage and access before evil government.” Not everyone but tens of millions more did. “Now, Gallup reports that from the first quarter of 2010 (when Obama signed Obamacare into law) to the third quarter of this year, 2 percent of American adults lost their employer sponsored health insurance. In other words, about 4.5 million Americans lost their employer-sponsored insurance over a span of just 18 months. ” “This is not what the Congressional Budget Office (CBO) had predicted would happen. Rather, the CBO had predicted that Obamacare would increase the number of people with employer-sponsored… Read more »

Nate Ogden
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Nate Ogden

“Stryker, the Kalamazoo-based maker of artificial hips and knees, will cut 5% of its global workforce by the end of next year to reduce costs in the face of new fees on device makers required by the U.S. health care law.”

Not governments fault at all is it Peter1, they had nothing to do with it

Nate Ogden
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Nate Ogden

only a liberal would tax an expensive product in order to reduce its cost.

Nate Ogden
Guest
Nate Ogden

” but at least that’s up to the employee not the employer.”

Once again Peter! you show how clueless you are. All of those full time Wal Mart employees that don’t have benefits made the CHOICE to not take benefits. Where in your endless propoganda reposting do you have a single study showing how many Wal Mart employees declined coverage or declined a split shift job that would make them eligibile? All you have shown is the number of uninsured Wal Mart employees, failed to report any cause, but still blamed it all on Wal Mart.

Nate Ogden
Guest
Nate Ogden

No I support government getting out of Health Care/Insurance so it was affordable enough that people don’t need assistance. We didn’t have an affordability problem until government promised to make it affordable

Peter1
Guest
Peter1

Split shift patterns can allow for full time hours. If employees want heath care in that type of business then they’ll have to accept split shifts, but at least that’s up to the employee not the employer. Some people only want and need part time, that’s their choice, but they all need health care coverage either way.

So Nate, do you support ACA subsidies for low income health care purchase?

Peter1
Guest
Peter1

“Even most large companies can’t afford to pay $7.50 per hour on top of that for comprehensive family health insurance coverage.”

What happens after ACA when coverage is mandatory for companies. The words “can’t afford” is different from “don’t have to afford”.

“part timers are generally not covered. ”

Walmart and others can engineer part time hours very easily.

“In the end, low wage workers will probably need significant subsidies to afford health insurance, especially family coverage.”

As in the ACA? Frankly this is why health care should be decoupled from employment.

Nate Ogden
Guest
Nate Ogden

“Walmart and others can engineer part time hours very easily.” Peter1 your so clueless how the world works. You mean to say Wal Mart can single handily change that fact most people get off work around 5? Or that food establishments serve distrinct meals? When I worked food service people would complain about part time positions or if they were full time they were split shifts. The reality of the world was people would come in at lunch then from 1-4 they would be dead, then pick back up for dinner. Go in a Wal Mart and you will see… Read more »

Barry Carol
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Barry Carol

“What is the percentage of sales that goes to paying lowly “associates”?” Margalit – As I said in my last comment, WMT and COST are very different business models. COST has about 1/5th of Wal-Mart’s revenues but only 1/9th as many employees which implies that the percentage of revenues that goes for employee compensation is just over half of Wal-Mart’s. The typical newer Costco store is slightly smaller than a Wal-Mart supercenter. However, Costco only carries 4,000 – 5,000 SKU’s many of which are there one week but not the next while Wal-Mart carries tens of thousands of SKU’s all… Read more »

Margalit Gur-Arie
Guest

“At a certain point it doesn’t make since to employee that person at that cost.”

What point might that be, Nate?

How does Walmart’s profit margin compare to Costco’s?
What is the percentage of sales that goes to paying lowly “associates”?

Barry Carol
Guest
Barry Carol

According to the Kaiser Family Foundation, family health insurance coverage costs over $15K per year these days or the equivalent of $7.50 per hour for a 2,000 hour work year. In low wage industries like hospitality, restaurants and retail trade, there are millions of people earning between $7.25 and $12.00 or so per hour in wages. Even most large companies can’t afford to pay $7.50 per hour on top of that for comprehensive family health insurance coverage. They may offer coverage for the full time employee but not for the rest of the family. As Nate noted, part timers are… Read more »