Walmart, Is Doctor Sam In?

Friday, November 18, 2011

Can the world’s largest retailer roll back prices on primary health care? Last week, the world got a look at the possible aspirations of Walmart’s latest venture, managing chronic diseases such as diabetes, asthma, high blood pressure, heart disease, and other illnesses. Walmart has been accused of destroying thousands of family owned and operated hardware, sporting goods, and clothing stores with its overwhelming marketplace presence. However, in the face of Walmart’s potential expansion into the primary health marketplace, it has eliminated health care benefits for its own employees who work less than 24 hours per week. Will patients vote with their wallets and abandon their primary care physicians in favor of Dr. Sam?

Many, if not most Walmarts have onsite pharmacies; others include optometrists; so why not include a primary care office? And some Walmart locations do offer walk-in clinics. It is hard to explain how a guy from Bentonville, Arkansas out did the Sears, Penney’s, and other retail mainstays to become an American institution, but he did. The basis for Walmart’s success has been its ability to put what the customer wants, at the price the customer is willing to pay, when the customer wants it on its store’s shelves. So how would this model that work in health care? Not many of us want a colonoscopy at any price.

For starters, it is unlikely that Walmart would perform even minimally invasive medical procedures within its stores. However, routine physical check-ups, diagnostic and basic laboratory screenings, health care and wellness coaching and counseling, as well as medication adherence and monitoring could be accomplished in a way to ensure patient privacy and protection. And while it is true that laws regulating health care do vary from locality to locality, so do most other regulation relatives to operating any business.

Would Walmart be able to appropriately staff a primary health care facility? It would not have to; it would merely sub-lease a space within a store to any existing or new medical practice that would then staff it with the required medical skills needed. Initially the facility might restrict the types of patients seen to routine physicals, health and wellness, and coaching and counseling. However, over time, patients requiring more extensive treatment could be seen as both Walmart, their medical providers, and the public became more comfortable with the services rendered. While Walmart would never (never say never) perform highly invasive procedures, it could certainly redirect a significant amount of traffic from the small medical practices as well as underserved communities throughout its market area. Walmart currently operates over 130 walk-in clinics in some 29 states. A good start on being the nation’s largest primary health care provider? And who operates these clinics, local and regional medical providers.

Walmart could become the dedicated primary medical provider for small and medium employers by contracting directly with the employer. Consider this adaption of the model, Walmart provides basic and routine well care, pharmacy, dental, and vision services on a capitated basis; while catastrophic and major medical care and hospitalization coverage is provided by a fully or self-insured health care plan. Capitated rates could be relatively low $10-$15 PMPM and catastrophic and major medical based on community rating. Sounds like an HMO, look out Kaiser, here comes Dr. Sam!