Walmart Wants to Shake Up the Health Care Business
Business + Economy

Walmart Wants to Shake Up the Health Care Business

Wikimedia Commons

For some, a trip to the doctor might soon involve walking through the snack aisle while a clerk blares “price check” over the loud speaker.

That’s because Walmart, the nation’s largest retailer, is looking to expand further into the health care business and become a one-stop-shop for all your needs -- from groceries and cleaning supplies to automotive supplies. Now, get in line to see your primary care physician.

In lieu of its existing acute care centers, which are leased by hospitals and treat only very basic needs, Walmart is in the process of opening a spate of primary care centers that will offer a range of medical services including prevention to treating chronic conditions like diabetes. The retail giant has already opened five primary care clinics in South Carolina and Texas and plans to open even more by the end of the year.

Related: How to Control America’s Health Care Costs

Just like its other products, Walmart is toting bargain-based prices that some experts say could eventually shake up the entire health care industry.

Right now, the primary care clinics charge $40 per visit.

“That is setting a new retail price in the health care industry," Jennifer LaPerre, a company official, said at the grand opening of the Sumter clinic in South Carolina, the Post and Courier reported.

They accept Medicare and Medicaid, but do not accept third-party insurance for now. Walmart employees, on the other hand, pay just $4 a visit if they are covered under the company’s plan.

Related: Why Health Care is Still a Winning Sector

Though Walmart had been in talks for years about having a larger presence in the health care sector, the implementation of Obamacare has presented a unique opportunity for the retailer. Now that millions of people are getting insurance through the exchanges—the retailer--which is already present in much of rural America—can step in and serve some of these people living in places where there might not currently be many options for care.

"One of the areas we're highlighting is where there isn't access to care," Marcus Osborne—Walmart's vice president of health and wellness payer relations said in a statement last year before the program was launched.

A study in JAMA Internal Medicine, flagged by The Washington Post, found that roughly one-third of all retail clinics were in medically underserved areas as of 2008. "Retail clinics are currently located in more advantaged neighborhoods, which may make them less accessible for those most in need," the researchers concluded.

Other factors likely influencing Walmart to get into the primary care game include its history running the discount drug program, which helped drive changes in pharmaceutical spending, as the Advisory Board noted.

Related: 4 Signs Health Care Costs Are Still Out of Control

Another reason is corporate cost control. Since the president’s health care law has driven up Walmart’s spending—it claims it will spend about $330 million more on health care to expand coverage to its workers. Opening its own clinics could potentially bring down its health costs.

Meanwhile, advocates also say it could also temper the potential doctor shortage that many had worried could result from Obamacare as a crush of newly insured people burden the system and add to clinic wait times.

But not everyone thinks Walmart should be in the doctor business.

Some say the retailer may not be able to provide complex care needed to treat chronic conditions like diabetes.

“There’s not a role for retail clinics to take care of chronic, ongoing problems like that,” Dr. Robert Wergin, president-elect of the American Academy of Family Physicians, told The New York Times. “It can provide a service, maybe an entryway into a system.”

The primary clinics will mostly be run by nurse practitioners and medical assistants, though each center will have a doctor supervising, but not treating patients.

Related: So Far, Obamacare’s Hospital Reform Isn’t Working

Some doctors say those with serious conditions should not exclusively rely on Walmart, but seek treatment with a specialist.

"While retail clinics may provide a limited scope of health-care services for patients, this can ultimately lead to fragmentation of the patient’s health care unless it is coordinated with the patient’s primary care physician’s office," the American Academy of Family Physicians said in February 2014 policy statement, noted in The Washington Post.

Walmart isn’t alone. Walgreens is also looking to expand its health practices. It already has more than 400 acute clinics in 23 states and it recently announced plans to add more. CVS also has plans to expand its retail clinics.

Some health experts caution the so-called “retail movement” goes beyond clinics. The Advisory Board’s Rob Lazerow wrote a post detailing how the “retail insurance market” and “retail shopping” for health products has grown since the ACA took effect.

“Our research team is seeing two more profound applications of “retail” in health care—the emergence of a new retail insurance market and growth of retail shopping for care,” Lazerow writes. “For hospitals and health systems, these versions of retail prove much more disruptive than the clinic variety.

He explains that the retail insurance market has been booming since the launch of the new health insurance exchanges and the continued growth in the private exchange. Now people have more choices. “The advent of health care insurance exchanges is putting these decisions directly in individuals’ hands,” he writes.

Meanwhile, people are shopping around for health products more since an increasing number of consumers are paying more out of pocket due. This is for two reasons—one, more people are enrolling in high-deductible health plans, and two, rising deductible levels, he says.

“Simply put: health care providers are no longer insulated from market forces.”

Top Reads from The Fiscal Times: