America’s Traffic Cop

Wal-Mart has steadily built itself into a healthcare giant, with more plans in the works

When people think of Wal-Mart, the first thing that comes to mind is retail giant – a place to shop for household goods, groceries and more. Those in distribution think of the company’s supply chain expertise, while those in contracting think of hard-nosed negotiators.

But there’s another way to look at Wal-Mart – as one of the largest healthcare companies in the country.

In 2006, the company announced its $4 generic drug program. For $4, anyone – insured, uninsured, Medicare or Medicaid enrollee, etc. – can buy one of about 350 generic drugs. Then there’s the fact that Wal-Mart is the largest seller of exercise equipment in the country. And if you have diabetes, you can buy your insulin, glucose meter and other necessary supplies at your neighborhood Wal-Mart.

In 2013, Wal-Mart expanded its long-standing program covering transplants at the Mayo Clinic to include treatment for certain heart and spine surgeries at five leading hospital and health systems in the United States, for associates and their covered dependents enrolled in medical plans.

Later that year, the company joined the Pacific Business Group on Health Negotiating Alliance to launch a national Employers Centers of Excellence Network, which offers no-cost knee and hip replacement surgeries for employees at four hospital systems in the United States: Johns Hopkins Bayview Medical Center in Baltimore, Md.; Kaiser Permanente Orange County Irvine Medical Center, Irvine, Calif.; Mercy Hospital, Springfield, Mo.; and Virginia Mason Medical Center in Seattle, Wash.

“We realize our core DNA is supply chain,” said Joe Quinn, senior director, public affairs and government relations, Wal-Mart, speaking at 2014 Annual Conference of the Association of National Account Executives in July. “But we realized that, if you have a heart issue and you need surgery, and you live in a small town in Mississippi, we can send you to Cleveland Clinic, where they do thousands of such procedures a year, rather than a local facility. And Wal-Mart covers the cost of your travel, and travel for a loved one.

“Our associates responded well after they understood what we were doing with the Centers of Excellence,” he said. “Over time, they realized they were getting care at a nationally recognized center. And we saved money too – because the procedure is generally done right the first time.”

It’s the new face of healthcare.

Healthcare traffic cop
Who better than Wal-Mart to serve as a traffic cop for the provision of healthcare for millions of Americans a year?

Each week, more than 140 million people visit a U.S. Walmart store. The company also has more than 1.3 million employees, said Quinn. The company’s core customer, often a woman, works one or two jobs, carries her share of worries about the economy, and serves as the “family CEO,” making decisions not only about what groceries to buy, but where her family will receive healthcare.

To help with the overall family well-being, Wal-Mart also makes an effort to sell healthy food at affordable prices to families, added Quinn. “We don’t believe your income should determine whether you’re buying healthy or unhealthy food. We should make healthy food available to all,” including those in so-called “food deserts.” Access to healthy food is one reason why Wal-Mart is moving away from its emphasis on supercenters, and opening up smaller, neighborhood stores and express formats.

The $4 generic drug program has had a big impact on Americans’ health as well, saving Americans an estimated $4.8 billion thus far, said Quinn. “It was a market-disruptive play for us,” which has improved healthcare by making necessary prescriptions affordable for people.

Retail clinics
Wal-Mart intends to push ahead with its retail clinic program. Its original plan, unveiled in 2006, called for the company to lease space in its stores to local healthcare providers. “But the concept of local owners didn’t work,” Quinn said. So “Clinic 2.0” was born, which found Wal-Mart partnering with local hospital systems to open Wal-Mart -owned clusters of clinics in localities around the country.

Now the company is in its third generation of retail clinics. This spring, the company opened its first Walmart Care Clinic in Copperas Cove, Texas. The primary care clinic provides diagnosis and treatment of chronic and acute illnesses, as well as preventative services, such as immunizations, physicals and health screening. Wal-Mart says this expanded scope of services enables the Care Clinic to serve as a person’s primary medical provider. The cost of a visit is $40. And Wal-Mart is testing a $4-per-visit program for its employees.

“Clinics are part of the healthcare dialogue in this country now,” said Quinn.

Specialty drugs and DME
Meanwhile, the company is attempting to increase its share of the specialty drug and durable medical equipment markets. It is considering developing a smartphone app that would allow shoppers to swipe their grocery goods to check calories, check their blood pressure, etc. “The future is your phone,” said Quinn. Furthermore, the company is working with some large corporations – including Peoria, Ill.-based Caterpillar – to open up pharmacies near factories; in exchange for volume, the retailer will offer pharmaceuticals with zero copays.

“As the country discussed healthcare reform, some people may have thought healthcare would be free,” he said. Now, the public has become more familiar with the law, and recognizes that they still must pay premiums, deductibles, out-of-pocket expenses and co-pays. “People have access to healthcare regardless of a pre-existing condition, but it still takes family budget to buy coverage.”

As a society, Americans must get more attuned to healthy living, including healthy eating and activities. In the meantime, Wal-Mart will continue to use its supply chain and negotiating expertise to try to bring those out-of-pocket costs down.