“Goodbye, doctor’s office. Hello, Walmart?
Based on Walmart’s latest moves, it’s not as unlikely as it sounds.
After years of “Will they or won’t they?” discussion, Walmart is making its long-awaited move into delivering primary care: The retailer has quietly opened a half-dozen primary care clinics across South Carolina and Texas, and plans to launch six more before January.
The clinics will be staffed by nurse practitioners, in a partnership with QuadMed.
Walmart watchers know that the company already has more than 100 “retail clinics” across its stores, a strategy it’s pursued for years. So why fuss over a handful of new clinics?
Because unlike those retail clinics — which Walmart hosts through leases with local hospitals, resulting inmixed success — these new clinics are fully owned by the company and branded explicitly as one-stop shops for primary care.
Because the clinics will be open longer and later than competitors: 12 hours per day during the week and another 8-plus hours per day on weekends.
And because of the company’s size and scale: Walmart potential as a disruptive innovator in healthcare is essentially peerless.
The company’s move comes at an ideal time to capture consumers: Millions of Americans are getting insurance coverage through Obamacare, and seeking new, convenient sources of care.
Walmart’s stressed that their clinics will be a low-cost alternative to traditional options: Walk-in visits will cost just $40.
And for the hundreds of thousands of Walmart employees covered by the company health plan, well, it’s even cheaper.
“For our associates and dependents on the health plan, you can come and see a provider in the Wal-Mart Care Clinic for $4. Four dollars!” Jennifer LaPerre, a company official, said last week.
“That is setting a new retail price in the health care industry,” she added.
What Walmart’s move means
I wrote about Walmart’s big move for the Advisory Board Daily Briefing back on Monday, and my colleagues and I have spent the past week kicking around the implications.
I thought it might be interesting to share a glimpseinto our conversations.
Walmart’s careful deliberations
For example, Walmart’s push into primary care clinics isn’t a shock. The company has spent several years dropping hints that it would make a play for the care delivery market.
But now that we can see the company’s actual moves — opening just a handful of clinics in relatively small markets in Texas and South Carolina — should we be surprised?
I asked Alicia Daugherty, my colleague who oversees the Advisory Board’s marketing and planning research, and she doesn’t think so. The company’s proceeding cautiously, keeping with their tradition.
“Walmart’s corporate strategy has never been about first-mover advantage — it’s about distribution efficiency and cost management,” she says.
“Coming in a little later in the game allows them to capitalize on markets created by others, and learn from others’ mistakes.”
And Walmart’s picking markets that have advantages, Daugherty adds.
“Both Texas and South Carolina have primary care access problems, [but] interestingly, the access problem is specifically related to cost,” she says. “And neither state is expanding Medicaid, so both will continue to have a group of uninsured who will prioritize cost when seeking care. Obviously, both also have high rates of obesity, smoking, chronic conditions, and poverty.”
Walmart as market mover
Lisa Bielamowicz, the Advisory Board’s Chief Medical Officer, notes that Walmart’s move keeps with the broader trend of retailers, big-box stores, and other non-traditional competitors charging into health care delivery. And Walmart’s entry into the market could push hospitals and doctors to up their game.
“The competitive factors by which you win primary care business are starting to change,” Bielamowicz said, in an interview with Healthcare Finance News.
“Health systems and physician groups have to understand that. If there’s a Walmart clinic open 15 hours a day, that’s the standard you may have to meet.”
Walmart as signal of a broader trend
And for all the focus on Walmart’s big moves — theNew York Times profiled the company’s health care clinics in a story today — what’s the media missing?
I asked Rob Lazerow, who helps lead Advisory Board research into health care transformation, what he thinks is being overlooked.
“Walmart’s new clinics show the continued growth of retail clinics – but only highlight one aspect of the emerging trend of retail health care,” he told me.
“For hospital and health system executives, especially those in markets without a Walmart clinic, the new retail insurance market is much more transformative,” Lazerow adds.
“Through public and private health insurance exchanges, millions of patients are gaining unprecedented control over their health plan decisions, actively selecting among many plans offered by a range of health insurers,” he says.
“This is a very different competitive landscape than what most executives have faced previously — and hospitals risk losing volumes at each decision point.”