Wal-Mart Shakes Up Primary Care — and the Whole System

Wal-Mart has a new take on retail clinics. These newly launched clinics will charge patients $40 for a visit — but only $4 for Wal-Mart associates. Anybody, with or without insurance, can go into one of these clinics and be seen by a qualified health professional, without the usual paperwork. Although the mega-retailer has operated clinics in its stores for a few years now, the new ones are different in a couple of ways.

First, Wal-Mart’s previous clinics were collaborations with local hospitals, which had “mixed success”. So, it appears to have decided to do it alone. I am not surprised. Can you imagine a company like Wal-Mart, which succeeds in an unregulated industry with ruthless price competition, trying to negotiate a deal with hospital executives? The communications challenges must be almost insurmountable — sort of a Mars and Venus situation.

When hospitals acquire primary-care medical practices, they don’t end up reducing costs and increasing transparency. On the contrary, they use the acquisition to charge higher, hospital-sized fees to patients and insurers. That is exactly the opposite of what Wal-Mart is trying to achieve.

Second, Wal-Mart looks to be rolling out these clinics in states which have not expanded the number of people dependent on Medicaid (such as South Carolina). Obamacare itself is not responsible for the growth of these clinics. Rather, the failure of Obamacare to significantly reduce the number of long-term uninsured Americans is a cause of renewed investment in these clinics.

Insurance is irrelevant to these clinics, which post and accept cash payments directly. Wal-Mart and other businesses outside the government-medical complex increasingly understand that there are opportunities outside those bureaucracies, and healthcare enterprises which operate free of the dead hand of Obamacare can take care of their customers without getting bogged down in the old system.

Comments (13)

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  1. Perry says:

    Welcome to Walmart. We’re running a blue light special today on sore throats.

  2. Thomas says:

    If Wal-Mart clinics are anything like Wal-Mart stores, I think I’ll pass. Wal-Mart health care doesn’t sound like a good option for me, but I am sure it will be highly valued for shoppers.

    • James M. says:

      The emergence of these clinics, such as Wal-Mart’s and the CVS MinuteClinic will change the landscape of how people receive primary care. Perhaps we will no longer see the days where you make an appointment with a fever or a wellness exam.

  3. Buddy says:

    So now I can get my groceries, an Xbox, new tires and an annual checkup at the same place!

  4. Walter Q. says:

    The Walton’s are going to try to takeover primary care, I am not sure what else there is left. When are the Wal-Mart surgery centers opening?

    • Devon Herrick says:

      My thoughts are that it’s too bad federal/state regulations prevent entrepreneurs like Sam Walton from creating a “Healthmart.” If you think about it, Walton helped develop the idea of using volume buying, logistics, data analysis of inventory and semi-skilled labor to distribute goods (i.e. a one-stop-shop in underserved markets). Historically merchandizing had been done by store owners and shopkeepers who ran the store themselves and hired an extra person or two to help out.

      I talked to a physician a while back who lamented that physician care is still a cottage industry. Hospital care is more advanced, but it basically seeks to maximize revenue against reimbursement formulas. Why not let “Healthmart” (not Walmart specifically, but a entrepreneurial talent like Sam Walton was 50 year ago) look for ways to streamline primary care.

      Every diagnostic image is expensive – but they don’t have to be. Lab tests cost hundreds, but they wouldn’t if done in huge volume. A trip to the doctor costs anywhere from $100 or more. If I could walk into a health store, (let’s call it Healthmart) give blood and urine specimens, breathe into a tube, my blood chemistry, and bodily functions could be tracked over time. Hundreds of billions of observations may provide an ongoing trend of my health status. Google is working on a project like this. But I fear it will never become a reality until regulations allow experimentation in medical practice, the corporate practice of medicine regulations are relaxed and patients begin paying more out of pocket.

  5. John Fembup says:

    “Insurance is irrelevant to these clinics” Yes, because the cost is minimal. It’s than the cost of a fill-up at Exxon-Mobil, and less frequent than a fill-up, at that.

    No one needs insurance for such minimal costs.

    I think it’s fine for people to harrumph and say they would never go to Wal-Mart for routine primary care. These clinics don’t depend for their success on those people. The services will be provided by licensed MD’s and PA’s and leverages the presence their in-store pharmacies.

    Note that a fair number of employers have been sponsoring general primary care clinics at, or near, their worksites for more than 20 years. I think it was inevitable that this idea would someday expand and become commercial. Important drivers include the continuing rise in medical cost and the growth of demand driven by a population that is not only older, but larger too. Looks like now we’re about to learn how far primary care can be “commoditized”.

  6. Yancey Ward says:

    Walmart, should they succeed in this endeavor, will eventually get sued out of it by those dependent on the current system of primary healthcare provision.

  7. Dale says:

    This could also be a way for Wal-Mart to provide a significant benefit to their employees. They have been widely criticized for providing low wages and benefits to their employees, $4 clinic visits could be a compelling benefit for them.

  8. Val says:

    Still, the big problem is that we now have to buy very expensive Obamacare. We can no longer buy $10,000-deductible insurance and pay for the oil changes and tune-ups ourselves.

  9. Bob Hertz says:

    I hope that Walmart succeeds. They have certainly have had some success in the sale of prescription drugs.

    Just from a business point of view, I am curious as to how their clinics can employ an internist at $140,000 a year and still charge such low rates. I wonder if the low prices are for a nurse’s attention only.

    Which would not be all bad, but needs to be disclosed.

  10. big truck joe says:

    Walmart reudced Rx prices buy being the first to offer $4 generics. Other competitors followed suit to the savings of the country. Now they are trying to fill in a similar niche for low cost clinic style visits using physian assistants and nurse practitioners to provide primary care. I wish them success as many of the Medicaid patients who use fhe ER for primary care may use walmart and prevent future more urgent situations.