Walmart wades into provider territory

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Anthony Brino, Healthcare Finance News
Aug 7th 2014

The retailer opens six non-healthcare partnered primary care clinics and plans on opening more

Walmart is taking another, bigger step into the U.S. healthcare system that could prove disruptive to legacy providers locally and nationally.

After years of selling prescription drugs, co-branding a Medicare drug plan and partnering with local hospitals and providers for some 100 walk-in clinics, Walmart is now going to be a quasi-provider itself. The retailer has opened six in-store Walmart Care Clinics in Texas and South Carolina, and has plans for at least several more this year.

The clinics offer access to nurse practitioners for $40 ($4 for its insured employees) and dozens of low-cost lab tests. The prices, particularly the $4 per visit cost for some 1.1 million workers and dependents covered by the company health plan, are aimed at “setting a new retail price in the healthcare industry,” as Jennifer LaPerre, Walmart’s senior director for health and wellness put it at a press conference covered by the Charleston Post and Courier.

The clinics, staffed and run with the company QuadMed, are offering appointments and taking walk-ins. Unlike physician offices, the clinics will be open every day of the week, but will have standard hours, 8 a.m. to 5 p.m., Monday through Friday. Weekend hours are 8 a.m. to 5 p.m. Saturdays and 10 a.m. to 6 p.m. on Sundays.

A visit with an NP is $40 for uninsured and privately insured patients. The company said it also accepts Medicaid and fee-for-service Medicare, though it is not clear what those beneficiaries would be charged. Customers “will have plenty of time” to ask questions or share concerns, the company said.

Patients will also have access to a wide range of basic diagnostic tests. Point-of-care lab tests, with the results delivered the same day, include bladder infection, cholesterol and mononucleosis tests for $8, and hemoglobin blood sugar, urine protein and HIV tests for $15.

Walmart’s move, along with clinics at CVS, Walgreens and Target, is “part of a whole larger trend where pretty much any retailer, big box, grocer and pharmacy is coming to stake a claim in consumer-driven healthcare,” said Lisa Bielamowicz, MD, the chief medical officer at the Advisory Board Company.

Walmart has been through an evolution in healthcare and this latest move – the company running its own clinics, rather than through the partnerships it has cultivated with entities such as the Mayo Clinic – is a fairly significant iteration, setting the stage for future dives into the healthcare economy.

The large opportunity Walmart is going after are the price-sensitive lower-income and uninsured populations, but the clinics may also gain traction among middle-income consumers with high-deductible plans and even the well-off, Bielamowicz said.

“No doubt that consumers of any income level want convenience and availability for basic care, and these factors can trump doctor-patient relationships, especially for younger patients,” she said.

Considering that primary care visits on average cost about triple what Walmart is charging, Bielamowicz thinks the clinic’s presence could set new standards for convenience and prices in certain regions, creating an impetus for health systems and medical practices to stay open later and lower at least some consumer out-of-pocket prices.

“The game and competitive factors by which you win primary care business are starting to change,” Bielamowicz said. “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.”

Legacy healthcare providers may be able to get away with charging higher prices right now for services such as same-day appointments and walk-in on-site lab tests because some consumers are willing to pay more, she said. However, these providers will eventually have to meet the new standards set by retailers like Walmart. And if the legacy providers don’t change to the new standards, retailers are poised to capture more business.

Another thing legacy providers and insurers need to consider is that Walmart’s reach will at some point extend beyond just primary care. Walmart, facing pressure from Amazon as a low-cost everything store, is looking for growth markets.

Depending on how many clinics Walmart opens and how many patients come to them, the retailer could help shape low-cost regional networks with its influence of referrals, and even launch a health plan, Bielamowicz said. “You could see how they could evolve this strategy.” A prospect that could be disruptive for insurers and providers alike.

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