Wal-Mart Stores - the nation's largest retailer and biggest private employer -- now wants to dominate a growing part of the health care market, offering a range of medical services from basic prevention to management of chronic conditions like diabetes and heart disease, National Public Radio and Kaiser Health News have learned.
In the same week in late October that Wal-Mart announced it would stop offering health insurance benefits to new part-time employees, the retailer sent out a request for information seeking partners to help it "dramatically ... lower the cost of health care ... by becoming the largest provider of primary health care services in the nation."
On Tuesday, Wal-Mart spokeswoman Tara Raddohl confirmed the proposal but declined to elaborate on specifics, calling it simply an effort to determine "strategic next steps."
But by midafternoon Wednesday, the retailer issued a press release saying its own request for information was "overwritten and incorrect." The firm is "not building a national, integrated low-cost primary health care platform," says the statement by Dr. John Agwunobi, a senior vice president.
The 14-page request asks firms to spell out their expertise in a wide variety of areas, including managing and monitoring patients with chronic, costly health conditions. "The objective of this RFI is to identify companies and their associated solutions, applications, and/or related offerings to become potential vendors/partners for Walmart in building a nationally integrated healthcare platform aimed at delivering the lowest cost primary healthcare services." The request says partners are to be selected in January.
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Analysts said Wal-Mart is likely positioning itself to boost store traffic -- possibly by expanding the number of, and services offered by, its in-store medical clinics. The move would also capitalize on growing demand for primary care in 2014, when the federal health law fully kicks in and millions more Americans are expected to have government or private health insurance.
"We have a massive primary-care problem that will be made worse by health reform," says Ian Morrison, a Menlo Park, Calif-based health-care consultant. "Anyone who has a plausible idea on how to solve this should be allowed to play."
In-store medical clinics, such as those offered by Wal-Mart and other retailers, could also be players in another effort in the health law: encouraging collaborations of doctors and hospitals who want to win financial rewards for streamlining care and lowering costs. Such collaborations, known as "accountable care organizations," might contract with in-store medical clinics, says Paul Howard, a senior fellow with the Manhattan Institute for Policy Research. He has studied retail clinics, some of which have recently expanded to offer services beyond simple tests and vaccinations, such as helping monitor patients with diabetes or high blood pressure.
Wal-Mart's request goes even further, asking possible partners to provide information on how they would oversee patients with complicated chronic conditions, including asthma, HIV, arthritis, depression, and sleep apnea.
While the retail chain's efforts to partner with others on health care could help lower costs for some patients and increase access to primary-care services, health-policy experts also say it raises questions.
Will expansion of in-store clinics, for example, further fragment care in the U.S. by drawing patients away from their established primary-care doctors? Would patients who need specialists fall through the cracks? Will patients seen by nurses or physician assistants at in-store clinics have equally good outcomes as those seen by doctors in more traditional practices?
"Maybe Wal-Mart can deliver a lot of this stuff more cheaply because it is an expert at doing this with other types of widgets, but health care is not a widget and managing individual human beings is not nearly as simple as selling commercial products to consumers," says Ann O'Malley, a physician and senior health researcher at the Center for Studying Health System Change, a nonpartisan Washington think tank.
And will it save money? Because primary-care services are not the main driver of health care costs in this country, "I would be surprised if this were a model that could truly attack cost problems," says O'Malley.
Whatever it does to health costs, it may also be a way to boost foot traffic and sales in Walmart stores, says Colin McGranahan, a retail analyst for Sanford C. Bernstein & Co.
"Their traffic has been declining for over two years and they've been losing market share," McGranahan says. "If you get someone in the door, you can also sell them milk and a shotgun."
CVS/Caremark, Walgreen's, Kroger, Target, and others have recently reinvigorated efforts to open in-store medical clinics. The first such in-store clinics opened in 2000, but growth took off later in the decade.
Until recently, Wal-Mart was the nation's leader in opening such clinics, but has dropped to third place with about 140, well behind industry leader CVS Caremark's nearly 550 Minute Clinics and Walgreen's 355 Take Care clinics, according to data tracked by Tom Charland, CEO of Merchant Medicine, a Minnesota-based research and consulting firm.
About 1,300 store-based clinics are open nationwide, Charland says. They have different business models. Walmart stores lease space to independent vendors, for example, while CVS owns and staffs its Minute Clinics. While a few centers operated by retailers have doctors on site, most hire nurse practitioners or physician assistants to provide the care.
In 2007, Wal-Mart CEO Lee Scott announced the firm would open 400 clinics by 2010. But early efforts backed by venture capital money faltered and the firm failed to reach that number, says Charland. Wal-Mart then switched strategies and began leasing to hospital systems primarily and it began to grow again. Still, last month, the effort appeared to be struggling: Walmart opened three in-store clinics, but closed 10, says Charland.
"This is an industry where people haven't figured out how to make money," he says. Hiring nurses isn't cheap -- and business can be seasonal: more people come in during the cold winter months and business can slow to a crawl in the summer. "My guess is the whole purpose of [Walmart's] request for information is to find someone to help them because they've not been able to pull it off."
CVS, which has run Minute Clinics since 2006, expects to break even for the first time this year, says Helena Foulkes, a CVS executive vice president in charge of strategy and marketing. It plans to keep opening clinics and is doing so at a clip of about 10 a month.
"We think the market will evolve so this will become a more important model," says Foulkes.
Kristian Foden-Vencil of Oregon Public Broadcasting, and Chris Weaver, Sarah Barr, and Christian Torres of Kaiser Health News co
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