Can Wal-Mart Save Health Care?

As more talk goes around about what Capital Hill will do with health reform, it has yet to be determined if change will really happen. We all agree that health care is broken as the cost continues to increase while the service levels decline. Health care has always been localized by city and town creating a situation where it is difficult to determine the broad standards across all markets. Now, enter a national discount chain known for decreasing costs and effectively managing the supply chain. Can Wal-Mart actually transcend its information technology capabilities to improve the delivery of health care in the U.S.?

According to company statistics, Wal-Mart is the third largest pharmacy chain in the U.S. As a leader, Wal-Mart drove down the price of generic drugs to $4.00 per prescription in 2006 which has been copied by other pharmacy chains (1). This innovation led Wal-Mart to enter the pharmacy benefits program as a new business. Wal-Mart has been successful in health care on the pharmacy side.

Wal-Mart started its foray into actual health care delivery by partnering with local health providers to create retail clinics at its stores (1). These clinics provide convenient, one-stop services at a very affordable price. The average visits cost around $65 according to Wal-Mart statistics (2). The clinics treat minor illnesses that do not require emergency department services. While Wal-Mart does not own or operate the clinics, they have created the place for the interaction to occur for their customers. The big game changer is that the clinics do not require health insurance as they accept cash and credit cards. For 46 million uninsured Americans, this provides a new venue to get basic health care at a reasonable price.

Wal-Mart has announced that it will sell electronic health records (EHR) and physician practice management software through its Sam's Club stores (3). Wal-Mart is partnering with eClinicalWorks and Dell Computers to sell and train physicians how to use the software. This partnership resulted from the success of work done at the retail clinics within Wal-Mart stores. Sam's Club will offer package pricing, training and support at a lower price than physicians can get anywhere else.

Electronic health records and information technology can play a role in improving the delivery of health care. But only a small percentage of hospitals and physicians have the costly technology in place so far. Where will the money come from to purchase EHR software? The American Recovery and Reinvestment Act of 2009 include $17.2 billion in Medicare and Medicaid incentives for hospitals and doctors to use electronic health record systems. Physicians can apply for financial funding to purchase the EHR systems. Sam's Club will market the products to physicians through its website, samsclub.com. Sam's Club has 47 million members with 200,000 being physicians (3).

Wal-Mart has a notorious reputation in health care. This is a different Wal-Mart than the one shredded by bad press for their employee benefits or lack there of comparable benefits. The Wal-Mart experiment in health care is worth following as an example of what a corporate behemoth can do when it gets its wheels in motion. The automobile industry failed to change health care and its rising cost through its' Leapfrog initiative largely due to an ineffective approach. Wal-Mart seems to be heading in the right direction as the leader in changing health care as only time will tell if its massive size can affect the industry in a positive manner.

Sources:

(1) Walmartstores.com, 400 Health Clinics to Open in Wal-Mart Stores During Next Three Years; April 24, 2007.

(2) Walmartstores.com, Medical Clinic Fact Sheet; Current.

(3) Walmartstores.com, Sam's Club Launches Electronic Medical Record (EMR) Package for Practices to Help Improve Patient Care; April 6, 2009.