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11/01/2014

Will Health Care Get Walmarted?

Walmart plans to institute 17 Care Clinics by the end of the fiscal year.

Walmart didn't start as a grocer, but now it's the No. 1 grocer in America by sales.

Will the same thing happen with healthcare?

Walmart's Care Clinics have the potential to fundamentally change the way healthcare is delivered in America. So far, they're barely a blip: Eleven Care Clinics have opened so far in Georgia, South Carolina and Texas, and another six are scheduled to open by the end of the fiscal year. But if they succeed, they could create what amounts to another tier of healthcare in America–or at least a significant, separate portal into the system.

Retailers have offered in-store health care for years, but Walmart is taking it further: It wants Care Clinics to be the primary caregiver to as many consumers as possible. Under this scenario, Walmart Care Clinics won't just be the place you pop into for a flu shot or a vision screening. They will be, in essence, your family doctor, without a doctor–a place for diagnosis, treatment and followup. (The care will be administered by nurse practitioners, who can treat minor ailments and will refer patients to doctors for more serious ones.)

At their core, the Care Clinics are an effort by Walmart to help consumers cope in every way with the Affordable Care Act and the changes it will bring to healthcare in America. The Care Clinics are approachable precisely because they don't take health insurance, except for traditional Medicare. A flat price of $40 covers all services ($4 for qualifying Walmart employees). This contrasts with the walk-in clinics maintained by some pharmacy chains like Walgreens and CVS (see page 16), which take insurance and charge from price menus that are variable but mostly higher than $40.

But Walmart also intends to help customers navigate the insurance market. A program announced in October will offer health insurance help at 2,700 of the retailer's 4,300 U.S. stores during the next nationwide enrollment period, which runs from mid-November to mid-February. The program partners with DirectHealth.com, which will offer Medicare-based health insurance policies to customers age 65 and over, and help in navigating the Affordable Care Act exchange for younger customers.

INSURANCE HELP

The idea is to capture consumers who, out of apprehension or confusion, still don't have health insurance or are unsatisfied with what they have. In a press release announcing the DirectHealth.com program, Walmart claimed that "more than 60 percent of people have difficulty understanding their health insurance plan options and nearly 40 percent feel they picked the wrong plan after enrollment."

The insurance initiative is of a piece with other drives by Walmart to bring services to a poor or working-class clientele that might not otherwise have access to them, such as the retailer's recent foray into personal banking. Its potential for complementary operation with the clinics is obvious: Who is a better candidate for health insurance than someone buttoning up his shirt after a checkup? Other, year-around synergies exist: In-store pharmacies can fill prescriptions for clinic patients and sell them the over-the-counter medicines and medical devices they were just advised to use; diabetics and others with diet-related conditions can stock up on the foods they need.

What possible implications does Walmart's foray into healthcare have, for both patients and care providers?

The appeal for patients is the same as the appeal of anything else at Walmart: Price. A $40 fee looks good to someone without insurance, whose policy has a high deductible, or who's having a hard time finding someone willing to take her Medicare. So do the expanded hours (open evenings and weekends) and the "walk-ins welcome" policy. Not to mention the clinics' potential presence in Walmarts located in medically underserved rural areas.

As for providers, they're always happy to have someone take Medicare patients off their hands, especially in states where reimbursement lags for months. More generally, retail clinics like Walmart's could be useful in dealing with the surge of patients newly armed with health insurance under the Affordable Care Act, which has given rise to speculation about a shortage of primary care physicians. On the other hand, the fear exists that clinics like Walmart's could skim off the healthiest patients with the least complex problems, leaving primary-care doctors to deal with the sickest ones.

HOW FAR?

In any case, it's currently an open question as to how fast and how far Walmart intends to take its foray into health care. Marcus Osborne, its vice president for health and wellness, was quoted as saying at a conference in January that Walmart plans to offer "full primary care services over the next five to seven years," but that statement was promptly walked back by other Walmart officials, and Osborne has stopped talking publicly on the subject.

Walmart may be proceeding cautiously because the clinics, which are in a very early stage, are feeling their way through obstacles. One of the biggest is the wide variation among states in how much nurse practitioners can do for patients, and how closely they have to be supervised by doctors. In Georgia, for instance, "I can do very little because I have to have a supervisor who is a physician overseeing what I do," Ken Miller, a past president of the American College of Nurse Practitioners, told Kaiser Health News.

Ironically, one of the factors that gives retail clinics so much potential–the surge in insured consumers–is causing Walmart to pull back on insurance for its own employees. The company announced in early October that it was ending insurance for some 30,000 employees who average less than 30 hours a week, and raising premiums for those still insured. It cited a rise in its estimated health care costs, to $500 million from an earlier estimate of $330 million, and said that increased participation in employee health insurance helped cause that rise. Thirty hours is the threshold that triggers the mandate in the Affordable Care Act for employers to offer health insurance or pay a fine, although enforcement of that requirement has been delayed.

This wasn't the first time Walmart cut insurance for part-timers; in 2011, it ended coverage for employees with less than 21 hours. In a blog post on the company website, a Walmart executive noted that Target, Home Depot, Walgreens and Trader Joe's have all stopped insuring part-timers. Walmart's part-time employees presumably will still be able to avail themselves of in-store help finding new insurance, but once they're not on the company plan, they'll have to pay the same $40 as anyone else.