Walmart last week announced that it has a new plan to become “the largest provider of primary health care services in the nation.” Although a subsequent discussion with reporters clarified that the retailer was not planning to dominate the medical market the way it has dominated discount stores, it is clear that Walmart intends to continue making a major investment in quick-service retail clinics that are able to provide vaccinations, simple laboratory tests, basic screenings, and basic treatments for cold, flu, and other common ailments. It now has 141 clinics but expects to build many more.
Walmart joins many other retailer outlets in its strategic thrust, including CVS Caremark, Walgreens, Kroger, Target, Safeway, and RiteAid. CVS is the largest of these with 645 clinics and more planned. But the others are very serious about offering basic medical services to Americans.
What is going on? Why is this happening now? There are two main reasons in my opinion. First, there is a real and growing shortage of primary care physicians, and a lack of basic easy-to-access primary care services. The retail operations are addressing a huge and growing market need that has been created mainly because of a bad federal policy – namely, that primary care services are so poorly reimbursed by the Medicare and Medicaid programs, which tend to establish prices even for private payers, such that fewer and fewer primary care providers are practicing medicine. They are simply choosing other specialties. Retail clinics can help fill this gap.
Second, retailers view the move to provide primary medical care services as a basic extension of what they already do now. This is especially true of retail chain drugstores, which already employ pharmacists. In my experience, pharmacists are excellent sources of clinical guidance for managing medications and learning about one’s medical issues and problems. With the support of powerful health IT decision support systems, and access to patient’s records (possibly through secure EHR connections) there is no reason pharmacists and other non-physician medical providers cannot help many people with basic medical needs. Walgreens, with whom I am most familiar, has trained hundreds if not thousands of its pharmacists to ensure they can ably provide services.
I see a long term future for retail clinics. Medical services, even simple ones, are not easy to provide on a large scale. Retailers will need to learn much about working with medical professionals, and about how to coordinate their services with the rest of the health care system. Over time, the best companies will differentiate themselves on the basis of their quality, customer service, and depth of capabilities. It is a fascinating major shift in American health care.
Yahoo Finance – Walgreens HIV Centers of Excellence Pharmacies Now Top 500 Nationwide in Areas Most Impacted by HIV/AIDS – Dated: November 10, 2011
The Wall Street Journal – Wal-Mart to Add Clinics – Dated: November 10, 2011