Friday, September 28, 2007

Health Care Innovation at WalMart

As a physician, soon or late you’re likely to have a Wal-Mart’s employees as a patient – some with and some without coverage, perhaps some referred to you by a nurse-practitioner at a Wal-Mart retail clinic, or maybe some needing a $4 prescription.

Wal-Marts and its affiliate Sam’s Club now have about 3100 stores in the U.S. – an average of about 60 in any given state. Walmart stores and subsidiaries hire 1.34 million Americans. Among other things, Walmart’s and Sam’s Clubs now sell more groceries than any other grocery chain, and most of its stores have pharmacies, which make it competitive with CVS and Walgreens and other giant pharmacy retailers.

Last year Wal-mart launched its $4 generic drug program covering about 2000 generics, and it recently announced for the public it is adding 24 new generics, mostly for $4 but $9 for birth control clinics. Under its new health plan, its employees will have access to even more generics. The new health plans for employees will features grants of $100 to $500, premiums as low at $5 a month, elimination of hospital co-pays, deductibles of $500 to $2000 – all in all 50 ways you can slice and dice health care plans according to your needs.

I’m not a naïve Wal-Mart backer. I’m aware of relentless Wal-Mart attacks by others for the Walmart stress on cheap foreign products, its low wage scales, its lack of coverage for 57% of employees, claims of sexism, and its reputation as a destroyer of small businesses.

But I’m also acute conscious of its reputation as the most innovative (and largest) retailer in the World. Since its founding in 1962 in Rodgers, Arkansas, Wal-mart has taken the retail world by storm. It will have revenues in 2007 of $351 billion with a new income of $11.3 billion.

It has done this through various innovative strategies – “hit ‘em where they ain’t” placement of stores in rural and suburban locations, a systematic worldwide “just-in-time” computerized inventory system, bulk purchasing in Sam’s Clubs, pharmacies in most stores, $4 generics, and most recently the introduction of nurse-practitioner-run retail clinics in hundreds of its stores.

As much as 40% of its pharmacy business now features its $4 generics, which it claims has changed the “name of the game” and is profitable while cutting $610 million in overall health costs.

Wal-Mart’s health strategies are not without critics. Some claim, for example, that a $2000 deductible is a King’s Ransom for employees that average $20,000 in income. But others – such as Ron Pollack of Consumers USA and Dr, Helen Darling of the Washington Business Group – find the Wal-mart approach promising.


Soon or late, as a physician you’re likely to be touched in one way or another by Wal-Mart’s eeping health care innovations. So, for your information, Walmart and its subsidiary, Sam’s Clubs, now have 3100 stores with 1.34 million employees in the U.S. Walmart is now the world’s largest corporation with revenues of $351 billion. Walmart is rapidly opening retail clinics in multiple outlets, rolling out new high deductible health plans for its employees, and filling $4 prescriptions for over 2000 generic drugs and $9 prescriptions for birth control agents.

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