Yesterday's top story: Two execs charged with murder in 2012 meningitis outbreak

Daily Briefing Blog

Health care for $4: Walmart launches primary-care clinics in South Carolina

Dan Diamond, Managing Editor

With more than 1 million workers, 140 million customers, and thousands of stores, Walmart operates on a grand scale across the United States. 

But despite advance buzz that captivated the industry last year, the company's actual moves into primary care haven't gotten much attention—partly because Walmart's new clinics have been popping up in smaller markets.

The company opened two primary-care clinics in South Carolina last week, Lauren Sausser reports for The Post & Courier. Walmart previously opened three clinics in Texas this spring.

The five new clinics are "the company's first effort to own and control its own primary-care clinics," Kim Souza writes at The City Wire. (While Walmart currently hosts about 100 retail clinics in its stores, those are through lease arrangements.)

Walmart expects to launch about a dozen primary-care clinics by the end of the year.

Beyond the clinics: What the retail movement really means

Behind the strategy

It's no surprise to see a large retailer push into health care, given the potential market opportunity. (Our experts have closely tracked the growth in the retail sector, and how hospitals can strike deals with these retailers.)

Walmart's specific approach is driven by several factors: 

  • Long-germinating plans: Whether hosting retail clinics or potentially launching a insurance exchange, company officials have spent years eying the health care market. 
  • Existing expertise: Walmart's already acted as a disruptive innovator within the industry: its discount drug program helped drive big changes for consumers' pharmaceutical spending a decade ago.
  • Internal push for cost control: The Affordable Care Act is driving up Walmart's own health spending. The company says it will spend $330 million more on health care this year as a result of expanding coverage, and officials say piloting its own clinics represents one attempt to try and rein in health costs.

Walmart's also targeting regions where patients are most in need of care innovation. The company's two South Carolina clinics are located in Sumter and Florence—where some of the state's poorest and least healthy residents live.

And local lawmakers believe the retail giant can help improve the state's health. South Carolina officials lobbied Walmart for the opportunity to launch the clinics, Sausser reports.

"We told Wal-Mart, 'We think this is perfect,'" said Tony Keck, director of South Carolina's Medicaid agency.

Walmart's moves matter. But here's what's really important for CEOs.

Clinics built around NPs, low costs

Walmart's stressing that it's designed its clinics to be customer-centric. The clinics are open about an hour longer than at competitors like MinuteClinic; at one of Walmart's Texas clinics—staffed by nurse practitioners in a partnership with QuadMed—the hours are 8 a.m.-8 p.m. on Monday through Friday; 8 a.m. to 5 p.m. on Saturday; and 10 a.m. to 6 p.m. on Sunday.

And in line with its usual branding, Walmart's touted the low prices available in its clinics: $40 to get a walk-in check-up, and even lower costs for employees.

"For our associates and dependents on the health plan, you can come and see a provider in the Wal-Mart Care Clinic for $4. Four dollars!" Jennifer LaPerre, a company official, said last week.

"That is setting a new retail price in the health care industry," she added.

Expert reaction—and what 'retail' really means

Given their size, existing foot traffic, and record of disruptive innovation, Walmart and other big-box stores represent an intriguing new player in health care delivery, which makes their moves well worth watching. Our experts on the Marketing and Planning Leadership Council have closely tracked the rise in retail clinic growth, for example, and how hospitals can set up a retail clinic partnership with one of these stores.

Some external estimates are even calling for more than 1,000 new retail clinics by the end of next year.

But I thought my colleague Rob Lazerow had an interesting takeaway—in health care, the "retail movement" is so much more than "retail clinics." Per Rob:

    Our research team is seeing two more profound applications of 'retail' in health care—the emergence of a new retail insurance market and growth of retail shopping for care. For hospitals and health systems, these versions of retail prove much more disruptive than the clinic variety.

Rob's full post is well worth checking out, as is this study on the Consumer-Oriented Ambulatory Network.

Get all our insights on retail strategy

More than 800 C-suite members are spending time with our experts this summer at our CEO Special Sessions. If you're a senior executive at your organization, it's not too late to join us.

REGISTER NOW


Popular on the blog

The least healthy states are saying no to the ACA.

Like a funhouse mirror, where the states stand on Obamacare has led to two versions of American health care that increasingly look very different.

Half of office meetings are a waste of time. How to change that.

The science and strategy of having a great meeting, according to Harvard Business School, MIT, and Advisory Board research.

Health spending is slowing. Jobs are growing. What gives?

One of health care's biggest mysteries: The cost curve is slowing. One of health care's biggest certainties: Jobs numbers keep growing. Read those two sentences again.

Tips to avoid the flu when you fly.

One of the most common spots for disease transmission? Aboard an airplane, warns the University of Arizona's Chuck Gerba.