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Wal-Mart considers expanding healthcare services at its clinics

A confidential document says the retail giant is exploring ways to become a primary care service provider by partnering with outside healthcare companies to treat and manage a range of serious medical conditions at its 140 in-store clinics nationwide.

November 10, 2011|By Duke Helfand and Tiffany Hsu, Los Angeles Times

Retail giant Wal-Mart Stores Inc. is exploring ways to expand the kinds of healthcare services it offers at dozens of stores across the country, potentially setting the stage to turn the nation's largest retailer into a major primary care service provider and drive down costs for millions of Americans.

The Arkansas retail giant is looking to partner with outside healthcare companies to treat and manage a range of serious medical conditions — including HIV, diabetes, arthritis and clinical depression — at 140 store clinics nationwide.

Any expansion of the retailer's clinics would come as millions of Americans prepare to gain health insurance in 2014 under President Obama's healthcare overhaul, which will provide government subsidies to people who otherwise could not afford coverage.

"It seems that Wal-Mart could be well positioned to care for a dramatic increase in the number of paying patients out there," said Larry Levitt, who heads the nonprofit Kaiser Family Foundation's Initiative on Health Reform and Private Insurance.

Wal-Mart's strategy was spelled out in a confidential, 14-page document sent to healthcare vendors and made public Wednesday as part of a National Public Radio report. The document said the company "intends to build a national, integrated, low-cost primary care healthcare platform."

But Wal-Mart downplayed the significance of its efforts, saying its internal document — a "request for information" — was only a preliminary move to test the feasibility of moving forward.

The confidential paper "is overwritten and incorrect," Dr. John Agwunobi, president of Wal-Mart U.S. Health & Wellness, said in a statement. "We are not building a national, integrated, low-cost primary care healthcare platform."

Wal-Mart declined to elaborate or say if it is considering adding more in-store clinics.

Regardless of the extent of Wal-Mart's expansion plans, one Orange County customer praised the effort, saying it would be a good alternative to expensive doctor visits.

Freelance writer Shelby Barone, 34, said she already shops at the Wal-Mart near her Aliso Viejo home once a week. Taking her three children to a clinic inside the store would be "so convenient," she said.

"Why would I spend $300 to take my child with a late-night fever elsewhere when I can spend $75 to do it at Wal-Mart," she said. "It's one stop. I wouldn't hesitate. If any company could tackle this and make it work, Wal-Mart can."

Wal-Mart isn't the only major retailer operating in-store clinics. It has competition from several national chains, including Walgreens, CVS Caremark and Target. As of last year, there were nearly 1,200 retail clinics across the country, many staffed by nurse practitioners and physician assistants treating minor ailments such as cuts and coughs, according to think tank Rand Corp.

Some healthcare analysts said the extensive primary care services envisioned in the Wal-Mart document would set it apart from the others.

The company's massive size also might allow it to negotiate better deals with outside companies that provide medical services in its clinics and the insurance companies that pay its customers' medical bills. Driving hard bargains could lower costs for consumers.

"It can potentially create an entirely new model" for delivering healthcare, said Paul Ginsburg, president of the Center for Studying Health System Change. "I would expect them to be innovative in thinking through how to deliver the full range of primary care efficiently."

But Ginsburg and other healthcare experts warned of challenges, including a shortage of primary care doctors, particularly in rural areas where Wal-Mart is a dominant presence. And the American Academy of Family Physicians has criticized retail health clinics, arguing that they often aren't well equipped to deal with chronic medical conditions.

"I would question if they really understand what it's like to deliver primary care with good outcomes and cost effectively," said Dr. Glen Stream, president of the academy. "It's a lot more complex than people would think. I would be concerned whether a retail chain is the right place to do that."

For Wal-Mart, however, offering a wide range of healthcare options could help the retailer remain relevant and retain customers in an environment marked by low consumer confidence and stiff competition.

"The nature of being as big as they are is that they have to continue to appeal to more customers," said David Schick, an analyst with Stifel, Nicolaus & Co. Inc. "Retailers who don't continue to add and adapt both services and merchandise categories will flat-line and fall behind."

duke.helfand@latimes.com

tiffany.hsu@latimes.com

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