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Readers Write: Walmart Health Centers Are Here — Here’s How to Respond

March 11, 2020 Readers Write No Comments

Walmart Health Centers Are Here — Here’s How to Respond
By Derek Baird

Derek Baird, MBA is SVP of Avia of Chicago, IL.

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I recently wrote about Amazon’s looming threat to health systems and physician practices. I closed with a comment that Walmart poses an even greater threat. Many (actually, most) of you disagreed. Since we all have unexpected free time this week, I hope you’ll hear me out.

Walmart Health is back in the news, thanks to the opening of their second Health Center and a not-so-subtle statement from former Apple CEO John Sculley, “Walmart Health will cause a consumer revolution.” Those are bold words from a smart man (and healthcare investor). Note: John’s been wrong at least once. He drove Steve Jobs out of Apple.

Walmart has run pharmacies since the 1970s and a small number of retail clinics for many years. Last September they opened the first Walmart Health Center. It’s not your 1990s-style retail clinic crammed in a closet next to the pharmacy. The 10,000 square foot clinic sits next to a Walmart Supercenter in suburban Georgia. It provides services ranging from physical exams to dental visits to x-rays. Notably, it is staffed by physicians.

The second clinic opened in another Georgia suburb in January with a similar footprint and services. Mark Wahlberg was at the opening. Makes sense since he’s a model of men’s fitness. On the other hand, he owns a burger chain delivering saturated fat to the masses. Speaking of brand dissonance, purists like me grumble about Walmart providing healthcare services in the building next door to its lucrative tobacco counter. I doubt their shoppers share my scruples.

Not only does Walmart offer a super-convenient one-stop shopping option, the digital experience is great. It features all the stuff we admire in solutions from cooler companies like Amazon, Carbon, and 98point6: clean website UI, extended hours, online scheduling, transparent pricing, text reminders, etc.

One hundred fifty million Americans visit a Walmart every week, though most healthcare executives aren’t part of that cohort. We spend lot more time discussing Amazon and other technology offerings even though 90% of us live within 10 miles of a Walmart store. Many Walmart shoppers are commercially insured  — with $1,600 average deductibles — and are likely tempted by the sound of $40 for an office visit and $25 for a teeth cleaning. I know I am.

Out of the gate, Walmart’s model is differentiated, difficult to replicate, and a savvy marriage of physical and virtual assets. Like Amazon’s not-yet-launched offering, Walmart designed its services to address glaring flaws in traditional offerings. But unlike Amazon and other direct-to-consumer telehealth offerings, it’s not reliant on virtual care. In most markets, virtual care is still hampered by stubbornly low awareness, understanding, and adoption. It will be a lot easier for Walmart to launch virtual care than it will be for Amazon to replicate Walmart’s foot traffic. Let’s keep an eye on Whole Foods.

If you’re more likely to visit Sam’s Club than Walmart, then the Walton family has you covered, too. They launched a set of innovative healthcare packages—including family bundles—for members last year. The bundles include free generic medications, a Humana-supported provider network, and $1 virtual visits through, yes, 98point6.

Here’s the kicker. Unlike Walgreens or CVS, Walmart doesn’t appear interested in partnering with local health systems. These Health Centers are launching to make up for health system shortcomings. They will gladly displace primary care physicians sitting behind ineffective call centers, packed schedules, opaque pricing, and myChart logins.

Just like small town Main Street retailers, health systems will have to compete.

Here’s how to get started. First, aim to match Walmart on digital convenience. Your digital front door must make it just as easy to access care as it is to grab an appointment at the Health Center. Put your price list online. Offer virtual visits for those who don’t want to leave the couch. Offer virtual queuing (“save my spot”) for urgent care centers. Your goal here is to approach competitive parity. This will require an intentional, multi-year focus on convenient access and virtual care. If you don’t have your key executives focused on this effort, it’s time to pull together a task force and allocate substantial capital.

Next, leverage your incumbent advantages so you don’t have to match on price. You have brand equity, data, and locations that can be assets rather than liabilities. If you can marry your clinical expertise with personalized communications to patients, they will value that continuity and credibility.

Some good news: Walmart is not going to scale as quickly as Optum or CVS. They have two, soon to be three, locations. You have a little time to prepare. Unless you’re in Georgia.



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