Health care moving into electronic age at Wal-Mart

KANSAS CITY , Mo. The future of health care at Wal-Mart will involve a heavy reliance on all things electronic as a means to improve overall efficiency, access to higher-quality care and the accuracy of medical records and prescriptions.

The company this year expects to work with physicians and other providers to fill an estimated 8 million electronically submitted prescriptions, and within three years will provide all of its employees and their families with electronic medical records, according to Wal-Mart president and chief executive officer Lee Scott. He also said the company this year would contract with select employers in the United States to help them manage how they process and pay prescription costs, and the initiative will save employers more than $100 million in 2008.

Scott’s health care and pharmacy comments were made Wednesday night to approximately 7,000 of the company’s U.S. store managers who gather annually in Kansas City for an event called the year beginning meeting.

“What your company does best is exactly what the U.S. health care system needs the most,” according to a transcript of Scott’s speech Wal-Mart released prior to the event. “It needs more affordability. It needs more accessibility. It needs to be more efficient. And it needs leaders with a genuine desire to work together for positive change.”

During his speech, ambitiously titled “The Company of the Future,” Scott went on to describe Wal-Mart’s goals regarding sustainability and the elimination of waste and new priorities regarding the ethical and responsible sourcing of products.

In each of those areas and with regard to health care, Wal-Mart was subjected to intense criticism the past five years. Initially and predictably, the company’s response to such criticism was defensive in nature. However, within the past few years, executives came to the realization that there was some truth to criticism and failing to adopt a more proactive and aggressive approach would be detrimental to the long-term prospects of a company that was already the world’s largest and as such faced higher expectations than others in the retail industry.

This was especially true in the health care arena where Wal-Mart occupies the unique position as the nation’s largest employer with nearly 1.4 million workers in addition to being a major health care provider through its network of pharmacies, eyecare center and increasingly in-store clinics. To counter the criticism, Wal-Mart improved employee access to its health plans by introducing low cost, high deductible alternatives and reducing eligibility wait times. The result of those changes were revealed earlier this week when Wal-Mart disclosed that more than half of the company’s U.S. employees now receive health care coverage directly from the company and nearly 93 percent of its employees have some type of health care coverage.

“Just as in the last few years, we are pleased to see an increase in enrollment numbers,” said Linda Dillman, Wal-Mart’s executive vice president of benefits and risk management. “With 690,970 associates and more than 1.1 million associates and dependants in total now covered by Wal-Mart’s plans, we can see that the improvements we’ve made are being embraced by our associates and their families.”

Going forward, Dillman will play a key role in executing Wal-Mart’s strategies regarding electronic health records and e-prescribing. She previously served as Wal-Mart’s chief information officer. It is through the increased use of technology that Wal-Mart expects to reap substantial cost benefits in addition to the wide range of quality of care benefits that stem from providers being able to efficiently and accurately share patient care information and provide pharmacies with accurate prescriptions.

“Our approach will be base on taking out unnecessary costs while providing high quality health care products and services,” Scott told the Wal-Mart store managers.

Such sweeping generalizations were prevalent throughout his speech that reads more like Scott is running for president than running a retail company expected to generate revenues north of $375 billion for its fiscal year ending January 31.

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