Higher healthcare calling motivates
Senior Walmart executives regularly invoke the name of Sam Walton when it serves to reinforce a point regarding the company’s business model or the cultural principles on which Walton is said to have founded the company. Dr. John Agwunobi, president of health and wellness for Walmart U.S., took the practice a step further recently when he participated in a panel presentation with other top executives at a conference put on by the Center for Retailing Excellence at the University of Arkansas’ Sam M. Walton College of Business.
When it was Agwunobi’s turn to address an audience comprised primarily of Walmart suppliers, he shared a grainy video of Walton speaking at one of the company’s Saturday morning meetings. It was early 1992, and Walton was seated next to then president and CEO David Glass. He was bemoaning the healthcare system, the markup charged for various tests he was receiving and a general lack of price transparency. “I wasn’t there,” Agwunobi said, “but he used that opportunity to deliver a very personal message that Walmart has a purpose.”
That purpose, embodied by the company’s “save money, live better” value proposition, has become a more powerful force, motivating Walmart’s health-and-wellness strategies. “We want to lower the cost of health care so more people can have access to it,” Agwunobi said. “Every employer in this environment is facing amazing increases in the price of health care, and we think we might have a way to help them.”
He believes the concept of the productivity loop the company applies to other aspects of its business can work just as well in health care. By lowering prices so more people can buy products and services, the cost can be lowered to increase access so even more people can buy and prices can be lowered more and access improved further in a sort of virtuous cycle, according to Agwunobi.
Accordingly, he said Walmart is visiting with benefit managers and offering lower prices on pharmaceuticals, healthcare services, products and even grocery items, and is asking in return that the firms it works with incent their employees to come to Walmart and become customers.
Agwunobi’s example demonstrates how much more broadly Walmart is thinking about its potential role in an evolving healthcare delivery system, where cost promises to be the dominant consideration for decades to come and nutrition will play a great role. Just five years ago, Walmart took a much narrower view of the healthcare industry, and its focus was primarily on pharmacy. Now it is apparent the company is intent on extending its reach more broadly, even if the extent of its reach still is being defined, as was evident from a recent request for information the company distributed.
“Walmart intends to build a national, integrated, low-cost primary care healthcare platform that will provide [preventive] and chronic care services that are currently out of reach for millions of Americans,” the request for information stated. “Walmart intends to do this in an affordable and accessible way while maintaining or improving quality outcomes. Walmart seeks partners who have a care model or capability that can help dramatically drive down the cost of care, while maintaining or improving quality on a national level.”
Not long after the 14-page request became public, its objective was disputed, as Agwunobi issued a statement that said, “The RFI statement of intent is overwritten and incorrect. We are not building a national, integrated, low-cost primary care healthcare platform.”
While the release of the request and Agwunobi’s denial muddies the waters somewhat regarding near-term health initiatives, it shouldn’t come as a surprise that Walmart sees opportunity in occupying a more prominent position in the delivery of healthcare goods and services. That philosophy also extends to food, where Walmart has embarked on a plan to reformulate products so they have reduced sugar, salt and trans fats, while also increasing access to perishables in neighborhoods known as food deserts.
“We want to make shopping for healthy groceries easier. We will always be a house of choice and a place where customers can come to find all of the options, but we will help [them] understand which is which,” Agwunobi said.
Meanwhile, the company hasn’t neglected its prescription business, which now numbers nearly 3,800 pharmacies in the United States. As the company noted during the third quarter, the health-and-wellness business continued to perform well and produce a low-single digit same-store sales increase thanks to improved in-stock on nonprescription products and an ongoing partnership with Humana on a Medicare Part D program. The Humana program, now in its second year with a monthly premium of only $15.10 and low co-pays, has signed up more than 1 million people since it was launched in 2010.
On the brink of Clinics 2.0
Since the inception of retail-based health clinics in 2000, the concept has grown to more than 1,300 locations throughout the United States and, in more recent months, has celebrated several significant milestones that prove clinics are not only an integral part of the U.S. healthcare system but also are a viable model for retailers when handled correctly. The real question now: Are we on the brink of clinics version 2.0?
Recently, CVS Caremark’s MinuteClinic surpassed its 10 millionth patient visit and, during the third quarter, inked its 11th clinical affiliation; the Convenient Care Association celebrated its five-year anniversary; and the fellowship of the College of Physicians of Philadelphia elected the first nurse practitioner to its ranks — Sandy Ryan, chief nurse practitioner officer for Walgreens’ Take Care Health Systems. These are just a few of the more recent milestones, and clearly are not all-inclusive.
Now the industry is trying to make sense of Walmart’s request for information sent to strategic partners. Walmart has denied that it is building a national, integrated, low-cost primary care healthcare platform; however, the retailer reportedly has not disputed that it is looking for new partners for its 140 clinics nationwide. According to published reports, Walmart is looking to partner with outside healthcare companies to treat and manage a range of medical conditions — including HIV, diabetes, arthritis and clinical depression. (See "Higher healthcare calling motivates.")
The bottom line: Such developments provide a glimpse into what retail-based health care, which has estimated clinic sales of $733.4 million, could look like come version 2.0.
“In terms of the acute care potential in the coming healthcare world with a broader section of the population, I think that is a true opportunity for retail clinics; and then if they can figure out pathways to really expand their services to chronic care patients, then they become an even greater destination for an even wider swathe of patients,” said Larry Kocot, deputy director of the Engelberg Center for Health Care Reform at the Brookings Institution.
Already the business model is no longer entirely dependent on simple, acute ailments, but is becoming increasingly integrated with medication therapy management, OTCs and nontraditional therapies, and dispensing. Not to mention the fact that clinics, especially worksite clinics, can serve as an alternative for employers looking to lower healthcare costs.
For example, Take Care Health Systems offers specialty medication injections and infusions for patients with asthma and osteoporosis in select Tampa, Fla.; Orlando, Fla.; and Pittsburgh locations.
“I think we are crossing the bridge from 1.0, which was a nurse practitioner with a computer hoping to get 20 visits a day, to now a more sophisticated business model that is going to become, I think, a staple in the industry,” said Paul Keckley, executive director for the Deloitte Center for Health Solutions.
Keckley believed that, going forward, it isn’t inconceivable that clinics could become accountable care organizations and operate as medical homes. “I’m very excited about the prospects of the industry. … I think these folks have matured in their business model, and I’m going to be fascinated when they are contracting directly with major employers to provide a whole suite of primary care services — and when they, in some markets, become the exclusive primary care network for a health plan,” Keckley said. “I think those are inevitable.”
Zipnosis to showcase technology in Verizon Wireless booth at mHealth Summit
MINNEAPOLIS and SAINT PAUL, Minn. — Zipnosis, which offers an online Web portal that allows patients to have virtual visits with a clinician for minor ailments, and Verizon Wireless have announced that Zipnosis will be a featured technology in the Verizon booth at the mHealth Summit Convention in Washington, D.C., on Dec. 5 to 7.
The mHealth Summit is the largest conference in the world focused on mobile and wireless health solutions.
Zipnosis offers treatment for minor health problems such as sinus infections, bladder infections and allergies. How it works: Patients visit Zipnosis.com, create an account, and complete a software-guided interview that collects their medical information. Within an hour, the patient receives a diagnosis and treatment from a board-certified, licensed clinician using the Zipnosis online portal. Each visit is $25 and can be paid with a credit card or health savings account.
“Zipnosis was designed to allow patients and providers access to affordable healthcare anywhere, anytime,” Zipnosis CEO Jon Pearce said. “Verizon Wireless provides an industry-leading network infrastructure and powerful devices that will allow us to rapidly expand our services, and the value of Zipnosis, across America.”
Verizon Wireless is leveraging its scale and reach to deliver a diverse set of wireless technology solutions for healthcare providers, payers and suppliers that enable communication, collaboration and secure information flow.
“We’re helping to bring new technologies to the marketplace by enabling the mobile and wireless health ecosystem,” explained Arthur Lane, associate director of healthcare strategy and new market development for Verizon Wireless. “Zipnosis’ digital platform is an innovative way for patients and providers to connect for acute medical needs using wireless devices like smartphones and tablets to access the portal."