Workforce.com

Wal-Mart Focuses on Clinics, Technology to Cut Health Costs

April 25, 2007
Wal-Mart has made two announcements in recent days that show the retailer is moving aggressively to change the health care system—both as an employer covering more than a million people and as a company looking to lift its stagnant share price.

Washington that the company plans to increase its number of in-store health care clinics to 2,000, up  from 76, in the next five to seven years, with 400 new clinics coming in the next two years.

“I think it will be a great opportunity for our business,” Scott said. “But more importantly, they will provide something to our community that is desperately needed: affordable access at the local level to quality, affordable health care.”

Scott reiterated an announcement made last week of a partnership between the retailer, Blue Cross Blue Shield of Arkansas and the University of Arkansas to develop ways health care can be improved through the use of technology. Wal-Mart hopes to streamline health care just as it did with its own supply chain.

“Health IT is perhaps the single largest opportunity to drive cost out of the health care system,” Scott said during his keynote address. Then he asked other employers to join Dossia. That group, founded by Wal-Mart, Intel, BP, Pitney Bowes and Applied Materials, says employees of member companies will have a personal health record by the end of the year.

The effort to use its purchasing power to reduce costs through technology and the creation of health clinics that treat patients as consumers are two ways Wal-Mart is trying to repair its economic fortunes, reduce its own health care costs and make a public case that the market, not government, can solve problems plaguing the health care system.

“The private sector can lead. The private sector can make a difference,” Scott said.

He said Americans need to become better health care consumers, and that Wal-Mart will help provide them with the tools to do so.

Wal-Mart has also been busy creating in-store clinics. Rather than hire a company that specializes in clinics, Wal-Mart has tapped local health care providers. This model will help boost the business of doctors in rural areas where Wal-Mart has a big presence. The clinics will also help doctors who have lost some business to the forces of globalization and employers that ship blue-collar jobs overseas or cut back on health benefits. These local providers can also make referrals to area doctors and hospitals.

As the health care debate gains more national attention, groups coming together to stake out a position on the subject of reform continue to proliferate.

One such group that Wal-Mart helped launch is called Better Health Care Together. Other members include the Service Employees International Union, Kelly Services, Intel and the Communications Workers of America. The group is having a meeting in New York next month, Scott said.

“This is too important for our country to be divided into two camps,” he said.

But when it comes to health care, even CEOs concerned with spiraling costs remain divided.

Safeway CEO Steven Burd is orchestrating his own group of health-care-minded CEOs. Burd told Workforce Management that he does not think Wal-Mart will be a member when the group is formally announced in May.

“I think it’s a very broad-based coalition. We add companies to it every week” Burd said.

Jeremy Smerd