Health Inc.


Some other news. The nation's largest retailer is electing to move into a new business. NPR has learned that Wal-Mart sent out a proposal saying it wants to become the largest primary care provider in the U.S. - health care. Here's Sarah Varney of member station KQED.

SARAH VARNEY, BYLINE: In the Wal-Mart document obtained by NPR, the company is seeking vendors to help build a vast national primary care network. A Wal-Mart spokesperson confirmed that the company had sent out what's known as a request for information to potential partners but says it's too early in the process to comment. This isn't the first time Wal-Mart has set its sights on health care. Back in 2007, the company announced plans to open 400 in-store health clinics. It never did hit that mark. Today, there are about 140 clinics that offer basic medical care, like diagnosing ear infections, school and camp physicals, and wart removal. But the Wal-Mart document signals a much more ambitious menu of services, like managing all sorts of chronic illnesses - diabetes, asthma, hypertension, arthritis, even clinical depression and HIV. You could go to Wal-Mart for an allergy or blood test, a urine culture, vaccination, even pregnancy check-ups.

BOB KOCHER: I think it's a really ambitious re-imagination of what can you do in a retail clinic.

VARNEY: Bob Kocher is a health policy expert and a partner at the venture capital firm VenRock. Although many pharmacy chains have in-store clinics, they haven't taken off. But the sheer size of Wal-Mart, with 3,500 stores and counting, and their ability to sign up employers, insurers, even hospital chains and doctors' groups, could, Kocher says, make Wal-Mart clinics a permanent part of the U.S. health care system.

KOCHER: And should lead to, as we've seen in other sector Wal-Mart's gone in to, better prices for patients. And health care's one place where prices seldom fall and there's not much competition around value.

VARNEY: Wal-Mart has already flexed its supersized muscles, bringing $4 generics to its customers, says Ed Kaplan of the benefits consulting firm the Segal Company. And Wal-Mart, he says, could bring its massive purchasing power to just about anything.

ED KAPLAN: If they do a better job at pushing down the acquisition cost of tests, test strips and prescription drugs and other medical supplies, there's a fair amount of margin in the reimbursement system relative to a hospital or an office setting where a physician tends to mark up those medical supplies.

VARNEY: Kaplan says customers may be willing to trade their regular doctor for convenience and cost, but they're only willing to go so far.

KAPLAN: I don't see it being successful if they don't really pay attention to the privacy concerns. I mean, there's one thing to bring your kid who's sneezing to that open space in a walk-in clinic, but it's different if you have a chronic disease and you really want some privacy

VARNEY: Family physicians have long been vocal critics of retail clinics. Glen Stream, president of the American Academy of Family Physicians, says Wal-Mart's proposal takes health care in the wrong direction.

GLEN STREAM: I would still be gravely concerned that this is going to fragment care at a time when we now clearly understand that people having a usual source of comprehensive and continuous care in a single location is one of the main features that drives high-quality care, good patient health outcomes, and drives down cost.

VARNEY: And if you want to roll back prices, primary care is not the place to look, says Stream. Indeed, health care economists largely agree that the bloat is with specialty care - surgeries, fancy medical devices and the like - and that primary care is largely underfunded. Stock analysts who cover Wal-Mart are skeptical of the company's ambitions to become the largest provider of primary care. Colin McGranahan with Sanford Bernstein says Wal-Mart is really good at logistics and store operations but health care is an entirely different beast.

COLIN MCGRANAHAN: It is a very, very different business than retailing that requires extremely different competencies, not many of which I would think Wal-Mart has today. And so it's a business and a market that lots and lots of very smart people have tried to streamline and figure out over time, and I think it's flummoxed most of those folks.

VARNEY: Wal-Mart's tagline, Save Money Live Better, seems an apt goal for the health care industry. It may be a question of whether consumers are willing to pass by those eager Wal-Mart greeters on their way to get a physical. For NPR News, I'm Sarah Varney.


INSKEEP: And that story was produced with the help of Kaiser Health News and Oregon Public Broadcasting. You heard it on MORNING EDITION from NPR News.

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