Should we be celebrating the fact that Wal-Mart is considering joining the health care industry? The retail giant made big news last week when NPR learned that it was seeking partnerships with health firms for a major expansion of its in-store medical clinics. According to Wal-Mart’s request, the retail giant wants to “dramatically: 1) lower the cost of health care while maintaining or improving outcomes, and 2) expand access to high-quality health services by becoming the largest provider of primary health care services in the nation.”
Most of the commenters that weighed in for NPR’s article expressed doubts. Ann O’Malley, physician and senior health researcher at the Center for Studying Health System Change, said:
"Maybe Wal-Mart can deliver a lot of this stuff more cheaply because it is an expert at doing this with other types of widgets, but health care is not a widget and managing individual human beings is not nearly as simple as selling commercial products to consumers.”
I admit, my first reaction to the news was also skepticism. Wal-Mart’s abysmal reputation for “rolling back” employee health benefits doesn’t seem to make it a frontrunner for becoming the savior for America’s worsening health care crisis.
But poor labor practices aside, the fact is that Wal-Mart is tackling an imperative and escalating challenge. One in six Americans has no health insurance. That’s 50 million people who cannot afford basic medical care — period.
And even the insured are facing financially crippling medical bills due to skyrocketing costs. We desperately need to make health services affordable and accessible, while maintaining a high standard of care.
Wal-Mart’s move to offer low-cost primary care means that it’s throwing its hat into the health care delivery race currently led by other chains like CVS and Walgreens. Health services and drugs are big business, and all three competitors are working to attract consumers with low-cost standard medical services that are more convenient to access.
CVS, for example, currently has 550 Minute Clinics in nationwide retail locations. Its walk-in clinics allow anyone to see a nurse practitioner or physician’s assistant, get a vaccine, or undergo routine lab tests — all without an appointment.
And the costs — all disclosed up-front in a “menu” of services — are astonishingly cheap. For instance, the fee to see a nurse practitioner for flu-like symptoms is between $79 and $89. (For comparison, the same type of appointment costs $388 at my hospital for those without insurance.)
With Wal-Mart’s size, it’s not a far stretch to imagine that the retailer’s immense purchasing power could be applied, at the very least, to lower the cost of drugs, lab tests, and other medical supplies. And more importantly, it could potentially offer a centralized oversight of partnerships with doctors, drug companies, and insurers to streamline processes and further drive down the cost of care.
The need for low-cost health care delivery models, however, isn’t new or unique to the United States. In the developing world, for-profit medical chains like HealthPoint Services in India and Carego Livewell in Kenya are using innovative business models to provide health care for low-income and rural communities — people at the very bottom of the pyramid who can’t afford or can’t reach traditional big hospitals.
What does this tell us about the prospects for retail giants, like Wal-Mart, getting involved in health care, and what might the United States learn from innovators tackling similar health care challenges in other countries? To explore this question, I spoke with Ashoka entrepreneur and author of The Next 4 Billion, Dr. Al Hammond.
Incremental change is not going to solve our problem. We have to get out of the medieval guild model of health care and into an industrial age model of health care, because otherwise, we simply can’t afford it.
Hammond is currently leading HealthPoint Services, which gives rural communities in India access to low-cost primary care through a chain of local clinics that provide consultations with licensed physicians via videoconferencing. The clinics also dispense drugs, perform a wide range of lab tests, and offer a “subscription” to villagers for access to clean water. HealthPoint uses technologies like telemedicine and electronic recordkeeping to lower costs and standardize care.
Changemakers: Are there parallels between the health care challenges we’re facing in the United States and the situation in India?
Hammond: They are very similar. In India, people don’t have the money for health care, or any alternative health care system really. And the problem in the United States is that we can’t afford the healthcare system we have. In both cases, there is a very powerful economic driver to do something different.
Changemakers: Is Wal-Mart’s potential entry into the health care space promising? Or the wrong path?
Hammond: It’s incredibly promising. You have to remember that the primary problem that we face in the U.S. is that so many people don’t have access to care at all.
Wal-Mart could provide a much more accessible way to get health care than finding a doctor. Doctors often don’t take new patients, or they worry about insurance coverage and other issues. But the neighborhood drug store is there — you know how to find it, and it’s often the easiest place to get to by public transport. Wal-Mart has a particularly strong presence in rural communities, which is where the majority of the uninsured population is. Having a low-cost provider is of course hugely important for someone without insurance.
Changemakers: What about detractors like O’Malley who say you can’t lower the cost of health care the same way you could lower the cost of a widget?
Hammond: It’s quite widely accepted in public health systems that 80 to 90 percent of primary care could actually be performed by a nurse, perhaps assisted by a clinical decision support tool. A nurse is far less expensive than a doctor.
Known, common ailments — a flu, respiratory problem, a sore back — can be addressed perfectly well by somebody who’s well trained. With clinical decision support tools, the algorithms are good enough that we know exactly what questions to ask, and we know what to prescribe based on the answers.
Here’s the analogy that doctors don’t like to hear: take McDonalds. The fries always taste the same, because the workers are following a well-defined procedure that is well controlled and monitored. Primary health care can be like that. At least, that’s what we’re doing in India.
The key is to have the ability to recognize something that is not in the realm of primary care. You want to detect more serious ailments and refer them to a hospital or appropriate facility. That sometimes takes experience and intuition.
And that’s where a real doctor can make a difference — but you could employ a remote doctor with the right tools. The data shows that if you have point-of-care diagnostics and a remote doctor doing evidence-based medicine, the result is actually likely to be better than if you walked in and saw a doctor in person.
Changemakers: What about critics who say retail chains are just further fragmenting the health care system?
Hammond: Our health care system is certainly too fragmented, but having a large provider with consistent standards and low costs is one way of unfragmenting it.
You get such widely varying practices among doctors in the United States. Outcomes vary enormously for the same condition, from group to group and state to state. That shows that the quality control is lousy.
With a big company like Wal-Mart, and its reputation on the line, they’re going to worry a lot about standardization and quality control, and detecting those things that are not simple and getting those to a real doctor. And in my opinion that would significantly improve the quality control.
This is not to say that Wal-Mart is automatically going to do a good job or that there won’t be issues. But if there aren’t Wal-Marts trying to invade the space, then we need to invent them. Incremental change is not going to solve our problem. We have to get out of the medieval guild model of health care and into an industrial age model of health care, because otherwise, we simply can’t afford it.
Changemakers: What might Wal-Mart learn by looking at HealthPoint Services’s model?
Hammond: Wal-Mart could go a lot further than the basics. If Wal-Mart were to learn about our experience in India, they might add point of care diagnostics, telemedicine, and good referrals. It could be the entire package.
Changemakers: Where do you see the most potential for innovation in this type of model?
Hammond: Right now, many people fall through the cracks, because the health system’s not integrated. There’s potential to form innovative partnerships with specialists, large hospital chains, insurance providers, diagnostic companies — you name it. In the spirit of social entrepreneurship, we should welcome any experimentation aimed at improving the system.
Al Hammond is an expert judge for the Changemakers Innovations for Health: Solutions that Cross Borders competition. Check out the competition page for more health innovations that have the potential to solve similar challenges in other countries.