Diagnosis for Democracy
Insights into the State of Our Union
A Blog by Rob Tenery, MD


December 12, 2011: Is Walmartcare the Answer?

By Rob Tenery, MD on December 12, 2011

This past October, reportedly in a document obtained by NPR and Kaiser Health News, Walmart issued a ‘Request for Information’ (RFI)in an attempt to establish relationships with doctors and hospitals that would help them to become the “largest provider of primary healthcare services in the nation.” (1)

The concept of walk-in clinics by private retailers is not new. CVS pharmacies established its first of 560, called MinuteClinic, in 2000. Walgreen’s has 355 named Take Care clinics and Walmart itself already has 140 in-store health clinics. The vast majority are manned by Nurse Practitioners or Physician’s Assistants who dispense immunizations and care for ‘minor ailments.’ (2)

Reported in Walmart’s  RFI is the projected ability to also provide continuing services for chronic conditions such as heart disease, diabetes, HIV, arthritis and high cholesterol through these clinics. (3) “They’re trying to target the working, middle class people who have more limited access to primary care,” quoted  Jeffery Hoffman, a health care strategist with consulting firm Kurt Salmon. “Walmart may be acting on the incentive to increase the number of customers in its stores. Primary care is low margin…they would also boost sales in their stores by increasing the foot traffic,” he continues. (3)

In Walmart’s defense, with the projected, additional 30 million covered lives under the Patient Protection and Affordable Care Act (PPACA), they claim their primary goal is to drive down the cost of care in the face of the exploding demand. Dr. John Agwunobi, a senior VP with Walmart contradicts the claims that Walmart’s intent to build “a national, integrated, low-cost primary care healthcare platform,” although this statement reportedly comes directly out of Walmart’s October RFI. (3)

Nurse practitioners are registered nurses who have completed advanced training in the diagnosis and management of common medical conditions, including chronic illnesses. They provide some of the same care as provided by physicians and maintain close working relationships with physicians. (4) Physician Assistants (PAs) work in hospitals, clinics, and other types of health facilities, and exercise autonomy in medical decision making as determined by their supervising physician, surgeon or medical practitioner. (5) One message rings clear through the definitions of both the nurse practitioner and the PA--- a close working relationship with a physician. That doesn’t mean a stack of charts that the physician electronically cosigns at the end of the day or having a pad of pre-signed prescriptions.  It means an ongoing interaction between the physician and the individual working in any proposed clinic if there is any doubt as to the diagnosis or the proper treatment.

Walmart changed the industry when, in September 2006, it first introduced its program, where for only $4, the patient could purchase a 30 day supply from a list of 300 medications. That cost did not involve part D of Medicare or go toward the patient’s deductable. Walmart claims to have saved patients $2 billion to date. Because of their success, that program has subsequently been expanded to over 350 medications for $10 for a three months supply.

It appears Walmart has the muscle to change any market that it enters. Look at retail products, groceries and now medications. There appear to be three major reasons:

A. High volume sales with lower profit margins

B. Squeezing bigger discounts out of the manufacturers or suppliers through volume purchasing

C. Offering certain products at a greatly reduced price as a lost leader item to get the customer into their store--- a practice that has been around retail sales for a long time

How does that apply to healthcare? It appears that Walmart’s $4 drug plan offers only generic choices, thus lowering their costs, even when the name brand might be clearly better. In order to stay competitive, most of the rest of the retail industry has followed suit. One has to question Walmart’s primary concern--- lowering the cost of health care services to a growing population or just more customers into their stores.

There are concerns. For example, take the chronic disease diabetes. The proper treatment for diabetic patients is not just control of their blood sugar or a spot-check of a patient’s hemoglobin a1c. It often takes a team approach to properly evaluate for and treat retinopathies, nephropathies and peripheral neuropathies. Is a clinic inside a Walmart store going to offer those services even if ‘arrangements have been made’ with other providers of healthcare? If they have, is Walmart going to try to lower the payments to the providers that they have made arrangements through volume discounting?

There is an important difference between lowering and driving down the costs of health care. Lowering the costs means cutting back on the profit margin. Driving down the costs implies competition, even the possibility of coercion, and has the potential to influence quality. There is also a difference between expanding coverage to those who would otherwise not have access to those services and using patients as lost leader items. The former is an act of beneficence. The latter reduces the patient to a customer status, getting them to spend more money in their stores but on other goods. Treating healthcare services as a commodity, subject to the same influences as other consumable goods, treads on very shaky grounds. We come close to it in capitated systems.

Minor aches, pains, bumps, scratches and immunizations are one thing. The responsibility for the long-term care of diabetes, heart disease and HIV takes the concept of walk-in clinics to a much higher level.

If the individual mandate clause in the PPACA (Obamacare) is ruled constitutional by the Supreme Court, predetermined relationships such as Walmartcare may be the way to go for a large sector of the population. Let’s just hope those patients are not short-changed.

-----------------------------------------------------------------------------------------------

References:

1. http://kaiserhealthnews.org/Stories/2011/November/09/walmart-primary-care-medical-services.aspx

2. http://info.cvscaremark.com/our-company/our-businesses/minuteclinic

3. http://www.azcentral.com/business/articles/2011/11/10/2011110walmart-may-expand-health-clinics.html

4. http://www.healthcommunities.com/nurse-practitioner/what-is-nurse-practitioner.shtml

5. http://en.wikpedia.org/wiki/Physician_Assistant




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