Wal-Mart CEO Hard Selling Health Care Reform


WASHINGTON — Wal-Mart Chief Executive Officer Lee Scott isn't waiting around for Washington's power elite to reform health care. He's taking on the job himself, one gigantic retail store at a time.

In the past 2 years, Wal-Mart has established on-site medical clinics in 76 of its stores, and plans to open thousands more of the clinics in the near future. Last year, the company began offering $4 generic prescriptions, a move hailed by some as a major step forward in reducing drug costs for millions of Americans but scorned by others as a marketing ploy.

Under Mr. Scott's leadership, Wal-Mart is forming alliances with other major corporations to push the federal government to establish universal health insurance coverage and transportable, patient-owned electronic medical records.

Welcome to health reform, Wal-Mart style. “The time for politics in health care is over. We need action to create affordable accessible and high-quality health care. I believe American business can lead and we should lead. We must be a catalyst for positive change,” said Mr. Scott, speaking at the fourth annual World Health Care Congress, sponsored by the Wall Street Journal and CNBC.

Revered by some, reviled by others, Mr. Scott is unquestionably one of the most active corporate leaders on health care issues. He seems determined to make the Wal-Mart stores a locus of affordable basic health care for millions of Americans. It's an idea that certainly redefines “retail therapy.”

“We now have 76 independently owned clinics in our stores in the U.S. We have a great model. In the next 4 years, we plan 2,000 such clinics. We know customers like and want them. Ninety percent of patients going to these clinics are satisfied or very satisfied with the service. It's fast, easy, and convenient. We can drive effectiveness in these settings,” said Mr. Scott.

Wal-Mart's “RediClinics” are owned and operated by an independent company, not by Wal-Mart itself. They are typically staffed by nurse practitioners who have ready access to physician and hospital backup if needed.

Wal-Mart is not the only retail chain to get into the health care services game. Walgreen's, CVS, Target, and Kroger all have or are exploring some form of quickie clinic, and there are a number of independent companies such as MinuteClinic and Take Care Health, competing for the contracts.

Though they are no replacement for comprehensive physician or hospital services, the retail-floor quickie clinics can provide what even many well-run physician offices cannot: instant access walk-in service, without appointments or waiting time, and at affordable and clearly visible prices.

That's an awfully enticing combination for many Americans, and the retail clinic model is clearly filling a need. Surveys of customers using the Wal-Mart RediClinics indicate that more than half are uninsured, suggesting that the clinics may be serving as a vital primary care center for many.

“Fifteen percent said they would have had to go to the emergency room for care if the store clinic was not there. Twenty percent were parents bringing children in for treatment,” said Mr. Scott.

That latter fact has not exactly endeared Mr. Scott to the leadership of the American Academy of Pediatrics, which has been outspoken in its criticism of Wal-Mart's clinics and retail-based medicine. But Mr. Scott believes that store-based care is better than no care at all.

For those families that have health insurance and their own physicians, it's still pretty hard to argue with the store-based clinic's convenience.

Other medical organizations, including the American Medical Association and the American Academy of Family Physicians, have taken a softer stance toward the retail clinic trend, acknowledging that the clinics are a reality, while at the same time pushing for standardized operating principles that limit the scope of services provided, and establishing guidelines for referrals to physicians and hospitals.

Mr. Scott stressed that Wal-Mart is not positioning the RediClinics as replacements for mainstream health care facilities. The future evolution of Wal-Mart's model centers on building partnerships between the store-based clinics and local hospitals. “People trust their hospitals, especially their local hospitals,” said Mr. Scott. With the right partnerships, the clinic in Aisle No. 3 can become an entry point to more comprehensive care.

If the RediClinics raised eyebrows among health care pundits, Mr. Scott's $4 generic prescription move has them shaking their heads in disbelief. Wal-Mart is now offering shoppers the opportunity to obtain generic forms of many popular medications for $4 per prescription. No doubt, this has traction with consumers.

“If you have cardiovascular disease, you will be able to get a regimen of drugs for between $12 and $16 per month as opposed to $300 for the branded drugs,” said Ron Winslow, a medical reporter for the Wall Street Journal, who moderated the session at which Mr. Scott spoke. “This has significant implications for health care costs, for drug development, and for drug marketing.”

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