Walmart makes a point of stocking its shelves with a little bit of everything. From food to clothes to specialized garden tools, the retail giant has the items its shoppers need to live a prepared daily life – and now, Walmart plans to extend that one-stop preparedness to meet its consumers’ healthcare needs. In late March, a report from the Wall Street Journal revealed that the corporation was in early negotiations with the Medicare insurance colossus Humana. The idea of an acquisition isn’t entirely unexpected, given that the two companies already collaborate on a Medicare prescription drug plan. But an acquisition of this scale could have an impact that makes a co-branded drug venture look near-inconsequential. If Walmart’s efforts to bring Humana into the fold succeed, the retail conglomerate might just open the door to affordable primary healthcare for millions of Americans.
Let’s take a step back. While significant, this foray into public health isn’t unprecedented; over the past year, retail competitors have made similar strides into the healthcare industry. CVS, for example, began a deal for the managed healthcare services company Aetna earlier this year for a whopping $69 billion. However, the difference between Walmart’s reach for Humana and CVS’s planned acquisition of Aetna is a matter of size and capability. The vast majority of Walmart’s near-4,700 branded and subsidiary locations already have on-site pharmacies, and stores in a few states have begun offering clinic services. Humana’s offerings would effectively complement what Walmart already has: the insurance giant runs its own pharmacy benefits service and almost 200 clinics. By merging with Humana, the retail giant could burgeon into a major primary care provider and have a ready pool of dedicated patients. Humana currently provides insurance to over 14 million Medicaid enrollees, all of whom could potentially turn to Walmart as a one-stop shop for their healthcare needs.
This is a game-changer for a number of reasons, not the least of which is that it removes some significant patient barriers to primary care. Unfortunately, as one researcher puts it in a paper published in a 2008 issue of JAMA Internal Medicine: “Simply being able to name a usual source of medical care is not the same as having effective and timely access to that same source of care.” The same study found that patients often can’t consult with their physicians because of barriers such as extended waiting periods, scarce appointments, and problems reaching their doctors via phone. This lack of access pushes primary care patients to seek treatment in emergency rooms and urgent care centers. This is understandably problematic: not only is the upfront cost more expensive for the patient, but the influx of low-grade cases divert resources that emergency centers need for more extreme cases. And make no mistake, there is an influx. In 2014, the CDC report found that approximately 32% of ER patients are seen for under 15 minutes – and only 7.9% of all visits result in hospital admission. This implies that the vast majority of cases could have – or perhaps should have – been taken care of by a primary care provider.
But this problem can be rectified – and Walmart’s merger might just be the first step towards a solution. According to a 2009 study published in the BMC Health Research Journal, “54% of patients reported choosing [Urgent Care] due to not having to make an appointment, 51.2% because it was convenient, 43.9% because of same day test results, 42.7% because of ability to get same-day medications.” In other words, patients chose urgent care because it was convenient and reliable. These patients didn’t need to worry about the pay they would lose by taking hours off of work, or about finding a pharmacy to take their insurance. If Walmart merges with Humana and becomes the significant primary care provider it has the potential to be, it could overcome the barriers that traditional primary care centers face and give millions of Americans access to quality, convenient care.
But will the acquisition go through? The situation is complicated.
Considered from a business perspective, this particular merger is somewhat of a mixed bag. Moving into healthcare would give Walmart the chance to diversify its consumer base, gain an edge over its dollar store and pricier retail competitors, and profit from the influx of patient-consumers. However, the move upward would come at a cost. Given that the market value for Humana currently stands at $37 billion and that the final cost could be even higher after negotiations, the decision to merge isn’t an easy one to make. To make matters more complex, the return value Walmart would receive could be years away. The change could be invaluable to Walmart as an organization and primary care patients as a whole, but it’s easy to see why the final decision to move forward will be a difficult one given the financial situation.
But from a healthcare provider’s perspective, I have to hope that this acquisition will go through, and that patients will have the access they need. We’re in the early stages yet, but Walmart-Humana deal might just be the Hail Mary that moves us towards a convenient and affordable primary care system.