Walmart health strategy may boost reliance on IT capabilities

The use of technology will be key to the success of Walmart health facilities that the retail giant is beginning to roll out.

Meanwhile, provider organizations responding to this potential competition see the integration of electronic information systems as one of the reasons why the fear factor over Walmart’s potential impact on competition may be blunted.

Results from a recent survey by Reaction Data show diverse opinions over how the rollout of Walmart health services could affect the competitive landscape within healthcare.


Last September, Walmart opened its first standalone clinic, called Walmart Health, in Dallas, Ga., and earlier this month, it opened a second clinic in Calhoun, Ga. Both offer a variety of services, including primary care and lab services.

In the company’s most recent quarterly statement on financial results, Walmart President and CEO Doug McMillon hyped the rollout of health services. “We’re taking an innovative approach to providing basic healthcare services,” McMillon wrote. “By partnering with local providers, we’re delivering quality, affordable and accessible healthcare for members of the local community.”

The Walmart CEO also noted that the chain will “continue to learn as we open several more and design the ideal model to provide customers with better and unique solutions for their everyday healthcare needs.”

Reaction Data surveyed individuals from provider organizations asking them to respond to the Walmart strategy and how effective the chain could be as a healthcare provider. With Walmart moving cautiously into the space, Reaction Data analysts found that 56 percent of respondents were not familiar with its plans. However, senior executives were more likely to be aware of the new competition.

Respondents said they believed the Walmart strategy would be only moderately effective—on a scale of 1 (ineffective) to 6 (very effective), some 46 percent of respondents rated the chain’s strategy as either a 3 or a 4.

In terms of impact on their own organizations, 30 percent of respondents said there would be a negative impact; 25 percent expected a positive impact; 27 percent said there would be no impact; while another 18 percent said they were unsure of the impact. The question evoked a significant number of comments, Reaction Data analysts said.

“There will be no impact,” predicted a chief operating officer from one organization. “The industry is moving to a coordinated electronic medical record that can follow the patient and be viewed by multiple providers. The coordinated electronic medical record and the increase presence of primary care during the off-hours will negate the need for Urgent Care sites and the Walmart clinics.”

The ease of obtaining care at set prices may accelerate the move toward increased price transparency, other respondents suggested. “This will force providers to move more quickly toward price transparency for simple procedures, and may commoditize those services,” a CEO of a healthcare organization told Reaction Data analysts.

“What's most fascinating, to us at least, will be the impact Walmart's plans may have on patient or consumer behavior and expectations,” the Reaction Data report concludes. “Will patients who visit a Walmart clinic start getting used to seeing the exact prices for medical services and then start demanding this same kind of price transparency when they visit a traditional clinic or hospital? What happens if Walmart's prices for medical services end up being materially less than those found at traditional healthcare provider organizations?” That may disrupt current healthcare organizations’ practices, it contends.