Big Box Healthcare

May 1, 2009
Bob Keaveney

Of all Wal-Mart’s innovations, the most surprising is its plan to sell EMRs off the shelf. Few private practices use EMRs - most cite cost as the biggest hurdle. Can Wal-Mart really make a difference?


I have never been, so far as I can tell, culturally elite. I don’t drive a Swedish automobile, I don’t cook with organic-only fennel, and I don’t drink half-caf, soy, mochaccinos.

And you know what? I don’t feel guilty about shopping at Wal-Mart. I know that some people think I should be ashamed of myself, and though I obviously don’t agree, I do understand their position. Am I getting cooking oil and tube socks at such low prices because of Wal-Mart’s purchasing power alone, or is it also because of low pay and parsimonious employee benefits?

The company has been criticized sharply over its healthcare benefits in particular, seen as too expensive for employees. Indeed, starting around 2005, Wal-Mart was targeted for well-publicized boycotts and media campaigns by forces organized and funded mostly by labor unions.

Yet recently, Wal-Mart has been developing innovations that could make healthcare cheaper and more efficient for patients and physicians. And it’s been getting better press.

It has reformed its employee benefits package: enlarging the number of eligible workers by 50,000 by halving the eligibility wait time; introducing a lower-premium option that led to a 78 percent enrollment jump by younger employees last year; and developing popular employee wellness programs, such as one for new moms. It also offers workers expanded access to the $4 prescription-drug program it launched for consumers in 2006, the same year it created its network of in-store clinics, which now number 30 in eight states. (Full disclosure: Wal-Mart is an advertiser of ours.)

I’m no Pollyanna about this. Even with the changes, barely more than half of Wal-Mart employees are covered by its health plan, for example, and its critics argue that its new lower-premium option tends to provide fewer primary-care services because it carries a high deductible that keeps patients out of doctors’ offices for all but urgent issues.

But Mark Smith, head of the California HealthCare Foundation, says that piling on the giant retailer is just not fair. “There are limits to what one company can do,” Smith told The Washington Post. Even Wal-Mart? Absolutely: health costs for business are increasing by 8 percent to 10 percent annually. The fact that not even the world’s largest company, which earns more than $750,000 per minute, can fix a healthcare problem as big as America’s says more about the problem than the company. Still, Wal-Mart is making a dent: Only about 5.5 percent of its workers are uninsured, compared with the national rate of about 18 percent.

Of all of Wal-Mart’s recent innovations, however, perhaps the most surprising is its plan to sell electronic medical records off the shelf through its Sam’s Club discount centers. Once you get past the peculiarity - OK, the weirdness - of purchasing a complex healthcare business-software system at the same cavernous warehouses where people buy bulk groceries and discount tires, you start to realize that the idea makes a lot of sense.

Most physicians are on board with EMRs on principle, but only 17 percent (by some estimates) of doctors are using them. There are many reasons for this. But cost, or doctors’ perception of cost as it relates to the value of EMRs to their practices, is the biggest. Another is distribution: Most software vendors are more inclined to focus their efforts on making large sales to hospitals and big practices than to try to sell, one at a time, to the thousands of small offices dotting American strip malls.

So why shouldn’t a big discount retail chain like Sam’s Club get into the act? It would seem to have an answer to both problems. Even before the announcement, the chain said that about 200,000 of its members are healthcare providers, though how many are doctors isn’t clear.

Will the Sam’s club offering, plus the Obama administration’s EMR-incentive money, be enough to turn the tide? Will your Saturday errands someday include a trip to Sam’s Club to pick up your new EMR, then to the post office, where your federal reimbursement check will be waiting? Something tells me it won’t be quite that simple.

But maybe we’re making progress.

Bob Keaveney is the executive editor of Physicians Practice. Join the conversation he’s started on this topic, or e-mail him directly at bob.keaveney@cmpmedica.com.

This article originally appeared in the May 2009 issue of Physicians Practice.