story by Kim Souza
ksouza@thecitywire.com
Wal-Mart’s goal to save people money does not end with the cost and pricing of goods sold in their stores. The retail giant continues to spread its wings in the service industry by announcing Monday (Oct. 6) plans to bring health care education and insurance enrollment specialists to its stores via a partnership with DirectHealth.com.
The program, “Healthcare Begins Here,” launch comes on the heels of a new clinic format began this summer as the retailer works to shave its insurance costs and those of its employees and customers.
“Our goal is to be the number one health-care provider in the industry,” said Labeed Diab, president of health and wellness for Wal-Mart U.S. “And the more we broaden our assortment, the more we broaden our offering, the more we educate the customer Wal-Mart is a great place to create a one-stop shop.”
THE BUSINESS OF HEALTHCARE
Health and wellness is big business for Wal-Mart’s Stores, garnering roughly $30 billion in sales, which was 11% of the retailer’s total U.S. sales in fiscal 2013. Sales grew 3.8% from the prior year but the retailer is barely scratching the surface of opportunities as there are major shifts underway in this segment.
Wal-Mart’s announcement notes that at least 60% of people have difficulty understanding their health insurance plan option and nearly 40% feel they picked the wrong plan after enrollment, according a report from the Kaiser Family Foundation. The retailer said this new partnership with DirectHealth.com is designed to bring transparency and simplicity to the changing health insurance market for millions of consumers who visit its stores each week.
DirectHealth.com, an online health insurance comparison site and an independent licensed health insurance agency, will provide a resource that seeks to provide Wal-Mart customers access to health insurance information and enrollment support.
“Walmart has long been known for innovation in health and wellness, and we’ll never stop delivering new products and services to the 140 million people who visit our stores each week,” Diab said. “For years, our customers have told us that there is too much complexity when it comes to understanding their health insurance options. Healthcare Begins Here addresses that complexity by bringing clarity and increased choice to the insurance enrollment process through DirectHealth.com.”
Diab adds that Wal-Mart has hosted insurance agents from individual insurers in its stores since 2005 to help answer questions regarding changing health care laws, Medicare and Medicaid programs. He said “Healthcare Begins Here” is a deeper layer of assistance and a next step in response to customers who wanted more options to choose from.
PROGRAM DATES
The program begins Oct. 10 and will run in 2,700 of 4,311 stores through Dec. 7, closely tracking with the Medicare open-enrollment period and partially overlapping with the open enrollment period for federal health insurance exchanges. The company said it will monitor the success of the program and potentially bring it back next year.
Wal-Mart said DirectHealth.com offers access to more than 1,700 plans from 12 leading carriers Aetna, Cigna, Humana, UnitedHealthcare and participating Blue Cross and Blue Shield companies. (Link here for more information on the program. (Link here for more information about the program.)
The retailer has opened 11 in-store clinics run by Walmart itself that offer primary care such as health screenings and management of chronic conditions like diabetes. That's different from its 100 leased health care clinics in its stores that focus on basic services like flu shots.
Wal-Mart has not been as aggressive as other retail pharmacy chains with in-store clinics and other health care ventures. According to the Convenient Care Association, there are more than 1,400 health clinics inside retail chain stores – twice the number than in 2007.
CVS Caremark leads the pack with 650 MinuteClinics in 25 states and Washington, D.C. Although Walgreen is second to CVS with Take Care clinics in 372 stores, it anticipates expansion in the next two years with a growth strategy that includes forming accountable care organizations (ACOs) and providing diagnosis and treatment services.
Walgreen partnered in 2013 with Florida-based Diagnostic Clinic, New Jersey-based Advocare, and Texas-based Scott & White Healthcare to form ACOs in which the retailer will benefit from gain sharing when the ACOs succeed in keeping patient healthy at a low cost.
Wal-Mart execs have said the early response to their own in-store clinics has been favorable thus far, but they reiterate that this format is still in the test phase.
Analysts agree that the emphasis by retailers on healthcare is not new. But, they continue to look for ways to draw traffic into their stores with expanded service offerings.