Friday, February 6, 2009

Wal-Mart President on Medical Market

How Would Wal-Mart Do Health Care?

All along we've argued the the "problem" with American health care is its high price. We've seen Wal-Mart have significant impact on the retail market, offering goods at prices significantly lower than their competitors and bringing these goods into the budgets of their customers. How would the Wal-Mart model work for health care?

We're going to have the opportunity to find out. Wal-Mart, like other retailers, has been introducing in-store clinics. I'm unsure about how many are now in operation, but 400 were announced in 2007. Some sources say there will be over 2000 in the next four years.

These clinics treat common medical problems for $40-65 a visit depending on clinic location and the health malady. In addition to the cheap office visit, Wal-Mart pharmacies have begun a $4 prescription plan. An impressive survey of medications are available for $4 for a 30-day supply or $10 for a 90-day supply.

Wal-Mart and its clinics certainly have critics, but it seems to us at FMP that these in-store clinics truly address the greatest need of American health care- the need for affordable care. The Wal-Mart mission of "saving people money so they can live better" certainly applies to health care.

Here are some extractions from speeches by former Wal-Mart President Lee Scott at the World Health Care Congress in 2007 and at the National Retail Federation last month on Wal-Mart's clinics and on the role of the market in health care.

"The private sector can make a difference," he said. "I believe American businesses can lead and we should."

"We think the clinics will be a great opportunity for our business. But most importantly, they are going to provide something our customers and communities desperately need -- affordable access at the local level to quality health care," Scott said. "We believe we can deliver effective and efficient health care at the local level."

"Within days of announcing our $4 program, countless other discounters, drug stores and supermarkets dropped their prices on generic prescriptions," Scott said. "That has surely saved our health-care system millions of more dollars. So let there be no doubt that the private sector can lead."

"As businesses, we have a responsibility to society. We also have an extraordinary opportunity. Let me be clear about this point … there is no conflict between delivering value to shareholders and helping solve bigger societal problems. In fact … they can build on each other when developed, aligned and executed right.

At Wal-Mart, we do not really see it as philanthropy or CSR or the Triple Bottom Line. All of those approaches have merit and can have an impact. But what we are talking about is different.

We believe you can bring together the bottom line on a balance sheet … with social and environmental bottom lines. Societal responsibilities and how we fulfill them can align and strengthen the business. When you do that, things really start to take hold, build momentum and make a much bigger difference. We have seen this at Wal-Mart when we have put together the “Save Money” and “Live Better” parts of our mission … and applied them to big challenges like the cost of prescription drugs. And I believe this can apply to all of us.

The principles are very simple. Does how you want to contribute to larger societal issues work with your business model – so it will last during the both good and bad economic times? Does it fit with your mission and culture – so that all parts of your company are engaged, energized and contributing? Does it offer the opportunity to leverage your unique strengths – so you can scale your efforts and make a unique, powerful and meaningful difference? And we can make a special contribution as retailers."

Rusty Scalpel


Terra said...


Do you really want to base your business model after Walmart or are you considering working at Walmart? What about the consumers/patients that prefer Target and will not shop at Walmart as a general rule?

In my quest for socialism (yeah right), I would hope to be taken over by the government and be allotted my salary and "free health care."

To clarify my point of view for other readers (as we have discussed this before), I am a capitalist with moderate views.

I often thought that insurance was horrible until I started to need it. I had a goal of self-insuring my family with only having a catastrophic insurance policy.

I often thought that people would be ethical until I met many that were not honest.

I once thought that people took too much medication as a prophylactic treatment until my son needed to take medications to stop his seizures.

I once thought I would open my own clinic in 5 years after graduation, but then I realized that I would spend too much time doing paperwork and worrying about the bottom line versus treating patients. I still have the goal of owning my own clinic and having other PTs working for me on a lease to own business model, but my priorities have changed recently to take care of my son/family and put my "dreams" on hold.

Rusty Scalpel said...
This comment has been removed by the author.
Rusty Scalpel said...


I never did like red, so Target's out.

Rusty Scalpel said...

This was sent to me by Cato:


I really don't Rusty Scalpel was suggesting basing a business model on Wal-Mart, Target, or HyVee? I think he was merely bringing up the fact that health care should be allowed to function as business. The spokesman for Wal-Mart pointed out they you don't have to be philanthropic to provide low-cost and quality health care but you can also make a profit doing it. I believe Rusty brought used Wal-Mart as an example how a business model can be applied to health care and accomplish what government cannot - affordable health care.

I am glad you do not favor socialism. I though it was unnecessary to identify yourself as a capitalist because everyone in the world is a capitalist at heart but I appreciated the modifier "moderate."

Your sentiments about health insurance industry seem to focus on the problem, health insurance companies, rather than the cause of the problem, which is the moral hazard caused by government. They came across to me at least to echo a popular feeling among United States' Citizenry - "Capitalism is Failing."

I remember being at a lecture and a conservative doctor had previously explained how Henry Ford made cars so affordable. A question was immediately asked "But what about the people who can't afford a car?" The doctor didn't elaborate on the individual but simple responded by saying "You missed my point."

The point is we need to move away from government interventionism and move towards our nation's roots as a Laissez-faire market system. Capitalism is not Failing! Government interventionism is! Why would you be worried about being bogged down by paper work? - it's not because of the free market it is because of government interventionism.

Join the fight to defend a Laissez-faire health care system for patients, nurses, doctors, and PTs - in short everyone!


Terra said...


In response to your comments to my response to Wal-mart President on Medical Market, I submit the following:

1 - I was joking about the Walmart vs Target preference.

2 - I agree that we are in a capitalist nation and I am a moderate because I believe in oversight to increase standards of care (Better Business Bureau, Accreditation, Schools of Health Professionals, State Licensing, and continuing education)

3 - Health insurance: I believe in cost sharing to decrease over utilization of health care resources. My previous comments about insurance simply show the pros and cons of insurance. I don't fault the insurance companies for existing or profiting. I do fault the ones that benefit from being unethical. The purpose of my comments is to spur comment and thought about conditions that may not have been covered. For example: FMP for the patient with chronic conditions.

4 - I will own a small business of apartments, and a PT clinic eventually. I may have to write my signs in Chinese. ;)

5 - I will submit a post to Rusty Scalpel in the near future to explain my opinion further.


If you are as far right as this blog claims, you may NOT want to:

1. participate in government programs such as medicaid.
2. use the public library, aquatic center, or parks.
3. take out Stafford Federal Student Loans - especially the subsidized loans (you should use the private loans and pay those rates).
4. accept stimulus checks
5. accept the $2000 per child when you finish your taxes, unless you decide to take your money back with the addition of the current market interest rate.
6. accept a single medicare payment.


I again want to state that I am spurring discussion of ideas that may not have been expressed on this blog.

I agree with a lot of the opinions expressed on this blog. Thanks Rusty!


Maytag said...


Firstly, I think you are completely missing the point that cato is trying to make. Since I have owned my own computer networking business before I came to medical school, I have tasted the fruits of taking a trade and reaping the rewards from doing it well. It’s very motivating; I encourage you to try it. Secondly, I would like to address your list you made to readers like me. It may sound petty, but then again your list is petty. I currently have my own insurance and so does my wife. Right now we qualify in the state of Missouri for full medicade reimbursement if we were to have a baby (although our insurance covers it). So sorry, I don’t use medicade or won’t need it in the future. Second, the only park I have ever used in Missouri (this point has nothing to do with health care, but you wanted it addressed) is the Rotary Park which has the Frisbee golf course. Well since it is funded and up kept by a private organization called the Rotary Club, I think I am okay. I have never used the library or the aquatics center here and don’t plan on it (again this point has nothing to do with my view of governmental regulation of health care…). I received a 600 dollar bush stimulus check. I see no problem with that since my wife and I both work full time during that tax period and paid all that money in taxes. I favor any tax break since I am not interested in revenue for the government but rather less governmental spending. I would not, however be in favor of “stimulus checks” that given out when you did not pay taxes. That is called welfare checks not stimulus, and that smells like socialism.

Dave, I would like to address the point you made where you justified governmental regulation to produce a standard, ie. education. Here is something to ponder, currently in the United States, there is one medical school that is a 100% for profit school. It located in Colorado. Since you made assumptions about readers like me, I am going to make an assumption about you. You’re gasping right? A school that bases its standard of education on the amount of green it can bring home? Here is the irony, the tuition is about the same as here. Our school is broke and unable to repair the flood damages. We loose good teachers because they are paid better at other schools. We receive private donations, have an endowment and receive funding from state and federal. Yet our school is still broke. This school in Colorado pays their teachers well, so they can afford to pick and choose whom they deem better. Their facilities are superb. As far as rotations go, hospitals are more willing to working with them because they have more money to offer. How do you think they do it? We keep dumping more money into our education system and see no improvement. We keep regulating (ie. No child left behind act) which also burdens the cost of our system and we see no improvement. You are supporting and arguing for a team that never wins. It’s called the government. They are people that are able and capable to take a trade and do it well and cheaper than the government. Government needs to get the hell out of the way and let us go to work.

Rusty Scalpel said...

I like the comments that have been made so far. I would hope we can continue to have a discussion where we probe the issues without being inflammatory or accusing. Many of us know each other and in no way would would I want this forum to be the source of contention or bad feelings between us.

A couple thoughts to add to what has already been said. To my knowledge, I don't think I have ever identified myself politically in any of my posts. My views speak for themselves, but in this setting I won't categorize myself as far-right, libertarian, republican, etc. That being the case, my views cannot be projected onto any of the above political organizations or on any of my fellow contributors. Likewise, I don't feel that anyone that comments on these pages should feel compelled to identify themselves politically. This is a place for discussion and no one should feel defensive about comments made- all comments made thus far at the least have generated good discussion.

With regards to Dave's last post, I would be interested in hearing more of your views. A lot of what you said makes sense, but I'm not sure about using the cost sharing of insurance to decrease over-utilization. It would seem to be the opposite to me.

Also, with regards to the list of public services to avoid as right-wingers- my take on public services is that the market can do better. I think Maytag said the same. However, I do not necessarily think that government services and programs ought to be boycotted. I think in most cases the market can produce better alternatives to government services, but in most cases I do not see government programs (for lack of a better categorization) to be politically immoral. I feel no need to boycott them. We can hope and work for a better society without boycotting the one we are in. There are certain programs that I personally will not use, but I'm still happy to get my tax returns- even without interest.

Rusty Scalpel

Terra said...

Rusteze and the Maytag Man,

I apologize for offending either or both of you with my comments.

I have written freely with little thought that what I wrote would offend. I knew that it would spur comments (which it has done). If you read the tone of my comments, then you will realize that they are all lighthearted. As Rusty knows better than most, I am constantly joking. I have continued to do that on this blog, but have been taken seriously.

I should have sent a post to R. Scalpel to explain my views rather than place my views and queries here.

Again, I apologize for offending you.


Terra said...

Rusty Scalpel,

Cost sharing: as you know insurance companies use co-payments, co-insurance, and deductibles to spread the cost of health care to the consumer. If I was using a government program such as medicaid, then I might be tempted to seek more medical attention than is warranted because it doesn't cost me as much money than the traditional insurance model. If I go to the ER every time I am sick, I am over-utilizing the available health care. If I have traditional insurance, then I may opt for an office visit that costs $30 rather than the ER visit that costs $400.

Non-health care related government services (libraries, parks, and student aid such as federally subsidized loans) benefit society. Why wouldn't we use them? As members of society that are contributing to its progression, we should enjoy libraries and parks. As a student, I took government subsidized loans. Now I am paying back the loan that has been purchased by another loan company with interest. The loans were set up to assist us at a time when we would not be able to pay the interest or the principal balance. In this case, I welcome the government aid to help make education more affordable to future contributors of society.

Other comments will be emailed to you for a future post. Thank you for your permission to do so.