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February 08, 2008

Wal-Mart: The 51st State?

When it comes to health care reform, I've long held the view that we should let the states act as laboratories, experimenting with new and different approaches to health care financing, delivery and quality assurance.  Now it seems that Wal-Mart views itself as one more such laboratory

First it was promoting $4 generics, then it started offering more in the way of employee benefits (though it's drawn a line in the sand on employment-based health insurance), and now it's pushing a bold new PBM (pharmacy benefit manager) plan and getting directly into the retail clinic biz.

The PBM plan was predictably pooh-poohed by potential competitors.

The news came out today that Wal-Mart will be getting into the retail clinic biz directly, through alliances with local providers, rather than continuing to lease space to outside operators -- one such operator suddenly closed up shop last week.  Wal-Mart is looking at 2,000 clinics over the next 5-7 years.  "The Clinic at Wal-Mart" will allow for greater standardization across all of these sites.  I've discussed pros and cons of retail clinics in other posts.

The common thread linking the PBM plan and the retail clinic plan is that Wal-Mart will seek to leverage its massive volume and is likely to outsource the guts of both operations.  Not an unreasonable approach; and if costs are down and quality is high, then it's win-win all around.

-- David Harlow

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