The company that radically reshaped the retail industry is getting into the healthcare business.
Wal-Mart is experimenting with ways to provide outpatient medical services to its millions of customers by opening walk-in clinics in about a dozen stores. The move by the $285 billion corporation is part of a broader trend that could significantly change the way many Americans get basic healthcare.
Target has opened 12 clinics in Minnesota and Maryland stores, staffing them with nurse practitioners who treat sore throats, earaches, and other minor ailments. The CVS pharmacy chain is aggressively rolling out similar clinics, with about 35 so far in cities like Atlanta, Nashville, and Seattle. Rite Aid, a national drugstore chain, and Duane Reade, a New York pharmacy chain, are setting up pilot programs for similar clinics. And MinuteClinic, a Minneapolis healthcare firm that leases space from Target and CVS, plans to expand to another 100 to 200 retail stores next year.
Janine Charles is already a believer in big-box healthcare. She thought she had the wrong address when her search for a doctor led to the parking lot of a Super Wal-Mart in Orlando recently. Charles, who had a sore neck, had called her insurance company to locate a walk-in clinic. After hunting around, she finally discovered the clinic was inside Wal-Mart, in a tiny space that was formerly a video arcade.
”I was really skeptical,” Charles said. ”I mean, Wal-Mart?”
Her visit turned out to be convenient, fast, and reasonably priced — $90 for an exam and an injection of muscle-relaxant medicine. The same treatment costs up to $200 at a doctor’s office and more than $500 at a hospital emergency room. Like those places, the Wal-Mart clinic accepts most major health insurance plans.
”It’s all about convenience,” said Dr. Grant Tarbox, medical director of Solantic, a for-profit Florida healthcare chain that leases the former video arcade space from Wal-Mart and operates the clinic. It is staffed by two doctors and offers services that range from a test for strep throat to X-rays for an injured ankle. Patients with more serious conditions are referred to primary care physicians or emergency rooms.
Doctors around the country say they worry about the quality of care that can be delivered in such a setting, particularly when the treating physicians don’t have access to a patient’s medical and pharmaceutical history.
Demand for lower-cost, convenient care is expected to grow as insurance companies and employers, trying to minimize premium increases, move employees to insurance plans with high deductibles. Such plans shift more out-of-pocket costs to patients, making them more likely to shop for lower-priced basic care.
Meanwhile, faster procedures and an increase in the number of nurses trained to provide in-store care have the potential to transform basic healthcare delivery, said Clayton M. Christensen, a Harvard Business School professor and author. The emergence of nurses and clinics in retail stores is a ”disruptive innovation,” he said.
”When you can unambiguously diagnose the condition, then a rules-based therapy can be prescribed and you don’t need a Harvard-trained doctor,” Christensen said. ”Quality is defined on how fast can I get what I need. Speed and convenience and price begins to matter a lot.”
Wal-Mart, which already offers an array of in-store services in many of its 3,700 US stores — including eye care, banking, and hair salons — has not determined exactly how it will provide healthcare on a wider scale. The Orlando Super Wal-Mart is one of a dozen stores around the country offering possible models. Some feature clinics with nurse practitioners instead of doctors, said Wal-Mart spokeswoman Sharon Weber. The company has not yet announced if it plans to locate clinics in other parts of the country.
The appeal to consumers is obvious. In Orlando, while shoppers pick up blue jeans and automobile floor mats, they can also have a child’s infected ear diagnosed and purchase prescription antibiotics.
They can receive care on weekends and until 9 p.m. on weekdays, when most primary care physicians’ offices are closed. The clinic at the Orlando store was even open on Thanksgiving Day and treated half a dozen patients, including a man who experienced stomach problems after his holiday meal.
The store records tens of thousands of transactions at its 29 check-out counters every week. However, Weber said, the idea behind the clinics is not to increase business, but to provide existing customers with another service. ”If it brings more traffic in, that’s great,” she said. ”It’s icing on the cake.”
MinuteClinic, the company that leases space in Target and CVS stores, is run by the former chief executive of the Arby’s fast-food chain, Michael Howe, who also worked for KFC. MinuteClinic’s motto: ”You’re sick. We’re quick.”
The business manager for the clinic at the Super Wal-Mart in Orlando, John Bernet, is a veteran of Waffle House, a chain with 1,500 restaurants in 25 states. He has found that keeping customers happy by serving them syrupy breakfasts is not so different from satisfying them with speedy X-rays. Solantic was attracted by his experience in managing multiple stores, Bernet said.
Simple pricing is a crucial part of the in-store healthcare formula. Visitors to the Wal-Mart clinic can study a posted list of prices and procedures that is much like the roster of services displayed at a Jiffy Lube.
It costs $65 to see a doctor, plus additional fees for tests and procedures. If patients know in advance what they need, they can select a service from an ”a la carte” menu. For instance, a cholesterol test is $30 and a child’s sports physical is $25.
The 430-square-foot clinic in Orlando has two small examination rooms. When there is a wait, a medical assistant gives patients beepers so they can shop and be notified when the doctor is available.
Marie and Sal Martinez recently brought their 2-year-old son Michael to the clinic for a $20 flu shot. During the visit, they also picked up fluorescent light bulbs, stuffing and pies, plus a ”War of the Worlds” DVD.
A week later, Marie was back with Michael, who has asthma. He seemed feverish, she said, and worried that he might have pneumonia, but the doctor ruled it out.
After Michael’s wails subsided, Marie explained why she chose the Wal-Mart clinic. ”We’re new to the area, and we don’t have doctors yet,” she said. Unlike Janine Charles, who initially had misgivings about being treated at the store, Martinez said the clinic’s association with Wal-Mart made her confident in the quality of care.
”It’s so much better than the emergency room,” she said.
But some physicians worry that easy access will trump quality and pose risks for patients.
”It’s convenient and expeditious for certain things, but it doesn’t replace a medical home where your records reside, where all your consultations come back to, where someone can help you navigate the healthcare system,” said Dr. Larry Fields, president of the American Academy of Family Practitioners.
Health clinics in chain stores will certainly reduce the ”inconvenience costs” of going to the doctor, such as losing a half day of work by sitting in a waiting room, said Dr. Richard Marshall, medical director of Harvard Vanguard Medical Associates, a large group practice in Boston. ”On the other hand,” he said, ”I think it would be an incredibly poor system for managing a chronic condition, because chronic conditions require long-term monitoring.”
Weber, the Wal-Mart spokeswoman, said the retailer is not trying to replace a patient’s regular physician.
”We see it as a complement to primary care,” she said. ”A lot of calls that would come into these clinics might be calls that would come into an emergency room.”
Tarbox, the Solantic medical director, defended the quality of the clinics. Solantic’s doctors are board-certified by the state of Florida. The two young doctors who work in the Orlando Wal-Mart — Sangeetha Polasa and Ajay Sood — received their medical degrees outside the United States; Polasa in India and Sood in the Dominican Republic. They recently completed residencies in family medicine at Florida Hospital, a multihospital nonprofit chain. Solantic pays them an hourly wage, which it would not disclose.
The clinic doctors routinely advise patients to establish relationships with primary care physicians, Tarbox said. ”This is a partnership. We’re not stealing from anybody,” he said.
But the potential for turf wars with primary care physicians will probably push retail stores toward the use of nurse practitioners instead of doctors, said Regina Herzlinger, a professor of business administration at Harvard Business School.”We have this in the rest of our economy. We have fast-food outlets. We have 7-Elevens. We have places that have a limited array of goods and services that are hugely convenient and usually relatively cheap,” she said. ”It’s what you and I want.”