The National Digest

Walmart HealthCare Will Challenge CVS And Other Chains

Walmart has been running health care clinics in several Southern states. But these additional services, which were first reported by CNBC, are an expanded effort by Walmart to compete with drug chains that have opened medical services. According to a report by Retail Dive, CVS Health announced plans in June to expand its HealthHUB to 1,500 locations by the end of 2021. It had already acquired health insurer Aetna in 2018 as part of its grand plan to transform healthcare.

Walmart has always been aggressive with its pharmacy operation. First, it focused on aggressive pricing that included a low $4 charge for generic drugs and generally low prescription pricing overall. Then, it expanded to healthcare clinics that accepted insurance plans and also offered low pricing without insurance plans for urgent treatment (those treatments included lab tests). According to reports, Walmart had also considered acquiring PillPack (which was scooped up by Amazon) and Humana. While the Humana deal fell through, Walmart did acquire Sean Slovenski, former senior VP of Health and Wellness of Humana. He is now leading the changes in the Walmart wellness program.

The CVS HealthHUB is a neighborhood health care destination that will bring easier access at a lower cost. These centers will also have a concierge who will be responsible for customer engagement – there to educate them about of new services and new events. Most customers welcome this service. According to Kevin Hourican, EVP CVS Health and president of CVS Pharmacy, “we have created an entirely new consumer experience and help people on their path to better health”. This is the example that will guide some of Walmart’s initiatives.

As a result of all of this activity, consumer health care has been totally changed. Pharmacies have transitioned from selling products to going more deeply into primary care and wellness, giving valuable services. While traditional physician care will still predominate and professional judgment continues to be very valuable, pharmacies will now offer ongoing patient care with the same professional attitude as well. For many consumers, Walmart Health will be a welcome change from the traditional practice of scheduling a doctor visit. Over time, this longer-term patient care will give them loyal traffic in the stores. In my opinion, the addition of such professional guidance for long term care is an optimization of Walmart Health, and these centers will become a part of how health care is provided.

This month Walmart will open a separate “Walmart Health” Care Center  in its Dallas, Georgia store. The opening is slated for September 13. This Health Care facility will provide low-priced health services for local customers that include dental, audiology, x-ray examinations, and mental health counseling. This is in direct response to CVS’s HealthHUB effort as well as to regional hospitals opening urgent care centers in malls and cities.

I was the senior retail analyst at Morgan Stanley for 16 years, following a 20 year career at retailers including Macy’s, May Department Stores and Allied Stores. Currently…

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