Bloomberg Businessweek USA - 02.03.2020

(singke) #1



THE BOTTOM LINE Walmart, which already has a $36 billion
health and wellness business, is opening full-service health centers.
Its 150 million weekly customers could fuel a lucrative market.

his toothache is caused by a sinus infection, he
can immediately be handed over to a physician.
Whatever a patient needs, she knows the price
upfront—a huge departure from how health care
usually works. “If you don’t know how much some-
thing is going to cost, that’s scary and intimidating,”
says Alexandra Drane, a health-care entrepreneur
who’s worked as a Walmart cashier. “The first thing
you see at Walmart Health is the price list.” It set
those prices by estimating the cost of common ser-
vices, copays, and deductibles, then coming in well
under that. “We have taken advantage of every lever
we can to bring the price of doing all of this down
more than any hospital or group practice could
humanly do,” Slovenski says. “Our goal, just like in
the stores, is to get the prices as low as we can.”
Slovenski won’t disclose how many patients have
come through the Georgia centers, saying only that
volume is “substantially higher than our expecta-
tions.” He says Walmart’s model lowers the cost of
delivering service by about 40%, by reducing what
he calls “all that administrative baloney.” Some phy-
sicians like that aspect, too: Dr. Janki Patel, at the
Calhoun clinic, says she spends about 25% less time
on paperwork than she did working in rural hospi-
tals around the Southeast. “I don’t feel rushed and
can spend more time with patients,” she says.
It’s also filling a void for many locals. In Dallas a
local nonprofit clinic staffed by volunteers is open
only two days a week, from 8:30 a.m. to noon. That’s
not enough for Joy Ivey-Obeng, a 28-year-old work-
ing on her master’s degree who’s been uninsured
since leaving her last job in July. She recently needed
some lab work done quickly over a weekend and vis-
ited the Walmart clinic on a Saturday, paying $42,
about $10 less than other local options. Afterward,
she filled her prescription at the store, even though
it would have been cheaper at the Kroger super-
market down the road. “I was already there, I didn’t
want to go elsewhere,” she says.
Walmart is counting on that kind of synergy.
“The obvious retail implication of Walmart’s move is
greater traffic to its stores,” says Simeon Gutman, an
analyst at Morgan Stanley. Foot traffic is the lifeblood
of any brick-and-mortar retailer, and health services
could give more shoppers a reason to visit stores in
an era when shopping is increasingly done online.
“They have the ability to be one of the largest
disruptive forces in health care by addressing some
of health care’s major issues, including access to
care in rural communities, price transparency,
and even, to some extent, social determinants of
health,” says Paul Schuhmacher, managing director
of the health-care practice at AArete, a global man-
agement consulting firm. “We could be seeing as a

norm people going into Walmart for their health
care in a lot of communities in this country.”
Still, Walmart won’t become a health-care desti-
nation overnight. It will have only a handful of loca-
tions by yearend—the third will open this summer
in Loganville, about 45 minutes east of Atlanta—
and Slovenski won’t say how many he envisions.
And only 11% of Americans polled by researcher
CivicScience in September said they would “likely”
visit a Walmart clinic. Still, if Walmart’s goal is to
be the front door of U.S. health care, one thing in
its favor is that it already controls so many doors to
American consumers. “Everyone says, ‘Look out,
Amazon is getting into health care,’” says Chas
Roades, co-founder of consultant Gist Healthcare.
“But it’s way more scary if Walmart really puts
these pieces together.” �Matthew Boyle, with
Angelica LaVito and Michelle Cortez

● In China, the homebound millions—and businesses—
turn to livestreams to fill the void

Coping With the

Coronavirus Blues

One Saturday night about a month into the new
coronavirus outbreak, Peter Li was going stir crazy.
He couldn’t bear to read more about the hun-
dreds of deaths it had caused. He’d have liked to
go for a drink, but his regular Beijing haunts were
closed. So in the middle of the night, Li—like mil-
lions of homebound twentysomethings in China—
turned to his phone in search of relief. In Li’s case,
he watched a livestream from One Third, one of
the capital’s hottest nightspots. It was empty that
night but live online with a pair of DJs pumping out

▲ The centers offer the
look—and services—of
a typical medical clinic
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