The world's largest retailer wants a bigger piece of America's growing health care market.
Walmart, which already makes a lot of money from health care through its pharmacies and retail stores, is eyeing a line of business that would sell health insurance to small employers, and the company also wants to add to its chain of in-store health care clinics, the Orlando Business Journal reported in two stories Friday.
Health care made up 17.9 percent of the U.S. economy in 2011, with the government, companies and households spending $2.7 trillion, according to a federal report issued this month. With that much money at stake, it's no surprise that Walmart would want to beef up its health care business.
Customers may think of Walmart as a place to buy groceries or a mop or car wax, but the retail giant already is a player in the health care industry. Walmart is the fourth-largest pharmacy in the U.S., offers vaccinations for influenza and other ailments in its stores, and sells health insurance at Sam's Club warehouse stores. Health and wellness accounted for 11 percent of Walmart stores' sales and 5 percent of Sam's Club sales in the 2011 fiscal year, the company disclosed in its most recent annual report.
Now Walmart has even bigger things in mind, according to the Orlando Business Journal. The company is considering a scheme to create a health insurance exchange, in which smaller companies could comparison-shop for employee health benefits, Walmart's vice president of health and wellness, Marcus Osborne, told the newspaper:
The idea is to offer those products through a health insurance exchange -- or as Osborne said, simply a marketplace -- that would leverage Wal-Mart’s buying and marketing power to make the exchanges widely available and used. "It would allow small employers to piggyback Wal-Mart," Osborne said. "We haven’t got it all figured out, but it’s one of the things we’re looking at."
A Walmart health insurance exchange for small companies would compete with those set up under President Barack Obama's health care reform law, at least for companies with fewer than 100 workers. The health care law will establish government-run health insurance exchanges in each state for individuals and small employers. (One thing the Obamacare exchanges offer that Walmart can't is tax credits, which are available to some of the smallest businesses.)
A Walmart spokeswoman did not respond to an email from The Huffington Post requesting additional information about its health care business.
Private health insurance exchanges are all the rage these days. The benefits consulting company Mercer announced this month it's building a health insurance exchange for employers, and its competitors are eying the same market. Aon Hewitt is creating an exchange for workers at Sears and Darden Restaurants, which owns the Olive Garden and other eateries.
Walmart also wants to grow its in-store health clinics business, the Orlando Business Journal reported, with those clinics offering full primary care services in five to seven years, Osborne said. Walmart will focus on rural and urban areas with a lack of medical treatment options, according to the paper.
The Orlando Business Journal followed up Tuesday with a story saying Walmart had attempted to deny the company's interest in expanding its clinics. Audio and a transcript of Osborne's remarks, however, support the Orlando Business Journal's original report.
Retail health care clinics, like CVS' Minute Clinics, are proliferating and becoming more popular. The number of patient visits to such sites quadrupled between 2007 and 2009, according to an article published last August in the journal Health Affairs.
Walmart isn't yet a dominant player in the retail clinic business. It operates around 150 of such clinics in its stores across the U.S., which puts it well behind rivals like CVS and Walgreens, the Wall Street Journal reported last June. In Nov. 2011, an internal Walmart document leaked to Kaiser Health News, which reported the company planned a huge expansion of its clinics. Walmart also denied that report.