4 reasons why Walmart could Be Good for Health Care

Walmart is known as one of the largest retailers and employers in the U.S. In fact, it’s the largest private employer in 22 individual states. The chain is known as a retailer at which millions of Americans shop for day-to-day essentials, so talk of its potential merger with Humana had many observers and analysts in the health sector anxious.

However, perhaps those observers and analysts should take a moment to rethink. The move could end up being a positive for the healthcare industry as a whole.

Walmart didn’t build itself into a retail giant by accident. The company clearly knows how to create efficiencies in areas where there previously were none, and analyze and activate on its abundance of consumer data. Those two qualities are in high demand in the health care sector.

Here are four reasons why Walmart could be good for health care and improve the lives of consumers, or in this case, patients:

1. Walmart knows how to create value for consumers. As a company, Walmart knows how to eliminate waste in the system, as well as how to market, analyze and create lifetime value for consumers. It’s one of the best companies in the world at using consumer data and analytics for things such as consumer segmentation, store assortment, creating a price-winning model, and understanding the loyalty value of their consumers—all things many consumers would welcome when it comes to their health care. The next move could be bringing those best practices to health care in a macro way.

2. It can address social determinants of health. The chain has invested heavily in its grocery business and is among the most affordable pharmacies in the country. Its stores are also open broad hours, which increases accessibility for consumers. Last month the Centers for Medicare & Medicaid Services (CMS) approved an expansion of supplemental benefits for Medicare Advantage plans beginning in 2019, and Humana has already indicated it will take advantage. This will allow insurance plans to cover non-medical social factors that often play a role in health care, such as basic food needs or modifications to homes to help prevent falls. Doing so in accessible locations such as Walmart stores could go a long way toward helping older and middle- to lower-income consumers engage in their own health.

3. It already has a huge presence. The chain claims roughly 4,500 in-store pharmacies and 2,900 vision centers. Further, under its already existing partnership, Walmart has helped Humana drive business for its Medicare Advantage and drug benefits plans. Walmart tends to target mid- to low-income households, and its average customer is over 50 years old. Meanwhile, a significant portion of Humana’s base is older Medicare Advantage members. Their pre-existing partnership has likely already benefited both sides, as well as older consumers, and a full-blown acquisition could take that to the next level.

4. Walmart is one of the largest employers in the U.S. Walmart employs roughly 1.5 million people in the U.S., second only to the federal government. The chain reportedly spends $500 million annually on health care costs, and the ability to streamline those costs could save employees money while also spurring growth as a company. Further, Walmart may become a more attractive destination for prospective employees if it’s able to improve its health insurance options for workers.

Even if the acquisition doesn’t materialize, as some analysts predict, there is evidence that Walmart could leverage its areas of expertise to make a positive impact on the healthcare system. Walmart, like many other large retailers, knows how to use consumer data and create trust among consumers. It has had success in delivering existing services in more efficient ways, and it could use that experience to do the same with health care.

Finally, insurance plans often feel removed from the member or consumer. Health care providers are seen as the ones with the patient relationship, and health plans are forced to rely on them. Yet just like providers, the health plan cares about you over your entire lifecycle, longitudinally. They have your back. There is a change needed in the dynamics of the relationship between insurance providers and patients — only one in seven Americans understand the basics of insurance plans — and it’s another area where Walmart could benefit the healthcare industry.