3 Reasons Why Hospitals Might Be Scared of Wal-Mart

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Some of the nations biggest retailers have been rapidly expanding into the provider space, including Wal-Mart. Retail health clinics may prove to be hospitals' most capable competitors in the years to come, particularly since chains like Wal-Mart have already demonstrated their abilities to move markets.  

In a video from the Advisory Board, Lisa Bielamowicz, MD, CMO of Health Care Advisory Board, said about a third of provider' patients shop at Wal-Mart on a weekly basis. "It's the cheapest place to buy groceries and ammunition, and it could become your most formidable competitor," Dr. Bielamowicz said in the video.

Wal-Mart has unveiled plans to have primary care services in rural markets within five to seven years. Here are three of the most pressing questions and potential scenarios for hospitals and health systems.

• What if Wal-Mart expands enough in primary care that it disrupts local established patient-physician relationships and referral chains?

• What if it combines consumer, pharmacy and clinical data to create comprehensive patient profiles and uses that to create a membership model that drives patient decisions?

• What if they are able to partner with a nationwide health plan and require aggressive price concessions to participate in their networks?

"Wal-Mart may or may not become a major player in the healthcare provider market," said Dr. Bielamowicz. "But either way, health systems need to fundamentally shift their growth strategy because the basis for competition is about to radically change."

She said health systems need to attract key decision makers by delivering greater value to newly accountable physicians, cost-sensitive employers and to demanding consumers. If hospitals cannot meet the needs and demands of these stakeholders, someone else — such as Wal-Mart — will, said Dr. Bielamowicz.

More Articles on Hospitals and Retail Health:

Retail Clinics Expected to Double by 2018
Study: Number of People Visiting Retail Clinics Quadruples
Retail Clinics Expected to Grow 133% in Next 5 Years


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