Walmart: Friend or foe to hospitals?

When Walmart founder Sam Walton declared the retailer's healthcare ambitions in 1991, he had harsh words for hospitals.

"We've got to get the hospitals and doctors in line," he told a Walmart leadership meeting at the time. "They're charging five and six times what they ought to charge us.

"We need to work on a program where we've got hospitals and doctors and workman's comp and pharmacies … saving our customers money and our employees money."

More than 30 years after his death, Mr. Walton may finally be getting his wish.

Walmart named its first health system partner Nov. 1. Orlando (Fla.) Health will work with the retailer on care coordination for patients at Walmart's eight healthcare centers in the Orlando area. Walmart Health has nearly 50 locations providing primary, behavioral and dental care across five states.

"Orlando Health looks forward to partnering with Walmart in order to broaden healthcare access in the Florida market," Timothy Traver, assistant vice president of strategic planning at Orlando Health, told Becker's. "Both Walmart Health and Orlando Health are rapidly growing services in the market, and our hope is for a continuing partnership which will help meet the growing healthcare needs of the communities we serve."

Other health system leaders told Becker's they too view Walmart more as a potential collaborator than a competitor.

"I have seen a lot of reference in healthcare to the old African proverb: 'If you want to go fast, go alone. If you want to go far, go together,'" said Ashis Barad, MD, chief digital and information officer of Pittsburgh-based Allegheny Health Network.

He compared Walmart's partnership to the ones that Amazon's One Medical has with health systems in nearly 20 of its markets. He was involved with Dallas-based Baylor Scott & White Health's One Medical collaboration when he worked for that health system.

Walmart said the care coordination agreement with Orlando Health will help with "effective transitions of care" and boost "value-based outcomes."

"Care navigation is a very important part of the total-cost-of-care discussion, and I believe these partnerships will be important for retailers like Walmart in healthcare to achieve high-quality, low-cost outcomes," Dr. Barad said. "The health systems are likely hoping for growth of new patients, and I think it'll be interesting to see if that holds true."

Orlando Health said money doesn't change hands with Walmart as part of the agreement. "The partnership is solely focused on care continuity for community patients and is not transactional," Mr. Traver said.

With One Medical, by comparison, a leader at Columbus-based Ohio State University Wexner Medical Center told Becker's the health system reimburses the company for providing care on its behalf and collects the fee-for-service revenue from the patient visits.

"Although there have been previous attempts at creating a one-stop healthcare experience for consumers, I'm sure Walmart will heed the prior lessons and can deploy the right resources for this endeavor," said David Sylvan, chief strategy and innovation officer of Cleveland-based University Hospitals. "It would be foolish for healthcare systems to ignore the disruptors, as these are the catalysts that will continue to drive sorely needed care-delivery innovations."

Patients are demanding affordable and timely care in convenient, readily accessible locations — and health systems must respond, Mr. Sylvan said. That could mean "creative and mutually beneficial strategic alignments," like the one Orlando Health struck with Walmart, he said.

Roy Rosin, chief innovation officer of Philadelphia-based Penn Medicine, said Walmart Health also presents an opportunity to improve health and well-being, and reduce healthcare costs, for Walmart's roughly 1.6 million employees, the nation's largest private workforce.

"I see large employers, even those with health offerings, as potential partners and not competitors," Mr. Rosin said. "There are aspects of care they can provide efficiently locally and other needs that will be addressed by health systems with specialty care. Coordinating to get the right person the right care at the right time and site makes sense."

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