Walmart has made the unfortunate decision to shutter its health clinics, the big box retailer announced. The decision was apparently sudden. Only about a month ago Walmart announced plans to add 19 more stores in 2024. In all Walmart will close all 51 of its physician-staffed clinics. Walmart is also closing its telemedicine portals as well. Eye centers, lab vendors and pharmacies are not affected by the closures. In a press release, Walmart wrote:
During our five-year journey, we made meaningful impacts with patients while continuing to learn, pivot and evolve. While our mission to help people save money and live better remains, today we are sharing the difficult decision to close Walmart Health and Walmart Health Virtual Care. Through our experience managing Walmart Health centers and Walmart Health Virtual Care, we determined there is not a sustainable business model for us to continue.
This is a difficult decision, and like others, the challenging reimbursement environment and escalating operating costs create a lack of profitability that make the care business unsustainable for us at this time.
The problem for Walmart is similar to what other firms trying to disrupt the status quo in health care have experienced, with Walmart saying “the challenging reimbursement environment… make the care business unsustainable…” That’s another way of saying that health insurers, employer plans and patients themselves are reluctant to pay for Walmart’s services. Other retailers’ efforts to expand into primary care clinics have stumbled as well:
Last month, Walgreens said it had closed 140 of its VillageMD primary care clinics, with plans to shutter 20 more. A high-profile joint health venture among Amazon, Berkshire Hathaway and JPMorgan Chase also failed several years ago, though Amazon continues to invest in One Medical, which it acquired last year and which has more than 125 locations.
Amazon’s One Medical is not an example I want to see emulated elsewhere. If you peruse One Medical’s reviews, numerous patients complained about being ambushed with high charges for needless or questionable services that patients found of little value.
The reasons Walmart and others have failed when they tried to disrupt the health care status quo is that patients have become conditioned to allow third parties to make decisions for them. Third parties decide which providers their members can use and determine the fees reimbursed for physician visits. Walmart’s clinics are not in-network for many patients, who want the cost of primary care to count towards their deductibles. In normal markets, offering more convenience and lower prices would be a winner. That’s how Walmart became a dominant retailer. Low prices and convenience have not worked in health care. Consumers appreciate advances in service and convenience. On the other hand, health insurers do not necessarily appreciate advances in convenience when they pay patients’ bills.
The local Walmart clinics near me posts prices and are accepted by a variety of local insurers, including Medicare and Medicaid plans. Walmart likely found it could not survive on Medicare and Medicaid patients and likely found it difficult to attract those willing to pay cash. However, it is not in many other health plans in my area including mine.
Walmart’s problem goes much deeper than whether patients are comfortable seeking care at Walmart. The U.S. health care system is dysfunctional. It’s dominated by third-party payers. Only about 9% of medical spending is out of pocket. Moreover, a substantial portion of that 9% is dictated by third-party payers who determine network affiliation and negotiate fees.
Virtually all the entrepreneurial ventures in health care run into the same problem of patients who don’t (or won’t) act like consumers. Virtually all the entrepreneurial health ventures later end up trying to appeal to third party payers, only to find the people paying the bills are not excited about adding more services to fund.
It’s sad to see a retailer as big as Walmart drop out of the health care space. However, it does not surprise me that a service consumers would embrace when paying with their own money struggles to find a market under third party payment.
Read more at New York Times.
Employer-based insurance is hitting the end of the line. Wisconsin State employees have only one health insurance option if they choose the PPO: Dean Access. State employees pay $7,956 annually, and taxpayers pay $36,504 annually for their family’s PPO insurance. Trump’s PPO from Allstate in Milwaukee for a 30-year-old mother and child is $3,206 annually, so the employee savings are $4,750 annually. The taxpayers save their entire $36,505 annually for each employee. In this example, the employee and the taxpayers save $41,255 annually. State law requires the employee to pay 100% of Trump’s PPO, so regardless of how much employees save, the taxpayers always save $36,505 annually for each employee with family coverage.
Trump’s PPO is vastly superior to Wisconsin’s overpriced Employer-Sponsored Insurance (ESI) if employees have a catastrophic illness. When a Wisconsin employee is diagnosed with ovarian cancer and becomes too sick to work, her premium increases, by federal COBRA law, to 102% of the entire premium or $3,779 monthly or $45,348 annually when she has no income. Trump’s PPO premium remains constant at $3,206 annually or $42,142 less expensive for her with a catastrophic illness or injury.
The 1973 ERISA imposes a fiduciary responsibility on employers to disclose potential rate increases to employees at the time of enrollment, particularly in the case of catastrophic illnesses. However, the State of Wisconsin is failing to fulfill this obligation. Employees are not being warned that their $7,956 annual premium as an active employee could skyrocket to $45,348 annually if they become too sick to work. This non-disclosure is a clear case of Deceptive Sales Practices, a serious Ethics Violation. Employers are setting themselves up for class action lawsuits from past employees who were not given Full and Proper Disclosure about their premium obligations when they were sold this employer insurance.
It’s all in the math, Devon. Both plans are going to double in price, which is similar to your wife’s current age. Health insurance premiums only go one direction, UP! Trump’s PPO’s premium of $3,206 annually is going to double to $6,414 per year. Also, the Wisconsin taxpayers’ premium for dangerous overpriced Employer-Sponsored-Insurance (ESI) will double from its 2024 premium of $45,348 annually to a whopping $90,696 annually! I know you and Dr. Goodman NEVER discuss the negative consequences of evil Employer-Sponsored insurance Devon. It’s legal for you two because you have no obligation to tell the truth. You have no fiduciary responsibility to the reader, so you can just lie by omission, which is what you two do; it’s sad.
Republican Healthcare Reform is at hand. The treasury loses income and payroll tax on Wisconsin’s $45,000+ family yearly premiums or $18,000 per year per employee. Nobel Prize-winning economist Milton Friedman’s “Cure” before President Clinton included tax credits and medical IRAs, like Trump’s first 2017 Obamacare reform with age-based tax credits and larger HSAs. The age-based tax credit for the above 30-year-old Milwaukee Mother is $3,000 and her child is $2,500 or $5,500 combined. The Republican tax credit is less than 1/3 of the current employer tax exclusion cost. It’s like Holy Cow! Right?
This Republican credit is an “option” for Obamacare, Medicaid, and employer-sponsored insurance. For example, the Milwaukee Mother State employee pays nothing, saving $7,956 annually! Plus, Trump deposits her $2,294 credit balance into her HSA at the bank at $191 monthly. Wisconsin taxpayers no longer pay for insurance and instead shift their premium cost to the employee’s HSA, which has new annual caps of $12,000 for single employees and $24,000 for families. Larger HSAs target wealth to the masses and lower our national debt simultaneously. Republican solutions work!
Vote Republican in 2024 so we can balance the budget and pay off the National Debt. It’s the MAGIC of the tax-free HSA!