Will Walmart’s Health Care Gamble Pay Off?

Pushing deeper into the high-risk business of health services, Walmart has opened its first standalone primary care clinic in suburban Atlanta. Walmart Health, which has a separate entrance adjacent to the Dallas, Georgia, supercenter, offers what the company describes as transparent pricing for an array of services including dental, lab tests, X-rays, hearing, optical and mental health counseling.

Walmart already operates 19 clinics across Georgia, Texas and South Carolina that are more limited in scope, but the pilot Walmart Health signals a bigger commitment by the world’s largest retailer to capture a share of the $1.3 trillion health care industry. Walmart runs one of the largest pharmacy chains in America, and health and wellness accounted for 9%, or $36 billion, of sales for fiscal year 2018.

Despite Walmart’s considerable resources, experts say the risk remains high because there hasn’t been a great track record of innovation in health care delivery. The potential for profits is a powerful incentive for Walmart to become a major player in the health care game, but the company has as much to lose as consumers have to gain from the pilot program.

“My view is, knock yourself out,” Wharton health care management professor Mark Pauly said. “Innovation is a good idea generally, although in health care most innovation has not been successful. But when firms are willing to invest their own money in trying to do something imaginative, if they succeed, that’s to the good of consumers, and if they don’t, that’s to the harm of their stockholders. But that’s the way progress is going to be made.”