The Alan Katz Health Care Reform Blog

Health Care Reform From One Person's Perspective

The Wal-Marting of Health Technology

Posted by Alan on February 19, 2008

A few years ago WellPoint, then the nation’s second largest commercial health care plan, offered to give thousands of doctors in its network either a free Dell computer system or a free PDA customized to help with prescriptions. The idea was to speed the adoption of simple technologies by the medical community. The computers would physicians automate more of their office functions. The PDA would help them more quickly, easily and safely prescribe medicines. And it was free. It was also a failure.It turned out, as then WellPoint chairman Leonard Schaeffer once put it, “Free wasn’t free enough.” Integrating technology into their practices required changing those practices. And that was a price too few physicians and medical groups were willing to pay.

Change, it seems, must be either pain-free or at least less painful than continuing to do business as usual. Since anyone who owns a PC knows technology is not painless, someone — or something — is going to have to make the status quo more painful.

When it comes to delivering pain to other businesses, few can match Wal-Mart. Their ruthless treatment of suppliers in pursuit of lower prices for customers is the stuff of legend. So are many of their other business practices. 

What cannot be denied, however, is that their gravitational pull is so great it distorts any business they enter. And they’re about to enter the medical business.

Wal-Mart is joining the in-store clinic movement. And as  reported by Marianne Kolbasuk McGee in Information Week, “not only is [Wal-Mart] rolling out e-health records to tens of thousands of its own employees and their dependents, … but it’s also requiring the use of e-health record software for patients treated at the in-store [medical] clinics it’s about to launch.” Wal-Mart will also be requiring its clinic operators to use practice management software as well.

E-health initiatives are a part of virtually every health care reform proposal put forward in the past few years. The goal is to reduce physician costs and increase patient safety. Forward movement, however, is nearly as rare as expectations are high. According to Information Week, ”less than 20 percent of U.S. doctors have deployed e-health record systems in their offices ….” That’s far too low to move the industry. But few industries are too large for Wal-Mart to move. Wherever the tipping point for widespread adoption of technology in physician practices might lay, Wal-Mart’s presence and impact is likely to get us there faster.

With Wal-Mart’s ability to drive markets — and to drive down prices — perhaps low cost, but demonstrably proven, technologies may finally be “free enough.”


5 Responses to “The Wal-Marting of Health Technology”

  1. jim said

    E-health initiatives are great, but as you point out, they always lack staying power. If this plan were to include payment at the point-of-service, then things could get interesting.

  2. Alan said

    Thanks for your comment Jeremy, but I have to disagree. Most agents spend most of their time helping their clients find the right plan for their needs, solving administrative problems, answering questions about coverage and making sure they have the right plan as their situatin changes over time. Very little time, if any, is spent tracking down medical records. I’m not seeing how electronic medical records changes the need for licensed, professional advocates and consultants — in other words, agents — at all.

  3. jeremy said

    Hmm interesting article. With medical records being transferred electronically it would probably eliminated the need for many insurance agents.

  4. Alan said

    Ken: Thanks for your comment. You make very valid points. However, here’s another way of looking at it:
    1. Wal-Mart’s involvement will bring down the cost of electronic medical records and other health related software. The lower the cost, the lower the barrier of adoption.
    2. By introducing electronic medical records to its employees and dependents and to their customers, Wal-Mart will create expectations within a significant amount of the population. If doctors are being pestered to add information to their patients’ EMR, then some of them are likely to comply. Goverment mandates and/or incentive programs may be required, but there’s a lot to be said for the power of consumer demand, too.

    Also, I’m not suggesting every doctor will run out and buy a sophisticated EMR system. My own doctor doesn’t even use email. But as I note in the post, Wal-Mart’s involvement could get us closer to the tipping point.

  5. Ken Terry said

    Wal-Mart has a lot of muscle to exert on its suppliers. And physicians are suppliers to the extent that they care for Wal-Mart employees. But by itself, the company still doesn’t have enough clout in most markets to get physicians to do anything. As for the retail clinics that it’s rolling out, those will be perceived as competitors by local physicians–and perhaps they might prompt some practices to expand their hours and deliver better service to patients. But the retail clinics’ use of EMRs, while it might help keep physicians in the loop regarding their patients’ care, won’t force them to adopt EMRs themselves.
    The only thing that will make doctors do that is a government mandate or incentive program, backed up by grants, subsidies and technical support.

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