Moving to upgrade its walk-in medical clinic
business, Wal-Mart is set to announce on Thursday
plans for several hundred new clinics at its stores,
using a standardized format and jointly branded with
hospitals and medical groups.
The first of the new Clinic at Wal-Mart walk-in
centers, as they will be called, is to open in
Little Rock, Ark., in April and be run by nurse
practitioners employed by the St. Vincent Health
System, a three-hospital group in central Arkansas.
Wal-Mart also says it plans to brand 200 of the
new clinics with RediClinics, one of the Revolution
Health companies of Steven Case, the AOL co-founder.
Those are to be operated in partnership with various
local health care providers. RediClinic, which
already operates 13 clinics in Wal-Mart stores,
plans to open one of the new units in Atlanta in
April and another in Dallas next summer.
“We have learned that people are willing to
receive their health care from the front of a store
or the back of a drugstore,” said Dr. John Agwunobi,
a medical doctor who is a Wal-Mart senior vice
president. “But customers also have said they would
rather it be delivered by a trusted name, a local
health care practice, a trusted local provider of
care.”
In all, Wal-Mart plans to have 400 store clinics
by 2010, including current units that will be
converted to the new brand as their leases come up
for renewal. The company currently has 78 in-store
clinics around the country, but has had uneven
performance in some cases. Wal-Mart does not operate
any clinics itself but is seeking local hospitals
and medical practices as partners, said Deisha
Galberth, a Wal-Mart spokeswoman.
Walk-in medical clinics are a growing industry,
with numerous competitors that include big-box
retailers, drugstores and even grocery chains around
the country. Industry executives say 1,500 to 1,800
clinics will be open by the end of the year.
Propelled by the drugstore chains CVS and
Walgreens, by far the biggest sponsors of the
clinics to date, more than 700 clinics have opened
in the last 15 months. But the business model is
unproven so far.
Few, if any, clinics are profitable, according to
industry analysts, and only a handful have broken
even on daily operations. Most have been open a year
or less, and executives say it takes up to three
years for a clinic to become profitable enough to
recover start-up costs.
Medical societies are inclined to be skeptical of
the clinics. The American Academy of Pediatrics
opposes them, saying they add to fragmentation in
the health care system.
Dr. Edward Zissman, a pediatrician in central
Florida, said he had qualms about hospitals that
hook up with the clinics. “Putting their name on a
product that I don’t think has the highest quality,”
he said, “is going to cost them dearly with
physicians.”
The American Academy of Family Physicians and the
American Medical Association have set forth
principles for clinics to observe, including sending
patients’ medical record to their doctors and
finding doctors for patients who do not already have
them. Most states require varying degrees of
physician supervision of the clinic nurses. Clinic
operators say they are complying.
Many patients have said they like the convenience
of the walk-in clinics’ weekend and evening hours,
the short waiting times to see a nurse practitioner,
and the posted price lists for a limited menu of
care like tests and prescriptions for sore throats
and ear infections and seasonal flu shots.
The typical customer is a mother with runny-nosed
children in tow. About one in five customers pay
cash. Wal-Mart says 55 percent of patients at its
store clinics do not have health insurance, like 47
million other Americans.
“The clinics are the latest big example of how
you could think about consumers and what their needs
are, rather than a health care system exclusively
designed around the needs of providers,” said
Margaret Laws, director of an innovations program at
the California Health Care Foundation, an
independent group that finances health policy
research.
Wal-Mart, for its part, rents store space to
clinics operated by eight independent clinic
companies and two hospital systems: Aurora Health in
Wisconsin and North Broward Hospital District in
Florida. The company plans to convert all of them to
the Clinic at Wal-Mart brand as those leases expire,
Ms. Galberth said.
Wal-Mart sets standards of service but the
quality of care is “clearly within the domain of the
provider,” Dr. Agwunobi said. “The customer will
always be able to trust that the partner we have
chosen is fully licensed and in compliance with all
local and regulatory rules and standards.”
Wal-Mart’s rebranding effort comes in the wake of
one notable failure in its clinic business. Last
month CheckUps, a clinic operator headed by Jack D.
Tawil, a New York businessman, ran out of money and
closed its operations in 23 Wal-Mart stores in four
Southern states.
It was not the first unhappy business experience
for Mr. Tawil, who had not previously worked in
health care. In 2003, he became entangled in a legal
dispute with the London department store Harrods
over the use of its name on a line of watches he was
selling. The case ended with Mr. Tawil defaulting
and being ordered to pay Harrods $4.68 million.
He was able to avoid making that payment by
filing for Chapter 7 bankruptcy protection in the
United States, according to federal bankruptcy court
records in New York.
Mr. Tawil said in a telephone interview that he
had found new investors for CheckUps and hoped to
reopen in the same Wal-Mart stores, starting next
month. Wal-Mart has said that with or without
CheckUps the clinics will reopen.
But even if they do reopen under CheckUps, at
least some of the nurses will not be going back to
work there, according to Nikki Leimer, owner of a
nursing employment agency in Mandeville, La., that
is suing CheckUps over money the agency says it is
owed.
In the future, said Dr. Agwunobi, the Wal-Mart
executive, “We are going to want to know that the
local health care providers can keep their
promises.”