The idea seems feasible, knowing services margins are better than just product margins at retail, but taking on the problem of lack of consumer trust in critical services is the giant risk. Can Walmart really win here or is this just another “one-up” on Amazon move?

The move by retail into healthcare makes a lot of sense. We’ve talked about this before here with CVS acquiring Aetna. So I see a lot of upside for pharmacies to be connected to healthcare.

I think the real question is, how much do we as consumers want these two connected? On one hand, it might make for less confusing script fills and refills. On the other hand, how much privacy does this afford the consumer? Will the healthcare portion of the retailer be able to see everything I’ve bought?

Let’s take this to the extreme. If my Walmart shopping history contains a high content of sugar and sodium rich products — sodas, confections, etc., and I get diabetes, does Walmart, my healthcare provider, now say that I don’t qualify for Medicare because of my lifestyle choices?

This is a data ploy to learn more about their target demographics and acquisition is the only way they would get them. Yes, it is a preemptive move on Amazon and direct response to Aetna/CVS but Walmart has far fewer locations making it less about access than supporting their fixed income and aging Boomer customers. That said, it is a far cry from Sam Walton’s vision and may prove a tricky bolt-on in a highly regulated market.

When asked by CNN, I hypothesized that Walmart would use the acquisition to provide cut-rate services to its employees and customers. It would be both good PR, and make financial sense — certainly easier than self-insuring.

It seems that others agree that’s the end game. It’s clever, Amazon or no Amazon.

I wonder what will happen when the respective heads of retail look at the incredible compensation levels for the heads of healthcare. Will the question be “why” or “why not”?

On the plus side, one possible outcome could be healthcare clinics in underserved (rural) areas. We’d all like to think that a merger like this could be applied to the greater good … time will tell.

American healthcare is itself on “life support.” Unchecked costs for meds, processes and equipment are untenable. Consumers need relief and when the current subsidies expire, many will be desperate.

National food, drug and mass retailers with the cash flow to create another reason for customer patronage are in critical need of yet another point of differentiation. Retail/healthcare is not only a good idea, it is a marriage of necessity.

Visiting clinics within the four walls of a Walmart Supercenter may not be everyone’s cup of tea, but if such a merger can produce affordable healthcare plans and alternatives to the current, escalating expense of health insurance, this just might be the answer to a problem the Feds have been unable to fix.

It makes sense for Walmart to acquire Humana as it ties in directly with their pharmacy. It’s a synergistic move, as the success of one (or both) support each other. It could also be good for the consumer as Walmart won’t likely be a high-priced option, and will likely offer the competitive pricing that they are known for.

The privatization of universal healthcare. It’s the right thing to do and makes a ton of business sense as many of Walmart’s customers cross the 60- to 65-year-old demographic. Win, win, win — customer, business and no government (until someone gets greedy).

In the long run I don’t think that Walmart will benefit from this move. Health insurance coverage and reimbursement is complicated. It means a totally new operating system and trained staff. Walmart has earned a reputation for squeezing its suppliers to maintain low prices for its customers. If that’s a guiding philosophy it doesn’t bode well for patients and healthcare providers. Aetna reached out for me to switch over to CVS from Walgreens for my drug plan prescriptions. Aetna stated it would be less expensive. I called Aetna and spoke with a representative who went through the comparison with me. There was no cost difference. I took away from that conversation that CVS/Aetna’s strategy is to promote itself as the less expensive option and try to convert as many customers as possible. If I were to buy my medicine from CVS, maybe that would be enough return on the original Aetna acquisition. I don’t know. But this long-winded anecdote is just to illustrate that CVS is trying to create expectations that may not be achievable.… Read more »

Recently grocers have started a natural progression towards health and wellness (ShopRite’s dietitians) and it was only a matter of time before two giants merged together. Walmart is in the middle of rebranding themselves while also competing against the Goliath Amazon. Walmart probably saw this as an essential next step and wanted to beat Amazon to the punch.

The risks of becoming entangled in the complex U.S. healthcare industry are considerable, especially at a time when Walmart is grappling with the competitive challenges of a rapidly shifting retail market.

However, there are some solid reasons behind a potential deal. Foremost among them is a need to diversify for growth. Healthcare is a huge market and a significant area of both consumer and corporate expenditure. It is also a major growth sector.

Potential linkages between health and retail, including services in stores and customer data sharing, are also attractive.

It is far from certain that any deal will come off. There are financial and regulatory hurdles as well as enormous corporate considerations. However, that the deal is even being discussed shows how much both retail and healthcare are changing.

For the past 100 years, major moves at retail have been about TRAFFIC, and building profits on that traffic other than selling customers things. There are three things that build traffic — water, food and, now with the aging population, healthcare. To understand the serious nature of traffic as a root driver of retail, bear in mind that more than 90 percent of CVS’ profits comes from the prescriptions in the back of the store — and that drive-through. The front of the store must carry its own weight but, in reality, the front is a traffic builder for the back. There is nothing strange about this. In the same way, when Walmart was topping out with their large general merchandise stores in the ’80s, they moved to supercenters with full groceries and that move, nearly alone, drove Walmart to become the half-trillion dollar behemoth they are today. But today it is not just food and beverage that is driving growth, it is healthcare for an aging population and, even more specifically, THE FUNDING OF… Read more »

This is a risky move, but Walmart may be looking at how Amazon successfully uses non-retail businesses to support their retail business performance and wants to emulate that in an area that a.) Amazon isn’t quite in yet, and b.) can be tied to their existing pharmacy business. It helps diversify, but also could help strengthen their business and make them a stronger competitor to CVS Health for consumers prescription dollars.

The acquisition by Walmart of Humana makes great sense. Walmart has a large collection of Medicare customers which lines up with Humana’s subscribers. Some of healthcare is already provided at retail — pharmaceuticals, in-store clinics, non-prescription remedies, etc. Pharmaceutical customers tend to return more frequently and spend more in the stores. And much of Walmart’s shopper base is insured by Humana so the synergies are many. The con is that Walmart’s executive team has little healthcare insurance experience. However, they will learn quickly and make it work as Walmart has the financial resources to make mistakes yet get it right in the long run.

If Walmart’s broad strategic goal is to simply win a larger share of America’s wallet, then it makes sense to go after the heaviest spending customers and categories. Health care is a natural add-on that has synergies with the company’s existing pharmacy, food, and wellness categories.

But it should beware the complexity. Health insurance and healthcare delivery are heavily regulated and subject to ever-changing political winds. HIPAA privacy rules require a firewall around healthcare data that could (and probably should) block some tempting cross-marketing concepts.

In light of the recent CVS-Aetna and Albertsons-Rite Aid deals, Humana’s pharmacy benefits business may be the gem Walmart covets most. As Walmart customers age, they may be expected to spend a larger share of their budgets on healthcare and prescription meds.

Taken in aggregate, the recent wave of acquisitions and deals in this sector are troubling to me. They send health care further down a for-profit spiral that will be increasingly difficult to unwind.

A retailer must evolve and keep attracting new customers to the franchise. If inexpensive clothing and other consumer goods are not bringing in new customers and you are in dire need of an image makeover, evolution is necessary.

I’m not certain if it makes sense, rollback prices and quality healthcare do not seem like an attractive proposition, but then I’m assuming the models that have been tried by pharmacies.

The positive aspect of the acquisition is an evolution of Walmart’s offerings, the major negative would be consumers’ reception of the concept.

At the end of the day, health care is one of the places you have to be in person in a majority of instances (distance health care aside). Integrating retailing and phama/healthcare is the next step for any enterprises with vested physical presence. It is going to be outside Walmart’s core competence, but one could say the same thing for Amazon and Whole Foods.