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Knowledge at Wharton: Can Walmart Urgent Care Compete With Existing Clinics?

From Knowledge at Wharton: Why is Walmart, which conquered retail as America’s top seller, getting into the health care sector by opening clinics across the country? The better question, according to Wharton health care management professor emeritus Mark Pauly, is why not? Health care accounts for 18% of gross domestic product, making it a substantial part of the economy. And the sector hasn’t been reformed or reorganized in 50 years, Pauly said, “so why not give it a shot.” “To a lot of big companies, Amazon as well as Walmart, this looks like a lot of low-hanging fruit,” he said to Wharton Business Daily on SiriusXM. “Walmart has had success in moving away from its original focus on low-priced clothing and things like that to becoming the No. 1 retailer of groceries in the U.S. If you can do it for potato chips, why can’t you do it for knee replacements?”

Why Walmart Urgent Care?

The professor admits to a bit of facetiousness, saying health care is certainly more complicated than selling socks. Insurance coverage alone makes the provision of service far from a straightforward supply-and-demand affair. But Walmart’s strategy seems to be built on its branding of convenience. Earlier this year, the company announced plans to build a total of 77 health centers across the country by 2024; it currently operates 32. “They seem to imagine you go out on a Saturday to buy some socks, and you decide to stop by for a shingles vaccine,” Pauly said. “They are setting up something that is very similar to the urgent care centers or retail clinics that already blanket the U.S. Walmart apparently intends to move into the market for episodic primary care.” Listed to the podcast episode at Knowledge at Wharton.