Healthcare Matters

We’ve previously reported on Wal-Mart’s move into healthcare here at Healthcare Matters. “Attention Wal-Mart Patients” was posted here late last year around the time the company’s healthcare strategy was first getting leaked. Has the company’s plan to become a one-stop, turnkey retail medical service unfolded as quickly as most of us guessed it would? No. At least not by the cynical standard most of us like to apply to them. But is Wal-Mart making progress? Absolutely. Responsible progress? I’ll let you be the judge.

Over the last 8 months, Wal-Mart has tripled the number of healthcare clinics in the US to 150 and it still has plans to quickly open thousands more –around the world. And as most of us know, because it is already a huge in-store pharmaceutical retailer, if you get your check-ups at Wal-Mart, you’ll have your prescription filled before you hit the parking lot. Not only here in the US, where the company’s $4 generic drug special has been a winner, but overseas as well, where the company’s recent vaccination program has been an inspiring success. Providing a low-cost, education-backed vaccination program to the emerging middle class in developing countries; could there possibly be a better introductory branding maneuver? Has Wal-Mart gone soft and decided to become a more socially responsible corporate citizen? Or does the business of healthcare afford both?

Warren Buffett just reduced his position in Johnson & Johnson (JNJ, quote) by two-thirds. Over the same period, he beefed up his holdings in Wal-Mart. One factor contributing to his move is the growth in consumer demand around the world for cheaper generic goods. The other is known demand for cheaper, accessible healthcare. Wal-Mart is not only well positioned to capture the growth in consumer spending in emerging markets (expected to grow to $30 trillion by 2025, according to global consulting firm McKinsey & Co.), but it is perfectly positioned to deliver a baseline level of healthcare that frankly, most governments –if so inclined– would be hard pressed to match.

FYI, that $30 trillion number represents about 50% of the world’s consumer spending.

—Tom Finn