A Supercenter for Medicine

Pols talk of reducing health costs. Walmart and CVS are doing something about it

By Charles Silver and David A. Hyman. Mr. Silver is a law professor at the University of Texas at Austin. Mr. Hyman is a law professor at Georgetown. Excerpt:

"This month Walmart opened its first Health Center, in Dallas, Ga. It offers “primary care, labs, X-ray and EKG, counseling, dental, optical, hearing and community health education,” all under one roof, a company press release announces.

The health center follows Walmart’s business model of “everyday low prices.” A dental cleaning costs $25, a doctor’s visit $40. A test for a urinary-tract infection is $10; a pap smear $50, a vitamin B-12 injection $18. Immunizations range from $39.84 for a flu shot to $223.88 for an inoculation against the human papillomavirus. Although Walmart Health Centers take insurance, most patients have deductibles high enough that they must pay out of pocket, so low prices benefit them directly.

Walmart will face determined competition. CVS Health expects to have 1,500 HealthHubs by the end of 2021. They’ll focus on managing chronic diseases, which are estimated to account for 75% of total health-care spending. Other rivals include Walgreens and a host of urgent care centers.

These primary-care clinics are following a path blazed by specialized providers of services not covered by insurance, such as Lasik vision correction. Lasik is 20% to 30% cheaper after inflation, and significantly better, than it was 10 years ago. Specialized retailers also offer prescription eyeglasses, cosmetic surgery, fertility treatments and vasectomies. They post prices, hold sales and offer financing plans. Ambulatory surgery centers are getting into the act, offering transparent pricing and disclosing their infection rates."