Wal-Mart expands employee health coverage
■ The giant retailer also plans to lease space in 50 stores to companies operating in-store medical clinics.
By Tyler Chin — Posted March 20, 2006
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Under fire from labor unions and state legislatures for what they say are the company's stingy health benefits, Wal-Mart Stores Inc. announced on Feb. 26 that it will make health care coverage more accessible and affordable to its employees, including opening 50 low-cost health clinics at its stores nationwide.
In a speech delivered at the National Governors Assn.'s winter meeting in Washington, D.C., Wal-Mart CEO Lee Scott outlined a series of steps the company is undertaking to improve employee health benefits, including:
- Expanding availability of a low-cost, high-deductible health plan to half of its 1.3 million employees by Jan. 1, 2007. The plan was rolled out in 2005 and is currently available only in a handful of markets for $11 per month plus 30 cents more per day for children. It provides three doctor visits and three prescriptions per year per covered member before the deductible kicks in. There is an employee co-pay for those visits and prescriptions.
- Sharply reducing the waiting period, currently two years, for part-time employees to become eligible for health coverage. The company did not say what the new time frame will be.
- Allowing part-time employees to enroll their children in a company-sponsored health plan, a benefit previously available only to full-time employees.
Scott also said Wal-Mart will lease space at 50 stores to companies that operate in-store medical clinics, making low-cost health care more widely available to customers as well as employees.
"The soaring cost of health care in America cannot be sustained over the long term by any business that offers health benefits to its employees," Scott said, urging the state governors to work with the company and businesses to address health care issues.
"And every day that we do not work together to solve this challenge is a day that our country becomes less competitive in the global economy."
Scott's speech comes after legislators in several states, upset that thousands of Wal-Mart employees are on Medicaid, proposed bills last year mandating that large employers pay a certain percentage of their workers' health costs.
Wal-Mart routinely was the target of those bills -- in fact, so far it is the only company affected by them, though Wal-Mart's name wasn't in the bills. To date, Maryland is the only state to have passed such a law, which the Retail Industry Leaders Assn. is seeking to overturn in federal court.
The AFL-CIO -- among the union groups and other critics who believe Wal-Mart's latest moves aren't enough to qualify as sufficient health coverage for employees -- announced in January that it will push similar measures in at least 30 states. Wal-Mart has opposed the bills on the grounds that they are bad public policy, and that they don't do anything to make health care more affordable and accessible to working families.
The company is casting in-store clinics as a solution offering less-expensive health care services not only for its employees but also for the customers and communities it serves. "They are a great way to serve working families," Scott said.
Another reason Wal-Mart is expanding the number of in-store clinics is that they have been well-received by customers since it began testing the concept last summer, spokeswoman Sharon Weber said.
After six months of operation, for example, three in-store clinics in Arkansas and Oklahoma treated more than 4,300 patients for 20 of the most common, nonemergency conditions, including 1,800 flu shots, she said.
Wal-Mart will open new clinics at 50 of its 1,980 Supercenter stores but hasn't determined which stores will get them, what states they will be in or with whom the company will contract with to operate them, Weber said.
Other retailers are renting space to in-store medical clinics, including CVS, Target and Cub Foods.
In-store medical clinics have received mixed responses from physician organizations.
The Rhode Island Medical Society has opposed them because it believes the clinics further fragment health care and steer patients away from their "medical home."
The society's opposition is believed to have played a role in MinuteClinic's recent decision to withdraw its application to open five in-store clinics in that state.
The American Academy of Family Physicians doesn't have a problem with in-store clinics as long as they meet certain criteria, said Lindsay Shannon, an AAFP spokesman. The clinics, among other things, must have a well-defined and limited scope of services; refer patients to physician practices when their symptoms exceed the clinic's scope of work, and have a formal connection with physician practices in their community.
The AMA does not have a policy on in-store clinics. However, the AMA Council on Medical Service is planning to present a report on in-store clinics, as well as recommending a series of principles to guide the establishment and operation of those clinics, at the House of Delegates' Annual Meeting in June.