Shopping list: paper towels, diapers, EMR, milk

Wal-Mart says it can make health information technology cheaper and easier for doctors to buy. But is retail the best option?

By Pamela Lewis Dolan — Posted March 23, 2009

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Wal-Mart Stores Inc. is betting that physicians are willing to purchase an electronic medical record system in the same place they can buy a 5-gallon bucket of dill pickles, a set of van tires and a retractable awning.

If Wal-Mart's instincts are right, observers say, the world's largest retail chain could revolutionize how doctors buy health information technology. Analysts expect Wal-Mart could make it less expensive and more convenient, thus spreading EMR systems beyond the fewer than 20% of practices that now use them.

In March, Wal-Mart said it had reached an agreement with computer maker Dell and EMR vendor eClinicalWorks to sell package-deal EMR systems and training through its Sam's Club warehouse stores for its 200,000 physician members.

That is meant to replace the usual piecemeal solution of separate purchases of hardware, software and training, which involves technology vendors, consultants, trainers and computer hardware companies.

The systems, which cost $25,000 for the first physician and $10,000 per additional doctor, won't be on shelves next to the computer monitors -- doctors will have to talk to Sam's Club sales associates and begin their purchase through the store's Web site. Physicians who don't belong to Sam's Club could not buy the systems.

Sam's Club spokeswoman Susan Koehler said physicians can save up to 50% of the cost of comparable systems by buying the bundled package.

Analysts say Wal-Mart's plan to sell EMRs through a retail outlet is a reassertion of its goal to drive changes to the health care system -- particularly through efficiencies it believes can be gained through information technology. Wal-Mart recently has been a frequent visitor to Washington to lobby on health care system reform, including finding ways to help physicians pay for EMRs.

In the last few years, Wal-Mart -- which has been criticized for its lack of interest in health care, particularly for its own workers -- has made personal health records available to employees, rented space to retail health clinics and offered discount generic drugs in its pharmacies. Its efforts have included joining with such past foes as the Service Employees International Union, operator of the critical Wal-Mart Watch Web site, to work together on health system reform.

Sreedhar Potarazu, MD, author of Get Off the Dime: The Secret of Changing Who Pays for Your Health Care, said Wal-Mart's EMR plan fits with its overall strategy for health care -- using the power it wields to get lower prices from product manufacturers to reduce health care costs.

"Wal-Mart is taking this leap as it has in other areas of the business," he said. "It's been very aggressive in getting into ... health care to demonstrate that it is one of the largest purchasers of health care, and they intend to make an aggressive investment in this to have some control."

The company says it's only a coincidence that its announcement comes on the heels of federal legislation that could give physicians up to $44,000 in Medicare incentives for purchasing and using a certified EMR system. Negotiations on EMR retailing had been going on for more than a year, it said.

Wal-Mart and eClinicalWorks forged a relationship nearly two years ago when the EMR vendor was the system of choice for Wal-Mart's retail clinics. (The company does not own the clinics, but leases out the space and controls the technology.) Girish Kumar Navani, CEO and co-founder of eClinicalWorks, said that's when the conversation about the company selling the systems in its stores began.

The firms decided to place the product at Sam's Club to take advantage of the relationships the warehouse store already has with physicians who use it for office supplies and other business products.

Some analysts say Wal-Mart is well-positioned to attract physicians with its EMR deal.

Jason Hwang, MD, executive director of health care at Innosight Institute, a San Francisco-based nonprofit think tank, said big EMR vendors have expanded and improved their products so much that it's impossible for most small practices to afford the systems.

But technology consultants have long said choice is key for EMRs, because they are not a one-size-fits-all solution. So some question how successful the company's sales will be.

Other options

Even if Wal-Mart's effort does not take off immediately, Dr. Hwang expects other vendors pursuing smaller practices to try to find retail partners, too. He said vendors targeting this market will have more exposure through the retailers, so smaller practices will have more choices.

Alan Ayers, assistant vice president of product development for Dallas-based Concentra Urgent Care, said if there's a company that should know about IT solutions, it's Wal-Mart. The company is well-regarded in retail circles for using information technology to track sales and stock shelves -- a big factor in its low-price strategy.

Although Don Detmer, MD, president and CEO of the American Medical Informatics Assn., agrees that Wal-Mart is an IT leader, he worries that it might be taking on too much in an area it doesn't know about -- selling health technology to physicians.

He is glad that the Wal-Mart package includes five days of training with eClinicalWorks, but he wonders if it is enough. The hardest part of any implementation is managing how technology changes a practice's work flow, Dr. Detmer said. He has talked with eClinicalWorks since the announcement and has encouraged the firm to participate in AMIA's efforts to train more health IT professionals.

"My sense is that's a question [Wal-Mart is] asking, as well," Dr. Detmer said. "But they are committed to learning as they go."

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