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The “featured providers” ranking is one of five new pilot programs Walmart is now offering its workforce. Getty Images
  • Walmart has announced five pilot healthcare programs for its 1.5 million employees.
  • One of them is a service that rates the performance of physicians and then guides employees toward those doctors.
  • Experts say this is one of a number of programs corporations use in an effort to reduce healthcare costs.

Walmart, the largest employer in the United States, has announced a series of new pilot health initiatives for its employees to expand benefits while curbing healthcare costs.

Five pilot programs will be rolled out to Walmart employees in select states next year.

Most significant among these is “Featured Providers,” a partnership with Embold Health that analyzes physician performance to rate and rank doctors based on clinical guidelines and other measures.

The program will “curate a group of local physicians in eight specialties based on independent-medical expert analysis of a large, comprehensive healthcare data set to identify the factors that lead to high-quality care,” according to a Walmart press release.

In other words, Walmart wants to guide its employees to the top-ranked doctors in its analysis in an effort to curb costs.

The initial areas of focus for this pilot program are primary care, cardiology, gastroenterology, endocrinology, obstetrics, oncology, orthopedics, and pulmonology.

Another pilot program Walmart is introducing is expanded access to telemedicine, including a “personal online doctor” to help manage chronic health conditions, provide nutritional counseling, and coordinate referrals for $4 per visit and a 1-week wait time.

The other pilots include Personal Healthcare Assistant for coordinating care and answering billing questions, access to a National Quality Provider Resource to find quality in-network physicians, and nationwide membership to fitness clubs.

“Some of the tactics they are utilizing can lead to a significant impact on both corporate health spend and overall employee well-being,” Joe Marullo, vice president of analytics and operations at health technology company Zillion, told Healthline.

“By helping their employees find physicians who deliver appropriate, efficient, and cost-conscious care and allowing inexpensive access to fitness facilities, Walmart is significantly increasing the chances that employees cut unnecessary hospital visits and care,” he said.

Marullo hints at the pragmatism at the heart of Walmart’s moves, a company whose 1.5 million employees comprise 1 percent of the total U.S. workforce.

Cutting healthcare costs increases profits for the company.

Those savings are potentially significant. The U.S. healthcare system wastes somewhere between $760 billion and $935 billion annually. That comprises around 25 percent of all total healthcare spending, a new study in JAMA concluded.

Looking specifically at the cost-cutting measures Walmart is implementing, the study estimated that the total cost of waste from either overtreatment or low-value care spanned from $75 billion to $101 billion, while the failure of care coordination accounted for $27 billion to $78 billion in wasted spending.

By far, the single biggest category of waste was “administrative complexity,” accounting for $265 billion — more than a quarter of the total unnecessary spending.

But Walmart’s approach of reducing costs by going through the healthcare system may itself be flawed, Marullo says.

“That is going to be an uphill battle when excess costs are also driven by several other factors [within the system],” he said. “By focusing on improving employee health and well-being outside the system — including encouraging the development of long-lasting healthy habits — employers like Walmart can find alternatives to improving employee health while reducing spending waste.”

Walmart has been dipping its toes in many facets of the healthcare industry.

These new pilot programs follow the introduction and expansion into direct service provision of medical care through its Walmart health facilities.

The United States’ second-largest employer, Amazon, has taken similar steps, launching a pilot “virtual primary care” clinic called Amazon Care in September, CNBC reported.

But Walmart’s efforts have the advantage of being brick-and-mortar.

All of this is symptomatic of the end results of a “corporatization of healthcare in recent years,” according to Dr. Purvi Parikh, MD, and Dr. Ainel Sewell, MD, board members of the advocacy group Physicians for Patient Protection.

“We have seen the number of healthcare administrators and their salaries grow 3,500 percent since 1975, whereas both the number of physicians and their salaries stagnate,” Parikh and Sewell told Healthline via email.

“An exorbitant cost is going into this growth of administrators. As a result, profits are the center of focus over patients, and non-physician providers are hired to save corporations money,” they said.

The two doctors worry that these cost-saving, nonphysician providers may end up making up the bulk of preferred doctors among these corporate-led initiatives.

Walmart, Amazon, and other efforts represent the corporate approach to the problems of healthcare spending waste.

Other approaches include a complete — and advocates say, necessary — overhaul of the system at the policymaking level, including the various “Medicare for All” bills in Congress that have become key political talking points in the lead-up to the 2020 presidential election.

Another option, the “direct primary care” model, avoids traditional health insurance almost entirely, with patients paying physicians a flat monthly, quarterly, or annual fee for regular health services and labs.

Under this, “patients often incur far less costs than when they go through an insurance company or large corporate system,” Parikh and Sewell said. “Also a focus on primary care, screenings, and preventative measures would save the overall healthcare system money.”