Is this the future of rural health care: Walmart, walk-in clinics and an ambulance?

August 18, 2014
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Those of us in Indianapolis enjoy—and pay for—the abundance of hospitals and doctors in the metro area.

But one of the most dynamic areas for health care in the near future will be the rural parts of Indiana that have shortages of doctors and small hospitals.

In two to three years, primary care clinics could be popping up in Walmart stores in rural Indiana while most rural Indiana hospitals will offer little to no inpatient services.

That’s the vision I got after a fascinating conversation with Don Kelso, executive director of the Indiana Rural Health Association.

Kelso was contacted this spring by a representative of Wisconsin-based QuadMed, the company Arkansas-based Wal-Mart Stores Inc. is using to operate primary care clinics in its stores in rural South Carolina and Texas. That representative said Wal-Mart intends to bring the primary care clinic concept to Indiana by 2016.

That’s significant because Wal-Mart isn’t just trying to handle patients’ sinus infections and cases of flu, as is the case with the retail clinics operated by Walgreens and CVS. Instead, Wal-Mart wants to make the nurse practitioners staffing its clinics the “primary medical provider” for its shoppers.

And, as usual, Wal-Mart is doing it at an always-low price—$40 a visit—that will come in below the typical rate its competitors, the traditional office-based physicians, are charging.

The good news for rural hospital systems, Kelso said, is that QuadMed is saying it wants to work with local hospital systems to provide the lab tests, imaging scans and the physician oversight that will be necessary for its clinics to provide their full spectrum of services.

“They’re not going to have a corporate doctor in Arkansas, for example,” Kelso said. Although, he noted that national lab testing companies, such as North Carolina-based LabCorp., already have courier services that pick up lab samples in his town—Washington, Indiana, population 11,500–and ship them out of state for analysis.

So local hospital systems would have to compete with those providers on price, Kelso said. Right now, as I noted recently, hospital-based lab testing isn’t even close to the independent facilities on price.

If Wal-Mart is able to control the referrals of a large chunk of patients, it’s a threat to local hospital systems’ business.

But they’re not worrying about it right now, Kelso said, because they have bigger concerns on their radar screen. Namely, that payments changes from the federal Medicare program, as well as advances in medical technology, are starting to empty out their hospital beds.

Kelso said his members have seen occupancy decline about 10 percent over the past two years.

That acceleration in the move away from inpatient care has sparked a few rural hopstials to look at getting out of the inpatient business altogether, and instead offer outpatient services, an ER and then transportation to larger hospitals for more complex care.

That’s what appears to be happening at Indiana University Health’s Morgan County Hospital in Martinsville, although the hospital is getting input from local residents and the chamber of commerce before it finalizes its plans.

IU Health Morgan CEO Doug Puckett said IU Health would invest “several million dollars” to help its hospital facility switch from an acute care, inpatient facility to an outpatient health center, according to the Reporter-Times newspaper in Martinsville.

These changes led to the end of obstetrical care last year and will result in the shuttering of IU Health Morgan’s histology lab next year. And there could be more to come.

“As long as it doesn’t have an adverse outcome for a patient, we will do that because overall costs going down is beneficial to the patient,” Puckett told the Reporter-Times—a jaw-dropping statement I can’t recall any local hospital executive saying in my seven-plus years covering health care.

Other hospitals haven’t gone public with these kinds of plans because they fear they’ll get the reaction that Puckett has. He said he was bombarded recently at the Morgan County Fair with people saying, “So, I’ve heard the hospital is closing.”

Even so, Kelso thinks financial pressures will push things that way—as soon as three years from now.

If he’s right, that means health care in rural areas will soon consist of outpatient centers, perhaps an ER, ambulances (or other transport vehicles) and a Walmart clinic.

That’s dramatically different than what we’re used to. But it may be the future of health care.

  • Urban bias doesn't help make your point
    Is this really the way this paper want to characterize people in rural Indiana: " care in the sticks could shift to a retail experience. (“Ma, pick me up some pork rinds when you get your aorta checked.”)"? Shame on you.
  • Ameliorating access to care issues
    Hi JK, nice post! As I read it, I kept thinking: Isn't Theranos, the lab-on-a-chip company, somewhere in this mix? But then I remembered that they partnered with Walgreens, not Walmart. A good example of a confluence of disruptive innovations, though. In any case, I think the developments you outline have big implications for access to care, which traditionally has been a significant problem in rural areas. Part of our problem in health disparities, which, as you know, is a big focus for the National Institutes of Health and other federal agencies, is the fact that in rural areas healthcare services are just not as available as in metropolitan ones. Clearly, the retail model of care makes a lot of sense in that context, if the care that is delivered is high-quality and based on best practices. Plus, technology such as telemedicine will contribute to making higher-end services, such as dermatology consults, available where they currently are not. Thanks Titus -- Director, Center for Biomedical Informatics Regenstrief Institute
    • Really?
      Hmmm...not sure this is a bright picture of what rural health care is allegedly becoming. It's difficult to see how patients will be satisfied with a Wal-Mart APN, an ER, and an ambulance...or how these three things are going to save money, when the ER/ambulance combination is a clearly-demonstrated cost-driver in the traditional system. I think patients deserve more (i.e., a Patient-Centered Medical Home and a PCP). I strongly suspect (especially re: chronic disease management) that we will "get what we pay for" with the $40 price tag. It's hard to prevent hospitalizations in the chronically-ill, even at current reimbursement rates, let alone for the $40 discount rate. I seriously doubt that the retail giant is going to add value to the provider-patient relationship as a free service, and suspect that the outcome will be proportional to the price. Wal-Mart is all about under-cutting existing systems economically. That may work when you are talking about bread and diapers, but I'm not sure that it can (actually, I am quite certain it can't) be extrapolated to healthcare. Better reimbursement for primary care services and loan forgiveness for PCPs is a better way to solve the manpower problem than relegating our rural citizens to triage and transport.
      • To Titus Schleyer
        Titus, Thanks for your comments. You are exactly right that telehealth will be part of the mix in rural health care. It already is and will only get more prominent. I didn't mention it in my post only to keep things simple. I also wonder if we'll see changes to medical transport to bridge the gap here. Does anyone know how states with much less population density than even Indiana--say, Montana or Alaska--provide access to hospital care when needed by rural residents?
      • To Lonnie Robinson
        I agree that medical transport as currently structured and reimbursed would be very expensive to expand. Don Kelso thinks there will be lots of innovations there, perhaps equipping other kinds of vehicles to handle patients on stretchers and wheelchairs, and perhaps with some monitoring equipment, without all the equipment and staff expense of ambulances. You might be right that better reimbursement and loan forgiveness programs are the better route to go. But since CMS and Congress haven't wanted to invest that way, health care providers have--and likely will continue--to respond accordingly.
      • Public Health
        So, in other words, I can go to Walmart and get some discounted item and an communicable illness or disease for free? Sweet!
      • Socialism at its worst
        In the "one for all, all for none" socialist doctrine the sick die...this plus obama"care" equates to caucasian genocide plus pushed flight to cities thus further eroding the conservative base and the continualed spiral toward complete liberal/progressive/marxist America.
      • look beyond the tired slogans of yesterday to the truth that is now.
        Socialized medicine works great for white people in Scandanavia. It works well in Costa Rica for a population that is partly white and partly mestizo. I don't really see Obamacare as something aimed against whites. I think that is a Republican canard designed to elicit support from white people for republican candidates who don't care about them any more than democrats care about the non-whites they pander to with their phony maneuvers. But what is different between Costa Rica nd the Scandanavian nations on one hand and the US on the other? SIZE. Maybe the US is just too damn big. Maybe it just needs to be divided into smaller self governing pieces like when the old Holy Roman Empire was dismantled. Maybe we are always trying the same set of solutions for different kinds of people as if we were all the same. Oh-- I know-- that is liberal dogma, that we are all the same. Which is the most idiotic American notion going right back to the propaganda of 1776. All men are different and their differences are myriad and that which is different is not equal. The state which pretends men are all the same is going to force men to be the same. That is what America does here, that is what we do in our stupid overseas wars, that is how we destroy true diversity and true difference, and we are all as different groups of folks, feeling the pains of how capitalism is grinding us down into equally insignificant proletarian microconsumers with no other identity whether we like it or not. And the Marxists had this much right about the War of Independence: it was fundamentally a war of capitalist against feudal systems. America has been about big money since day one and whatever gets in the way is crushed. Health care is just another market and Obamacare, to the extent that it Rationalizes and makes more uniform a market which should actually be really different in nature and delivery from place to place-- well that will serve the interests of the biggest capitalist stakeholders in health care which is not Walmart for Gosh Sakes it is the INSURANCE INDUSTRY. CUI BONO Obamacare? The insurance industry. So republicans drop the delusion pro capitalist scales from your eyes this has almost nothing to do with race or "socialism" it has to do mostly with what the INSURANCE INDUSTRY wants to have happen in order to make their lives and profits easier.

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