Friday, September 22, 2006

The Wal-Mart Health Plan

Upscale items in Dallas, followed by a political victory in Chicago. And now, cheap drugs in Tampa. In its latest move to drive store traffic and make nice with politicians Wal-Mart has adjusted their highly criticized health plan.
"They are doing something that may be good for consumers, but they don't have altruistic motives," said Patricia Edwards, a portfolio manager and retail analyst at Wentworth, Hauser & Violich in Seattle. "They are capitalists. They still need to make a profit."

Analysts have said the risks to Wal-Mart are slim because profit margins on most of the drugs already are low, and the program could help the Arkansas-based retailer address an image problem stemming from its policies on health insurance coverage for employees.
"We're able to do this by using one of our greatest strengths as a company _ our business model and our ability to drive costs out of the system, and the model that passes those costs savings to our customers," he said at a Tampa Wal-Mart. "In this case, we're applying that business model to health care."

Beginning Friday, the company will offer 291 generic drugs for $4 per prescription at 65 Wal-Mart, Sam's Club and Neighborhood Market stores in the Tampa metro area. The company said it hopes to expand the program statewide by January--and, should it prove successful, to other states later in 2007.

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