Will Wal-Mart's health cost crisis hit doctors?

With Wal-Mart striving to offer more health benefits to its employees, yet limit its spending on health care, physicians could end up getting squeezed.

By Tyler Chin, AMNews staff. Nov. 14, 2005.

Wal-Mart Stores Inc. has a problem. It's under withering attack from critics for having thousands of its employees and their families on Medicaid rolls or otherwise unable to afford health insurance on what they earn. Wal-Mart would like to buff its reputation, but it doesn't want to do so by being so generous that its health costs rise even faster.

Answers to Wal-Mart's problem lie in a 27-page company memorandum released Oct. 27, the day after an earlier version was leaked to the New York Times and Wal-Mart Watch, a Web site critical of the company. The memo, written by Susan Chambers, Wal-Mart's vice president of benefits, is one of the bluntest assessments of corporate health benefits ever released. It is a study of how one large, influential corporation wants to effect change among employees and their interaction with the health care system.

Physicians aren't front-and-center in the memo, but experts say they surely will feel the effects of what Wal-Mart wants to do.

Wal-Mart's actions "have a societal impact that goes significantly beyond what would happen if it was a smaller company," said David E. Williams, a principal at MedPharma Partners LLC, a health care consulting firm in Boston. "Whatever their costs are, other competitors are going to have to try to match them. So, if Wal-Mart is very stingy on benefits, it does encourage others to be stingy as well."

Wal-Mart, which would not comment for this story, makes no bones about trying to find ways to hire and promote a healthier work force, such as making physical activity a part of every job. For example, clerks also have to clear carts from the parking lot. Offering education benefits is another way to appeal to a younger, healthier work force. Such open assessments have some lawyers saying Wal-Mart is setting itself up for discrimination lawsuits.