Thursday, April 26, 2007

Give Me a Loaf of Bread, an iPod and a Flu Shot

According to this press release, Wal-Mart intends to contract with local hospitals and other organizations to open as many as 400 in-store health clinics over the next two to three years, and if current market forces continue, up to 2,000 clinics over the next five to seven years. The clinic program’s expansion is just the latest in a series of moves by Wal-Mart to help implement customer solutions to America’s health care crisis, including the $4 generic drug prescription program. (Note: Customers have saved $290 million from this program just since September, and one-third of $4 prescriptions are bought by the uninsured.)

“We think the clinics are going to provide something our customers and communities desperately need – affordable access at the local level to quality health care,” said Wal-Mart's CEO Lee Scott.

From an editorial in
today's IBD "Dr Sam": Wal-Mart's advance into health care is a testament to private-sector industriousness. While others whine about America's health care "crisis," and back monstrous government programs to solve it, Wal-Mart is actually making care more affordable. Yes, the same Wal-Mart that politicians and activists demonize because its pay and benefits supposedly are insufficient.

But watch out for some new Wal-Mart bashers: physicians and their staffs who don't really want to have to compete against Wal-Mart. Will Wal-Mart now be accussed of "crushing" overpaid physicians, and putting small clinics out of business?

Bottom Line: Gotta Love Wal-Mart, and it's too bad for consumers it was kept out of banking.


At 4/26/2007 3:23 PM, Anonymous Anonymous said...

I look forward to Wal-Mart expanding into health care.

Some things that I have noticed from Wal-Mart:

They are not the cheapest alternative. They do not have sales. The new Super Wal-Mart that opened last year has about half of the inventory and selection that the Meijer has. If you shop the sales, you will definitely get a much better price elsewhere. They have their customers trained to believe that they are getting the best price, but comparison shopping shows me differently.

When Wal-Mart gets into health care, I am sure they will have the lowest price. How long to they keep it that way? After you train the customers and drive the competition out of business, you can raise the prices again.

Will Wal-Mart just offer the "easy" diagnosis? When it is more complicated, do they send you to a Wal-Mart specialist (that would scare me)?

At 4/26/2007 4:07 PM, Anonymous Anonymous said...

Other stores that utilize a "sales" methodology of pricing are able to offer lower prices during the sale only because non-price seekers paid non-sale prices which are much higher.

Shopping for Frozen Pizza in my neighborhood, for example, Food Lion has a daily price of $4.99, but occasionally is on sale for $3.33 (3 for $10). Meanwhile, the super walmart down the street sells the same brand for $3.75 everyday.

Why? Well, many shoppers are not price concious and will therefore pay whatever the current price happens to be, even if it is $4.99. Meanwhile, other shoppers are price concious and shop wherever it is cheapest. Given this fact, Food Lion has an ideal pricing strategy: it charges high prices to those willing to pay and offering competitive prices to those that either do not notice or do not care.

Now, I understand this and really must save money. As such, I shop at Food Lion. As a result, I occasionally must go weeks waiting for it to go on sale again (I need to buy a larger freezer).

Of course, as you can imagine, if you use a shopping list and do not wish to suffer the hassle of seeking sales, shopping at Food Lion will quickly land you in the poor house. The sale only saves you 42 cents, but when there is no sale it costs you $1.66, and it is usually not on sale.


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