By Nandita Bose and Chris Prentice
March 31 (Reuters) - Walmart Inc’s efforts todevelop closer ties with health insurer Humana Inc,which came to light on Thursday, point to a brave new world ofretail where superstores become healthcare centers offeringbasic medical care.
They are also aimed at boosting Walmart's slowing growth inbrick-and-mortar store sales as it faces increasing pressureonline from Amazon.com Inc.
Deepening its existing partnership with Humana, or evenacquiring the company outright, could be a step toward turningits 4,700 or so
"The end goal here is to get more people in their stores,get them to buy drugs and make an additional purchase while theyare in the store,” said Charles Sizemore, founder of SizemoreCapital Management LLC, who owns shares of Walmart.
If Walmart can offer “competitive rates” on primary care andother health services, he said, it “can grow traffic and pushstore visits.”
Walmart approached Humana this month, and the companiesbegan to discuss closer ties focused on new partnerships, twopeople familiar with the matter told Reuters on Thursday. Anacquisition of Humana by Walmart is also being discussed, thesources said.
Walmart declined comment Friday. Humana could notimmediately be reached for comment.
Closer ties between the two could enable the retailer to tapinto Humana’s patient roster and possibly put some of itsphysician clinics in stores to offer medical care to customers.
Walmart is the largest retailer to hit upon the combinationof retail and health insurance, but it is not the first.
CVS Health Corp has struck a
AMAZON CHECKMATE?
Humana could provide Walmart with “one more way to checkmateAmazon and equal and eclipse the CVS/Target partnership andequal and eclipse the CVS/Aetna partnership,” said BurtFlickinger at marketing consulting firm Strategic ResourceGroup.
“It allows them to get ahead of everybody from warehouseclub operators like Costco, Target and other retailers who runchain drugstores as well as food and drug combo operators likeKroger and Wegmans.”
Humana has 5.1 million seniors on prescription drug benefitsand another 3.5 million on full medical benefits, according toAna Gupte, senior health care analyst with Leerink Partners in
Walmart superstores “could be a one-stop shop for seniors,”said Gupte, adding that Humana already has about 50 pharmaciessharing locations with doctors’ clinics, and could expand thatmodel using Walmart’s real estate and pharmacies.
DATA ANALYSIS
There is also a potential for Walmart and Humana to benefitfrom their mass of customer data, said Neil Saunders, managingdirector of GlobalData Retail.
“One thing retailers have is a very good understanding ofcustomers. They know their eating habits and other consumptionpatterns and that is quite useful in forming insurancedecisions," he said. "That is certainly something that Walmartwould be able to leverage.”
Humana patients are most likely already heavy shoppers atWalmart, according to David Friend at the BDO Center forHealthcare Excellence and Innovation.
"If you know that somebody is on a certain medicine you cansell them other products and services and that will help keepcustomer loyalty," he said.
(Reporting by Nandita Bose and Chris PrenticeAdditional reporting by Carl O'Donnell and Emma ThomassonWriting by Vanessa O'ConnellEditing by Susan Thomas and Bill Rigby)