Not long after Amazon partnered with a group of Wall Street investors in a new healthcare venture, Walmart announced that it is in acquisition talks with the insurance company Humana. As mentioned in a previous post, the Walmart/Humana deal would ultimately be good for competition and the consumer. In fact, Walmart’s recent announcement will probably cause Amazon to accelerate their process.
Both organizations have issues to resolve, but Walmart is slightly ahead since they already have a vast pharmacy network. To my knowledge, most Walmart locations, including Sam’s Club, have a pharmacy. If they do acquire Humana, they’ll immediately gain access to a customer base in the range of five to ten million subscribers. Humana also services countless Medicare recipients, a target market that is rapidly growing as the baby boomers age.
So, Humana is probably a good choice for Walmart as an acquisition target. A possible stumbling block however, is that Humana is what’s known as a “legacy” insurer. Modernizing the traditional systems currently utilized by Humana and integrating them into Walmart’s infrastructure will be a huge challenge. Also, I’m pretty sure that Walmart is light years behind Amazon in information technology and customer management systems.
For the record, I’m a big fan of Walmart. On a recent road trip through Nevada, I had a flat tire and Walmart was the only option for repairs. After quickly (and cheaply, I might add) patching my tire, the technician literally told me: “my job is not to sell you a tire, but to create a lifetime customer.” Well, he created one that day. So Walmart’s customer service and overall friendliness gives them an advantage.
Nevertheless, the local Walmart can still be an overwhelming shopping experience for many customers. The sheer size and layout of their stores is sometimes baffling. Also, there seems to be a lack of locations in many large urban areas. And Walmart is still playing catch-up to Amazon when it comes to online ordering and delivery. These are areas to improve if they want to be a player in the healthcare space.
The bottom line is, we should be excited about where this process may be headed. Two huge and iconic US companies are looking for new ways to improve healthcare in this country. Hopefully, as they compete with each other for customers, the American consumer will benefit. Amazon’s innovation and Walmart’s influence could finally bring real change to our broken healthcare system. We should all hope that they succeed.