Wal-Mart and eClinicalWorks –kind of interesting

The New York Times reports (Wal-Mart Plans to Market Digital Health Records System) that the company’s Sam’s Club division will bundle eClinicalWorks electronic medical record software, Dell computers, installation, maintenance and training to offer to small physician practices. Pricing is about $25,000 for the first physician in an office, and $10,000 for each subsequent physician. Annual maintenance and support costs will be about $4,000 to $6,500 (though it doesn’t say whether that’s per physician or per practice).

Wal-Mart says its package deal of hardware, software, installation, maintenance and training will make the technology more accessible and affordable, undercutting rival health information technology suppliers by as much as half…

Dell will be responsible for installation of the computers, while eClinicalWorks will handle software installation, training and maintenance. Wal-Mart is using its buying power for discounts on both the hardware and software.

This program has promise, but it isn’t revolutionary and is by no means certain to succeed. Interestingly, the Wal-Mart PR people, who usually send me a heads up about any new Wal-Mart move in health care, didn’t tell me about this one. It makes me wonder what’s really going on.

There are a couple of very promising aspects of this program:

  • The company partnered with eClinicalWorks (eCW), which based on my experience is the best system for small and mid-sized practices. The software is easier to install and use than competitors’ programs, and has a lower total cost of ownership. eCW has done an excellent job with the Massachusetts eHealth Collaborative, for example.
  • The program addresses one of the key bottlenecks of EHR adoption for small practices: distribution. It’s painfully difficult and expensive to sell EHRs to physicians and that’s a big part of a vendor’s costs. I don’t know what Sam’s Club plans to do in that regard, but if they figure how to sell to physicians efficiently that could be a big deal. Physicians are starting to realize that they need an EHR, so perhaps it will be easier than in the past to make the sale. Having said that, I’m not convinced Wal-Mart has any idea how to do this.

There are also unanswered questions and some key elements that the program doesn’t address:

  • It’s hard to tell if the pricing is attractive or not. It’s notoriously difficult to make an apples to apples comparison of EHR costs and there is not nearly enough information in the article to know whether there will be any savings at all from the typical eCW pricing. The claim of “undercutting… by as much as half” can be said about eCW anyway, with or without Wal-Mart. This is not like the $4 Wal-Mart generic program where Wal-Mart really did undercut existing pricing dramatically.
  • After cost-effective distribution (mentioned above) the main bottlenecks in EHR adoption are finding enough good technical people and change management people to help physician practices transition to the new workflow patterns that EHR adoption brings. Successful companies like eCW already strain to find enough talent to meet the demand. And it looks like eCW will still be responsible for all of those activities –not Wal-Mart. I don’t think Wal-Mart adds any value to this part of the equation.

So overall, thanks Wal-Mart for giving this a go. At least you picked the right EHR vendor to work with and are raising awareness among small physician practices. If you make this program a big success I’ll be impressed and surprised.

March 11, 2009

7 thoughts on “Wal-Mart and eClinicalWorks –kind of interesting”

  1. There’s a lot of noise in Southeast asia right now about private hospitals. After reading this I randomly associated back to a conversation I had with a member of Parkway health who mentioned that private clinics are, in fact, leading the private health care charge in China. I suddenly imagined a Chinese private health care system built around self sufficient private clinics using cheap, perhaps even non- pirated EHR technology.

    Care to share a utopian vision of your own for China and EHR?

  2. What’s really going on here?
    Most physicians are looking at this deal with purely a customer’s perspective, and that’s to be expected. What do you see when you step back and look at the big picture though?

    You see a global marketing giant with an enormous physician customer base, a global leader in IT products and remote IT support, and a credible EMR/PM vendor with a working product and a nimble and cutting edge software company (unlike, say a GE). The marking component (Wal-Mart) is also rolling out it’s own emergency clinics in all of it’s locations that will be using this product and technology, and by the way, they also already have a major piece of the prescription pie.

    When I look at this at the macro level, (forgetting even for a moment the so called “stimulus money, which will be like throwing gasoline on a fire) I see a potential health care juggernaut that will quickly have the potential to influence national policy at the de-facto – if not at the legislative level.

    People (individual physicians) don’t have to like it. Frankly, it doesn’t even have to be a great product offering. (Everyone forgets how bad Microsoft was when it started out, and how they actually became the O/S and Application standard it is today.) All it has to do is work. And it will work. This will be a uniquely disruptive event in the marketplace with far reaching consequences for all industry stakeholders, patients, physicians, payors, and vendors.

  3. $70 jello:
    currently Walmart sells jello for $1.48. If they sold the jello for $3.00, then that would double their profit while still undercutting the steep costs of hospitals.

    free EHR trojan:
    Why not just give it away, subsidize the hardware and tech support, and tap into the medical supply chain? Some have blogged on this before, and it seemed as a more surefire way to expand IT. At $26K + fees, I am not so sure about Walmart’s plan.

    vs:
    So what is better for IT adoption- subsidize now and sell supplies later, or sell now ?

  4. We are using ECW and providing it for use to Dr. offices that are affiliated with our hospital. We are basically becoming an ASP for the Doc’s. ECW has plenty of issues and bandwidth is definitely one. We give it away for free. No one in IT is too happy about it.

  5. Interesting business model. I wonder what David Zahaluk would think of this venture as he is one of the most successful? I wonder if it would work well with his proposed business model outlined in his book, “The Ultimate Practice Building Book” which teaches physicians to be good at running their business (practice).

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