Wal-Mart is trying to brand itself a leader in health care. They've rolled out cheap prescriptions, changed their employee coverage (as paltry and sad a change as it was), and opened in store clinics. CEO Lee Scott even chastised business leaders for not weighing in on health care policy (we won't harp on the obvious irony). But this latest news from the Wall Street Journal is likely to throw a wrench in Wal-Mart's PR plan. It seems that Walk In Clinics are hard to manage, and they're hard to make money with. What with Wal-Mart's obsession with making gobs and gobs of money, it'll be interesting to see how long Wal-Mart's clinics will last. Wal-Mart had long touted these clinics as a cost effective solution to health care. It would eliminate doctors visits and safe people money, they said. It was, in essence, Wal-Mart's scheme to fix our health care crisis. Instead, we think Wal-Mart should offer affordable, quality health care to its workers, and legitimate policies on sick days. They can't make a ton of money off of it, but I'm pretty sure it'll work better than walk in clinics at keeping people healthy.

Here's the story from the Wall Street Journal:

Health Clinics Inside Stores Likely to Slow Their Growth

The boom in walk-in health clinics located inside pharmacies, supermarkets and big-box retailers is showing signs of slowing.

Hailed as an inexpensive option for treating minor health ailments like sore throats and rashes, the retail clinics have grown in
number to 963 as of May 1 from just 125 three years ago. The clinics typically feature nurse practitioners who can prescribe basic drugs, and the price for a visit ranges from $50 to $75.

But in recent months, retail health-clinic operators based in New York, Nevada, Indiana and Alabama have closed their doors, shuttering 69 clinics in 15 states, including ones operating inside outlets of Shopko Stores, Meijer Inc., Bi-Lo LLC, Wal-Mart Stores Inc. and the Medicine Shoppe unit of Cardinal Health Inc.

Now, the biggest retail-clinic operator, CVS Caremark Corp., says it is scaling back expansion plans for its Minute Clinic brand.

"We have seen fallout in this industry, on a smaller scale, that is not unlike the dot-com bubble," says Tom Charland, the owner of industry consultant Merchant Medicine LLC and a former vice president for strategy at Minute Clinic. "The big mistake was for people to think they could reach break-even in six months," he says. "People are learning this is an 18-to-24-month process to get to break-even."

Mr. Charland says the venture capitalists and private-equity firms that backed many of the retail clinic operators failed to appreciate how complicated and expensive the clinics are to operate. Research shows that patients are enthusiastic about the clinics' convenience and quality of care, but acceptance has been slow.

CVS, which operates more than 500 Minute Clinic facilities, says its plan to scale back expansion is part of a change in strategy. David Rickard, chief financial officer, told analysts last week that the company expects to add 100 clinics this year, down from a prior estimate of 200 openings. He said the company may also close some Minute Clinic locations that aren't in CVS outlets. He said that CVS will focus on "enriching" services at Minute Clinic facilities rather than expansion, and that the company believes Minute Clinic will be a "terrific, successful little business."

Some operators are finding that the clinics are complex to manage. Earlier this year, Check Ups, a clinic operator based in New York, abruptly closed 23 clinics that it operated inside Wal-Marts in Florida, Mississippi, Alabama and Louisiana. It was stretched thin by operations in multiple states, says company spokesman William Armstrong.

"You have to have a critical mass of stores seeing a high number of patients to get somewhere," he says. He adds that new clinics need to spend a lot of money on marketing to build public awareness and that the clinics become expensive quickly. "We ran out of operating funds," he says.

Not everyone is trimming sails. Walgreen Co. says it still plans to more than double the number of its Take Care health clinics this year by adding about 240 locations between now and the end of the year, bringing it closer to the number operated by rival CVS. The expansion will cause a drag on earnings in fiscal 2008 of five cents a share, the company says.

Tina Galasso, an analyst who follows the retail clinic industry for Verispan LLC, says the cost of setting up an in-store clinic runs about $500,000. That is one reason why much of the future growth in walk-in health centers is expected to come from big companies with deep pockets and from hospital systems that are already well-known within a community and don't have to spend so much on marketing.

In a strategy that combines both elements, Wal-Mart plans to partner with hospital systems to open as many as 400 co-branded store clinics by the end of 2010, up from about 50 sites in operation now. That approach is a departure from an earlier strategy under which Wal-Mart leased space to operators like Check Ups that weren't associated with hospital systems.

It's shocking, but this is the second time in just a short while that we've agreed with something Lee Scott has said. First it was his "Wal-Mart is not green" comment, and now Lee Scott is criticizing business leaders for not stepping up and taking a stand on the health care crisis. In a Financial Times interview the CEO said, "I think government is going to be engaged after this election regardless of who wins, and I think business should be more involved in the discussion." We agree! although it is odd that of all the CEOs of all the companies in the US, Lee Scott is criticizing other business leaders. It is odd because Wal-Mart isn't exactly known for top-notch insurance, or expansive coverage.

Unfortunately, we don't think Lee Scott means that businesses should start trying to figure out how to cover more of their employees with better insurance programs because health and happy employees are more productive. Rather, we think he probably means that businesses might want to start combating plans that may cost companies some money now, before the politicians force them into it. I guess we don't agree that much.

Here's the article:

The chief executive of Wal-Mart has criticised US business for not taking a lead in the debate on the future of US healthcare ahead of the presidential elections in November.

Lee Scott said in a Financial Times interview that he was "not particularly encouraged" by the public debate on the issues.

"I think business has been absent in this debate on healthcare. I'm not sure why," he said.

"I think government is going to be engaged after this election regardless of who wins, and I think business should be more involved in the discussion. I think it has long-term ramifications for our global competitiveness."

Mr Scott said Wal-Mart, which has more than 1.3m US employees, had not taken "a firm stand" on what a national healthcare system might look like.

The retailer has in the past argued that reforms should focus on reducing costs rather than increasing employer funding of the system.

Some US corporate leaders say they have kept a low profile on healthcare for fear of being dragged into a political debate that could end up harming their companies' image and finances.

One chief executive of a large US company said recently: "Healthcare is a minefield of problems. We don't know yet how the debate will shape up and until then we don't want to make our positions known."

Mr Scott said some business leaders might hesitate to take on the burden of entering a debate that they were not required to be in. But "in our case we were already in the debate", he said.

Union-led critics have repeatedly attacked Wal-Mart during the past three years over the level of healthcare provision for its low-wage workforce.

Its healthcare spending is below unionised competitors - principally the three leading supermarket groups - while being broadly in line with other retail competitors.

Mr Scott expressed satisfaction that in spite of the union campaign, Wal-Mart's record had not become an issue in the Democratic primaries. Hillary Clinton served on Wal-Mart's board from 1986 to 1992 when her husband was governor of Arkansas, the retailer's home state.

Both Democratic presidential hopefuls say they want employers to either provide health insurance or to contribute towards costs, with Barack Obama saying he would set a percentage of payroll costs for health coverage.

For those of you who aren't on our e-mail list, here's a letter we sent out about Wal-Mart deciding (or being pressured) to do the right thing. Finally.

Occasionally others help us step back and look at a situation in a different way. This is one of those times. --Pat Curran, Executive Vice President, People. Wal-Mart Stores, U. S.

Dear Wake Up Wal-Mart Supporters,

Over the past few weeks, the Debbie Shank case gave us a tremendous opportunity to teach Wal-Mart a lesson about corporate responsibility.

Check out the Wal-Mart workers' petition to Lee Scott and Shank case overview

Today, the backlash against Wal-Mart's lawsuit finally drove the company to drop its claim on her settlement winnings. Consider this concrete proof that Wal-Mart must change when supporters like you take action.

After years of being dragged through the courts, the Shanks can finally begin to piece their lives back together. We couldn't be happier for Debbie and her family. But, we still can't forget the other Wal-Mart associates who have been treated unfairly by Wal-Mart.

Let's not forget Olga Sanchez, who lost her job because Wal-Mart wouldn't let her see her son before he was deployed to Iraq; or Sean Thornton, who lost his job while he was on active duty. We can't let Wal-Mart forget the 1.6 million women involved in the largest certified gender discrimination lawsuit in history.

We can change America's largest retailer just by raising our voices. That's an amazing thing. If we all remember this day, we'll see better things to come for Wal-Mart's associates.

Thanks for all that you do,

The Team,
WakeUpWalMart.com

Here's an article from the Wall Street Journal about Wal-Mart finally dropping it's claim to the money Debbie Shank won in a suit against the trucking company that hit her car, leaving her permanently brain damaged.

Wal-Mart Stores Inc. is dropping a controversial effort to collect over $400,000 in health-care reimbursement from a former employee who is confined to a southeast Missouri nursing home since she suffered brain damage in a traffic accident.

The world's largest retailer said Tuesday in a letter to the family of Deborah Shank it will not seek to collect money the Shanks won in an injury lawsuit against a trucking company for the accident.

Wal-Mart's top executive for human resources, Pat Curran, wrote that Ms. Shank's extraordinary situation had made the company re-examine its stance. Wal-Mart has been roundly criticized in newspaper editorials, on cable news shows and by its union foes for its claim to the funds, which it made in a lawsuit upheld by a federal appeals court.

Insurance experts say it is increasingly common for health plans to seek reimbursement for the medical expenses they paid for someone's treatment if the person also collects damages in an injury suit. The practice, called "subrogation," has increased since a 2006 Supreme Court ruling that eased it.

Wal-Mart's Ms. Curran said the retailer was required by the rules of its plan to seek reimbursement from the Shank's settlement. But she said the case has made Wal-Mart revise those rules to allow for flexibility in individual cases. "Occasionally others help us step back and look at a situation in a different way. This is one of those times," Ms. Curran wrote in the letter.

Ms. Shank, 52, lost much of her memory and ability to communicate or walk in a crash between her minivan and a tractor trailer in May 2000. Her family sued the trucking company and won $700,000. Court records show that after attorney's fees and costs, the remaining $417,477 from the settlement went into a trust to care for Ms. Shank. The fund now has about $270,000, the family said.

Ms. Shanks' health insurance was through Wal-Mart, where she worked nights stocking shelves. After the Shanks won their lawsuit, Wal-Mart sued the Shank family to recover medical costs totaling about $470,000.

Wal-Mart won its case and subsequent appeals by the Shanks that went as far as the Supreme Court, which closed legal avenues this month by declining to hear the case.

The case put a spotlight on the growing use of reimbursement claims by health plans, experts say. Roger Baron, professor of law at the University of South Dakota and a specialist in health-plan law, said health plans have become "very aggressive" about subrogation since the 2006 Supreme Court decision.

"It's free money. They want the free money," Mr. Baron said.

Lynn Dudley, vice president for policy at the American Benefits Council in Washington, D.C., said the negative publicity around the case was beginning to draw the attention of lawmakers who might want legislation to stop or limit subrogation.

Mr. Baron said Wal-Mart's size -- it is the nation's largest nongovernment employer, with over 1.3 million workers -- means that its willingness to compromise in an individual case may have a wider impact on reimbursement practices by other health plans. "I'm so pleased to see an element of reason because so much of this subrogation has been about just blindly going after the money," Mr. Baron said.

Here's a little video we put together of Wal-Mart CEOs and execs talking about Wal-Mart doing the right thing, and the importance of the individual and the associate. We totally agree with these statements, and it would be great if Wal-Mart acted the way it was talking. But instead of doing the right thing, and caring for its associates, Wal-Mart sued Debbie Shank for nearly half a million dollars. I guess to Wal-Mart suing a former employee who is permanently brain damaged for the money she was going to use for long term care is 'doing the right thing.'

Wal-Mart workers in Essex County, NY are "living better" after a recent court decision. Wal-Mart has been ordered by a U.S. District Court to provide health care for workers' stepchildren. The decision comes after one woman on Wal-Mart's health care plan was refused coverage for her stepson.

Sadly, Wal-Mart requires a court order before acting like a responsible employer.

In an Aug. 22 decision, the U.S. District Court for the Northern District of New York ruled that Wal-Mart Stores Inc. must extend health insurance benefits to the stepson of a Wal-Mart employee living in Essex County. The Essex County Department of Social Services sought to obtain medical support from a Wal-Mart employee on behalf of her stepson.

Essex County had obtained a Family Court order establishing the employee’s obligation to provide available health insurance for her non-custodial stepson, who had been receiving coverage through Medicaid. The Essex Department of Social Services’ Child Support Collection Unit issued a notice to Wal-Mart, the stepmother’s employer, but the company refused to enroll the boy in its health plan.

The case was moved to federal court, which ordered Wal-Mart to comply with the Family Court order and provide coverage for the stepchild, even though such coverage was beyond the coverage ordinarily provided by the company’s plan.

The entire press release is here.