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February 19, 2008

Wal-Mart's Take on Public Health Care

By Anna Magazinnik

On February 12 John O. Agwunobi delivered the Second Annual Susan B. Meister Lecture in Child Health Policy, sponsored by the Child Health Evaluation and Research Unit (CHEAR) of the University of Michigan. Founded in 1999, CHEAR seeks to bring a multidisciplinary approach to the problem of children’s health care. CHEAR brings together faculty from the schools of Medicine, Public Policy, Dentistry, Public Health, Nursing, Law, Pharmacy, Business and Social Work to research and evaluate the efficiency and effectiveness of state, local and federal government health care initiatives and programs. Mr. Agwunobi, M.D., M.B.A., M.P.H., is a Senior Vice President of Wal-Mart Stores, Inc., as well as President of Wal-Mart’s Professional Services Division. He is also a former U.S. Assistant Secretary for Health and was in charge of the State Health Program of Florida.

Mr. Agwunobi set the theme for his lecture by reference to Henrik Ibsen’s play, An Enemy of the People. In a small town in Norway, whose only source of funding comes from healing baths, a doctor discovers that the baths are contaminated and a health threat and notifies the town officials. When they refuse to shut down the baths, he quits and becomes a school teacher. Mr. Agwunobi described a commentary on the play which saw the doctor as a hero for standing up for what was right. He, however, saw the doctor as a failure. The right response was not to demand that the baths be shut down, ignoring the legitimate economic needs and concerns of the people and businesses of the town, but to include all these actors in a collaborative effort to find a solution. Mr. Agwunobi acknowledged that Wal-Mart was seen by many people as the enemy of “all that is right,” but said that changes to health care would never come just from government alone, or just from individuals attempting to stand up for what is right through grassroots efforts. His lecture stressed the need for the corporate world to be included in a collaborative effort between the government, individuals and corporations. Relying on his past experience in the government, he concludes that the government is too slow of an actor to accomplish health care changes alone.

Mr. Agwunobi believes that the corporate world’s strength of responding quickly to the needs of its customers makes corporations ideal agents of change in health care. He noted that there is a proven track record of success when the business world takes responsibility for health care. For example, Rockefeller’s announcement from the offices of the Standard Oil Company, in 1909, that he would provide one million dollars to fight hookworm infestation in the Southeastern parts of the nation is credited by many people for the eradication of hookworm in the United States. Likewise, the work of Bill Gates to fight malaria and AIDS has the potential to help eradicate these diseases. What these types of corporate programs have in common is the setting of specific goals. Mr. Agwunobi explained that up until his coming to Wal-Mart, the company had a foundation for health care projects, but lacked “strategic clarity.” Now, Wal-Mart has figured out that the best way for a corporation to get involved is to do what it does best: listen to the customer.

Mr. Agwunobi believes that the key to success for corporate health care programs is the corporation’s presence among the local people. With over 1.5 million employees in the United States, and stores throughout the most rural areas, Wal-Mart is in a position to know the needs of local communities better than most large government actors. Furthermore, Wal-Mart’s customers are the very people that are most underserved by the health care system, the people who live “check to check” and are “price-sensitive.” Every week 136 million of these people are served by Wal-Mart. Thus, Wal-Mart has instituted its “personal sustainability project.” Employees receive credit for making individual differences in health care, the environment, or other related areas, and can choose their own projects, knowing better than anyone else what is most needed in their community. Likewise, Wal-Mart’s retail health clinics, a recent addition to some of the corporation’s stores, work on a model stressing connection to the local community. For example, every customer that comes in, fifty-five percent of whom do not have health insurance, can have basic medical procedures performed at the clinic, which is staffed by local doctors and nurses, and upon discharge every attempt is made to connect the individual to a local health care provider for follow up treatment. However, Mr. Agwunobi also stressed that Wal-Mart and other corporations have a duty to be willing to sacrifice some profits to further health care improvement goals that they are in a unique position to fulfill. He highlighted Wal-Mart’s four dollar generic drug program as an example. Under the program, Wal-Mart uses its massive supply chain and unique relationship with suppliers to receive generic drugs more cheaply than a smaller or non-corporate actor might be able to, and is thus able to sell them for four dollars only.

Conceding that corporations still have far to go, Mr. Agwunobi nevertheless hopes for a future where corporations become local health care providers to the communities they serve. He believes changes in health care will happen only when individuals from every field become involved, bridging the gap between the government and the corporate world.