Walmart’s Agwunobi talks health care

John Agwunobi is president of Walmart’s health-and-wellness division, where he is responsible for the retailer’s health-and-wellness businesses, including pharmacy, optical and health clinics. Prior to joining Walmart in September 2007, he served as assistant secretary for health with the U.S. Department of Health and Human Services. Agwunobi is a pediatrician and also served as Secretary of Health for the state of Florida. He recently spoke with Drug Store News.

Drug Store News: You’ve been with Walmart for 18 months. How have you adjusted to the world of retail given your background in medicine and time in state and federal government?

John Agwunobi: I have been very lucky. I joined a company that is truly committed to making a difference in the broader world of health and wellness. From store to board room, hundreds of thousands of associates share my passion for improving the health of our nation. I have found the vision of our tagline “Save Money Live Better” to be completely consistent with my inner desire to make a difference in the lives of people. Although the high pace of retail takes some getting used to, our daily proximity to our customer inspires me to a higher level of performance every day. I have never felt more connected to the customer or patient. In retail, we develop a very special insight into the lives of the millions of people who rely on Walmart to help them as they go about their lives.

DrSN: The new administration faces pressing economic issues, but as the subject of healthcare reform moves to the forefront, what advice would you offer President Obama as far as improving access and affordability?

Agwunobi: I would advise that the president engage corporate America in the debate. I am convinced that the best solution will be one that fully leverages all that the individual, corporations and the government can bring to the table. I have come to believe that reform must result in a solution that continues to encourage, empower and support the individual with more information and decision-making. The patient must become as empowered as the customer, and Walmart’s six healthcare principles align with that. The system must be one that over time responds to the needs and preferences of its beneficiaries.

DrSN: Please elaborate on the principles.

Agwunobi: They are pretty simple. First, Walmart believes every American should have affordable health insurance. Second, we believe that we all share the responsibility for offering solutions and driving costs out of America’s healthcare system, whether you are an individual, a business or the government. Third, we believe that waste and inefficiencies must be eliminated using solutions, such as technology, that will bring efficiencies to the system. Driving efficiencies through technology and eliminating costs are something Walmart has been committed to for 40-plus years. The fourth and fifth principles are focused on the individual’s health, realizing that while we should all be working together to find solutions, it is up to the individual to maintain and protect his or her health, with a clear focus on HEALTH, not just the treatment of an illness. Finally, principle six states that Walmart will play a role as a retailer, employer and influencer to drive changes in health care. We stand ready to engage other business and government leaders, and already have begun the dialogue regarding ways to create a new healthcare system.

DrSN: Have you had an opportunity to share your ideas or provide details on some of Walmart’s initiatives with the new administration?

Agwunobi: Walmart has enthusiastically engaged in the healthcare reform debate. Walmart believes that businesses, governments and individuals all should contribute to a healthcare system that drives costs out and encourages innovative health solutions. 

We also believe it is critical that every corporation participate. Many of our company’s associates have offered their thoughts and ideas to the team that has engaged with policy-makers at all levels. I have been privileged to participate in the discussions both internally and with policy-makers.

DrSN: Looking broadly at the healthcare industry, where else do you see opportunities for Walmart to leverage its scale, logistics and information technology capabilities?

Agwunobi: We think there are real opportunities for us to help employers reduce the cost of their health benefits by giving them direct access to our value. We have identified numerous other ‘zones’ within the healthcare industry that could benefit from the everyday low price’ philosophy that we bring to the market every day. These include improvements in sourcing, logistics and information technology. We believe there are numerous opportunities to reduce the cost of healthcare delivery and in the coming months and years we will do everything we can to help.

DrSN: The prescription drug pilot program with Caterpillar and the new ‘cost plus’ pricing model have generated a lot of interest among pharmaceutical companies and PBMs. What have you learned during the eight months this program has been in place?

Agwunobi: We have long known that whenever you can make price a competitive factor prices tend to fall. We know that today employers are really motivated to reduce the cost of health benefits. We have learned that all too often, employers are not receiving the best prices for the individual components of their health benefit package and that they are often paying much more than they need to. We are in discussion with a number of employers.

DrSN: An emerging business for Walmart is in-store clinics. Why is this business one that Walmart wants to be in and what is the outlook for opening more clinics?

Agwunobi: We are motivated by our customer. We know they need improved access to affordable, convenient basic health care. Our model also recognizes that hospitals and other local providers of quality health care need clinic locations that allow them to be close to their patients as they go about their daily lives.

DrSN: Walmart also is involved with the Better Health Care Together coalition, a group that has as one of its goals ensuring that all Americans have high-quality, affordable and accessible health care by 2012.  Is that an achievable goal in such a short time frame?

Agwunobi: Yes, it is an achievable goal. We believe passionately in the goals of Better Health Care Together. The importance of these goals was highlighted when the leaders of the SEIU and Walmart stood together with the leaders of many other organizations and corporations on the steps of the U.S. Capitol to call for the goal with one voice. I think that if President Obama and Congress listen to the nation they will hear a clear call for action and an expectation that they deliver. There is no reason a country as accomplished as our own cannot achieve a goal as noble and as needed as the one laid out by Better Health Care Together.

DrSN: Electronic prescribing is seen as an important way to improve efficiency and accuracy.  What needs to be done to accelerate adoption of this practice?

Agwunobi: Our third and fourth health care principles address this issue. We need to engage the provider and the patient to further increase adoption of e-prescribing. If we can identify the barriers to adoption by prescribers and work systematically to reduce those barriers, adoption will increase. Clearly, the cost and complexity associated with adopting electronic medical records and e-prescribing systems is one of those barriers.

We recently announced our intent to offer a low-cost, high-quality