Current Events Health Insurance

Why would Walmart want to buy Humana?

Walmart is a mega-retailer.  Humana is a health insurer.  Yet Walmart is in talks to either partner with or outright purchase Humana.   Why would Walmart want to do this?  My

  • By becoming a health care provider, Walmart’s image will improve.
  • By becoming a health care provider, Walmart stores will get more traffic as people shop after they have a physician or nurse practitioner visit at Walmart’s version of a MinuteClinic.
  • Walmart already sells generic drugs and perhaps they could reduce health care costs by focusing on low cost generics. Walmart is in talks to buy PillPack.
  • Walmart already has over 2 million employees and health care costs make up a large share of compensation. Buying Humana and developing health plan products for their employees could lead to the creation of attractive health plan products they could sell to other employers.
  • Like retail, health insurers is a low margin business.  Perhaps Walmart believes they can institute efficiencies in the insurer business.
  • Amazon is partnering with JP Morgan and Berkshire Hathaway to try to improve health care.  Whatever Amazon does, Walmart must follow.
  •  Walmart wants people’s health care records to be able to better track them for their own sales or sell that data to others.

There are many other potential reasons, but these are my potential guesses.

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