The clinics are part of a growing trend among large retailers to open full-service healthcare clinics where consumers seek out other goods and services

Major retail chains continue to partner with local health systems and other healthcare companies to expand the range of primary care services delivered in their stores. The latest such collaboration is a partnership between Walmart (NYSE:WMT) and Oak Street Health (NYSE:OSH) at three locations in Texas.

Why is this trend important for clinical laboratories to follow? Because after 15 years, retail chains are moving past the simple walk-in clinic model of using a nurse practitioner to provide limited diagnoses that produce prescriptions at chain store pharmacies and other retail locations. They are now partnering with local health systems to provide full healthcare services that are delivered by physicians. These medical services include many common clinical laboratory tests.

The new OSH clinics, located in Walmart Supercenters, are open and accepting patients via walk-in, same day, and scheduled appointments. The clinics are located in the Dallas-Fort Worth area at:

  • Arlington Walmart, 4801 S Cooper St, Arlington, TX, 76017
  • Benbrook Walmart, 8840 Benbrook Blvd, Benbrook, TX, 76126
  • Carrollton Walmart, 1213 E Trinity Mills Rd, Carrollton, TX, 75006

The clinics offer comprehensive, preventative, and urgent care services to consumers, including:

  • Primary care
  • Optometry
  • X-rays
  • Dental
  • Behavioral counseling
  • Hearing services
  • Nutrition and fitness

As well as clinical laboratory testing, including:

  • A1C
  • Lipid
  • Pregnancy
  • Strep
  • Mono
  • Flu
  • Drug screenings, and more.

 “While all members of the community—from toddlers to seniors—are welcome at these clinics, Oak Street Health’s focus in its growing network of more than 60 primary care centers remains adults on Medicare,” states an OSH press release.

This partnership between Walmart and Oak Street Health means clinical labs in that area will need to follow their patients to be able to collect the specimens and perform the lab tests for patients seen in Walmart Health clinics.

Walmart Health Center Outside Inside
In, “Walmart Opens Second Health Center Offering Clinical Laboratory Tests and Primary Care Services,” Dark Daily reported in May on similar Walmart Health Center openings like that shown above in partnership with WellStar Health System in Georgia. These full-service primary care centers offer many common clinical laboratory tests. “By offering clinical laboratory testing in support of primary care and urgent care, Walmart may be able to lower prices for lab tests in any market that it enters,” said Robert Michel, Editor-in-Chief of Dark Daily and its sister publication The Dark Report. (Photo copyright: Walmart.)

Oak Street Health Brings Value-based Medicine to 11 States

“It is our mission at Oak Street Health to rebuild healthcare as it should be, and that aligns directly with Walmart’s history of providing accessible and equitable healthcare in communities across the country,” said Mike Pykosz, CEO of Oak Street Health, in the press release. “We look forward to becoming a positive addition to the neighborhood in these new markets and providing an unmatched healthcare experience in a convenient location.”

Both companies are planning to extend their relationship beyond these three locations and open additional clinics in other regions.

“We’ve proudly served customers at these three former Walmart Care Clinic locations for the last five years, and we are excited to bring this evolved approach to healthcare to our customers at these locations with Oak Street Health,” said Marcus Osborne, Senior Vice President, Walmart Health, in the press release. “As we grow Walmart Health locations in other markets, we think Oak Street Health’s innovative value-based healthcare model will help us continue to deliver on our live better promise at these locations.”

The majority of Oak Street Health consumers are Medicare Advantage patients, but OSH does accept most major and commonly-accepted insurance plans, Healthcare Dive reported.

Full-Service Healthcare Clinics Drawing Investor Attention

There is evidence that savvy investors believe moving primary care into retail stores and other non-traditional locations can be a big winner. In its third quarter report, Oak Street Health released very strong numbers for their third quarter, which ended September 30. Their total reported revenue for the quarter was $217.9 million, which accounted for a 57% increase over last year’s third quarter earnings, Yahoo Finance reported.

OSH’s capitation revenue totaled $211.8 million, according to the report, which was a 59% increase year over year. Law Insider defines capitation revenues as “all payments from managed care organizations, where payment is made periodically on a per member basis for the partial or total medical care needs of a patient, co-payments, and all HMO incentive bonuses.”

In its third quarter statement, Oak Street Health also reported caring for approximately 59,500 at-risk patients, which represented 66% of its total patients.

“Our strong third quarter results were highlighted by 38% growth in at-risk patients, 57% revenue growth, and the resumption of new center openings, as we opened 13 centers during the quarter amidst continued uncertainty related to the COVID-19 pandemic,” said Pykosz in a statement, Yahoo Finance reported. “Looking ahead, we continue to be excited by the ample opportunity to drive continued de novo expansion across both new and existing markets, as well as the complementary growth opportunities presented by our Walmart collaboration and CMS’ Direct Contracting program.”

As we wrote in the May Dark Daily e-briefing, “Clinical laboratory leaders may want to explore partnerships with Walmart and other retailers that are developing healthcare centers to deliver primary care services in places where masses of people shop for everyday items. Especially given that these big-box retailers remain open during healthcare crises like the COVID-19 pandemic.”

This is even more critical now, as more retailers partner with health systems to provide expanded primary care and clinical laboratory services.

—JP Schlingman

Related Information:

Walmart, Newly Public Oak Street Health Launch Clinic Partnership in Texas

Oak Street Health Opens Its First Texas Walmart Clinic

Oak Street Health Announces Collaboration with Walmart to bring Affordable, High-quality Healthcare to Texas

Oak Street Health Announces Collaboration with Walmart to Bring Affordable, High-Quality Healthcare to Texas

Oak Street Health Reaches Milestone 70th Location with Entry into New York and Opening of First Walmart Community Clinic

Oak Street Health Opens First Center in Mississippi

Oak Street Health Reports Third Quarter 2020 Financial Results

Walmart Opens Second Health Center Offering Clinical Laboratory Tests and Primary Care Services

Walmart Remodeling In-Store Pharmacies to Include Private Consultation Rooms