Walmart and Humana already have some synergistic compounds. Since 2010, they have sold a co-branded prescription drug benefit to Medicare beneficiaries that provides savings on certain medicines purchased at Walmart pharmacies.
The two companies are discussing how to expand this partnership in a way that would help drive more traffic to Walmart's 4,700 US stores while Humana will increase the enrollment.
As part of this initiative, analysts said, Walmart could open up urgent care clinics in its stores or host community events such as Bingo
"Seniors will come to their stores, visit the pharmacy, see a doctor and shop while they're there," said Ana Gupte, senior analyst at Leerink, a small investment bank
The discussions are at an early stage and could fall apart, said the people who were briefed on the matter.
Two months ago, Amazon, JPMorgan and Berkshire Hathaway announced that they wanted to form some kind of health care for their employees, indicating a willingness to ransack the insurance market. Rising healthcare costs and the prospect of Amazon infiltrating the pharmacy business and the wider healthcare industry have sparked a flood of business.
Last year, CVS Health acquired Aetna for about $ 69 billion in an agreement that would help businesses cut costs and improve healthcare through retail clinics.
This month, insurer Cigna agreed to buy Express Scripts, the pharmacy-use manager, for $ 52 billion.
But last year a federal judge blocked a proposed merger between Aetna and Humana over antitrust concerns. Given the threat of competition and uncertainty in Washington, Humana and other insurers have been forced to look for new partners, such as retailers. Gupte predicted in a research note in December that Walmart and Humana could soon reach an agreement.
Humana's largest business is in private Medicare Advantage plans for older Americans. Because of the way it is paid by the government, the company earns more money if it can lower the overall cost of supplying its customers.
In recent years, it has begun to invest in its own health centers and to partner with medical providers who can help manage clients with chronic conditions and try to keep them out of the hospital.
The Walmart Agreement could provide a way to significantly expand these efforts by housing medical clinics in rural communities across the country.
"The strategy directly targets the senior market Use Wal-Mart's retail presence to redefine primary care in Medicare Advantage," said John Gorman, CEO of the Gorman Health Group, a consulting firm for public health companies -Mail. "Walmart has hundreds of pharmacies and Humana is investing heavily in its Conviva clinic business – imagine these two side by side in every Walmart store."
But there would be challenges. None of the companies has extensive experience in delivering health services directly, and this could be crucial to their integration.
And some key insurers claim that this type of grouping is designed to cut costs for consumers and control health. When it comes to the cost of care, there is little evidence yet that consumers will benefit if more consolidation leads to less competition.
Talks between Walmart and Humana were first reported on Thursday by the Wall Street Journal.
For decades, Walmart has been driving growth through the operation of shops selling everything from eggs and light bulbs to paperbacks, and dominate local markets with the lowest prices.
Amazon's growing threat has forced the company to rebuild its traditional network and engage in a series of online takeovers, including the hip men's clothing line Bonobos and Jet.com. But the company has never strayed far from its core businesses.
The changing moods of consumers have forced Walmart and other dealers to look more radically for other ways to get customers into their stores.
Last month, supermarket operator Albertsons said it would buy the remains of the drugstore chain Rite Aid. It is expected that the increased foot traffic to the in-house pharmacies renamed Rite Aids will also bring more customers into the dining areas.
"It's not necessarily about synergies," said Brian Owens, vice president of retail consulting at Kantar Consulting. "This gives Walmart another way to keep the buyer in his box."
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