Inside This Issue - Opinion
Health care at Walmart is entering a new era
April 21st, 2014
The appointment of Labeed Diab to succeed John Agwunobi marks the start of a new era in health and wellness at Walmart.
As a senor vice president and president of the discounter’s health and wellness business, Diab begins from a position of strength. During the Agwunobi years, which lasted from September 2007 until the end of March, Walmart maintained its standing as the nation’s third-largest dispenser of prescription medications and top seller of over-the-counter health care products. It consistently looked for ways to innovate, building on the resounding success of the $4 generics program launched a year before Agwunobi’s arrival, and undertaking initiatives like the prescription drug program for Medicare beneficiaries developed in conjunction with Humana.
Diab has the right credentials — a blend of health care and store operations experience — for his new assignment. Among his accomplishments as senior vice president of Walmart’s Midwest division was the introduction of small-format stores in greater Chicago, a first for the retailer in an urban area. That background dovetails with the company’s recent decision to accelerate deployment of Neighborhood Markets and Walmart Express outlets, important components of which are pharmacy and health and beauty aids. As its small-format stores proliferate and e-commerce capabilities are enhanced, the retailer will put increasing pressure on other community pharmacy operators.
Even with those advantages, Diab faces tough challenges. The U.S. health care system is being overhauled, a process that is placing greater demands on pharmacies. It is no longer enough to fill prescriptions accurately and efficiently. Walmart, like its competitors, will have to find ways to free the professionals who staff its stores from routine duties in order to let them practice at the top of their license, spend more time with patients, and coordinate care with physicians and other providers. Another major change is the shift in the basis of payment from dispensing medications to patient outcomes. That transition will be especially tricky at a company that has always measured success by its ability to drive volume with low prices.
The confluence of forces guarantees some interesting days ahead for Diab and creates the opportunity for him to quickly put his stamp on a pivotal part of Walmart’s business.