BENTONVILLE, Ark. — Before being named to her current position as senior vice president and chief operating officer of Walmart Health and Wellness, Lori Flees spent more than two years as senior vice president and general merchandising manager of Health and Wellness at Sam’s Club. In a recent conversation with Mass Market Retailers editor-in-chief Jeffrey Woldt, Flees discussed the role community pharmacy can play in making health care more effective and efficient, and what grocers and pharmacies need to do to maintain the high level of public support they currently enjoy.
This is an edited version of a Video Forum interview that was posted late last month by MMR and its sister publication Chain Drug Review.
WOLDT: About a year ago, Sam’s Club launched its Care Accelerator program in three markets on a test basis. Can you tell us what’s involved in that and how the test has progressed so far?
FLEES: Sure. The Care Accelerator bundles with Humana as a partnership. Not just with Humana, but with many other players in the industry, to bring affordable health care services to our members. So many members are paying out of pocket for their health care services they have, that they need today. And when we did the research with members to ask them what they were spending money on that we could help them with, we used that information to create the bundles. There are three levels that you can purchase in our pilot, which is in three states today, and we continue to work to make those broader across our chain. But the three bundles really are $50 and $100, which would be for an individual, and then $240, which would be for a family up to six.
Now, what’s in them grows in time, grows at levels. The $50 bundle includes dental benefits, deeply discounted dental services with Humana’s partnership, as well as five generic drugs that are high volume, that our members and patients will be paying for today out of pocket. That bundle is $50 and the next bundle is a $100, which includes those things, but has five more generic drugs, high-volume generic drugs, that are included in it and telehealth visits for a dollar. Meaning anytime you need to see a doctor, it’s just a dollar.
And then the $240 bundle is really all of those benefits for six members of a household, but it includes alternative medicine like chiropractic, acupuncture and massage therapy at discounted rates, and then a preventative lab visit or lab results. And then 10% on hearing. And just as a context, 10% on a brand new set of hearing aids could pay for the entire bundle. And so it really does pack a number of things in to provide savings to either an individual member or their family.
In addition, each bundle comes with a prepaid credit card that gives them money back, meaning it gives them money to spend on the services. As an example, the $240 bundle includes a $100 prepaid debit card that people can use to pay for the services. And so the amount is really $140 for a family of six to get low-cost dental services, up to 20 prescriptions, generic prescriptions types for free, 10% off hearing, deeply discounted alternative medicine in a Quest lab visit. So, really, comprehensive for a net of $140 is a great value. And it’s the most popular one that we have.
You asked how the test is going. We thought that the most popular option would be one of the first two bundles, but actually the bundle that is the most popular in our tests today is a $240 one for the family, which is a testament to people trying to solve for their entire family, but also the value that’s in that bundle.
WOLDT: How have Sam’s Club members responded to that program?
FLEES: We did only offer it in three states, and some of the marketing around the program was impacted because of the media attention to COVID. But what we’ve seen is that the $240, or family, package has been the most popular because it offers the most benefits for the member. And then when we looked at the usage rates of the packages, the most popular usages are for the prescription drugs, for the telehealth and the dental. So the core elements of the packages are what’s being used most. We recently did a focus group with some of the members that have purchased it, and they really find it valuable, easy to use and would like us to continue to offer it because they see a lot of value in the savings that they’re getting.
WOLDT: As you pointed out, the program is designed to help members with pain points in the health care system. Some of the offerings you’ve mentioned are pretty obvious, such as prescription drugs and dental, and some are a little surprising. You mentioned massage therapy and alternative medicine. What made you decide to bundle those into the packages you’re offering?
FLEES: In part it was based on the members’ feedback about what they’re spending on that is not included in their insurance coverage. So many insurance programs no longer include chiropractic, acupuncture and massage therapy, and there are many members who actually desire to have and use those services for their overall wellness. And so really it was in service to the members’ input around where they’re spending money and where the savings could be provided.
WOLDT: Another key component of the Care Accelerator is to try to help your business customers. Maybe you can talk about how they’ve been able to leverage this program to help their employees.
FLEES: Yes, a lot of our members are small businesses, people who run a restaurant or a group of restaurants or daycare centers, etc. They have a small number of associates, many of them family members or people who feel like family members. In the small group insurance area, it’s very difficult to find extensive coverage plans that do not require a high deductible in order to keep the premium costs low. And so what we’re seeing with our small business members is that this Care Accelerator bundle is a great way to augment the insurance that they’re providing, such that they can give access to lower-cost care options, health care options in addition to the insurance that they’re providing. And it’s really a complement, that Care Accelerator bundles are not insurance, it’s really a discount program, but it is a great complement to insurance, particularly when that insurance ends up being a high-deductible insurance plan.
WOLDT: You and Sean Slovenski recently announced the acquisition of some assets from CareZone. Maybe you can tell us what those assets entail and how they will help the health care business at Sam’s Club and Walmart?
FLEES: We’re really excited that we worked to acquire specific technology assets from CareZone. They have a fantastic set of technologies that helps people manage health information for themselves and for their loved ones. Keeping track of things like medications, blood pressure rates, A1c levels and so forth can be like a full-time job. And this technology really does help people track the right health information as well as medicine, in order to ensure better care and adherence for their loved one or themselves. And they were able to, through the acquisition of the technology IP and some patents, welcome some of the people that actually built those assets to our team to really augment what we’re already doing.
We have a digital pharmacy, both at Sam’s Club and at Walmart, but we weren’t doing that kind of medication management. And being able to take what they’ve built, and combine it with what we’ve built in the infrastructure of our pharmacy chains, will allow us to serve our customers and members more thoroughly in the way that they’re managing their own health and some of their health information for themselves or loved ones. We’re super excited about what they’re bringing. It’s a great team with a lot of great experience that we definitely can leverage.
WOLDT: How quickly will the Sam’s Club and Walmart customer be able to access that service?
FLEES: There are multiple technology platforms, and we’ll want to bring that technology onto our platform and ensure that it has the same privacy standards as they were operating on their platform and that we require on the Walmart one. We have to integrate it with our back end, the pharmacies and the rest of our health care assets. That will take some time.
I think that we’ll be coming out with some things before the end of our fiscal year, but we’re still working through that process. We’ve only been closed for about a month and just onboarding during this time with everyone working from home. We’re spending a lot of time with our new associates and really understanding the details of the technology and how it will play and how we will integrate it together with what we’ve already built. So we’re going to do that right, not race to get it out there, but get it out in a way that will support customers in that, create more friction for them. Because this is certainly — in times like this, you can’t introduce more friction, you have to make it easier. And so we’ll take the time to do that right. But we’re excited.
WOLDT: Maybe you could talk a little bit about Sam’s and Walmart’s response to COVID and how you’ve stepped up to try to help the country get through.
FLEES: Obviously Sam’s and Walmart provide food and essentials to the communities, but I’ll talk a little bit about what our pharmacy teams have been focused on. Both the Walmart and the Sam’s Club team have been sourcing millions and millions of masks and face shields, both to protect our own associates, and also to donate to the health care organizations, as well as to sell to our members and customers at the same great value that we’re known for with the rest of our products. We spend a lot of time sourcing PPE, including almost 100,000 digital thermometers. Right after most of the shelter-in-place orders had started, we started doing temperature checks to ensure the safety not only of our associates, but of our customers and members.
And then we quickly put in sneeze guards in the stores to protect our associates, at pharmacy as well as at the registers. So we’ve done a massive effort in the pharmacy side. We’ve quickly moved to create all kinds of convenient options for our patients, including taking the prescriptions out to their cars at those locations where we didn’t have a drive-thru. At Sam’s Club, we don’t have drive-thrus, so that meant in every club being able to provide pickup service, where we took the script out, or shipped it from the club to the home of the individual, or even had associates deliver it to members in cases where shipping was not appropriate for the medication. All of these things we put in place relatively quickly to ensure that our patients could continue to stay adherent to their medication and get the access to the medication that they needed.
In addition to that, we’ve opened COVID testing sites in parking lots and are moving those into our drive-thrus in order to help the entire country increase the testing capacity for COVID-19, so that we could know where there were outbreaks, and to take care and protect people.
And so that’s been a place where both Sam’s Club and Walmart have focused from a pharmacy perspective. And then in optical, whether it’s Sam’s Club optical or in our Walmart vision centers, we quickly moved to emergency services and then have completely reconstructed our mode of service in order to recognize the risk of the six-feet social distance in the nature of the business to ensure that our associates and the patients who we’re serving have the right protections in place and to sanitize everything that’s being touched. And to just make sure that we could operate safely.
So all of these things take work, and I think that I’m super proud of the way the company has responded. There hasn’t been one request that we’ve made that we have not been able to do, where we were focused on the safety of our associates and members and customers. And it’s been a real pleasure to see the team rise to the occasion and step out of their day job to do things that were helping the company or the communities that we operate in.
WOLDT: How are you bringing all of the assets together to make a bigger statement in health care?
FLEES: Walmart is doing a number of things to bring more accessible services into communities that need it. There are the Walmart Health Centers that have been opening and bringing dental, vision, primary care, mental health counseling, labs, hearing to communities. Bringing all of those services together into one place at very affordable prices that rival out-of-pocket co-pays in some cases. Walmart sees our customers and the frustration they have with the rising cost of health care, the limited access to health care options and the desire to engage more in their own health and the health of their families.
What we really want to do is leverage the assets that we have to provide access to affordable and quality health care services so that people can take care of themselves and their family without spending a lot of money and without having to do a lot of the work to get it done. So really making it easier.
And, as I said, when we rolled out the Care Accelerator bundles of Humana, you want to make it so they can’t afford not to do it. And that’s when you know you’ve done something that makes a real difference. And that’s what we’re trying to do.