Walmart to Become the Healthcare IT Punching Bag?

At "Wal-Mart to market Electronic Medical Records? Has Medicine Gone Bananas?" I noted the entry of Walmart into the healthcare IT fray.

As I observed here in early 2005, HIT is a field where angels fear to tread. Or should fear to tread.

Walmart is not exactly popular in numerous circles, so let me state I buy from them (most recently my Acer Netbook, clothing and various Christmas gifts) and am neutral on most of the issues that create the opposition. My father ran a business, after all.

However, he at least stuck to his core expertise, pharmacy. Walmart is trying to market EMR's, a product far beyond their core competencies. The HIT market and "ecosystem" is also far beyond their competencies, and it's not hard to predict they are going to have a rapid and quite unpleasant learning experience about the dark corners of this industry.

Felix Fulmer, a correspondent with longstanding expertise in academic and pharmaceutical research environments conveyed to me the following observations about this arrangement:

Deficient as its products often are, the HIT industry was built up by entrepreneurs over many years and by much hard work. They are now being challenged by a very large and very powerful entity. The entry of Walmart into EMR represents a tremendous threat to the HIT industry status quo.

This initiative is likely to help doctors and patients at the very least by reducing the cost of EMR (even if not improving the performance), putting downward price pressure on the entire industry. It is also likely to change the marketing and consulting practices in the HIT industry as well, driving wages down among other factors.

If successful, Walmart's initiative could in fact cause the extinction of the current monopolistic and parasitical HIT establishment. [In my estimate, a 33% - 50% reduction in companies, revenues and personnel in three or four years would not be an unreasonable figure - not that I would be sad to see some of them go - ed.]

Mr. Fulmer continues:

The HIT industry must realize this and, based on Walmart's history of capturing other markets and putting smaller competitors out of business, the captains of this industry must be quaking in their boots. These entrepreneurs will fiercely act to defend their territory, using every trick in the book [knowing the industry as well as I do, I cannot fail to agree with that assessment - ed.]

Walmart is going to be severely punished. The pushback from the HIT establishment will likely consist of three phases: subversion, obstruction, and agitation for litigation (in a collusive manner) to challenge the newcomer. There will be technical, administrative and political angles.

The first phase, subversion, will be the establishment's attempt to try to keep the Walmart arrangement from happening. It may occur through the press and through political means. Antitrust complaints, and a negative campaign of badmouthing and panning may occur. It will be insinuated or stated that Walmart doesn't have the required expertise, that they don't know what they're doing, among other claims to discredit, diminish and minimize the initiative.

The second phase will likely be obstruction. HIT products Walmart will carry will be sabotaged by other vendors in terms of passive aggressive measures to complicate or prevent data interoperability. There may be issues such as constant "breakdowns" of interfaces, inexplicable technical glitches blamed on Walmart and its supplier, of course. Walmart's HIT products and services will be scrutinized under a microscope and deficiencies highlighted through the media and printed competitive materials.

There may also be attempts to intimidate and misdirect physicians not to go with this product through the medical leadership, through back room paid sponsorship of "influential thought leaders" (as in pharma), through "detail people" (e.g., sales reps as in pharma) and other means. Hospital administrations and CIO's may also be influenced by various means to steer physicians away from this offering, perhaps to the level of marginalizing users or refusing to support this product.

Finally, there will be litigation, especially regarding the inevitable medical errors that occur when this technology is pushed into small town physicians offices unused to technology of this complexity. Walmart may be shocked to find the "learned intermediary" principle suddenly and mysteriously not be applied. Why would this be a surprise, considering their immensely deep pockets and the disdain of the the left-leaning, anti-big business judiciary system?

Mr. Fulmer concludes with this thought:

Walmart may think of their entry into the HIT marketplace as a great business plan, but their executives may need to partake of their own medical clinics to deal with the stress the HIT industry pushback will cause.

-- SS