By Steve Moran
On March 29, the Wall Street Journal posted an article titled: Walmart in Early-Stage Acquisition Talks With Humana (behind a paywall). That article was followed quickly by a bunch of articles about why, what it might mean, and how it would work. Here are a couple of examples:
Here are the highlights:
Walmart is currently one of the largest pharmacies in the country and they could become a one-stop shop for Humana’s 14 million plus policyholders.
Purchasing Humana is seen as a way to defend themselves against Amazon's growing reach.
Walmart is looking for ways to bring in new customers and to make it a more attractive place to work; this is seen by some as being consistent with those goals.
Walmart already has some retail health clinics and this merger would likely bolster that initiative.
79% of Humana’s total premiums and services revenue comes from the federal government through individual and Medicare Advantage plans with Humana offering at least one type of Medicare plan in each of the 50 states.
So Now Imagine . . .
Walmart purchases Humana and then turns their eyes on Brookdale, which seems to be a bargain at today’s prices (Disclosure: I hold Brookdale shares.) They have two massive databases with seniors and boomers. They already know this audience's likes and dislikes, their patterns, they can likely make very accurate inferences about their ability to purchase senior living.
While Walmart has more traditionally been the haunt of low-income folks, seniors frequently love Walmart and care much less about being labeled as being a “Walmart Shopper” in favor of lower prices.
What It Might Mean . . .
It seems inevitable that one of these mega-companies will turn their eye towards senior living. It would, I believe, provide tremendous benefit for seniors and team members in the areas of . . .
A more integrated senior living healthcare system
Providing benefits to teams
It might very well make senior living look more attractive to more people.
It is not without danger for sure. It would make senior living even more about the bottom line and that could be a disaster. It would also seem to be ripe to invite federal regulation of assisted living.
What do you think?