Please consider Hospitals Fear Competitive Threat From Potential Walmart-Humana Deal.

Hospitals have been eyeing Walmart nervously for years as it advances into health care, seeking to leverage its enormous purchasing heft, physical reach and focus on price. The Bentonville, Ark., retailer already operates pharmacies and primary-care clinics and plans to begin offering lab-testing services. It has also recently increased its direct negotiations with hospitals for competitive prices on some procedures for its employees.

A deal isn’t guaranteed. But a merger could add to the wave of consolidation in U.S. health care, pairing insurers with other sectors of the industry that offer cheaper care through clinics and pharmacies. CVS Health Corp. announced last year a $69 billion deal for insurer Aetna Inc. Cigna Corp. early last month said it would buy Express Scripts Holding Co. for $54 billion, in a combination that would marry a health insurer and the largest U.S. pharmacy-benefit manager.

Walmart operates 19 clinics in Georgia, South Carolina and Texas and other providers operate about 50 additional clinics. But Walmart’s expansive retail footprint would make it a formidable competitor should it build out low-cost outpatient offerings, said industry executives and consultants.

A potential Walmart-Humana deal “should be a concern to everybody in health care,” said Randy Oostra, president and chief executive officer of nonprofit hospital system ProMedica, based in Toledo, Ohio. “What worries us is death by a thousand cuts,” he said. “Another deal and another deal.”

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