Walmart’s bet on telehealth could serve as a promising example for employers seeking cost savings

In October, Walmart announced it’s expanding virtual primary healthcare benefits to employees nationwide. As part of the expansion, employees and dependents who are on most of the company’s medical plans will be able to see virtual primary care physicians, as well as digestive health and physical therapy specialists. Most of the benefits will be offered at a $0 copay, according to a statement from the company, in all states but Hawaii, which has its own set of benefits.

The announcement builds on a pilot program that Walmart launched in three states—Colorado, Minnesota, and Wisconsin—in 2020, after recognizing only about one-half of employees and their family members saw a primary care doctor, which is similar to national statistics. Walmart said it saw an 11% reduction in the total cost of care for employees during the pilot, which ultimately expanded to 21 states. Patients with diabetes and hypertension who used the service saw average improvements to their conditions, the company said.

Walmart is partnering with healthcare services company Included Health to offer virtual care. Its CEO, Owen Tripp, praised the program for boosting health outcomes while simultaneously lowering costs. Walmart’s US benefit plan spent $6 billion on claims, insurance premiums, and administrative costs in 2022, according to Department of Labor data cited by Bloomberg.

Now that the largest private employer is offering virtual primary care to workers nationwide, the results could serve as a leading example for other employers seeking to expand their telehealth benefits, Guy D’Andrea, executive director of Catalyst for Payment Reform, told HR Brew.

The appeal of virtual care. Availability of telemedicine benefits rose precipitously during the Covid-19 pandemic. As of 2022, 90% of companies surveyed by the Kaiser Family Foundation said their plans with the largest enrollment covered telemedicine, up from 69% in 2019.

The appeal of virtual care to employers is two-fold, explained D’Andrea, whose nonprofit works with large employer purchasers to advance employee health, cost savings, and value-based care.

For one, telemedicine promises increased accessibility, particularly for “patients in rural areas or in underserved areas,” who “may have a hard time accessing primary care services,” D’Andrea said. Nearly two-thirds of areas designated by the federal government as having severe shortages of primary care health professionals were located in rural areas as of September 2022; telemedicine is seen as one potential solution to the dearth of access.

There are also potential short-term and long-term cost-savings from telemedicine, D’Andrea said. In the short-term, employers may save money on health costs because telehealth visits tend to be less costly than in-person care, some studies have found.

Looking a few years down the road, investing in virtual primary care may help save employers money because these physicians can work with covered employees to slow the progression of chronic conditions, which “improves patient quality of life, but also leads to lower long term costs,” D’Andrea said.

A promising example. The research on cost-savings potential from telehealth is mixed. While some studies have found virtual visits help avoid costly care down the line, others suggest telehealth claim payments aren’t actually lower than in-person ones, or that virtual care might actually spur more medical sending.

The fact that a large employer like Walmart is betting on telehealth to help mitigate health costs may inform how other companies approach the issue going forward, D’Andrea said. “I think the example of Walmart is one that other employers will follow, given that they’ve achieved positive results.”