Lessons Learned From Wal-Mart: What hospitals can learn about reinvention

A recent article in Becker’s Hospital Review began: When a successful innovator like Wal-Mart is urgently reinventing itself, America’s hospital executives should take note.


For years, Wal-Mart has been the envy of retailers, driven by a huge buyer base, new technology and a very tight supply chain. But things began to shift and the economy wasn’t the only reason that the retail giant had five straight quarters of negative U.S. sales and six quarters of declining store traffic. There were weaknesses in Wal-Mart’s basic business model, which had always worked, until they didn’t. 

The comparison between Wal-Mart and hospitals are palpable and it is worth taking note.  U.S. hospitals have experienced declines in revenue and inpatient volume.

Hospitals have seen their business eroded by organizations—convenience clinics, and freestanding outpatient surgery centers.

Like Wal-Mart, hospitals too have been forced to move beyond their own “big-store” mentality.  Wal-Mart’s answer has been to shift its focus to smaller stores with broader geographic distribution. The healthcare corollary is integrated networks that include physician practices, urgent care centers, in-home care management and labs.

As Wal-Mart has, hospitals are coming at this transition with a sense of urgency and an understanding that near-term investments will be necessary for long-term viability. True, even speed, strong ideas, and the sizable resources of Wal-Mart do not guarantee its success in the future. Any organization—whether retail or healthcare—will need to invest in innovations that yield results sizable enough to replace lost revenue resulting from business model disruption.


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