Walmart’s Potential Humana Deal Could Help Fight Diabetes
- Walmart is the nation’s 4th largest provider of prescription drugs
- People in the “diabetes belt” are more likely to be African American
Walmart’s (WMT -%) possible interest in buying Humana (HUM +0.45%) is the latest buzz around the emerging symbiotic relationship between retail and health insurance. As the country’s largest retailer and the biggest seller of food, it’s in a unique position to help consumers lead healthier lives. Would this deal help address rising diabetes and high blood pressure health concerns?
Why This Matters: Walmart’s geographic reach is especially concentrated in rural and suburban communities, areas where diabetes is extremely common. The CDC calls a stretch of the southeastern U.S. the “diabetes belt.” People in the diabetes belt are more likely to be African American and at higher risk for type 2 diabetes.
Walmart is the nation’s fourth largest provider of prescription drugs. With the retail giant possibly owning a health insurance firm, the black community would benefit from the companies combining big data.This can potentially lead to rewarding customers for making healthy food choices. “You can use data to predict what the life expectancy might be of your consumers, change the way you think about risk for them and you can hopefully drive wellness with them” said Gurpreet Singh, health services sector leader for PwC.
In the same way this deal may help lower diabetes, it can have the same impact on high blood pressure which is highest amongst African Americans. “Customers may see improvements in health indicators such as high blood pressure and obesity,” Walmart said. This is a good thing since doctors have changed how they diagnose high blood pressure meaning more people now fall into this category.
A deal to buy Humana would not come cheap for Walmart. The health insurer had a market valuation of $39 billion, as of Tuesday’s close.
Situational Awareness: The jury’s still out on how much individuals will change their daily health decisions in response to corporate prodding. However, deals in this space are heating up with CVS Health's (CVS -0.11%) $69 billion pending acquisition of insurer Aetna. Also, Cigna's (CI +0.07%) $54 billion proposed merger with Express Scripts is another major deal looming. Of course Walmart is also gearing up for Amazon’s (AMZN +0.06%) entry into the healthcare business as well.
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