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John O'Connor
John O'Connor

Long-term care operators may soon have new reasons to keep an eye on Walmart.

Sure, there's the traditional way this sector has sized up the world's largest retailer: as labor competition. As such, whenever Walmart makes noises about increasing wages or perks, it can affect you. Given that the mega-chain now operates more than 11,000 stores, it's a safe bet you've probably already had to deal with this reality.

But that's small potatoes compared to what could soon be playing out.

As you may have heard, Walmart is now in talks to buy Humana, which happens to be one of the nation's largest insurers.

Why would Walmart be interested? Well for one, Humana is a major player in the Medicare Advantage market. In fact, Humana accounts for 17% of all Medicare Advantage enrollees, trailing only United Healthcare.

According to company filings, Humana expects membership growth to escalate this year, possibly by as much as 180,000 new members.

This is happening as Medicare managed care continues to play a larger role in post-acute care. Should an acquisition take place, it's very possible you may find yourself dealing with Walmart in a very different way: as a de facto discharge planner.

But wait, things could get even more bizarre.

As several deep thinkers have pointed out, it might be in the interest of insurers steeped in the Medicare Advantage market to scoop up nursing homes for their portfolios. It would certainly help cut out the middle man when it comes to funneling post-acute patients.

This is hardly just idle speculation. Remember, Humana has already purchased 40% of Kindred's home care business, for largely the same reason. There could be a lot more of where that's coming from.

So it's not beyond the pale that you as a long-term care operator could be a subsidiary of Humana, which could be a subsidiary of Walmart.

Think about the possibilities here: While other drug retailers might be offering one-stop clinics, Walmart might have post-acute beds next to the sporting goods section.

Think the nurse aides will have to wear vests or act as greeters in their spare moments?

John O'Connor is McKnight's Editorial Director.

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Daily Editors' Notes

McKnight's Daily Editors' Notes features commentary on the latest in long-term care news and issues. Entries are written by Editorial Director John O'Connor, Editor James M. Berklan, Senior Editor Elizabeth Newman and Staff Writer Marty Stempniak.

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