Mammoth retailers like Amazon, Walgreens, and even Dollar General, a trusted low-price brand in rural America, are competing for a bite of the healthcare apple, and are reported to be investing billions of dollars and creating significant expansion plans. Their goal is to become dominant players in urban areas where they have a dominant footprint and the new battleground: rural America. In a report from Cain, approximately 15% of US patients live in rural areas. Many are at higher risk for cancer, heart disease, stroke, chronic respiratory issues, and unintentional injuries than metropolitan patients, according to the CDC. Patients outside of urban areas are also typically older, sicker and more apt to be lower income.

However, rural America still needs healthcare. In response, Walmart, Amazon and Dollar General are expanding their free-standing stores and medical services to include every function that, in the past, required a visit to the ED, doctor’s office, or clinic. For example, Walmart Health announced adding four health clinics in Oklahoma City in 2024, adding another state to its expanding footprint.

This gives the big pharmacy chains like CVS, Walgreens, and Rite-Aid a run for their money. They are responding by expanding their health services offerings, but the big pressure is on legacy health providers like clinics, doctors’ offices and hospitals.

Want more proof? In 2021 Dollar General hired its first-ever chief medical officer, who is overseeing the expansion the retailer’s healthcare product and service offerings to its 17,400+ stores. CEO Todd Vasos stated “our goal is to build and enhance affordable healthcare offerings for our customers, especially in the rural communities we serve.”

The stakes keep getting higher in health care retailing. Recently, Walmart and Amazon added prescription drugs to their membership programs. Both offer deeply discounted pricing on medications in-store and online, creating another area of competition between the two titans and their pharmacy competitors.

Walgreens has invested in primary care businesses, and raised its ownership position in VillageMD to 63% in 2021. In January, 2023, VillageMD announced the conclusion of its Summit Health-CityMD acquisition, adding 680 provider locations in 26 markets. Walmart has a substantial retail footprint with almost 5,000 stores that create walk-ins to their clinics. In addition, Walmart has opened 16 new health centers in Florida to sustain its primary health delivery, including X-ray, labs, EKG, behavioral health, hearing, dental, select specialty services, and community health. It is testing a chiropractic clinic at ten locations in partnership with The Back Space.

Distinguished NYU professor Scott Galloway recently noted, “Walmart has the scale and incentive to make an impact [in health care]. Rural Americans are closer on average to a Walmart than to a hospital and as the largest private employer in the world, Walmart’s health care costs are its biggest expense after wages.”

Galloway states that as Walmart and Amazon fight for retail dominance, “there are trillions of dollars in opportunity here. Amazon and Walmart are … fighting the largest proxy world in the business world: health care.”

For Amazon, Amazon Care didn’t work as expected, but it is testing the waters with the recent One Medical acquisition. The acquisition of One Medical allows Amazon to immediately pick up where it dropped off in Amazon Care and the development of a telehealth service while adding a reputable primary care practice and the opportunity to combine online pharmacy services with One Medical, to manage customer prescriptions and have them sent to their home.

Other retailers are also dipping their toes into the healthcare pond. Target is building its health care services. In 2021, CVS had 1500 units following its acquisition of Aetna two years ago and rebranding as CVS Health.

While no one is going to get a stent placed at Dollar General, a full range of DME products like O2 concentrators and other by-prescription-only devices are on display at my local CVS. This may not be a concern for Boston Scientific, but medtech companies like Baxter and J&J may want to investigate how competition in this space could erode their market shares. Competition will get more intense as the post-pandemic era recedes but patients retain the habit of paying attention to their health. In a CNBC report, Robert Field, professor of health management and policy at Drexel University said succinctly: “Health care is the next frontier at retail.”