Walmart + Humana Merger Is a Match

It only takes a quick scan of recent news from the past few days to see that speculation has gone wild about the recent announcement that Walmart is in early stage M&A discussions with Humana. The Wall Street Journal came out of the gate with a take on why hospital operators are feeling anxious about the potential for Walmart and Humana to join forces, and TheStreet’s view makes it more personal for consumers, with thoughts on what it could mean for their retirement.

In addition to these speculations, several stories have included a huge disclaimer, to the effect of: “But these are just early conversations, and time will tell whether these talks will lead to M&A activity or just a deepening of Walmart’s existing relationship with Humana.”

We think this misses the mark.

Here’s our take: Whether or not a Walmart/Humana deal goes through, the trend driving the possible merger is still very real.

It’s a matching game.

Retail players, health plans, and PBMs are matching their assets (data, clinical staff, supply chain leverage, member base) with complementary assets of potential partner organizations to see if they can piece together a more integrated healthcare delivery system. This will help them control costs (maybe) and gain share of wallet (bigger maybe).

Each of the recent M&A announcements have highlighted this matching model.

CVS’s pharmacy, PBM, consumer retail data, and sites of care + Aetna’s insurance plans, member base, and data—some have called this the country’s first healthcare delivery system that is not physician-centric.

Cigna’s insurance plans, consumer experience, and data + Express Scripts’ supply chain leverage—this is a more traditional combination.

UnitedHealthcare’s empire of health plans and technology solutions + DaVita’s wealth of clinical experts to expand their care delivery footprint—this is the industry’s under-the-radar powerhouse, increasingly capable of meeting all non-acute hospital admission care needs (in certain MSAs).

And now…

Walmart’s consumer data, brick-and-mortar scale, pharmacy, and (potential) sites of care + Humana’s insurance plans, clinical staff, at-home care, and data—this feels like a variation on the CVS/Aetna theme, but adds into the mix a robust home care capability as a result of Humana’s Kindred acquisition.

Here’s how the vertical stack has shaped up among just a few players with similar M&A announcements:



Walmart would have an uphill battle building out a clinical facility footprint given how long it takes to do so properly, but the at-home care through Kindred and their established brick-and-mortar locations beg the question of what type of integrated care delivery model they have in mind.

Each of the resulting behemoths from these M&A blockbusters will have different strengths and natural market-ownership opportunities, but the trend as a whole yields common takeaways for every existing healthcare organization.

What does it mean for your business model?

Selling a Technology or Service

Don’t get tunnel vision.

With any B2B offering, it can be easy to myopically focus on one specific buyer set that seems most receptive to your product, service, or offering, and neglect buyer sets that may be integral to your future business development efforts. With vertical integration going mainstream, you must avoid the pitfall of buyer tunnel vision. Buyer organizations are getting more multifaceted, with more complicated priorities, and it’s never been so important to have a 360-degree view of current and potential buyer sets. If you have buyer personas, it’s time to refresh them to include a broader view of potential buyers.

Sell your products/services and your business.

Complementing every good marketing and lead generation initiative is a strong strategic growth and partnership plan. With M&A activity and cross-sector partnerships ramping up, it’s imperative your organization looks valuable on two fronts: as a vendor and as a partner. You must ensure that you’re evaluating your position in an ever-changing market to meet the needs of tomorrow’s market leaders.

Providing Care

Pay attention to your potential competitive set.

If you’re a hospital, your competition now goes way beyond other hospitals. If you’re a home health provider, you’re not just competing with other home health providers. As healthcare players get bigger, spanning more rows of the vertical integration stack, you’re either going to be competing with different players, or you’ll be joining one of them—more likely the former. Start considering how your value proposition and messaging change if you’re up against new, unexpected competition. If CVS + Aetna, Walmart + Humana, and Optum control the top of the funnel, they are everyone’s competitors—or potential partners.

Brand matters more.   

We can debate for hours about whether Walmart, CVS, or even Amazon have brands that will translate well to the healthcare space, but we’re not going to argue whether they’ve captivated the American consumer. These brands have thrived in the consumer model, and as they make inroads in healthcare, your brand has to show up as a worthy competitor. Consumer engagement is the beginning and sets the stage for everything else, from transaction to expansion.


The Walmart/Humana deal may not come to fruition, but this type of deal isn’t going to stop hitting the headlines. So, in that sense, it doesn’t really matter whether they close the deal—it matters that deals like this will close, and that has massive effects on you as a healthcare organization. In a mad dash to reshape the healthcare system for the modern world, big players are building a foundation to own healthcare consumer engagement—from brand awareness all the way through to clinical care. Let’s talk more about what this means for your business.

April 4, 2018
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