Magazine On-line [fall 2010]
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Marcus Osborne the cost of healthMarcus Osborne ’97 is tackling healthcare the Walmart way

by Tyler Young

If you’re one of those people who make a stop into their local Walmart Supercenters for groceries, clothes, an oil change, bank deposit, and a new DVD player, you probably know that Walmart also offers health and wellness services, which include pharmacies, health clinics, and vision centers. You may not know just how extensive those services are, however.

Marcus Osborne ’97 is senior director of healthcare savings programs and health and wellness global sourcing for Walmart, a title that, while maybe not well suited for a business card, gives an idea of just how wide ranging his job is.

“I’m part of the overall health and wellness business unit, which includes our pharmacies, our vision centers, a number of retail health clinics that we do in partnership with hospitals, and other health services such as hearing and lab services that we offer, and it includes all of our health and wellness products like over-the-counter products,” Osborne said.

Explaining all of those duties in detail would be difficult, but, generally, Osborne’s two primary roles are running a team focused on working with companies to help lower their healthcare costs and ensuring the quality of the pharmaceutical products that come into Walmart pharmacies.

There are more than 2,800 Walmart Supercenters in the country, according to Walmart’s corporate office, and most of them have pharmacies, health clinics, and vision centers. As people around the world think more and more about affordable healthcare, Walmart’s health and wellness offerings have grown, thanks, in part, to Osborne’s work.

“Given the escalating costs of healthcare in the U.S., and given some of the fears that exist around the health reform changes, and given all of the health challenges facing Americans, one of the big challenges is, ‘How do you improve access to affordable healthcare?’” Osborne said. “I’m right at the center of that. Our focus is lowering the cost of healthcare and making it easier for people to get access to what they need.”

Osborne works with companies of all sizes to help them partner with Walmart’s pharmacies and clinics. For example, in a deal with the Caterpillar construction and mining company, Walmart gives Caterpillar employees low prices on pharmaceuticals, and, in return, Caterpillar gives its employees incentives to use Walmart pharmacies, like no co-pay on generic medicines.

Some companies are also cutting their vision benefits and steering their employees toward partnerships with Walmart vision centers for glasses and contact lenses. The centers can give the employee an eye exam and sell him or her frames and lenses for affordable prices without insurance.

“Instead of seeing their pharmacy costs escalate, which most employers are seeing growth of 7-10 percent per year, Caterpillar has been able to see its costs really get managed and even decline in some segments,” Osborne said. “And Walmart’s happy because we picked up a bunch of volume, and I may be making less money per purchase, but it’s sort of the Walmart way that we benefit by volume.”

Adding that service to the $4 generic prescription program Walmart launched in 2006 means more people are coming to its pharmacies for inexpensive health and wellness services.

“It’s been almost frightening how much traffic they’ve generated and the benefit they’ve accrued in the market,” Osborne said. “There is actually a role for Walmart in healthcare. I don’t think anyone would have assumed there was one, but lately we’ve been allowed to do, and are doing, a lot more.”

One of the next issues Osborne is tackling is getting these pharmacies into areas that need them the most. There are stores in several countries including China, India, Mexico, Brazil, and Chile, but they aren’t in some of the United States’ troubled regions.

“Walmart isn’t in Harlem, New York, and we’re not in the south side of Chicago, and we’re not in northern Washington, D.C., and those are places that would benefit enormously from getting access to things like the $4 program or low-cost vision services, retail clinics, or vitamins and supplements,” he said. “If you’re an expecting mother, and you should be taking a pre-natal vitamin, those are very expensive. And if it takes you an hour and a half to get to one of our pharmacies, that’s not reasonable. So we’re continually looking at ways to expand that access.”

The other facet of Osborne’s job is supervising the quality control of the products that come into the pharmacies and clinics. With the level of global sourcing in the pharmaceutical industry, that can be a big job. Raw materials can come from one country and go somewhere else to be processed before they’re formed in a third country and packaged in a fourth.

“As you think about wanting to ensure that you’ve got a consistent, quality, safe, low-cost product, that essentially demands, even as a retailer, that we play a big role in having an influence over that supply chain,” he said. “Whether you’re on Lipitor or Viagra, that product didn’t just get made in a single factory in New Jersey. And you can’t just sit at the New Jersey level and watch what happens.”

When he’s dealing with other companies and other countries, particularly poverty-stricken countries, sometimes ethical questions arise, whether it’s child labor or sub-standard working conditions. Osborne, who was a political science major at Transylvania before heading to Harvard business school, where he completed an M.B.A., said he felt well-prepared to make some of those decisions.

“My Transylvania degree was preparing me to do a lot of stuff; it taught me strong analytical skills, influence skills,” he said. “It really was a liberal arts degree, because you went from philosophy to statistics to everything in between. It was one of the best general educations you could get. I felt like I got an enormous breadth of education, that I wasn’t just specializing in one thing.”

On top of that, the leadership aspect of his position is very much influenced by his political science education.

“One of the great skills in political science you learn is you’re really constantly thinking about politics and the political process and influence and power,” he said. “Fundamentally, everything is about influence, and everything is about power. From a startup in Silicon Valley to Walmart to the White House, you’re always having to manage. It’s always about influence and how you use your influence to drive some goal or vision. I look at that and think, that is the absolute perfect degree for anybody ever wanting to get into business.”

While Osborne was at Transylvania, he embraced the liberal arts education he received. Although he is a successful businessman, he didn’t take business courses. Instead, he took an education course on children’s literature and an art course in sculpture.

“It’s funny how I can remember drawing on classes like those,” he said. “They were completely different from everything else I was doing, and I felt that they would expose me to whole new areas.”

He is mentoring some of the younger associates on his health and wellness team, having them read The Prince by Machiavelli, a book that he was assigned at Transylvania 15 years ago. He still uses some of those texts not only in his teaching, but for himself.

“My professors probably would take great pleasure in knowing that I’m making some of my mentees read that book,” he said. “I still pull out those books they made me read and force them on some people that I’ve been given the opportunity to help develop as leaders.”

Osborne lives in Bentonville, Ark., with his wife, Cara Caskey Osborne ’99, and their sons, Max, 5, and Tate, 3. Cara earned a master’s degree in nursing from Vanderbilt University and a master’s and doctor of science degree in child health from the Harvard School of Public Health. She is a faculty member at Frontier School of Midwifery and Family Nursing.

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