Is this the future of rural health care: Walmart, walk-in clinics and an ambulance?

Those of us in Indianapolis enjoy—and pay for—the abundance of hospitals and doctors in the metro area.

But one of the most dynamic areas for health care in the near future will be the rural parts of Indiana that have shortages of doctors and small hospitals.

In two to three years, primary care clinics could be popping up in Walmart stores in rural Indiana while most rural Indiana hospitals will offer little to no inpatient services.

That’s the vision I got after a fascinating conversation with Don Kelso, executive director of the Indiana Rural Health Association.

Kelso was contacted this spring by a representative of Wisconsin-based QuadMed, the company Arkansas-based Wal-Mart Stores Inc. is using to operate primary care clinics in its stores in rural South Carolina and Texas. That representative said Wal-Mart intends to bring the primary care clinic concept to Indiana by 2016.

That’s significant because Wal-Mart isn’t just trying to handle patients’ sinus infections and cases of flu, as is the case with the retail clinics operated by Walgreens and CVS. Instead, Wal-Mart wants to make the nurse practitioners staffing its clinics the “primary medical provider” for its shoppers.

And, as usual, Wal-Mart is doing it at an always-low price—$40 a visit—that will come in below the typical rate its competitors, the traditional office-based physicians, are charging.

The good news for rural hospital systems, Kelso said, is that QuadMed is saying it wants to work with local hospital systems to provide the lab tests, imaging scans and the physician oversight that will be necessary for its clinics to provide their full spectrum of services.

“They’re not going to have a corporate doctor in Arkansas, for example,” Kelso said. Although, he noted that national lab testing companies, such as North Carolina-based LabCorp., already have courier services that pick up lab samples in his town—Washington, Indiana, population 11,500–and ship them out of state for analysis.

So local hospital systems would have to compete with those providers on price, Kelso said. Right now, as I noted recently, hospital-based lab testing isn’t even close to the independent facilities on price.

If Wal-Mart is able to control the referrals of a large chunk of patients, it’s a threat to local hospital systems’ business.

But they’re not worrying about it right now, Kelso said, because they have bigger concerns on their radar screen. Namely, that payments changes from the federal Medicare program, as well as advances in medical technology, are starting to empty out their hospital beds.

Kelso said his members have seen occupancy decline about 10 percent over the past two years.

That acceleration in the move away from inpatient care has sparked a few rural hopstials to look at getting out of the inpatient business altogether, and instead offer outpatient services, an ER and then transportation to larger hospitals for more complex care.

That’s what appears to be happening at Indiana University Health’s Morgan County Hospital in Martinsville, although the hospital is getting input from local residents and the chamber of commerce before it finalizes its plans.

IU Health Morgan CEO Doug Puckett said IU Health would invest “several million dollars” to help its hospital facility switch from an acute care, inpatient facility to an outpatient health center, according to the Reporter-Times newspaper in Martinsville.

These changes led to the end of obstetrical care last year and will result in the shuttering of IU Health Morgan’s histology lab next year. And there could be more to come.

“As long as it doesn’t have an adverse outcome for a patient, we will do that because overall costs going down is beneficial to the patient,” Puckett told the Reporter-Times—a jaw-dropping statement I can’t recall any local hospital executive saying in my seven-plus years covering health care.

Other hospitals haven’t gone public with these kinds of plans because they fear they’ll get the reaction that Puckett has. He said he was bombarded recently at the Morgan County Fair with people saying, “So, I’ve heard the hospital is closing.”

Even so, Kelso thinks financial pressures will push things that way—as soon as three years from now.

If he’s right, that means health care in rural areas will soon consist of outpatient centers, perhaps an ER, ambulances (or other transport vehicles) and a Walmart clinic.

That’s dramatically different than what we’re used to. But it may be the future of health care.