HMA's Emergency Room Pain

"Aside from the media frenzy over the $4 prescriptions, there is much more in the decision than Wal-Mart has said," Young states. "Wal-Mart is known for understanding the market for each product the company sells. And when the company indicated an entry into the retail healthcare market by placing minor-care clinics in stores, the move suggested to me the company intended on becoming a major player and ultimately consolidator of minor-care delivery."

Heavyweight Giant

Wal-Mart will first roll out its $4 generics in Florida, where it already operates some retail clinics -- and where many hospital companies could face significant exposure.

HCA counts Florida among its largest markets. But HMA, with nearly one-third of its hospitals concentrated in that state, could suffer an even bigger hit.

HMA has always stressed the importance of its emergency departments, which generate more than half of the company's overall admissions. To be sure, the company should continue to attract many of those sick patients -- who require inpatient treatment -- because most retail clinics, employing nurse practitioners, cannot provide high levels of care. But the company stands to lose even satisfied patients who sought out its E.R.'s for minor treatment in the past.

To its credit, HMA boasts efficient E.R. departments, where patients typically spend less than two hours as opposed to the six-hour waits they might face elsewhere. But even a two-hour E.R. visit could start to sound long to patients who can spend just 30 minutes -- and far less money -- obtaining similar treatment from a retail clinic instead.