Alice Walton’s prescription for a ‘broken’ US health system

The world’s wealthiest woman has a blunt diagnosis of the sickness she has set out to cure. “Health care is going to break and bankrupt American companies, and America itself, if we don’t change it,” Alice Walton says in a forceful Southern drawl.

The 75-year-old daughter of Sam Walton, the late Walmart founder who turned a five-and-dime store in rural Arkansas into the world’s largest company by revenue, thinks the US is very close to that breaking point. “We are at the crisis,” she says.

The disconnect between the country’s outsized spending on health care and its struggles to stem the tide of chronic disease and preventable deaths has consumed policymakers, business leaders, and patients for years, preceding the Trump administration’s Make America Healthy Again agenda or Democrats’ efforts to pass the Affordable Care Act in 2010. Now “everybody’s feeling the pain,” Walton says, citing recent reports that health insurers in her state have been pushing companies for a one-third increase in premiums.

Walton, a former investment banker with an estimated wealth exceeding $100 billion, has no executive role at Walmart, but she has picked its hometown of Bentonville, in the Ozark Mountains, as “the perfect playground” from which to test the combination of policy, commercial, and educational reforms that she believes are needed across the country.

Walmart’s growth, coupled with investments from Walton and her family, has turned this former backwater into a heartland hotspot, known for mountain biking trails, a thriving art scene, and one of the country’s fastest-growing populations. In 2011, Walton opened Crystal Bridges, a lauded museum anchored by her collection of American masterworks, including paintings by Georgia O’Keeffe and Norman Rockwell’s Rosie the Riveter.

But she saw a critical missing piece in the region’s revival: Arkansas has four counties without a doctor, and another eight with just one doctor and no hospital, she says, pointing to such “health care deserts” as a leading cause of the country’s grim medical statistics. “There is no health care in rural America,” she says.

A ‘whole health’ rethink of medical school

There are several remedies in Walton’s prescription, including the Heartland Whole Health Institute, which she launched in 2019 to manage the research and policy side of her campaign. The latest opened in July, when Walton welcomed the first 48 students (out of 2,000 applicants) to the Alice L. Walton School of Medicine, or AWSOM, a gleaming building on a plant-filled campus from which she intends to reimagine medical education.

The Ozarks-inspired structure was designed by the Arkansan architecture studio Polk Stanley Wilcox, and features walls hung with art, a “healing garden,” and a two-acre rooftop park alongside its state-of-the-art examination rooms and operating theater.

Walton seems less interested in the building than the curriculum, which she designed with the school’s dean and CEO, Dr. Sharmila Makhija, an oncologist who previously ran the obstetrics department at New York’s Montefiore Health System.

Alongside a conventional medical curriculum, AWSOM’s course features exposure to art and nature, an emphasis on self-care, and direct clinical experience from the very start of students’ studies. Walton and Makhija hope not just to provide a “support system” to ease the stresses of med school, but to train a new generation of doctors in preventive, patient-focused “whole health” principles. Makhija defines these as looking not only at a person’s illness, but at their broader needs and circumstances — and at the health outcomes they want from treatment.

“You still have to know how to take care of the kidney,” she says, but mainstream medical education has become too narrow, leaving young doctors lacking empathy or ill-equipped to deliver bad news. “When you’re talking to another human being and telling them that they’re not going to make it, there is an art to that. There’s a compassion and an empathy, and that’s not taught,” Makhija adds.

12 years, 30 surgeries, and one book club

Walton is a commanding and lively presence, brightly dressed and wearing large, luminous emerald earrings on a quiet summer Thursday morning. But AWSOM’s focus on the softer skills of medical care stems from her own traumatic experiences of medical treatment.

A car crash in 1983 led to her having 30 surgeries over 12 years. “I know the health care system way too well,” she says drily. “The first thing I learned is that anybody with a chronic disease is going to have mental health issues of some type … but the health care industry doesn’t even recognize that. There’s no support system, and I learned that firsthand.”

Walton took up meditation and yoga in those years. But painting was her main “weapon against anxiety, against depression, against … all sorts of negative thoughts,” she says. That’s why AWSOM sits on the same campus as Crystal Bridges, why the museum has a director of arts and medicine, and why “collisions” between students and curators are part of AWSOM’s curriculum. Exposure to art and nature, she says, were “my personal way to get through 12 years of not much fun.”

Many wealthy individuals have fallen ill and subsequently endowed medical facilities. Education and health care have been the biggest recipients of billionaire philanthropy over the past decades. But Makhija says Walton stands apart for her effort to learn the intricacies of America’s health care industry. “Alice can do anything she wants, and she’s taking on a very complicated sector,” she says. “I think a lot of big changes happen when you have someone outside the system who tries to understand it, not just try to apply different measures, but to really make those changes.”

“All I’ve been doing is reading health care books now for four years,” says Walton, adding with a laugh that it is not a book club she would recommend.

How to change a system with a prototype

Walton and Makhija’s ambitions start locally, but quickly radiate outwards. Close to home, they hope to start filling the shortage of physicians in rural communities, which one report estimates is costing Northwest Arkansas almost $1 billion a year as patients travel elsewhere for specialist care. Of AWSOM’s first intake of students, whose tuition Walton is paying in full, 55% come from Arkansas or surrounding heartland states.

A short drive from the school, work is underway on a Bentonville health care campus, part of a $700 million partnership with the Mercy medical system and Cleveland Clinic to offer specialty care services to the local population and opportunities for students to practice what they have learned. Both Mercy and Cleveland Clinic practice “value-based” care, which focuses on health outcomes and which Walton sees as central to reforming the broken system.

“The key thing has to be to change the financial incentives in health care,” she says. “Everybody follows the money, and systems behave according to where the incentives are.” Right now, she sees the system encouraging doctors, hospitals, and insurers to think, “Let people get as sick as you can, encourage them to have all sorts of tests that they don’t need and surgeries that they don’t need, and we’ll make money.” Medical schools, she adds, “do not focus on prevention at all, because they’re not paid to prevent anything.”

With AWSOM and her other investments in Bentonville, Walton is trying to create a prototype for others to copy. “We want to create a model that you can replicate,” Makhija says, adding that her team has been ruthless on budgets despite their benefactor’s deep pockets, and developed an “open platform” curriculum others can share.

Pushing on a corporate lever

“Philanthropy can support change. It doesn’t create change,” Walton says. So she is covering tuition costs for AWSOM’s first five years, but still needs to enlist corporate partners with the market power to help spread her vision of health care’s future across the country.

US businesses have been straining for years under the growing cost of providing health benefits to their staff. Amazon, Berkshire Hathaway, and JPMorgan went so far as to form a joint venture in 2018 to give employees “simplified, high-quality, and transparent health care at a reasonable cost,” but abandoned the effort in 2021.

Walton sees self-insured companies as “where the lever is” to effect larger-scale change, because “that’s the only place [in health care] where the payer and the patient are aligned.” Self-insured companies which run on low profit margins have been better at making benefits costs a C-suite issue, she adds, without mentioning the low-margin juggernaut her father founded. “Your high-margin companies have not, and that’s something that needs to change.”

Arkansas has “an unusually high incidence of major self-insured employers,” she notes, “And we’re a tight-knit community. We all work together. We know each other, we trust each other. That’s a major ingredient.”

Walton includes the broken industry she hopes to disrupt in her appeal. Her message to health care CEOs is: “Let’s get together and try to fix this thing. You know it’s got to be fixed. Somebody’s going to change it. It’s probably a lot smarter if you participate in that process.”

Empowering risk-takers in an industry that resists change

AWSOM is Walton’s third major construction project, and it was completed in two years and almost 50% under its (undisclosed) budget. Asked what matters most in executing projects of this scale, she says: “You’d better find the right people. And if you don’t have them, you need to fix it.”

In health care, she found, “a lot of people like to talk a lot about change, but very few people know how to make change.” So she has picked people for leadership roles who understand that “it’s a process of experimentation and trying your best idea, and if it doesn’t work, then you go to the next one, and you take what you can learn.”

In her health care investments, as in the similarly risk-averse museum world, she adds, she has a favorite saying: “Throw spaghetti at the wall. See what sticks. It’s OK if none of it sticks.”

That attitude comes from the man who put Bentonville on the map, she says: “I think my willingness to take risks and try things that haven’t been tried before comes directly from my father. My father loved change, and he was not afraid of risk. And I’m not either. I just hope I take smart risks.”