Walmart Closing All 51 Health Centers And Telehealth Service
Walmart’s mission to disrupt the healthcare industry by offering affordable places to see doctors alongside its grocery aisles is ending five years after it began.
Trouble with cost reimbursement and rising operating expenses are leading Walmart to close all 51 of its Walmart Health centers throughout five states, the company announced Tuesday. It will also close Walmart Health Virtual Care, its telehealth provider it acquired in 2021.
The closures will not impact Walmart's 4,600 pharmacies and 3,000 vision centers, the company said in its news release. The company determined that there was no sustainable business model for the Walmart Health centers and telehealth services to continue.
“We understand this change affects lives – the patients who receive care, the associates and providers who deliver care and the communities who supported us along the way,” the release states. “This is a difficult decision, and like others, the challenging reimbursement environment and escalating operating costs create a lack of profitability that make the care business unsustainable for us at this time.”
The 51 clinics across Arkansas, Florida, Georgia, Illinois and Texas will close over the next 45 to 90 days, CNBC reported, citing two people familiar with the matter.
The closure news comes a month after Walmart announced it had planned to expand its number of Walmart Health centers from 48 to 70 this year. The 22 new locations would have grown its presence in Texas and expanded into Missouri, Forbes reported. The brand also planned to expand into Arizona in 2025.
The first Walmart Health center opened in a 10K SF facility in Georgia in 2019, according to Forbes. It continued to open more clinics next to its traditional big-box stores, offering relatively affordable healthcare services like a $30 annual checkup, a $45 counseling session and a $25 teeth cleaning, according to CNBC.
Brett Biggs, Walmart’s former chief financial officer, told investors in 2019 that Walmart Health could make a massive difference in how people live, saying it had brought common generic drug prices down at its pharmacies and planned to do the same for other healthcare services.
“When we think about ‘Save money, live better,’ we can do both with what we can do in healthcare. And so, we plan to be a big player going forward in what happens in healthcare,” Biggs said, according to CNBC.
But the coronavirus pandemic and a significant healthcare worker shortage challenged Walmart Health, which cycled through several executive leaders, according to CNBC.
Walmart executives are touting other growing parts of its business, like its third-party marketplace, during investor meetings and earnings calls. The company hosted a Walmart Marketplace Seller Summit in August as it attempts to get more online sellers and shoppers to better compete with Amazon.
Meanwhile, Amazon is expanding its presence in healthcare and agreed to acquire primary care organization One Medical in 2022. The $3.9B deal for One Medical gives Amazon access to its more than 200 medical offices and more than 815,000 members.
