Walmart to shutter health centers, virtual care service in latest failed push into health care

Walmart
on
Tuesday
said
it
will
close
all
of
its
health-care
clinics
across
the
country,
a
stunning
reversal
of
its
plans
to
bring
its
low-priced
reputation
to
the
dentist
and
doctor’s
office
along
with
the
grocery
aisle. 

The
big-box
retailer
said
it
would
also
shutter
its
telehealth
provider,
which
it

acquired
for
an
undisclosed
amount
in
2021.

Walmart
will
close
51
clinic
locations
across
Arkansas,
Florida,
Georgia,
Illinois
and
Texas,
plans
that
won’t
affect
the
company’s
4,600
pharmacies
and
more
than
3,000
vision
centers,
the
company
said
in
a
release.
The
clinic
will
close
over
the
next
45
to
90
days,
two
people
familiar
with
the
matter
told
CNBC. 

Walmart
blamed
its
plans
to
shutter
clinics
on
a
broken
business
model.
In
the
release,
it
described
the
move
as “a
difficult
decision,”
but
said
it
couldn’t
operate
a
profitable
business
because
of “the
challenging
reimbursement
environment
and
escalating
operating
costs.”

The
shortage
of
health-care
workers
in
the
U.S.
has
also
increased
the
company’s
labor
costs,
according
to
the
sources
familiar
with
the
matter. 

The
announcement
comes
just
a
month
after
Walmart
said
it

planned
to
double
the
size
of
its
clinic
footprint
by
opening
up
22
new
locations
this
year
and
more
in
2025. 

Walmart’s
announcement
is
also
another
sign
of
how
challenging
it
is
to
disrupt
and
radically
improve
American
health
care
–
an
expensive,
complicated
and
entrenched
system
of
doctors,
insurers,
drug
manufacturers
and
other
players
that
costs
the
nation

more
than
$4
trillion
a
year. 

Walmart

opened
its
first
Walmart
Health
clinic
in
Georgia
in
2019,
and
then
gradually
opened
more
clinics
next
door
to
its
big-box
stores. Customers,
who
typically
shopped
Walmart’s
aisles
for
groceries
or
household
items,
could
also
stop
by
for
a
doctor
or
dentist
appointment
or
therapy
session.
The
clinics
offered
other
services, too,
such
as
flu
tests,
X-rays
and
stiches.

Those
health-care
services
came
with
a
low
price
tag,
such
as
$30
for
an
annual
check-up
for
adults,
$45
for
a
45-minute
counseling
session
or
as
little
as
$25
for
an
adult
teeth
cleaning.

At
a
conference
in
fall
2019,
then-Walmart
CFO
Brett
Biggs
touted
the
company’s
ambitions
to
investors.
He
referred
to
how
Walmart
had
used
its
large
size
to
bring
down
the
price
of many
common
generic
drugs
to
as
low
as
$4 at
its
pharmacies
and
planned
to
do
that
for
other
parts
of
healthcare.

“It’s
more
than
test
and
learn
because
we
know
that
this
is
a
place
we
can
have
a
massive
difference
on
how
people
live,”
he
told
investors
at
the
time. “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.”

Yet
in
the
following
years,
Walmart
opened
new
clinics
at
a
slow
pace
and
faced
new
challenges
and
competitive
dynamics
—
including
keeping
its
store
shelves
stocked
and
locations
staffed
during
the
Covid-19
pandemic.
Walmart
struggled
with
high
executive
turnover
and
cycled
through
numerous
leaders
of
Walmart
Health.
And
CVS
Health,
Walgreens
Boots
Alliance
and
Amazon
all
announced
their
own
ambitions
to
open
or
acquire
doctor
offices.
Amazon
last
year

closed
a
$3.9
billion
deal
to
buy
primary-care
provider
One
Medical.

Meanwhile,
on
earnings
calls
and
at
investor
meetings,
Walmart
CEO
Doug
McMillon
and
other
company
leaders
instead
highlighted
other
emerging
and
higher-margin
businesses,
such
as
its
growing
advertising
business
and
its

third-party
marketplace.

Going
forward,
Walmart
will
return
to
the
health
services
it
offered
before
the
Walmart
Health
push:
It
will
continue
to
operate
its
thousands
of
pharmacies
and
vision
centers.

Walmart
said
its
clinics
will
continue
to
see
patients
with
scheduled
appointments
until
their
doors
close,
the
people
familiar
with
the
matter
told
CNBC.
The
company
will
also
help
patients
find
high-quality
providers
in
their
insurance
networks
to
ensure
they
continue
to
get
care,
the
people
said.

Walmart
Health
marks
the
latest
failed
push
into
health
care
by
a
high-profile
company,
following
the
disbandment
of
a

joint
venture
between


JPMorgan
Chase,


Berkshire
Hathaway
and


Amazon
in
2021. 

Before
it
announced
the
closures,
Walmart
was
among
a
slate
of
retail
giants
racing
to
build
up
their
primary
care
presence
as
demand
grows
for
convenient
and
affordable
medical
care.
Walmart
grew
its
clinic
business
at
a
slower
pace
than
its
competitors,
but
some
companies
have
struggled
to
balance
their
expansion
plans
with
their
swelling
networks
of
patients. 

Walgreens
said
in
March
it
had
closed
140
of
its
VillageMD
primary
care
clinics
and
plans
to
shutter
20
more
to
boost
the
profitability
of
its
broader
health-care
division.
Walgreens
also
recorded
a
nearly
$6
billion
charge
in
the
first
quarter
related
to
the
decline
in
value
of
VillageMD,
which
has
generated
disappointing
returns
since
the
company
became
a
majority
owner
of
the
business
in
2021. 

Meanwhile,


Amazon‘s
health
clinic
operator
One
Medical
now
has
more
than
125
locations
nationwide.

Walmart
has
made
several
other
plays
in
the
health-care
space,
including
partnering
with
an
insurer
and
health
system
on
care
coordination
in
Florida.
But
Walmart
will
no
longer
see
patients
under
that
partnership
moving
forward,
according
to
the
two
sources
familiar
with
the
matter.

Walmart

bought
a
chronic
condition
management
platform
called
CareZone
in
2020
for
an
undisclosed
amount.