Walmart to close all health care clinics and stop telehealth service: Unhealthy business?
Walmart, citing “lack of profitability,” announced plans to close all 51 of its health centers in five states, while the retailer will continue to operate its 4,600 pharmacies and more than 3,000 Vision centers.
Walmart is closing all 51 of its health-care clinics in five states as well as its virtual-care services, the retailer announced on Tuesday.
“Through our experience managing Walmart Health centers and Walmart Health Virtual Care, we determined there is not a sustainable business model for us to continue,” the company said in a news release. “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 move is a major reversal from the retailer’s previously announced plans to expand its health clinics. Earlier this month, Walmart Health announced plans to open a new clinic in Houston, although it said it would delay the opening of clinics in certain regions until early 2025.
Walmart said a year ago that it intended to nearly double its footprint by the end of 2024, opening 75 locations by the end of the year. However, pressures related to construction resources led it to delay six health centers planned for the Phoenix region and four in Oklahoma City to the beginning of next year, a spokesperson told Fierce Healthcare. Nevertheless, Walmart said in early April that it still was on track to open the planned 75 locations by early 2025.
“Given their scale, it’s not very believable that Walmart cannot operate primary care clinics profitably, which calls into question why they haven’t — lack of interest, poor execution, etc.” Hal Andrews, president and CEO of Trillian Health, a health-care data analytics company, told Fierce Healthcare. “Whatever the reason, if the largest company in the largest country in the world cannot — or won’t — operate primary care clinics profitably, it is ominous for the future of rural health care in America.”
Walmart will continue to operate nearly 4,600 pharmacies and more than 3,000 Vision centers.
“Our culture of innovating and trying new formats and services has helped our company become stronger and better able to serve customers,” the company said. “We will continue to innovate as we grow our core businesses and launch even more services like the Walmart Healthcare Research Institute and health programs to join our fresh food and OTC offerings in helping our customers live better.”
Related: The Walmart, UnitedHealth Group deal: Another big retail, health care partnership
Walmart is not the only retailer to struggle with operating a profitable health-care unit. Walgreens plans to close 160 of its primary care clinics after it recorded a $5.8 billion impairment charge on its investment in VillageMD. Amazon in February said it would cut a few hundred jobs across its health-care units, including clinic operator One Medical, which it acquired for $3.5 billion last year.