Humana’s CenterWell health care business will take over 23 Walmart Health locations

Humana announced on Wednesday that CenterWell, its health care services business, will lease 23 Walmart Health locations in four states. The centers will operate under the CenterWell Senior Primary Care and Conviva Care Centers brand names in Florida, Georgia, Missouri and Texas.

“We are excited by the unique opportunity to lease space from a world-class community partner such as Walmart and offer seniors in these four states greater access to our integrated approach to care,” said Dr. Sanjay Shetty, president of CenterWell. “These nearly two dozen primary care centers are specifically designed for seniors, and each location’s design, including dedicated entrances and easy parking, offers patients the access that they have come to expect at our clinics across the nation. We are eager to expand on our mission to help patients lead happier, healthier lives.”

The number of CenterWell senior care locations increased from about 65 three years ago to nearly 300 last spring. CenterWell accounted for slightly less than 3% of Humana’s total revenue in the company’s latest quarter ended March 31, bringing in $787 million. Revenue rose 4% from the same quarter in 2023, driven largely by growth in the primary care and home solutions businesses, the company said in its April earnings release.

The announcement comes three months after Walmart said it would close its 51 Walmart Health centers in five states, as well as Walmart Health Virtual Care, which is the retailer’s telehealth business. At that time, Walmart said it didn’t see a sustainable business model in primary care.

Walmart hasn’t disclosed how much the shutdown is costing the company, which spent tens of millions of dollars over the last five years opening primary care centers that typically were more than 5,000 square feet in size and included an array of primary care services, dental and mental health care as well as X-rays, immunizations and chronic condition management.

Related: Walmart to close all health care clinics and stop telehealth service: Unhealthy business?

Walmart executives said it had become increasingly more difficult to recruit health care professionals and physicians amid a U.S. health care staffing crisis and tight labor market.  Margins were driven by Medicare and Medicaid reimbursement rates, among other external factors, Walmart CEO Doug McMillon said at an investor conference in June. “As that changed, that changes the model, and then the future doesn’t look like what you thought it was going to look like as we were building this out,” he said.

The company now is focused on expanding its pharmacy and optical businesses, which are more similar to Walmart’s core retailing operations and are steadily growing. Financial terms of the deal weren’t disclosed, but Humana said CenterWell expects the centers to “be equipped, staffed and opened no later than the first half of 2025.”