The retailer said it found it difficult to operate a profitable business due to a challenging reimbursement environment and rising costs.
-By Daniel Beaird
June 2024 – The Journal of Healthcare Contracting
Walmart Health is closing all 51 primary care health centers across five states over a 45- to 90-day span since its announcement on April 30. It’s also shuttering its telehealth service Walmart Health Virtual Care.
Other retail-based commercial healthcare providers (CHPs) have seen difficulties too. Walgreens has closed many of its VillageMD clinics and Amazon has cut hundreds of roles in its healthcare division, including its primary care company One Medical. CVS Health spent billions of dollars on its clinics for seniors but fell short of its revenue projections in the first quarter and cut its earnings outlook for 2024.
Walmart said in a release it could not operate a profitable business due to a challenging reimbursement environment and rising costs, including labor costs tied to a shortage of healthcare workers in the U.S. It’s closing clinic locations in Arkansas, Florida, Georgia, Illinois and Texas.
Walmart had recently announced expansion plans for Walmart Health
It was a surprising announcement because it came one month after Walmart announced it planned to open 22 new locations in 2024 and even more locations in 2025. Walmart opened its first Walmart Health in Georgia in 2019. After Walmart disrupted the pharmaceutical industry with generic drugs as low as $4 at its pharmacies, the retailer planned to do the same in other areas of healthcare.
But the healthcare business was tough to crack for Walmart against big hospitals and health systems. All Walmart associates with Walmart Health are eligible to transfer to any other Walmart or Sam’s Club location. If after 90 days, they don’t transfer or leave, eligible associates will receive severance benefits.
Walmart Health’s provider partners will continue to serve existing patients while clinics are open. These providers will be paid for 90 days through their respective employers, after which eligible providers will receive transition payments.
Walmart said in a statement, “We are deeply grateful to these associates and providers for their caring service to patients in our communities and to the patients who trusted us with their care.”
Walmart continues to operate its pharmacies and vision centers.