Walmart to Close its 51 Health Clinics across the US Citing Profitability Concerns

The decision to shutter its healthcare operations stems from Walmart's acknowledgment of the unsustainable nature of the business model. 

In a significant development, retail giant Walmart has closed all of its 51 health clinics and virtual healthcare operations across the United States. 

The decision comes as Walmart grapples with profitability challenges in its healthcare ventures, highlighting the complex landscape of healthcare provision within the retail sector. 

Additionally, the decision to shutter its healthcare operations stems from Walmart's acknowledgment of the unsustainable nature of the business model. 

Sharing insights, Walmart's spokeswoman Marilee McInnis said, "Healthcare is expensive to run. We found that the increased labor and operating costs environment, like public and private reimbursement, made it difficult (to run the business) and obvious we had to close."

Why are Big Giants Facing Challenges in Healthcare Ventures?

The move by Walmart reflects broader trends within the retail healthcare sector, where companies such as Walgreens, Amazon, and CVS have ventured into providing healthcare services in recent years. 

Despite initial enthusiasm for these ventures, profitability, and consumer demand remain vital challenges. 

Walgreens, for instance, plans to close 160 of its VillageMD primary care clinics following significant impairment charges. 

Moreover, Amazon recently announced job cuts across its healthcare units, including clinic operator One Medical.

Major Impact

Walmart's decision marks a notable departure from its earlier ambitions to expand its healthcare footprint. 

David Carmouche, Walmart's senior VP of healthcare delivery, had previously highlighted its vision to provide affordable healthcare services, leveraging its extensive retail presence. 

However, in a LinkedIn post, Carmouche acknowledged the closure, stating, "Though it didn't end where I had hoped it would...there will be a time in the future to think about and discuss the challenges specific to retail healthcare."

Walmart's health clinics, which started in Georgia in 2019 and expanded to five states, including Texas and Florida, by 2024, offered a range of services, including primary care, dental care, and telehealth. 

The company anticipates closing all stores within the next 30 to 90 days, with employees allowed to transfer to other Walmart or Sam's Club stores.

Walmart's Recent Series of Partnerships

Previously, Walmart Health partnered with Orlando Health, a not-for-profit hospital network, to enhance patient care coordination in Florida. 

The collaboration aimed to improve patient referrals, care coordination, and engagement, streamlining the patient journey and ensuring effective communication between Walmart Health centers and Orlando Health providers.

Walmart Health also partnered with Ambetter from Sunshine Health, operated by Centene, and offers insurance through the Florida health insurance marketplace. 

Initially launched in 2019, Walmart Health offers a wide range of healthcare services, including primary care, labs, X-ray, EKG, behavioral health, dental, select specialty services, and community health under one roof.

With 48 locations across several states, Walmart aimed to become a significant player in healthcare. Their plan included nearly doubling the number of health clinics by the end of 2024 and expanding to new states and existing markets.