In A Stunning Reversal, Walmart Announced On Tuesday That It Will Close All 51 Of Its Health Centers Across Five States And Shut Down Its Virtual Care Services, Citing Unsustainable Operating Costs And Reimbursement Challenges.
The Retail Giant Had Made An Aggressive Push Into Healthcare Starting In 2019, Opening Clinics Next To Its Supercenters To Provide Affordable Primary Care, Dental, Vision, And Behavioral Health Services In Underserved Areas.
The Abrupt Decision Deals A Blow To Walmart’s Ambitions To Disrupt The U.S. Healthcare System And Fill Gaps In Care, Especially For Uninsured And Rural Patients.
As Recently As Last Year, Walmart Had Plans To Nearly Double Its Number Of Health Centers. But The Company Determined There Was Not A Viable Business Model Despite Its Massive Scale And Store Footprint.
This Is A Difficult Decision, And Like Others, The Challenging Reimbursement Environment And Escalating Operating Costs Create A Lack Of Profitability That Make The Care Business Unsustainable For Us At This Time,
Walmart Executives Said In A Statement. The Company Declined To Disclose Financial Details But Said The Impact Would Be Immaterial.
Concerns Over Loss Of Access
The Closures Are Slated To Occur Within The Next 30-90 Days And Will Affect Health Centers In Arkansas, Florida, Georgia, Illinois And Texas.
Walmart Said Eligible Employees Will Have The Opportunity To Transfer To Other Parts Of Its Business, Including Nearly 4,600 Pharmacies And Over 3,000 Vision Centers That Will Continue Operating.
However, The Retreat Has Raised Alarms That It Could Exacerbate Healthcare Inequities In Communities With Already Limited Options.
It’s Disappointing That Walmart Wasn’t Able To Make It Work Because These Patients Need Care And Don’t Have As Many Alternatives, Said Ateev Mehrotra, A Harvard Professor Who Studies Retail Clinics.
Challenges In Retail Healthcare
Walmart’s Struggles Highlight The Obstacles Even For Deep-Pocketed Companies Trying To Succeed In The Complex Healthcare Landscape.
Rival Retailers Like Walgreens, CVS And Amazon Have Also Faced Setbacks In Their Clinic Expansions. “You Can Buy All The Right Ingredients – You Still Need A Good Recipe To Cook The Meal,” Said Craig Garthwaite, A Professor At Northwestern University’s Kellogg School Of Management.
This Was Sadly Quite Predictable – If A Missed Opportunity.
Some Analysts Believe Walmart’s Core Strengths In Cost-Cutting And Scale Did Not Necessarily Translate To Delivering Quality Healthcare Services.
It Is Different From Selling Products, Like Toothpaste And Breakfast Cereal, And Requires Different Kinds Of Expertise And Management, Noted Robert Field Of Drexel University.
Final Word
Despite The Clinic Closures, Walmart Said It Remained Committed To Its Healthcare Strategy Centered Around Its Pharmacies, Vision Centers, And Insurance Partnerships.
The Company Recently Agreed To Acquire Medicare Advantage Insurer Caresource’s Ohio Contracts. But The Sudden Retreat After Years Of Investment Has Cast Doubts On Walmart’s Ability To Transform Healthcare The Way It Revolutionized Retail.
As The Largest Private Employer And A Mainstay In Rural America, Walmart’s Next Steps In Healthcare Will Be Closely Scrutinized.
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