Walmart Gives Up on Health Clinics and Virtual Care

Published on May 3, 2024

In a somewhat surprising move, Walmart announced this week that it will close all 51 of its health centers as well as its telehealth business after a 5 year go at the market. The Walmart Health arm of the retail giant’s strategy was on track to expand beyond its initial 5 states (Arkansas, Florida, Georgia, Illinois, and Texas) but has abandoned the model because of a “challenging reimbursement environment,” the company said in a press release. Employees losing their jobs will receive 90 days of wages, and some providers will receive “transition payments.” Walmart’s impetus for launching the primary care health clinics was to offer low-acuity services to consumers who know the brand and would take advantage of the clinics’ convenience when visiting the retail store—consumers who probably don’t have a regular primary care physician and might not have health insurance either. Its telehealth offering came from the acquisition of MeMD just 3 years ago, which will now shutter. The addressable market is significant, but apparently Walmart has judged the high operational costs and low profitability as too risky.

Let’s try this again: “In 2020, I expressed skepticism over Walmart’s 4th or 5th iteration of in-store clinics,” says Alan Ayers, MBA, President of Experity Consulting and Senior Editor of The Journal of Urgent Care Medicine. “While I appreciate that Walmart has taken a conservative and analytical approach to developing and scaling its healthcare delivery, in the past 20 years, Walmart has failed to achieve penetration of even 1% of its US store footprint. End of day, Walmart is a procurement and supply chain powerhouse, but healthcare entails service delivery, which is a different capability. Everything Walmart does receives significant media coverage, and given the company’s massive resources, anything Walmart does is worth watching.”