Walmart Shutters 51 Health Centers Across 5 States, Ending Telehealth Services

Walmart, theretail giant based in Bentonville, Arkansas, has made the difficult decision to close all 51 of its healthcare centres across five states and discontinue its virtual care services. The company launched its ambitious foray into the healthcare industry in 2019, aiming to provide affordable and accessible care to its customers. However, after five years of operation, Walmart has determined that the current business model is unsustainable due to escalating costs and reimbursement challenges.

Theclosure of Walmart's healthcare centres highlights the struggles of providers in the current healthcare landscape, exposing the challenges of reimbursement and regulatory hurdles. This development may have broader implications for the healthcare industry, potentially influencing the strategies of other retailers and providers seeking to enter the market.

The affected states include Arkansas, Florida, Georgia, Illinois, and Texas, where Walmart had established a network of health centers offering a range of services such as primary care, dental care, behavioral health, lab testing, X-rays, and audiology. The company had plans to expand its footprint, with a goal of operating over 75 health centers by the end of 2024. However, the challenging reimbursement environment and rising operating expenses have forced Walmart to reevaluate its strategy.

In a statement, Walmart acknowledged the difficulty of the decision, stating, "While our mission to help people save money and live better remains, today we are sharing the difficult decision to close Walmart Health and Walmart Health Virtual Care... Through our experience managing Walmart Health centers and Walmart Health Virtual Care, we determined there is not a sustainable business model for us to continue."

The closure of Walmart's healthcare centers and virtual care services highlights the challenges that providers face in the current healthcare landscape. Andre Ulloa, a partner and executive adviser for M&A Healthcare Advisors, noted that the move"exposes the challenges that providers of all sizes are facing when it comes to reimbursement and regulatory challenges in healthcare."

Why this matters: Walmart is not alone in its struggle to establish a profitable presence in the healthcare industry. Walgreens, another major retailer, recently announced the closure of 160 VillageMD primary care clinics to improve profitability. Healthcare researchers and analysts point out that building a network of primary care clinics can be challenging, even for established companies, due to factors such as patient reluctance to switch doctors and the high costs associated with treating and improving the health of new patients.

Despite the setback, Walmart remains committed to promoting healthy living and will continue to operate its nearly 4,600 pharmacies and more than 3,000 vision centers across the United States. The company also plans to explore new ways to deliver healthcare services to its customers. Employees affected by the closures will have the opportunity to transfer to other Walmart or Sam's Club locations.

The closure of Walmart's 51 healthcare centers and the discontinuation of its virtual care services mark the end of a five-year endeavor to disrupt the healthcare industry. While the company's mission to provide affordable and accessible care remains unchanged, the challenging reimbursement environment and escalating operating costs have rendered the current business model unsustainable.

Key Takeaways

• Walmart closes 51 healthcare centers across 5 states due to unsustainable costs.
• Virtual care services also discontinued due to reimbursement challenges.
• Affected states: Arkansas, Florida, Georgia, Illinois, and Texas.
• Walmart remains committed to promoting healthy living through pharmacies and vision centers.
• Employees affected by closures can transfer to other Walmart or Sam's Club locations.