Walmart to close health clinics in latest blow to retail health care

Walmart is closing its Walmart Health Centers and virtual care business, saying the retail giant doesn’t see a sustainable business model in primary care.

It’s the latest blow to the retail health clinic model, with Walmart saying it will close its 51 Walmart Health Centers in five states and Walmart Health Virtual Care, which is the retailer’s telehealth business. The centers will close in the next 30 to 90 days, the company confirmed on Tuesday.

Walmart did not disclose how much the shutdown will cost the company, which has spent tens of millions of dollars over the past five years opening primary care centers that were typically more than 5,000 square feet in size and included a wide variety of primary care, dental and mental health services. health care, as well as X-rays, immunizations and chronic disease management.

The decision to close the 51 health centers in five states and shut down the virtual care offering was not easy, Walmart said in a blog post on the company’s website. We understand that this change affects the lives of the patients who receive care, the partners and providers who deliver care, and the communities that have supported us along the way. This is a difficult decision, and like others, the difficult reimbursement environment and rising operating costs create a lack of profitability that makes the care business unsustainable for us at this time.

Just a month ago, Walmart said it planned to add 22 new locations by 2024, deepening its presence in Texas while opening new locations in Missouri. A sixth market, Arizona, was expected to see expansion in 2025 where the company does not yet operate Walmart Health facilities.

But Walmart executives said the business environment was becoming increasingly difficult to hire health care professionals and doctors amid a U.S. health care workforce crisis and a tight labor market.

Other primary care clinic operators are also facing staffing issues. For example, physician-owned primary care practices are still experiencing a loss of support staff since the start of the pandemic, 40% per physician since 2019, according to a report last year by the Medical Group Management Association.

Physician-owned practices had just 3.0 support staff per FTE in 2022, compared to 5.08 per physician in 2019, as the COVID-19 pandemic and the so-called Great Resignation passed billed to physician practices across the country. The MGMA study is a snapshot of health care labor issues, which have been hit hard by the current economic trend of workers leaving their jobs, even though studies show that the health care industries, the education and hospitality have been the most affected.

And Walmart Health executives found they’re not immune to the health care workforce and labor crisis plaguing employers, either. This is a difficult decision, and like others, the challenging reimbursement environment and rising operating costs create a lack of profitability that makes the care business unsustainable for us at this time, he said. Walmart in its blog post.

Walmart’s decision to close its health centers and virtual care comes as Amazon grows its One Medical Clinics in new markets and CVS Health, which spent $10 billion last year to add Oak Health Centers Street, adds to its portfolio of health care provider operations with clinics that treat patients covered by Medicare and privatized Medicare Advantage.

But Walgreens, which made a multibillion-dollar investment with VillageMD, has struggled somewhat with expanding too quickly and not being able to fill patient panels in certain markets it is now exiting. Walgreens last month reported a loss of nearly $6 billion in its second quarter due primarily to the loss in value of its VillageMD investment.

In Walmarts case, the retailer said it will now take what the company has learned and focus on trusted health and wellness services nationwide through our nearly 4,600 pharmacies and more than 3,000 vision centers, said the company. For 40 years, we have provided these high-quality, accessible and affordable points of care that are part of their respective communities.

The decision released Tuesday comes five years after Walmart opened the first 10,000-square-foot Walmart Health facility that opened in 2019 in Dallas, Georgia, where Walmart shoppers and patients in the community had embraced the concept and they convinced Walmart executives to go ahead. Walmart’s newest health centers are about 5,400 square feet, located inside Walmart Supercenters, and include Walmart Healths full suite of health services, the company said. The range of services included primary care, dental care, behavioral health, labs and X-rays, and telehealth services from Walmart Health Virtual Care.

Some doctors, dentists and other providers may stay in stores if, for example, they negotiate a partnership with a local hospital or health system. According to sources close to Walmart, Walmart health care providers are independent and generally contract to provide care outside of Walmart health centers.

Today and in the coming days, we are focused on continuity of care for patients and providing respect and assistance to affected associates as we begin the process of closing health care facilities, Walmart said in its blog post. Associates and Providers have made an incredible difference for their patients and communities, and are a priority: All Associates can transfer to any other Walmart or Sams Club location (and) All Associates will be paid for 90 days, unless they are transferred. to another place during this time or leave the company.