May 1, 2024
Walmart Closing Its Health Centers, Citing Lack Of Profitability
In a statement released on April 30, the company cited “the challenging reimbursement environment and escalating operating costs” as a reason for shuttering the clinics.
Walmart announced that it would be closing its healthcare clinics across the country after the company said in 2023 that it would be opening up 22 additional locations in 2024 and more locations in 2025. In a statement released on April 30, the company cited “the challenging reimbursement environment and escalating operating costs” as a reason for shuttering the clinics and its telehealth provider, MeMD, which it purchased for an undisclosed amount in 2021.
As CNBC reports, Walmart will close the 51 locations it opened across five states: Texas, Arkansas, Florida, Georgia, and Illinois. However, this will not affect the company’s pharmacy and vision centers. Anonymous sources familiar with the operation told the outlet that the clinics expect to close within 45 to 90 days.
Those sources also indicated to CNBC that the rising costs of compensating healthcare workers played a role in Walmart’s decision. The outlet interpreted this as a sign of how difficult it is to disrupt and change the American healthcare system, which has become expensive and complicated and costs the country an average of $4 trillion a year to operate.
As The Verge reported, the increased competition in the healthcare space from retailers like Walmart, Amazon, Best Buy, and already-established urgent care providers put a dent in plans to make healthcare more affordable.
Walmart’s press release states, “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 press release continued, “This is a difficult decision, and like others, the challenging reimbursement environment and escalating operating costs create a lack of profitability that makes the care business unsustainable for us at this time.”
Although there is currently a shortage of primary care doctors nationwide, healthcare analysts say it is difficult to build a clinic network, even for companies like Walmart. The AP cited issues like patient familiarity with doctors and increased spending from clinics to improve health outcomes for patients who may have gone without healthcare for some time.
Walmart’s press release indicated that workers currently staffed at its clinics are eligible to transfer to any Walmart or Sam’s Club location and will continue to be paid for 90 days unless they transfer to another location or leave the company.
After this 90-day period expires, employees who do not transfer or leave the company are eligible to receive severance benefits. The press release also indicated that the provider partners used by the clinics would continue to receive payments for 90 days, after which time eligible providers would receive transition payments.