Walmart announces closure of all health center clinics, citing profitability concerns

Publish date: 2024-07-06

WASHINGTON (TND) — The big-box retailer and hypermarket chain operator Walmart announced Tuesday it would be shuttering all 51 of its health center clinics across six states due to a lack of profitability.

"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 company said in a statement.

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 opened its first health center clinic in the town of Dallas, Georgia (population 14,042 as of the 2020 census) as other chain retailers like pharmacies CVS and Walgreens and other big box retailers like Target all started offering retail medical services at some locations throughout the 2010s. Walmart, like other brick-and-mortar retail operations, also sought to expand into other industries and possible income streams as Amazon began to swallow the market share of general goods sales as it grew exponentially that decade (it now also owns and operates a chain of retail clinics, One Medical).

In a 2020 article praising the "12 Innovations That Will Change Health Care and Medicine in the 2020s" Time magazine noted the significant potential of Walmart's foray into the medical industry, including bringing the store's signature "low prices" guarantee to routine care.

The prices are affordable without insurance ($30 for an annual physical; $45 for a counseling session), and the potential is huge. ... Like Walmart’s merchandise suppliers, doctors and other medical pros may need to adjust to the retailer’s everyday low prices.

The board approved a plan in 2018 for the company to open 4,000 centers by 2029 -- dwarfing CVS' MinuteClinic locations by four -- but Business Insider reported that by 2021, the retail giant was scaling back its ambitions of widespread healthcare service. The initial leadership behind the push had been replaced by 2021, Business Insider reported at the time, and the health team was split between those who wanted to stick to the more aggressive expansion plan and those who thought the current rate of growth (with 20 clinics then open) was a fine course to keep.

However, both Walgreens and Amazon are also facing financial downturns in their healthcare operations as well, as Reuters reports that Walgreens is planning to close 160 of its VillageMD primary care clinics after losing $5.8 billion on its purchase last year while Amazon will lay off a few hundred staff from One Medical.

"We understand this change affects lives – the patients who receive care, the associates and providers who deliver care and the communities who supported us along the way," Walmart added in its statement. "Our priority will be ensuring the people and communities who are impacted are treated with the utmost respect, compassion and support throughout the transition."

The company said it does not yet have dates for when each of the 51 clinics would shut their doors but would share the information with customers when those decisions are made.

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