Walmart retreats from healthcare, closing clinics across US

Walmart Health

For the last few years, Walmart has been promising to disrupt the US healthcare sector with a national network of clinics providing low-cost care and telehealth services. Now, it is reining back on those plans.

The retail giant has said it will close all 51 of its Walmart Health clinics across the country and shut down its telehealth service, built with its acquisition of MeMD in 2021, saying “there is not a sustainable business model for us to continue.”

The company said the decision was taken on the back of “the challenging reimbursement environment and escalating operating costs” that were making it impossible to run Walmart Health as a profitable business.

The clinics – which provided medical, dental, and behavioural health services – are clustered in five states, namely Arkansas, Georgia, Florida, Illinois, and Texas.

It’s not a complete retreat, as some health services will be provided through its 4,600 pharmacies and 3,000 optician centres, a network which also underpins its recently launched clinical trials business. However, there’s no doubt it is a major reversal and comes just weeks after Walmart said it planned to open up more than 20 new clinics this year.

Other big retailers like CVS Health, Walgreens Boots Alliance, and Amazon have also tried to provide healthcare services, and so far the track record is mixed, reflecting the difficulties of bringing real change to an entrenched sector.

Walgreens has been closing dozens of its VillageMD primary care clinics and took a $5.8 billion charge in connection with the business in its last quarterly results, for example, although CVS Health has said it is committed to growing its network of Oak Street Health clinics. Amazon, meanwhile, has been adding additional sites to its One Medical service, bought for $3.9 billion in 2022, but has been slashing staff to cut costs.

The Walmart decision has raised concerns that some patients may face a gap in access to healthcare, particularly those on lower incomes and no insurance or high deductibles. The company said when it announced its first clinic in 2019 that a key objective was to provide access to people in underserved communities.

In its statement on the decision, Walmart said its “priority will be ensuring the people and communities who are impacted are treated with the utmost respect, compassion, and support throughout the transition,” adding: “In the coming days, we are focused on continuity of care for patients and providing impacted associates with respect and assistance as we begin the closing process.”