Walmart has announced that it will be closing its Walmart Health centers and virtual care business due to a lack of profitability in the primary care sector. The decision will affect 51 Walmart Health centers in five states as well as the Walmart Health Virtual Care telehealth business. The closures are expected to take place within the next 30 to 90 days, with the company citing the challenging reimbursement environment and escalating operating costs as reasons for the closure.
The retail giant did not disclose the financial impact of the shutdown, but it had invested tens of millions of dollars over the past five years in opening primary care centers that offered a range of services including dental, mental healthcare, X-rays, immunizations, and chronic condition management. Walmart stated that the decision to close the health centers was a difficult one and that it understands the impact it will have on patients, associates, providers, and communities that have supported the centers.
Walmart’s initial plans were to expand its health centers by adding 22 new locations in 2024, with a focus on deepening its presence in Texas and entering new markets in Missouri and Arizona. However, the company faced challenges in recruiting healthcare professionals and physicians amid a healthcare staffing crisis and a tight labor market. Other operators of primary care clinics are also facing staffing issues, with physician-owned practices experiencing a significant decrease in support staff since the beginning of the pandemic.
The closure of Walmart’s health centers and virtual care business comes at a time when competitors like Amazon and CVS Health are expanding their medical care provider operations. Amazon is growing its One Medical Clinics into new markets, while CVS Health acquired Oak Street health centers and is adding clinics that treat patients under Medicare and Medicare Advantage. However, some companies, like Walgreens, have struggled with expanding their healthcare operations too quickly and have faced financial losses as a result.
Going forward, Walmart will focus on providing trusted health and wellness services through its pharmacies and vision centers, which have been integral parts of the communities they serve for over 40 years. Walmart’s decision to close its health centers comes five years after opening its first 10,000-square-foot facility in Dallas, Georgia, and expanding to newer locations inside Walmart Supercenters. The company will prioritize continuity of care for patients and support for impacted associates during the closing process of the health centers.
