Recently, Walmart (WMT) made the decision to close 51 of its health centers and discontinue its virtual care services. The retail giant cited a lack of sustainable business model as the reason for this move. This news came shortly after reports that UnitedHealth (UNH) would also be shutting down its Optum virtual health business.
Walmart initially launched the health centers in 2019 as part of an effort to expand its health services offerings. There were rumors at the time that the company may acquire Humana (HUM). In contrast, Amazon (AMZN) has been more aggressive in the health clinic business following its $3.9 billion acquisition of One Medical.
The closure of Walmart Health Centers is seen as a positive development for CVS Health (CVS), which fully embraced the health center model after acquiring Aetna in 2017. Despite the closure of the health centers, Walmart still maintains nearly 4,600 pharmacies in its stores and has been expanding their range of services. The company also operates over 200 vision centers.
Walmart’s fiscal Q1 earnings are expected on May 16, while CVS will report its Q1 results on Wednesday morning. The retreat from virtual care by UnitedHealth and Walmart reflects the challenges faced by companies like Teladoc (TDOC) in the rapidly evolving healthcare industry.
In stock market activity, Walmart’s stock dipped slightly, while Amazon and CVS saw modest gains. Walmart’s stock has found support at its 50-day moving average as it forms a flat base with a 61.66 buy point. Investors may consider a move past 60.89 as an early entry opportunity.
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