In a major change, Walmart announced on Tuesday that it will shut down all of its health care clinics and virtual medical services due to financial difficulties. This marks a significant shift for the retail giant, which had entered the health care sector five years ago.
At first, Walmart had opened medical centers next to its superstores and offered primary and urgent care services, x-rays, and dental work. However, the company has now decided to close its health care services due to a challenging reimbursement environment and increasing operating costs. Clinics in five states – Arkansas, Florida, Georgia, Illinois, Missouri, and Texas – will be shut down with specific closure dates yet to be determined. Impacted employees will have the option to transfer to other Walmart or Sam’s Club locations or receive 90-days pay and severance benefits if they do not choose to transfer.
Despite this closure, Walmart emphasized that it will continue to operate its nearly 4,600 pharmacies and more than 3,000 vision centers across the U.S. The retailer’s decision to exit the health care business is not unique as other major companies like Amazon have also struggled to expand into health and wellness services. Amazon previously operated a web pharmacy and telehealth service called Amazon Clinic but later closed a separate home care service highlighting the challenges in entering the health care industry for retailers and other businesses.
Walmart’s decision comes after several years of trying to make its health care business profitable amidst rising costs and declining reimbursements from insurers. The closure of these clinics is expected to save the company millions of dollars in annual operating expenses.
The closure of these clinics may also impact patients who relied on these services for their primary healthcare needs. It is unclear how patients will access healthcare services in these areas after the closure of these clinics.
Overall, this decision marks a significant shift in Walmart’s strategy as it moves away from its failed attempt at expanding into the healthcare industry.
