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Walmart is shutting down its healthcare business.
The retail giant said Tuesday that it will close its 51 primary care clinics across five states and stop offering online care after determining the bets weren’t “sustainable.”
“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,” the company said in the announcement.
Walmart’s failed primary care push is another in a long line of ill-fated attempts by big retailers and tech giants to nab a piece of the $4.5 trillion healthcare industry. Owning care delivery, especially primary care, gives these companies access to millions of consumers and a potential new stream of revenue. But breaking into the heavily entrenched industry has been far easier said than done.
Amazon famously struggled to find its footing in healthcare. Its Haven venture, a partnership with JP Morgan and Berkshire Hathaway to lower rising healthcare costs and improve care for their employees, shut down in 2021. The company also shuttered its virtual care business Amazon Care in 2022. Amazon is now struggling with worsening losses at its clinic chain One Medical, according to a report by Business Insider, though One Medical CEO Trent Green told another publication that the chain plans to expand to new locations.
Meanwhile, Walgreens said in March that it plans to close 160 VillageMD primary care clinics after losing billions on the business.
Though it had dabbled in care delivery before, Walmart stood up its first health clinics in 2019, but struggled with basic healthcare operations, leadership changes and competing priorities. The clinics offered low, transparent prices for primary care, dental exams, vision tests, mental health counseling, and imaging. Back in 2018, the company had planned to have 4,000 clinics by 2029, Business Insider reported.
“Today’s announcement is disappointing for those of us who understand the need to transform healthcare and fought hard to do our part,” David Carmouche, the head of Walmart’s healthcare push, wrote in a LinkedIn post Tuesday.
A Walmart spokesperson told Endpoints that health clinics will close in 45 to 90 days. Walmart is still determining how many employees in its clinics and corporate office will be affected, the spokesperson said, and affected employees are eligible to transfer to another role within Walmart.
The spokesperson declined to share how many patients would be affected, but said its providers are providing them with their health records.
Walmart will continue to operate its thousands of pharmacies and vision centers.
Editor’s note: This story has been updated with additional details on Walmart’s decision to shut down its clinics business.