Those sources also indicated to CNBC that the rising costs of compensating healthcare workers played a role in Walmart’s decision. The outlet interpreted this as a sign of how difficult it is to disrupt and change the American healthcare system, which has become expensive and complicated and costs the country an average of $4 trillion a year to operate.
Walmart’s abrupt exit from healthcare reflects a startling recalibration of the retail health market. This decision suggests that even a giant like Walmart struggles to blend healthcare into its portfolio, despite its size and resources. The closures may amplify disparities in…— Tatyana Kanzaveli (@glfceo) April 30, 2024
Less than a few weeks after opening its first health centers in the Houston area, Walmart announced it is closing all of its health centers nationwide.https://t.co/8W8VdFPKAz— Houston Chronicle (@HoustonChron) April 30, 2024
– Walmart Health closing down ops– Walgreens lost $6B operating VillageMD– CVS closing minute clinics– Oak Street losses are piling up– One Medical still unprofitable for AmazonRetail healthcare is hard.https://t.co/gqbzFJnfJm— Jason Hartley (@Jason_Hartley) April 30, 2024
Walmart will shut down all 51 health centers it opened up.This decision shouldn’t fool anyone. It’s not about healthcare not being interesting and profitable to tech and retail companies, but specifically the US market is a tricky and expensive one. https://t.co/mFYzZiIgnu— Berci Meskó, MD, PhD (@Berci) May 1, 2024
As The Verge reported, the increased competition in the healthcare space from retailers like Walmart, Amazon, Best Buy, and already-established urgent care providers put a dent in plans to make healthcare more affordable.
Walmart’s press release states, “While our mission to help people save money and live better remains, today we are sharing the difficult decision to close Walmart Health and Walmart Health Virtual Care. Through our experience managing Walmart Health Centers and Walmart Health Virtual Care, we determined there is not a sustainable business model for us to continue.”
The press release continued, “This is a difficult decision, and like others, the challenging reimbursement environment and escalating operating costs create a lack of profitability that makes the care business unsustainable for us at this time.”
Although there is currently a shortage of primary care doctors nationwide, healthcare analysts say it is difficult to build a clinic network, even for companies like Walmart. The AP cited issues like patient familiarity with doctors and increased spending from clinics to improve health outcomes for patients who may have gone without healthcare for some time.
Source: Black Enterprise
