The closure of Walmart Health: 5 key notes

Walmart Health announced April 30 that it is closing all 51 of its clinics and shutting down its virtual care options.

Here are five key notes on the closure:

1. Following the announcement, health system leaders told Becker's they're not surprised by the failure of Walmart Health due to the financial challenges of healthcare and the difficulty of providing primary care at scale.

"Walmart, like Walgreens and Amazon and others before them, are experiencing the reality that healthcare systems have had to contend with for years," David Sylvan, chief strategy and innovation officer of Cleveland-based University Hospitals, told Becker's "A compressed reimbursement environment, operating and supply chain inflation, and of course, increased workforce costs, have all but eroded the majority of health systems' margins in recent years."

2. In late May, Walmart Health Virtual Care announced that it was laying off 74 employees at its corporate headquarters in Phoenix. Walmart also said it would lay off hundreds of corporate employees and require a majority of its remote workers to relocate to its headquarters in Bentonville, Ark., or the San Francisco Bay and New York City areas.

3. Walmart cited "challenging reimbursement environment" and rising operating costs as driving the clinic closures, which offer primary care, dental and mental health services. Walmart's nearly 4,600 pharmacies and more than 3,000 vision centers will not be affected by the closure. 

4. The retail giant opened its first health center in Georgia in 2019. The 6,000-square-foot clinics were located adjacent to Walmart stores across Arkansas, Florida, Illinois and Texas. Walmart Health had been two-thirds of the way through its goal of opening 75 centers before shutting down.

5. Walmart isn't the only healthcare disruptor scaling back services. In April, Optum shuttered its virtual care business. In February, Amazon laid off hundreds of employees at primary care subsidiary One Medical. Walgreens is in the process of closing dozens of VillageMD clinics.

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