Walmart to close its health centers, says business model not sustainable

Walmart is shutting down all of its health care clinics and virtual medical services, the nation’s biggest retailer said on Tuesday, citing an inability to make the businesses profitable.

The announcement marks an abrupt reversal for Walmart, which five years ago stepped into health care in a big way, launching medical centers adjacent to its superstores and offering primary and urgent care, x-rays and dental work. 

Walmart described its sudden change of course as a “difficult decision,” and cited a “challenging reimbursement environment and escalating operating costs” as unsustainable.

The clinics to be shuttered are in five states: Arkansas, Florida, Georgia, Illinois, Missouri and Texas, according to Walmart, which said it does not yet have specific closure dates.

Employees impacted by the closures are eligible to transfer to other Walmart or Sam’s Club locations, and those that don’t opt to switch to another store will get 90-days pay and severance benefits, the company said.

The retailer will continue running its nearly 4,600 pharmacies and more than 3,000 vision centers across the U.S., it said. 

Walmart is not alone in looking to expand into the health and wellness business.

Amazon runs a web pharmacy and telehealth service called Amazon Clinic, which uses third-party medical providers to help treat less serious conditions, like pink eye.

The e-commerce giant in 2022 shut down a separate hybrid virtual and in-home care service it spent years developing, a surprising move at the time, illustrating the difficulties retailers and others face in getting into the heath care business.