Walmart exit to create rural health care gap
For rural and lower-income Americans, staying healthy will become more time-consuming, with longer drives and wait times for doctors, following Walmart’s decision to exit the primary care business, experts say.
Walmart announced on April 30 that it would close all 51 Walmart Health centers in five states and shut down its virtual health care service because it was “not a sustainable business model.”
The move marked a sudden shift for the giant retailer, which had said the previous month that it planned to expand its virtual 24/7 health care – which includes video, chat and calls – and its brick-and-mortar health centers, which were open during the same hours and days as its stores and staffed by primary care physicians and licensed nurse practitioners.
The shift reflects big economic challenges in health care, including low government reimbursements for primary care, a shortage of nurses and doctors, and soaring costs for supplies and labor, experts said.
What happens now?
For patients in rural areas or areas with limited resources served by Walmart, the closings will mean difficulty finding health care in the near term and traveling longer distances once they do, said Hal Andrews, chief executive of health care consulting firm Trilliant Health.
“People will have to go back to driving to a big city,” Andrews said. “Going to the doctor will take an entire day. We’re going backward.”
When Walmart entered primary care in 2019, it said it could provide many Americans easy access to primary care, including dental, vision and mental health, since 90% of Americans lived within 10 miles of a Walmart store.
However, Walmart found that affordable care was not affordable for providers, even for a retail giant known for squeezing out a profit from lowmargin businesses like groceries.
“Primary care margins are small, similar to grocery margins,” Andrews said.
It was 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,” Walmart stated in a news release.
Those economics lay bare the challenges of running a health care business, said Brian Marks, University of New Haven senior lecturer of economics and business analytics.
“It’s problematic and suggests we need to reexamine the primary health care delivery system.”
Only the company’s vision centers and pharmacies, which weren’t part of Walmart Health, will now stay open, Walmart said.
Walmart ran most of the centers in rural, low-income and underserved communities in Arkansas, Florida, Georgia, Illinois and Texas. These areas will suffer the most from the closings, Trilliant’s Andrews said.
People who came into the clinics often had not seen a primary care physician in two or three years or a dentist in five years, Marcus Osborne, Walmart’s former vice president of health and wellness transformation, told CNN in 2020. Some patients saw a mental health counselor for the first time.
If Walmart can’t make it, who can?
Even Walmart, with its financial might, couldn’t attract enough health care workers amid a labor shortage, or find a way to make a profit by providing convenient, affordable primary care, experts said.
“It’s a terrible sign that Walmart, the top Fortune 500 company, can’t or decided not to” continue, Andrews said.
Other contenders in retail primary care have struggled, too.
Walgreens said last month it would close 160 VillageMD clinics across the country, and Amazon in February announced job cuts at its One Medical primary care and Amazon Pharmacy units.
CVS said it’s expanding its Oak Street Health clinics specializing in primary care for seniors, though it closed some of its MinuteClinics this year.
All these companies face similar financial hurdles that will likely lead to consolidation in care clinics, said Web Golinkin, a former health care CEO and author of “Here Be Dragons: One Man’s Quest to Make Healthcare More Accessible and Affordable.”
“We’re flashing yellow lights here,” he said.
No one can predict the future, but many experts think virtual care, or telehealth, will become a larger part of care.