In a major shakeup, Walmart has announced the closure of its health care clinics and virtual medical services due to financial struggles. The decision marks a significant departure from the company’s strategy of expanding into the health care industry five years ago, offering various medical services in addition to its superstores.
Citing challenges in reimbursement and escalating operating costs as the main reasons for the closures, Walmart described the move as a difficult one. The clinics being shuttered are located in five states: Arkansas, Florida, Georgia, Illinois, Missouri, and Texas. Specific closure dates have not yet been announced by the company.
Walmart has assured customers that it will continue operating its nearly 4,600 pharmacies and more than 3,000 vision centers across the U.S., which will remain operational as usual. Despite the closures, affected employees are given the option to transfer to other Walmart or Sam’s Club locations or receive 90-days pay and severance benefits.
The announcement comes after Amazon also faced difficulties when it shut down its previously developed virtual and in-home care service in 2022. This underscores the challenges that retailers face when trying to enter the health care business. Retailers must navigate a complex regulatory environment while also managing high costs and competing with established players in the industry such as hospitals and insurance companies.