Rural Healthcare Hit as Walmart Shutters 51 Centers

As Walmart begins the process of closing its health centers, healthcare professionals are questioning how it will affect underserved communities who rely on them for in-person care.

Walmart Clinics Closing

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At the start of the month, retail giant Walmart announced its decision to shut down its Walmart Health Initiative due to mounting expenses that “made it difficult” to continue operations.

All 51 Centers Shuttered

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The end of the initiative means that all 51 health clinics located in various states will be shut down. An online virtual clinic will also be coming to an end.

Pharmacies and Vision Care Not Affected

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Fortunately, the decision will not affect the 4,600 pharmacies and 3,000 vision care centers that can be found in Walmart stores across the country. Still, the announcement has rung alarm bells for some experts.

Impact on Rural Communities

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Hal Andrews is the chief executive of Trilliant Health, a Tenessee-based healthcare consulting firm. He believes that the end of the Walmart Health Initiative, particularly the closing of clinics, will have a negative effect on rural communities and other communities that have limited access to affordable healthcare. 

“We’re Going Backwards”

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“People will have to go back to driving to a big city,” Andrews told reporters. “Going to the doctor will take an entire day. We’re going backward.”

More Concerns Roll In

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Other healthcare industry experts, including Harvard professor of healthcare policy Ateev Mehrotra, are similarly concerned about the effect this decision will have on healthcare accessibility in underserved areas.

“These Patients Need Care”

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“One of the unique things was they were focused on stores located in underserved communities,” Mehrotra said. “It’s disappointing that Walmart wasn’t able to make it work because these patients need care and don’t have as many options.” 

Starting in 2019

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Walmart began its foray into healthcare, including pharmacies and clinics, back in 2019. It was seen as an effective way to provide more efficient healthcare access to Americans, as 90% of the population lives a mere 10 miles from a Walmart store.

Too Expensive

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While some initiatives have proven fruitful, Walmart’s health clinics and telehealth programs were found to be too unwieldy and expensive for the company to justify. 

“Not a Sustainable Business Model”

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“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,” Walmart announced in a public statement. 

Challenging Environment and Escalating Costs

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The statement pointed to a “challenging reimbursement environment and escalating operating costs” that created a “lack of profitability” for the initiative overall. 

“Healthcare is Expensive”

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A separate spokesperson for the retail company elaborated on the closures, explaining that  “Healthcare is expensive to run. We were finding that the increased labor and operating costs environment, like with reimbursement, both public and private, made it difficult.”

Sharp Turn for Walmart

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It’s an extreme change of fortune for Walmart’s Health Initiative after the company announced plans to double the number of clinics they provided just last year. They also projected plans to raise the number of doctor-staffed clinics to 70 by the end of the year. 

Others Have Been Impacted

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Walmart is not the only non-traditional healthcare provider that has been impacted by soaring operational costs and an overall lack of sustainability. 

Walgreens and Amazon

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Retail pharmacy chain Walgreens has also had to close 160 of its VillageMD clinics across the US. Earlier in the year Amazon announced layoffs at Amazon pharmacies and One Medical primary care clinics.

Rise of Telehealth

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Industry analysts believe the growth of telehealth, or visual care, may contribute to further closures and layoffs for in-person healthcare clinics in the future. 

No Exact Dates Given

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While the exact dates of the Walmart clinic closures have not yet been announced, all scheduled appointments will be kept until further notice.

Six States

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These will apply to every doctor-staffed Walmart clinic in Arkansas, Florida, Georgia, Illinois, Missouri, and Texas, which are the six locations that currently provide clinical care. 

Pledge to Reconnect Patients

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Walmart has also pledged to help redirect its existing patients to new care providers in their area and in their individual health insurance networks. 

Prioritizing Respect and Compassion

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“Our priority will be ensuring the people and communities who are impacted are treated with the utmost respect, compassion, and support throughout the transition,” the company concluded in its announcement.

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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.

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