In the latest sign that the nation’s behemoth retail companies are deciding they can’t fix the healthcare system, Walmart recently shut down the retail health effort it launched in 2019.
“Today we are sharing the difficult decision to close Walmart Health and Walmart Health Virtual Care,” the company said in its announcement. “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.
Robert Field, a professor of health management and policy at Drexel University, told the Advisory Board that Walmart’s challenges included a shortage of healthcare workers, and added that the company’s strength in retail did not guarantee its success in the healthcare field.
“It is different from selling products, like toothpaste and breakfast cereal, and requires different kinds of expertise and management,” Field said.
This is a very different picture from when Walmart announced its several expansions into primary care. The thinking then was that the company had such muscle in its retail operations that it could not fail, but instead would be able to show the klunky and much less nimble world of healthcare how it’s done.
We have seen this over and over again in the healthcare environment: People from outside, with no experience, arrive and decide that the only reason the problem hasn’t been solved is that their brains have not been applied to it. Sadly, many of these companies fold quietly after a few years.
Primary care is a particularly tough nut to crack. “In healthcare, primary care is a loss-leader, and that dynamic needs to change,” Blake Madden, who writes about healthcare in his newsletter, wrote on Twitter. “Low reimbursement is exactly why operating an independent primary care practices is tougher than ever (a big reason why firms like Aledade exist). It’s why we’re seeing burnt-out physicians buck traditional pathways in favor of concierge medicine or direct primary care. And it’s also why the urgent care → specialty services pipeline exists within our health systems.”
That’s also why the urgent care system is growing so fast.
Walmart is not the only company re-thinking its investment in primary care. VillageMD, backed by Walgreens, has closed about half of its primary care locations, company officials reported, including some locations that closed less than a year after opening. They described a strategic review of businesses that is expected to continue.
Amazon and CVS
In 2023, Amazon bought primary care provider One Medical, and plans to add about 15 clinics to its current list of 200 locations this year. Amazon opened up One Medical for $9 a month to existing Amazon Prime members, or $99 a year — a $100 discount from OneMedical’s standard rate. With a membership, a virtual visit will be free, “with unlimited access to 24/7 on-demand virtual care, including video chats with licensed providers within minutes,” Amazon said in the announcement.
A year ago, CVS bought Oak Street Health, another primary care provider. It plans to open 50 to 60 clinics this year, making a total of at least 250 clinics.
Meanwhile, it’s not clear that this is an improvement, but the automated health kiosk keeps springing up in the news.
This one, from the State of Washington Health Department, in late April, offers “at-home COVID-19 rapid antigen tests, alongside COVID-19 and influenza (flu) PCR tests with results available within 48 hours for both COVID-19 and flu.”
“Some kiosks may also have:
- Naloxone (a nasal spray that can reverse an opioid overdose)
- Pregnancy tests, sexually transmitted infection (STI) prevention tools
- Over-the-counter medications
- Other health care supplies
“Look for kiosks in food pantries, churches, schools, and libraries. Find one near you with the kiosk locator.”
Another sign of the times is the recent announcement of “Carepods,” by Forward Health — “an AI-powered box for primary care,” with just a box, not a person.
Techcrunch wrote in its announcement: “Why spend hours in a doctor’s office to get your throat swabbed for strep throat? Walk into the CarePod, soon to be located in malls and office buildings, and answer some questions to determine the appropriate test. CarePod users can get their blood drawn, throat swabbed and blood pressure read — most of the frontline clinical work performed in primary care offices, all without a doctor or nurse. Custom AI powers the diagnosis, and behind the scenes, doctors write the appropriate prescription, which is available nearly immediately. The cost? It’s $99 a month.”
