Industry Voices—Walmart's exit from health centers reflects broader challenges in primary care

Walmart announced that it is closing all 51 of its health centers and virtual care operations just five years after they launched. These centers were offering primary and dental care, behavioral health, audiology, labs, X-ray and telehealth.

Walmart made a studied business decision, but we should be sad about the early demise of this inchoate effort and worried about what it could mean for the future of retail-based healthcare.

Primary care has been the bedrock of health services delivery, but the traditional model is no longer sustainable. There are too few primary care doctors in practice, and many are nearing retirement or planning to cut back due to professional burnout and other factors.

The Association of American Medical Colleges forecasts a primary care physician shortage of between 17,800 to 48,000 by 2034 (up to about 20% lower than we have today) while about 84 million Americans already live in a region with a shortage of primary care. Advance practice providers (such as nurse practitioners and physician assistants) are helping make up for the shortage resulting in a shift in care delivery models to more team-based and integrated approaches.

In this backdrop emerged retail health. Organizations such as Walmart, CVS Health, Walgreens, Amazon, supermarket chains and many health services ventures believed they could do better, offering consumer-friendly, cost-effective and high-quality primary care. The experimentation has played out in headlines showcasing investments, acquisitions and pivots as these organizations gained market experience.

The retailers are businesses that consumers are familiar with, are located near our homes and have deep experience in efficiently delivering products and services that consumers value. They have a right to play in healthcare services and participate in the $4.5 trillion healthcare economy—don’t they?

Healthcare is hard, and the business models supporting primary care are one of the hardest parts. Primary care is not well reimbursed. Traditional care delivery sites (such as hospitals and clinics) use primary care as a funnel to higher-value specialty services. Attracting well-insured patients and offering profitable primary prevention (e.g., colonoscopy cancer screening) adds to the mix.

This has not yet evolved in the retail setting, making it important that the delivery of primary care is more efficient than other options and that it augments their traditional footprint. In the case of Walmart, CVS Health and Walgreens, that includes their pharmacy, floor traffic and general retail operations, while for supermarkets, food sales are also a consideration.

For Walmart, the juice turned out not to be worth the squeeze. Walmart is not entirely abandoning healthcare, since it will maintain its 4,600 pharmacies and more than 3,000 vision centers suggesting that new health service lines may emerge.

It’s not just Walmart; we have seen Amazon pivot several times as it learned the market, as has Walgreens, absorbing a $5.8 billion impairment charge for VillageMD. CVS Health, too, is navigating the complexities of its retail, pharmacy, insurance and health services businesses. Common challenges include high medical care costs, low reimbursement rates and implementation.

So, where does that leave all of us who may already be struggling to find consumer-friendly, affordable and high-quality primary care? The hope that retailers were poised to offer a scaled-up solution has yielded to a more realistic view that, at best, it will be a long journey.

The reality is that most primary care will continue to be delivered where it always has. We must hope that these traditional sites of service can navigate their own challenges to keep us healthy. They will need to experiment with new care delivery models that leverage the evolving workforce and take advantage of new technologies to deliver high-quality healthcare services that are affordable and accessible to all Americans. Let’s say farewell to the Walmart Health experiment while cheering every effort to fortify primary care.

Peter Bonis, M.D., currently serves as the chief medical officer at Wolters Kluwer Health and an adjunct professor of medicine in the division of gastroenterology at Tufts University School of Medicine, where he continues to see patients. Additionally, he has published more than 70 research articles and speaks regularly to global audiences on issues related to improving the health system to advance patient and public health.