Walmart Ditches Virtual Care Model, Leaves UHealth in Similar Situation

In recent news, Walmart (WMT) has made the decision to close 51 health centers and discontinue its virtual care offering due to the lack of a sustainable business model. This move follows in the footsteps of UnitedHealth’s announcement that it will be shutting down its Optum virtual health business.

In 2019, Walmart launched its health centers with plans to expand their services. There were rumors circulating about Walmart acquiring Humana (HUM) during this time. Amazon (AMZN) has also been increasingly involved in the health clinic business following its acquisition of One Medical for $3.9 billion.

Despite this setback, Walmart still maintains nearly 4,600 pharmacies within its stores and has been expanding the range of services they offer. They also operate over 200 vision centers. The lack of success with Walmart Health Centers is a positive development for CVS Health (CVS), which fully embraced the health center model with its acquisition of Aetna in 2017.

The recent retreat from virtual care by UnitedHealth and Walmart reflects the challenges faced by companies like Teladoc (TDOC), which was once a highflier in the industry. It remains to be seen whether a consolidation of the industry could allow Teladoc to return to growth. Amazon expanded its Amazon Clinic virtual health offering nationwide in August last year.

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