Dive Brief:
- Walmart plans to expand its network of medical centers in 2024, including a launch into two new states, as retail health giants race to build out their primary care footprints.
- The company announced Thursday it plans to open 28 new Walmart Health centers in 2024, bringing its number of total locations to more than 75.
- Walmart Health will open clinics in Missouri and Arizona for the first time, while deepening its presence in Texas by expanding in the Dallas area and growing into Houston, according to the announcement.
Dive Insight:
Walmart launched Walmart Health in 2019, as a one-store pilot in Georgia. Now, Walmart Health has grown to 32 locations in Arkansas, Florida, Georgia, Illinois and Texas, and the Arkansas-based retailer plans to launch 17 more in Florida by the fall of 2023.
Walmart declined to comment on how much it was investing in the expansion for 2024, but said in 2020 it was spending “millions” to build out its clinical network.
The medical centers, which are geared at patients with no or poor insurance coverage in underserved areas, are located next to or inside Walmart Supercenters. They offer a range of services, including primary and urgent care, labs, X-rays and diagnostics, dental, optical, hearing and behavioral health and counseling in one facility.
Walmart says a key differentiator of its centers is their inexpensive and transparent pricing at the point of service.
The cost of services at a specific center vary based on factors like the baseline cost of healthcare services in a specific region, patient demographics and underlying area health needs.
Walmart is one of a handful of retail health giants racing to build up a primary care presence as demand hikes for inexpensive care close to the home. Along with rivals like CVS and Walgreens, Walmart is banking on its extensive brick-and-mortar footprint, brand recognition and a series of partnerships and acquisitions to drive consumers to its medical centers.
Along with bringing in revenue from services themselves, retail clinics have also been shown to lead to higher script-writing and front store sales. There’s also the potential for a significant amount of revenue from directing consumers to other businesses, like telemedicine or health plan offerings.
As a result, the primary care space has seen a number of multi-billion dollar deals recently. Amazon closed its $3.9 billion acquisition of primary care company One Medical in February. Earlier that same month, CVS announced plans to acquire value-based primary care chain Oak Street Health for $10.6 billion.
Some 30% of the primary market could belong to nontraditional players by 2030, according to estimates from Bain.
It unclear how the CVS-Oak Street deal might impact Oak Street’s partnership with CVS rival Walmart. Currently, Walmart and Oak Street co-operate three clinics in Walmart supercenters in the Dallas-Fort Worth area, and as recently as November were in discussions about a potential expansion.
The first of Walmart Health’s new centers will open in the first quarter of 2024, and will include changes made after feedback from patients, David Carmouche, SVP of omnichannel care at Walmart, wrote in a blog post on the expansion.
That includes integrating Epic’s electronic health record system in the locations, and changing the layout of the center in a bid to have patients spend less time in the waiting room.
Specifically, Walmart plans to open 10 new locations in Dallas; eight in Houston; six in Phoenix; and four in Kansas City, Missouri.
