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Walmart Health seeks buyer for its medical clinics

Walmart Health seeks buyer for its medical clinics

But since then, Walmart has been behind the scenes approaching potential buyers to take over the Walmart Health clinics that the company has already begun closing, Fortune has learned.

Some of the discussions involved health insurers, including Fortune 50 giant Humana, multiple sources familiar with the matter said. FortuneIt’s not clear whether discussions are underway, but Walmart has made it clear throughout the process that it is seeking to recoup some of its massive investment in the clinics through a sale or other acquisition arrangement.

Spokespeople for both Walmart and Humana declined to comment.

The sequence of events surrounding the Walmart Health clinic closure and sale talks has left some around the talks confused. On April 30, Walmart announced that it would end its latest five-year experiment in health care by closing its 51 clinics, which were originally billed as “the first to offer primary and urgent care, labs, x-rays and diagnostics, counseling, dental, optical and hearing services all in one facility.” The company cited “a challenging reimbursement environment and rising operating costs” in its announcement. Fortune reported alone, the reality was probably more complicated than that.

But at least some of the sales calls didn’t happen until after the closure was announced, potentially diminishing Walmart’s leverage in sales calls as the world — including Walmart Health patients and employees — moved on. Walmart Health clinics were scheduled to close on Friday, June 28.

Still, Walmart did reap some dividends when it announced last week the sale of its virtual care business, called MeMD, to healthcare tech company Fabric for an undisclosed sum. But there was no announcement about the physical clinics, which are typically located next to Walmart stores.

Several types of insurance companies, known in the industry as “payers,” could make sense in a deal for Walmart’s clinics. Some of these companies already run their own medical clinics. Humana, for example, runs hundreds of primary care clinics for seniors through its CenterWell and Conviva businesses. Other health insurers that don’t could try to enter the market by buying Walmart’s facilities and avoiding having to build their own clinics from scratch.

Walmart’s interest in the sector dates back to at least 1991, when founder Sam Walton himself complained to his employees about the industry’s high costs.

“We’ve got to get the hospitals and the doctors on the same page,” he told an audience of Walmart workers the year before he died. “We’ve got to get those charges under control.”

In the decades since, the company has gone through several experiments in the sector as it grappled with executive turnover and a disruptive strategy. In 2019, the company unveiled its latest initiative, launching these mini-care supercenters that offered medical and dental appointments, plus x-rays and lab work, all under the same roof.

Walmart Health promised transparent and affordable pricing, just as Walton had called for during the Saturday morning meeting nearly 30 years earlier. Walmart Health focused its initial pitch on the affordability of its services for people with little or no insurance; doctor visits would cost $40 and dentist appointments $50. But it didn’t take long for cracks in the model to appear.

“There was so much opportunity to bring affordable health care to rural and underdeveloped areas of America, but it’s gone,” a former Walmart Health marketing executive told Fortune in May.

But perhaps another company will continue the effort, with the same buildings but a new brand name on the front door.

Learn more about Walmart:

Inside Walmart and Amazon’s race to buy popular healthcare startup PillPack — and how Walmart let the company slip

Walmart’s $2.3 billion acquisition of Vizio is mostly a matter of jealousy at Amazon

Marc Lore’s startup Wonder is opening food halls in Walmart stores, following Walmart’s $3 billion acquisition of his e-commerce startup

Are you a current or former Walmart employee with thoughts on this topic or a tip to share? Contact Jason Del Rey at [email protected], [email protected]or via the secure messaging app Signal on 917-655-4267. You can also send him a message on LinkedIn or at @delrey on X.