Walmart to close Health Care Clinics

[wnetmacman]

Seems like Walmart finds out fast what doesn't work for them:
https://www.cnn.com/2024/04/30/business ... index.html

[mjhale]

There is something about going to Walmart for health care that just doesn't line up for me. People think of Walmart for cheap stuff (although not so much since all the price increases), marginal store experience and so-so quality. That's not something that people would equate to being able to provide quality health care. The quote at the end of the article sums it up pretty well:

“It is different from selling products, like toothpaste and breakfast cereal, and requires different kinds of expertise and management,” Field said.

With all of that said, the need to get health care into rural and under served areas is important. Perhaps Walmart could give discounted or free rent for a medical clinic to locate inside a store in one of the dead store spaces behind the cash registers. People would be able to get any products that are suggested by the clinic in the Walmart HBA section or the Pharmacy. That could make up for discounted or free rent. Maybe Walmart has tried this before and it didn't work? I do wonder if a non-Walmart medical clinic would be willing to be flexible with people with inadequate or no insurance. I'd imagine at the Walmart medical clinics some of that cost got "eaten" as opposed to being sent to collections like a lot of medical facilities do with unpaid balances.

[wnetmacman]

With all of that said, the need to get health care into rural and under served areas is important.

In the more rural areas, this is easier said than done. When you're looking at Supercenters now, you look at three models:

The primary model runs 175,000 to 220,000 s.f. These stores have the mall area up front with several spaces for potential tenants, though small. My local store had a VetIQ location for a while last year.

The middle model is around 150,000 s.f., and also has the same mall.

The third group is smaller - only around 100,000 s.f. This is the under served areas you speak of. There's only one issue.

Unlike the first two groups, these stores only have one bank of doors. In the other groups, the leased space is between the doors. In the smaller group, there is no lease-able space. Any clinic area would have to be added to the store. In many of these rural areas, local-ish clinics lease space in the shadow centers that have popped up over the years near these stores.

[BillyGr]

With all of that said, the need to get health care into rural and under served areas is important.

In the more rural areas, this is easier said than done. When you're looking at Supercenters now, you look at three models:

The primary model runs 175,000 to 220,000 s.f. These stores have the mall area up front with several spaces for potential tenants, though small. My local store had a VetIQ location for a while last year.

The middle model is around 150,000 s.f., and also has the same mall.

The third group is smaller - only around 100,000 s.f. This is the under served areas you speak of. There's only one issue.

Unlike the first two groups, these stores only have one bank of doors. In the other groups, the leased space is between the doors. In the smaller group, there is no lease-able space. Any clinic area would have to be added to the store. In many of these rural areas, local-ish clinics lease space in the shadow centers that have popped up over the years near these stores.

Then you also have an issue of getting the medical staff needed for those more underserved/rural areas.
At least one place here that they closed a regular "family" practice in a smaller town as it was having trouble getting employees to stay there vs. going to the larger areas that would assumably offer higher pay due to larger client base, and that would be similar for a clinic type setting that also may not be as consistently busy with a smaller population to draw from.

[buckguy]

With all of that said, the need to get health care into rural and under served areas is important.

In the more rural areas, this is easier said than done. When you're looking at Supercenters now, you look at three models:

The primary model runs 175,000 to 220,000 s.f. These stores have the mall area up front with several spaces for potential tenants, though small. My local store had a VetIQ location for a while last year.

The middle model is around 150,000 s.f., and also has the same mall.

The third group is smaller - only around 100,000 s.f. This is the under served areas you speak of. There's only one issue.

Unlike the first two groups, these stores only have one bank of doors. In the other groups, the leased space is between the doors. In the smaller group, there is no lease-able space. Any clinic area would have to be added to the store. In many of these rural areas, local-ish clinics lease space in the shadow centers that have popped up over the years near these stores.

Then you also have an issue of getting the medical staff needed for those more underserved/rural areas.
At least one place here that they closed a regular "family" practice in a smaller town as it was having trouble getting employees to stay there vs. going to the larger areas that would assumably offer higher pay due to larger client base, and that would be similar for a clinic type setting that also may not be as consistently busy with a smaller population to draw from.

Staffing is a problem, esp. given the relative shortage of primary care physicians. Physician Assistants and Nurse Practitioners have varying scopes of practice depending on state laws. Telehealth can extend what's available, through consultations with specialists but its no panacea. People in rural areas are much more likely to be using public insurance or no insurance which limits the financial base. I doubt that Walmart would establish Federally-Qualified health centers which can supplement those funds to deliver more services.

As for the space--you need hazardous waste disposal, plumbing, etc. for the scope Walmart was doing. It's expensive to retrofit space for a clinic.

Doc in box models of care have been coming and going since at least the 80s. My guess is they don't generate enough volume or revenue. Health care systems have been setting up urgent care offices to reduce emergency room use for routine care but they're rarely open 24 hours and probably have limited utility for that purpose.

Health care is highly regulated, for mostly good reason. I can't imagine Walmart doing well with this.

[ClownLoach]

Only thing I find odd is that this is a very, very rapid "about face" from Walmart. Here is an announcement from just last month about a massive expansion underway for the program. So a hair less than two months from announcing the doubling in size of the program they pull the plug?

https://corporate.walmart.com/news/2023 ... es-in-2024

Makes me wonder if Walmart is doing much worse than expected financially right now and decided to make some urgent changes to cut costs. I wonder if they will also halt the program to expand the "flagship" store program to 1,000+ major remodels this year (and renamed "Store of the Future"). Those are long, painful remodels that have been taking half a year and severely disrupting the affected stores. Not to mention they appear to be the most thorough and expensive remodels Walmart has ever done. I saw lots of little detail work occurring on these remodels, and as we know Walmart has never spent money on little details before.

[Alpha8472]

Walgreens and CVS closed down many of their clinics first. The reason is awful reimbursement rates from low income health plans such as Medicaid and Medi-Cal. An eye doctor normally charges $175 for a exam. Medi-Cal pays $40. This patient uses up an hour and a half of time in the office with paperwork, billing, exam tests, etc. A person with profitable insurance would pay $175.

Doctors are now forced by law to pay $25 an hour to health care workers in their office. That worker spent an hour and a half and you only got paid about $40 by Medi-Cal. Many doctors have stopped taking Medi-Cal.

Most customers at Walmart have money losing insurance plans such as Medicaid and Medi-Cal. Of course you lose money on Walmart customers. No doctor would want to work in these clinics.

[ClownLoach]

Walgreens and CVS closed down many of their clinics first. The reason is awful reimbursement rates from low income health plans such as Medicaid and Medi-Cal. An eye doctor normally charges $175 for a exam. Medi-Cal pays $47. This patient uses up an hour and a half of time in the office with paperwork, billing, exam tests, etc. A person with profitable insurance would pay $175.

Doctors are now forced by law to pay $25 an hour to health care workers in their office. That worker spent an hour and a half and you only got paid about $40 by Medi-Cal. Many doctors have stopped taking Medi-Cal.

Most customers at Walmart have money losing insurance plans such as Medicaid and Medi-Cal. Of course you lose money on Walmart customers. No doctor would want to work in these clinics.

All makes sense, but why were they bullish on this concept and expanding it to additional low income area stores in additional states just last month, and now killing the entire program? The economics were already bad and I had no idea how they could make it work but their fluffy press release last month sounded like they were going to single handedly fix Healthcare for poor and uninsured Americans. This month the concept is a money loser and needs to be killed? It was bad then and is bad now. Obviously they felt they had the money to lose, but now they don't?

Pure speculation here but Walmart has been very slow last couple of months. In fact I find myself buying very little there right now with their sky high food prices that are in desperate need of a rollback. I've never seen so many piles of merchandise next to price scanners before... So many people think magically they're going to scan the items and find a magical deal that isn't on the shelf. I think the economy has started kicking them in the butt and they are curtailing unnecessary expenses immediately. I already speculated on remodel cut backs, they could probably value engineer the heck out of the luxe Store of the Future remodel and they need to address the bad front end design anyway before making any more stores where you must wait in line twice to see a cashier. I wonder if they are going to drop more store closures as well? Seems like California oddball stores that were shoehorned into difficult sites are paying the price so far this year.

[retailfanmitchell019]

I wonder if they are going to drop more store closures as well? Seems like California oddball stores that were shoehorned into difficult sites are paying the price so far this year.

Encinitas would be an example, it is a former Home Depot Expo design center. Demographics in the area are anathema to Walmart.

[storewanderer]

Walgreens and CVS closed down many of their clinics first. The reason is awful reimbursement rates from low income health plans such as Medicaid and Medi-Cal. An eye doctor normally charges $175 for a exam. Medi-Cal pays $47. This patient uses up an hour and a half of time in the office with paperwork, billing, exam tests, etc. A person with profitable insurance would pay $175.

Doctors are now forced by law to pay $25 an hour to health care workers in their office. That worker spent an hour and a half and you only got paid about $40 by Medi-Cal. Many doctors have stopped taking Medi-Cal.

Most customers at Walmart have money losing insurance plans such as Medicaid and Medi-Cal. Of course you lose money on Walmart customers. No doctor would want to work in these clinics.

All makes sense, but why were they bullish on this concept and expanding it to additional low income area stores in additional states just last month, and now killing the entire program? The economics were already bad and I had no idea how they could make it work but their fluffy press release last month sounded like they were going to single handedly fix Healthcare for poor and uninsured Americans. This month the concept is a money loser and needs to be killed? It was bad then and is bad now. Obviously they felt they had the money to lose, but now they don't?

Pure speculation here but Walmart has been very slow last couple of months. In fact I find myself buying very little there right now with their sky high food prices that are in desperate need of a rollback. I've never seen so many piles of merchandise next to price scanners before... So many people think magically they're going to scan the items and find a magical deal that isn't on the shelf. I think the economy has started kicking them in the butt and they are curtailing unnecessary expenses immediately. I already speculated on remodel cut backs, they could probably value engineer the heck out of the luxe Store of the Future remodel and they need to address the bad front end design anyway before making any more stores where you must wait in line twice to see a cashier. I wonder if they are going to drop more store closures as well? Seems like California oddball stores that were shoehorned into difficult sites are paying the price so far this year.

If only when we heard someone was going to "fix" healthcare (by somehow wringing costs out of the system) and increase accessibility for groups who have access issues (rural, uninsured, underinsured, whatever...)... it would ever actually happen... all that happens is prices keep going up up and UP. Insurances keep getting more and more powerful. Eventually this whole thing is going to crack but it is still chugging along. Now Wal Mart is bowing out- whoever talked up the expansion plans probably had no clue what was going on with the financials of this venture.

Your Wal Marts still have price scanners? I haven't seen those in years in any Wal Marts other than some state where they were supposedly mandated and it wasn't CA, it was somewhere else. Whatever state that was Walgreens also had price scanners, only time I've ever seen those. Target still has price scanners and there are always piles of merchandise everywhere around their price scanners...

I agree that non food sales seem very slow at Wal Mart in recent months. Grocery is where most of the traffic is. Ironically I buy few groceries there, after they started playing games only having a few self checkouts open, it was back to actual grocery stores 100% with self checkout/no wait in line for me. They've also been holding onto merchandise longer. I finally got some $1 shorts recently, those are from last summer, they FINALLY marked them down to $1, and had all sizes ranging XS to S to M to L to XL to XXL in that style which had a regular of 12.98 or 13.98 or something. They'd been sitting on them at $9 for months.

I did notice this week Wal Mart was back to 100% self checkout at the location I go to with 100% of the self checkouts open. No cashiers in the evening. The self checkouts by pharmacy had been closed since they started playing games only opening a few etc. which I've noticed at various locations and that is also really frustrating for non-grocery purchases.