After operating for five years, Walmart (NYSE: WMT) has decided to close its Walmart Health centers and virtual care program. The retail giant stated that Walmart Health did not have a “sustainable business model for us to continue,” signaling a major shift away from its ambitious foray into health care. This Walmart Health Closure Behavioral Health news shines a spotlight on the significant challenges retailers face when trying to enter and thrive in the behavioral health and primary care markets.
Walmart Health’s Vision and Services
Walmart Health was launched with a bold vision to provide accessible, affordable health care — including medical, dental, and behavioral health services — to communities across the country. The services were available to individuals aged 6 and older and included access to licensed clinicians and psychiatrists. Behavioral health offerings ranged from counseling for depression, anxiety, stress, grief, relationship difficulties, alcohol use, ADHD, and more.
In addition to physical clinics in select locations, Walmart Health Virtual Care provided patients with quick access to psychiatric professionals — often within 72 hours — via telehealth platforms. This virtual care option included the development of personalized treatment plans that combined talk therapy, medication management, and other psychosocial interventions.
Price Transparency as a Core Tenet
One of the hallmark features of Walmart Health was its commitment to price transparency. Prices for services were clearly posted on billboards outside Walmart Health centers, a strategy aimed at demystifying health care costs. In 2020, Walmart launched a program allowing patients to speak with behavioral health counselors for just $1 per minute, which was particularly appealing for patients without insurance or those residing in states that had not expanded Medicaid.
According to Corbin Petro, founder of Eleanor Health and a healthcare advisor, this approach gave uninsured patients a straightforward way to access care:
“This is a way for patients to get some of the needed services in a really price transparent way and then go into Walmart and spend money.”
This commercial model was also a stepping stone for Walmart to build health care capabilities and negotiate value-based contracts with health plans, balancing cash-pay models with value-based care strategies.
The Business Model Challenges Behind the Closure
Despite Walmart’s retail dominance and operational scale, Walmart Health struggled to find a sustainable business model. Corbin Petro told Behavioral Health Business:
“Walmart is known for being the most efficient, the most scaled [retailer]. If anyone can do something profitably based solely on scale, it’s Walmart. They can figure it out. And the fact that they haven’t is really alarming. If they can’t figure it out, who can?”
This highlights the harsh realities of health care delivery—especially behavioral health—that even a retail powerhouse like Walmart found difficult to navigate profitably. This Walmart Health Closure Behavioral Health story illustrates these challenges clearly.
Retail Health Care: Broader Industry Struggles
Walmart is not alone in its struggles. Other major retailers, including Walgreens (NASDAQ: WBA) and CVS (NYSE: CVS), have also ventured into health care by opening clinics at retail locations. However, these efforts have faced headwinds as well. Walgreens recently shuttered 160 primary care clinics operated by VillageMD, underscoring the financial and operational challenges retailers face in sustaining provider networks.
Petro points out a critical advantage held by organizations that combine payer and provider roles, such as CVS Health with its acquisition of Aetna:
“When you think about innovation in behavioral and primary care, is the end zone where Aetna, Cigna, and Humana are the only ones going to see an acquisition as something that’s accretive? Part of that is probably because they control both sides. …They can lose money on those services but make it up because they drive volume to a low-cost service area.”
This vertical integration allows payers to absorb losses on clinical services, knowing they will ultimately reduce overall costs by steering patients to more affordable care settings, a luxury Walmart and similar retailers do not have.
The Pricing Paradox: Cash Pay vs. Insurance Reimbursement
Walmart’s price transparency approach, while consumer-friendly, also created complexities in transitioning services from cash pay to insurance reimbursement. Posting prices that are lower than insurance reimbursement rates can create compliance risks, particularly in Medicaid, which regulates payment parity.
Petro explained:
“The problem with that approach is if you post prices on the wall that are lower than you’re getting reimbursed by a health plan, which technically you can’t do in Medicaid, … that then makes it hard for you to go from super low cash pay to insurance reimbursable services.”
This dilemma complicated Walmart’s ability to scale its health services sustainably, especially as it sought to build value-based care relationships with insurers. This is a key part of the Walmart Health Closure Behavioral Health narrative.
Walmart’s Efforts in Value-Based Care
Despite the challenges, Walmart Health made significant strides toward integrating value-based care models. In 2022, Walmart announced a partnership with UnitedHealth Group (NYSE: UNH) to launch a 10-year value-based care initiative at 15 Walmart locations beginning in January 2023. This partnership aimed to serve seniors enrolled in Medicare Advantage (MA) plans by delivering coordinated care focused on improving outcomes and reducing costs.
This effort illustrated Walmart’s commitment to evolving its health care strategy beyond a pure cash-pay model toward one that aligned incentives with payers and promoted higher-value care delivery.
What Walmart’s Exit Means for the Future of Retail Behavioral Health
Walmart Health’s closure sends a clear message: the retail model for behavioral health care faces steep hurdles that require more than just operational scale and brand recognition. The business of health care is complex, involving nuanced payment models, regulatory constraints, and the need for deep clinical integration that many retailers lack.
For other retailers, the path forward may involve embracing payer-provider integration, strategic partnerships, or technology-enabled care models that better align with health plan incentives. Purely commercial, cash-pay approaches, while attractive for some segments, may not provide the sustainable economics needed for widespread adoption.
This Walmart Health Closure Behavioral Health development is a significant lesson for any retail or commercial entity looking to expand in behavioral health.
Final Thoughts
The shutdown of Walmart Health’s centers and virtual care program is a sobering development in the retail health care landscape. It highlights the tension between providing affordable, accessible care and maintaining a viable business model amid a fragmented health care system.
While Walmart’s exit is a setback, it also offers valuable lessons for the industry. Success in retail behavioral health likely requires a more integrated approach that combines clinical expertise, payer alignment, innovative care delivery, and sustainable financing models.
As retailers recalibrate their health care strategies, the experience of Walmart Health will serve as a critical case study in the ongoing evolution of behavioral health care delivery in America.
