Walmart is shutting down its healthcare centers…which means…what?

Three things.

First, healthcare is a very complicated and complex business, nothing like Walmart’s core business 

Walmart’s culture, ethos, business practices, priorities, and people built a multi-gazillion dollar consumer business by TBH, beating the crap out of vendors to deliver really low prices.

That is diabolically different from building a service-oriented, one-at-a-time, people-based interaction around a very complex need – healthcare.

So, yeah, healthcare is about as different from Walmart’s core culture as you cold possible get. 

Walmart’s failure comes after Haven Healthcare, the joint venture of giants Amazon, Berkshire Hathaway and JP Morgan went belly-up early in 2021.

Haven CEO Atul Gawande MD lacked the intimate, deep knowledge of healthcare infrastructure, reimbursement, regulations and management required to be successful. A brilliant writer, insightful analyst, and highly visible public figure, Gawande didn’t have the management chops. He also didn’t give up his other jobs and had no experience as CEO of a start-up.

Many who think they know healthcare – don’t.

Then there’s commitment. Gawande was committed to Haven – and frankly the three founding companies were as well – like the chicken is committed to breakfast.

If you want to take on something as daunting as reforming healthcare, you’d best be committed to the task like the the pig is committed to breakfast.

Second, reimbursement.

Despite a partnership with giant UnitedHealthcare, Walmart Health was unable to attract enough customers paying enough for care at its 51 centers. This MAY have been due – at least in part – to the venture’s focus on Medicare Advantage members…

This from UHG’s announcement back in 2021:

(the partnership will launch in) 2023 with 15 Walmart Health locations in Florida and Georgia and expand into new geographies over time, ultimately serving hundreds of thousands of Medicare beneficiaries in value-based arrangements through multiple Medicare Advantage [MA] plans. [italics added]

MA has been having a rough time of late which may have factored into a non-produdctive partnership…As the payor, UHG would want WH to agree to low reimbursement rates…as the provider, WH wanted high reimbursement…

Third, providers.

Primary care providers are expensive, rare, and thus have a lot of bargaining power. Oh, and you can’t have a business without them.

Which – to return to the lede, runs directly counter to Walmart’s…everything.

What does this mean for you?

Fixing healthcare requires understanding healthcare.