Walmart details Health superstore expansion, one year after pilot

Rebecca Pifer@RebeccaMPifer Sept. 18, 2020

Dive Brief:

·        One year after the first Walmart Health location opened in Dallas, Georgia, the retail giant is moving forward with nationwide expansion of its health superstores.

·        Currently, the company has six Walmart Health locations open: five in Georgia — including a location in Cartersville that opened Friday — and one in Arkansas. Seven more locations are planned in Georgia by the end of the 2020 fiscal year, and two in the Chicago area this fall, COO Lori Flees said in a Friday blog post.

·        The Bentonville, Arkansas-based retailer also plans to open seven more superstores in the Jacksonville market next year, with at least one launching in early 2021. "We are beginning conversations in the Orlando and Tampa markets," Flees said.

Dive Insight:

Walmart announced in July it was expanding its nascent health superstore network into Florida, which has the second highest number of Walmart locations after Texas. The retail giant is investing millions in the expansion overall, but declined to share a more specific figure. The locations include primary and urgent care, dental and therapy and on-site diagnostic services.

Walmart Health locations are seeing a marked increase in visits, with more than half booked by returning patients, Flees said. About half the visit volume is for primary care, while the other half is for specialty care. And, at some of the oldest locations, initial primary care visits are beginning to transition to more longitudinal chronic care management, Flees said.

The clinics are meant to be affordable, but "Walmart Health is a prototype, and part of our testing includes the pricing structure," a Walmart spokesperson said. The company factors in the baseline cost of healthcare services in a specific region, patient demographics and underlying area health needs when determining pricing.

"​As we expand into different states, there may be variability in our pricing based on the market dynamics in each community," the spokesperson said. The first Georgia store, at least, charges a flat $40 for an adult primary care visit, $50 for an adult dental checkup and $45 for an eye appointment. Therapy services are $1 per minute.

The retail basic care market is in its formative stages. CVS Health and Walgreens have been particularly active, capitalizing on extensive brick-and-mortar footprints and using partnerships and acquisitions to build out their clinic chains. 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 some competition around pricing. Walmart's nurse-led clinics are priced at a 35% to 40% discount to CVS Health's network of health- and wellness-focused locations, called HealthHUBs, across myriad basic health services, per SVB Leerink.

Consumer demand for low-cost healthcare close to the home has fueled a race to gobble up market share quickly.

Walmart has partnered with BLOX, a decade-old medical module manufacturer, to standardize manufacturing with a goal of scaling more quickly, Flees said.

CVS currently has 275 HealthHUB locations up and running, with a goal of opening 1,500 by the end of 2021. The stores are in addition to its more than 1,100 walk-in MinuteClinics.

And Walgreens is investing $1 billion to open full-service doctor's offices in its stores, run by medical services provider VillageMD. It's the first national pharmacy chain to try building an in-store primary care infrastructure staffed by doctors, instead of nurse practitioners. Walgreens plans to open 500 to 700 of the clinics over the next five years, starting in Texas and Arizona.

Walmart already runs 19 primary care clinics with a more limited range of services than its Health Centers. The massive retailer is also partnering with a medical network, newly public Oak Street Health, to staff clinics in three Walmart Supercenters in the Dallas-Fort Worth area.

Walmart also said in July it planned to peddle health insurance policies directly to consumers, as it elbows further into the traditional healthcare sector during the coronavirus pandemic. And in June, it acquired CareZone, a VC-backed startup that develops apps to manage medications and chronic illnesses, in a $200 million deal.

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