Thanks Joe...
2024-05-20 08:31:45 UTC
NPR's Ayesha Rascoe talks with Forbes senior healthcare contributor Bruce
Japsen about why Walmart is closing 51 health clinics and what this means
for the rural populations they served.
AYESHA RASCOE, HOST:
Walmart is getting out of the primary care business. The retail giant said
Tuesday it's closing 51 clinics and shutting down its telehealth service,
just five years after jumping into the industry and weeks after saying it
was expanding into new markets. Bruce Japsen reports on health care for
Forbes and joins us now. Welcome to the program.
BRUCE JAPSEN: Hey, thanks for having me, Ayesha.
RASCOE: So, when people walk into a Walmart, they'll usually find a
pharmacy, maybe vision care, but these clinics that we're talking about
were much more than that, right?
JAPSEN: Yes, they started about five years ago. And Walmart - a lot of
people don't realize this, but Walmart has done some innovative things in
health care over the years. Years ago, they had this market-moving move on
$4 prescriptions. So they thought, you know what? We're - in the markets
that we operate, which were at one time rural, we're going to expand and
get into the health care business and start retail clinics. So the first
clinic they opened in Dallas, Ga., which Dallas, Ga., maybe 20 years ago,
was rural. Now it's a booming suburban market. They opened a 10,000-
square-foot health center. It would have primary care doctors. It would
have X-rays. It would have mental health support - all sorts of services,
and it went well enough. They ended up in five states, and then just a
month ago, they told me, yeah, we're expanding, you know, we're going. And
then they reached out and said that they were getting out of it.
RASCOE: Yeah, well, so, what - 'cause, you know, Walmart is obviously
legendary for maximizing its profit margins and keeping its eyes on the
bottom line. So is this simply a question of profitability? Like, why did
they go from announcing expansions to now saying they're going to shutter
the whole thing?
JAPSEN: Well, that's a great question, because they basically said this -
after the pandemic, we have a very tight labor market. In healthcare,
you've had a lot of burnout and hospitals have had to pay a lot of money
to attract and retain primary care providers. And Walmart basically said,
for right now, they don't see a sustainable business model because health
care costs are going up. In some cases, reimbursement is not keeping up.
They're trying to go into the primary care business when they're competing
against big hospitals and health care systems. And meanwhile, you know,
Amazon, Walgreen, CVS - they're all going into - trying to go into this
primary care market.
RASCOE: So where does this leave the communities where Walmart opened
these clinics?
JAPSEN: Yeah, that's a great question, because, Ayesha, people like these
retail clinics. You know, your doctor isn't off office - isn't often open
on the weekends or after 5 or 6 'o clock. These clinics that Walmart is
closing - and of course, Walgreens is closing and their partner Village MD
are closing clinics as well - people love them because you can go and you
can take your kid, you can take yourself, and you can get care for
different things. What Walmart did say they're doing in the next 60 to 90
days, the next 90 days, is they're closing them. They're hoping and they
think that in some of the markets, because the physicians were on
contract. Generally, they said they were independent physicians and so
forth. They're hoping that maybe the local hospital system or health care
system will take it over. And then they'll have whatever market it is, the
- hopefully, the local hospital or health care system might move in there
or keep it going in some capacity.
RASCOE: So, and I mean, as you've mentioned, you know, Walmart is not the
only big company that got into primary care. You know, you mentioned, you
know, Walgreens and their clinics that are shutting down - Warren Buffett,
Amazon's Jeff Bezos, and JP Morgan's Jamie Dimon teamed up to get into
healthcare and their business called Haven lasted just three years. Is the
American healthcare system just too complex for newcomers?
JAPSEN: Well, CVS had their earnings this week. And I asked their CEO - I
said, are you sticking this out? Because they spent $10 billion on primary
care clinics for seniors. And her answer was, it's complicated, but we're
sticking in. Amazon has said they're committed to their primary care
centers. But the company they bought, One Medical - it was losing money
last year, and my guess is it's probably still losing money. But I think
people say if we really are going to solve the spiraling healthcare cost
equation in this country is primary care is where the cost is the
cheapest, and you want to encourage people to get primary care services.
It's just that the margins aren't as good.
RASCOE: That's Bruce Japsen of Forbes. Thank you so much for speaking with
us.
JAPSEN: Thanks for having me.
https://www.npr.org/2024/05/05/1249231441/walmart-is-ending-its-
telehealth-service-and-closing-over-50-health-clinics
Japsen about why Walmart is closing 51 health clinics and what this means
for the rural populations they served.
AYESHA RASCOE, HOST:
Walmart is getting out of the primary care business. The retail giant said
Tuesday it's closing 51 clinics and shutting down its telehealth service,
just five years after jumping into the industry and weeks after saying it
was expanding into new markets. Bruce Japsen reports on health care for
Forbes and joins us now. Welcome to the program.
BRUCE JAPSEN: Hey, thanks for having me, Ayesha.
RASCOE: So, when people walk into a Walmart, they'll usually find a
pharmacy, maybe vision care, but these clinics that we're talking about
were much more than that, right?
JAPSEN: Yes, they started about five years ago. And Walmart - a lot of
people don't realize this, but Walmart has done some innovative things in
health care over the years. Years ago, they had this market-moving move on
$4 prescriptions. So they thought, you know what? We're - in the markets
that we operate, which were at one time rural, we're going to expand and
get into the health care business and start retail clinics. So the first
clinic they opened in Dallas, Ga., which Dallas, Ga., maybe 20 years ago,
was rural. Now it's a booming suburban market. They opened a 10,000-
square-foot health center. It would have primary care doctors. It would
have X-rays. It would have mental health support - all sorts of services,
and it went well enough. They ended up in five states, and then just a
month ago, they told me, yeah, we're expanding, you know, we're going. And
then they reached out and said that they were getting out of it.
RASCOE: Yeah, well, so, what - 'cause, you know, Walmart is obviously
legendary for maximizing its profit margins and keeping its eyes on the
bottom line. So is this simply a question of profitability? Like, why did
they go from announcing expansions to now saying they're going to shutter
the whole thing?
JAPSEN: Well, that's a great question, because they basically said this -
after the pandemic, we have a very tight labor market. In healthcare,
you've had a lot of burnout and hospitals have had to pay a lot of money
to attract and retain primary care providers. And Walmart basically said,
for right now, they don't see a sustainable business model because health
care costs are going up. In some cases, reimbursement is not keeping up.
They're trying to go into the primary care business when they're competing
against big hospitals and health care systems. And meanwhile, you know,
Amazon, Walgreen, CVS - they're all going into - trying to go into this
primary care market.
RASCOE: So where does this leave the communities where Walmart opened
these clinics?
JAPSEN: Yeah, that's a great question, because, Ayesha, people like these
retail clinics. You know, your doctor isn't off office - isn't often open
on the weekends or after 5 or 6 'o clock. These clinics that Walmart is
closing - and of course, Walgreens is closing and their partner Village MD
are closing clinics as well - people love them because you can go and you
can take your kid, you can take yourself, and you can get care for
different things. What Walmart did say they're doing in the next 60 to 90
days, the next 90 days, is they're closing them. They're hoping and they
think that in some of the markets, because the physicians were on
contract. Generally, they said they were independent physicians and so
forth. They're hoping that maybe the local hospital system or health care
system will take it over. And then they'll have whatever market it is, the
- hopefully, the local hospital or health care system might move in there
or keep it going in some capacity.
RASCOE: So, and I mean, as you've mentioned, you know, Walmart is not the
only big company that got into primary care. You know, you mentioned, you
know, Walgreens and their clinics that are shutting down - Warren Buffett,
Amazon's Jeff Bezos, and JP Morgan's Jamie Dimon teamed up to get into
healthcare and their business called Haven lasted just three years. Is the
American healthcare system just too complex for newcomers?
JAPSEN: Well, CVS had their earnings this week. And I asked their CEO - I
said, are you sticking this out? Because they spent $10 billion on primary
care clinics for seniors. And her answer was, it's complicated, but we're
sticking in. Amazon has said they're committed to their primary care
centers. But the company they bought, One Medical - it was losing money
last year, and my guess is it's probably still losing money. But I think
people say if we really are going to solve the spiraling healthcare cost
equation in this country is primary care is where the cost is the
cheapest, and you want to encourage people to get primary care services.
It's just that the margins aren't as good.
RASCOE: That's Bruce Japsen of Forbes. Thank you so much for speaking with
us.
JAPSEN: Thanks for having me.
https://www.npr.org/2024/05/05/1249231441/walmart-is-ending-its-
telehealth-service-and-closing-over-50-health-clinics