In April, Walmart decided to close all 51 of its health clinics and shut its virtual healthcare operations. Last week it sold its virtual care subsidiary, MeMD, to healthcare technology startup Fabric, and is now attempting to recoup some of its huge investment, by engaging in discussions with potential buyers to sell its recently closed medical clinics.

Why it’s notable:

• Last week, Fabric announced its acquisition of the MeMD virtual care platform from Walmart, as the retailer continues to shift away from primary healthcare services. The sale follows Walmart's recent decision to shut down its Walmart Health division, close its health clinics, and terminate its virtual healthcare services. The challenging reimbursement environment and rising operating costs made it difficult for Walmart to generate a profit from the business.

• Walmart acquired MeMD in 2021, and despite financial difficulties, under Walmart’s ownership, MeMD experienced significant growth and expansion, with an established network of 30,000 corporate, institutional, and health plan partners and 5 million members. Fabric's acquisition of MeMD from Walmart represents a strategic vision of transforming healthcare through technology innovation, boosting its ability to offer comprehensive care solutions, including behavioral, urgent, and primary care services. 

POV: There is an increasing emphasis on creating consumer-focused solutions that offer convenience and high-quality holistic care while addressing financial and operational hurdles. 

• Fabric is a care enablement company that utilizes conversational AI to identify patients' symptoms and direct them to the appropriate care setting, such as urgent or virtual care, while also assisting in scheduling primary care visits. The acquisition of MeMD builds on their existing technology collaboration, streamlining patient intake and documentation processes. Additionally, it ensures a smooth transition for MeMD's current patients, partners, and clinicians, providing access to cost-effective, high-quality care. This acquisition underscores a trend towards consolidation in the virtual healthcare industry, with companies increasingly combining resources to offer more comprehensive and specialized healthcare solutions.

• Walmart's departure from the health clinic business highlights the challenges retail giants encounter in the healthcare sector. The company will continue to focus on nearly 4,600 pharmacies and more than 3,000 vision centers. The shift reflects bigger economic challenges in health care, which is struggling with low government reimbursements for primary care, a shortage of nurses and doctors, and soaring costs for supplies. Sesame, a Costco partner, offers discounted 24/7 virtual primary and mental health care, however the company operates a pay-per-service model, and doesn’t accept health insurance. Similar models are used successfully by companies such as tech giant, Amazon, and may be indicating a shift in the way consumers interact with primary care. 

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