As it competes with CVS, Walgreens and Amazon on primary care, Walmart had to acquire a company to bridge the gap between virtual and in-person visits.
The retailer recently struck a deal to acquire telehealth provider MeMD as a complement to its in-store clinics, which have been rolling out at a relatively slow pace.
“Walmart has had a slow roll out of physical clinics compared to other retail storefronts; they needed a partner to achieve national presence with their healthcare strategy,” Forrester Principal Analyst Arielle Trzcinski wrote in an email. “Without a comprehensive primary care and chronic care delivery model that met consumers in their homes, they would struggle to gain market share against others like Amazon Care that focus on convenience, as well as cost.”
Scottsdale, Ariz.-based MeMD was founded in 2010 by an ER physician, and offers virtual urgent care and behavioral health services. Currently, MeMD’s visits are priced at $65 for an urgent care visit and $230 for a psychiatry visit, according to its website.
The companies did not disclose the terms of the deal, which is expected to close in the next few months.
The acquisition would add a virtual component to Walmart’s ongoing healthcare efforts, which involve building in-store clinics with a mixture of preventive health services, including primary care, dental, mental health, hearing and vision services. Walmart launched its first pilot of the concept in Georgia two years ago, and to date has opened about 20 of the clinics.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
“Telehealth offers a great opportunity to expand access and reach consumers where they are and complements our brick-and-mortar Walmart Health locations,” Dr. Cheryl Pegus, executive vice president of health and wellness for Walmart, said in a news release. “Today people expect omnichannel access to care, and adding telehealth to our Walmart Health care strategies allows us to provide in-person and digital care across our multiple assets and solutions.”
But since the start of the pandemic, and with the departure of several key leaders at the helm of the initiative, that work has slowed. Sean Slovenski, who first spearheaded the idea, left last fall to join testing startup BioIQ, and the company’s chief medical officer and head of dentistry, who also played a significant role in the development of the clinics, are also departing.
In the meantime, other retailers are ramping up their own healthcare efforts. CVS Health has opened or renovated 800 of its stores into “Health HUBs,” which have more dedicated space for clinics and other health services. The pharmacy chain recently shared plans to build on a pilot for offering in-store therapy services.
After piloting telehealth and in-home care for its employees in Seattle, Amazon is offering the service as a covered benefit to other employers. But given the proliferation of telehealth services in the last year, it’s not clear how they — and Walmart — will fare against a growing number of competitors.
Another big question is how MeMD will connect people to local care when it is needed.
“We have seen early success of virtual primary care models, but it has to be backed by the ability to send a consumer seamlessly into higher acuity settings when needed or to specialists when the need arises,” Trzcinski wrote.
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