- Walmart is considering buying a majority stake in value-based medical chain ChenMed, according to a Bloomberg report published Friday.
- The retail giant is in discussions with ChenMed regarding a transaction that would value the Miami-based primary care clinic operator at several billion dollars, Bloomberg reported, citing sources familiar.
- Terms of the deal aren’t finalized, and talks could fall through or a different buyer could emerge, Bloomberg’s sources said.
If a deal is announced, Walmart would become the latest retail operator to bag a primary care operator, following in the footsteps of rivals including CVS, Amazon and Walgreens.
ChenMed operates a network of more than 125 clinics for Medicare-eligible seniors in 15 states, according to the company’s website.
The family-owned business, which focuses on care for seniors with complex conditions, was founded in 1985. ChenMed is private and doesn’t disclose its financials, but the company has struggled amid reimbursement pressures and regulatory changes, reportedly exploring a sale of its senior medical center business JenCare last year.
ChenMed is also reshuffling its leadership amid rising pressures in the healthcare ecosystem, with members of the Chen family stepping down from their roles.
Retailers are increasingly angling to snap up a larger slice of the $4 trillion healthcare system. Integrating primary care capabilities, whether physical or via telemedicine, allows retailers to provide a front door to the medical system for consumers and nudge them toward other services, like pharmacy capabilities, urgent care clinics or medical devices for sale in stores.
CVS purchased value-based medical chain Oak Street Health for $10.6 billion in May, while Amazon closed its acquisition of membership-based primary care company One Medical for $3.9 billion in February.
Meanwhile, VillageMD — a primary care operator majority owned by Walgreens — has been actively pursuing deals with provider groups, including an $8.9 billion acquisition of New Jersey-based chain Summit Health late last year.
Buyers have particularly targeted companies managing the care of seniors in value-based arrangements, as the private Medicare Advantage program has proved exceedingly lucrative for health insurers and other risk-bearing entities.
Walmart is not a health insurer but is familiar with MA. Along with brokering MA plans beginning in 2020, the Arkansas-based retailer signed a decade-long deal with UnitedHealth last year to offer co-branded MA plans, with the eventual goal of serving hundreds of thousands of seniors and Medicare beneficiaries.
Walmart has also been active in healthcare M&A, buying a telehealth provider in 2021 and a chronic condition management tech platform in 2020.
Walmart is also investing heavily in building out its network of health superstores, called Walmart Health, since launching the initiative in 2019. The centers offer primary care, hearing, eye and dental care, lab and X-ray and counseling services with flat-rate pricing for health services. As of April, Walmart operates more than 30 locations in five states, and plans to enter three new states next year.
Walmart and ChenMed did not respond to requests for comment.