Walmart and UnitedHealth are linking up on a decadelong collaboration deal to offer healthcare services, first targeting seniors, the companies announced Wednesday.
The partnership between the retailer and vertically integrated healthcare firm — giant U.S. companies both with hundreds of billions of dollars in annual revenue — comes as Walmart looks to build out its care delivery network and UnitedHealth looks to expand the reach of its Medicare Advantage plans.
The value-based care partnership will start next year with 15 Walmart Health locations in Florida and Georgia, and expand into new geographies over time, according to a release.
Beginning in January, UnitedHealth and Walmart will operate a co-branded Medicare Advantage plan in Georgia, called UnitedHealthcare Medicare Advantage Walmart Flex. In addition, Walmart Health’s virtual care offering will be in-network with UnitedHealthcare’s Choice Plus PPO plan, meaning roughly 20 million of UnitedHealthcare’s commercial members will have access to Walmart virtual care.
UnitedHealth’s health services business Optum will also offer analytics and decision support tools to Walmart Health to help its clinicians deliver value-based care.
A representative for Walmart declined to share the financial terms of the deal.
Ultimately, the goal is to serve hundreds of thousands of seniors and Medicare beneficiaries in value-based arrangements through multiple Medicare Advantage plans — and eventually expand to those in commercial and Medicaid plans through social determinants of health initiatives, over-the-counter and prescription medications and dental and vision services, the companies said.
The union between two powerhouses could result in a windfall of new customers for both Walmart and UnitedHealth. MA plans continue to grow in popularity among U.S. seniors, with the privately run Medicare plans are expected to surpass traditional Medicare in size by 2023.
UnitedHealth operates one of the largest private payers in the U.S. and is also the biggest provider of MA coverage with almost 8 million enrollees. Linking with the company has the potential to significantly expand use of Walmart Health clinics, which launched in 2019 to offer low-cost primary and urgent care, along with ancillary services like X-rays, behavioral health and dental, geared at patients with no or poor insurance coverage in underserved areas.
However, the company has pivoted away from what it deemed “disruptively low” cash prices at early locations, with its newest centers in Florida contracting with roughly 90% of the state’s payers.
Walmart has invested millions in expanding Walmart Health’s reach, and currently operates 27 locations across Arkansas, Florida, Georgia and Illinois. But the retailer faces stiff competition from other national pharmacy chains also looking to become the front door to a wider range of healthcare services than just prescription drugs.
CVS Health is currently undergoing a major overhaul of its store network to include more health services, including physician-led primary care centers with integrated virtual and home assets. The Rhode Island-based healthcare company agreed to acquire home healthcare firm Signify Health this week for $8 billion after an extended bidding war against other potential buyers, including UnitedHealth.
Meanwhile, Walgreens plans to open 200 co-branded primary care clinics with provider VillageMD this year, and just completed its $330 million acquisition of a majority stake in at-home care technology platform CareCentrix at the end of August.
Including Walmart Health’s virtual care services in its Choice Plus PPO plan comes months after UnitedHealth said it planned to expand its coverage of virtual care offerings for 2023, along with testing and screening services for its members.
MA is a key area of growth for the company, as is Optum, which operates hundreds of doctor practices and outpatient clinics, along with analytics capabilities that pulls in data from payers and providers to coordinate and improve care.