- Walmart is partnering with primary care player Oak Street Health to bring its clinics to three Walmart supercenters in the Dallas-Fort Worth area as Walmart continues to grow its retail clinic offerings.
- The new clinics are scheduled to open this fall. They will offer preventive primary care and urgent care services, with extended hours for walk-ins and same-day appointments, per a Tuesday release on the news.
- Eight-year-old Oak Street, which now has a network of 60 value-based primary care centers, focuses primarily on managing the health of seniors in Medicare, but all ages can receive services at the new locations. Oak Street closed its IPO last month, and raised about $377 million in gross proceeds. Its shares were up 9% in premarket trading Wednesday to 138% over the IPO price of $21.
Walmart has been investing more heavily in retail care clinics over the past few years. After launching its first "health superstore" in Georgia last year, the Bentonville, Arkansas-based company quickly added three more locations and now plans to expand the network into Florida early next year. Health services at the superstores go well beyond primary care, and include therapy and behavioral health, dentistry and educational and community events focused on health and wellness.
Walmart, which brought in more than $514 billion in revenue last year, and other health-focused retail behemoths like Walgreens and CVS Health have been building out their clinical footprints as consumers, facing skyrocketing healthcare prices, increasingly look for low-barrier care close to the home. Retail clinics also have the added benefit of leading to higher script-writing and front store sales for their owners, and are usually trialed in traditionally underserved, highly populated areas like the Dallas-Fort Worth area.
The competition to build out market presence quickly is stiff.
CVS now has more than 200 of its large, wellness-focused locations, called HealthHUBs, up and running, in addition to its more than 1,100 MinuteClinics. HealthHUBs devote 20% of floor space to healthcare products and services. CVS plans to have 1,500 operational by the end of next year.
In early July, Walgreens invested $1 billion to open full-service doctor's offices in its stores managed by VillageMD, a medical services provider. Walgreens plans to open 500 to 700 clinics in the next five years, making it the first national pharmacy chain to begin building a primary care infrastructure in its retail locations using doctors, as opposed to nurse practitioners.
Amazon is also currently trialing a small series of primary care centers for its own employees run by medical group Crossover Health, and didn't quash the idea it might eventually expand to the public at large if they're successful.
Oak Street's clinics will be replacing Walmart's own care clinics at the three Texas stores in Arlington, Benbrook and Carrollton. Texas has the highest number of Walmart stores in the country.
It's the first major retail partnership for Oak Street, which currently has clinics staffed by its interdisciplinary care teams in nine states: Illinois, Michigan, Indiana, Pennsylvania, Ohio, Rhode Island, North Carolina, Tennessee and Texas. The majority of its some 90,000 patients are under capitation arrangements, where Oak Street contracts with Medicare Advantage payers on a per-patient, per-month basis and assumes full financial risk for their patient population.
After years of aggressive growth and an ongoing nationwide expansion, the Chicago-based primary care center operator went public in July, saying it planned to use the funds to continue expanding in new and existing markets. The IPO was well received, with shares up almost 91% following Oak Street's first day of trading, signaling strong investor confidence.
Correction: A previous version of this story misidentified Walgreens.