In
early
July,
rumors
arose
about
Humana
possibly
buying
Walmart’s
shuttered
clinics.
The
Louisville,
Kentucky-based
insurer
is
now
announcing
its
intention
to
lease
clinical
space
at
23
Walmart
Supercenter
retail
stores.
Where
the
Bentonville,
Arkansas-based
retailer
is
stepping
back
from
its
ambitions
in
primary
care,
Humana
sees
the
opportunity
to
expand
its
primary
care
business
for
seniors
in
vital
markets.
“Humana’s
business
model
is
focused
on
Medicare
Advantage,
and
Medicare
Advantage
enrollment
is
growing
rapidly
in
rural
areas
where
Walmart
has
a
significant
retail
footprint,”
said
Hal
Andrews,
president
and
CEO
of
Brentwood,
Tennessee-based
Trilliant
Health,
a
healthcare
analytics
company.
“With
Humana’s
focus
on
developing
value-based
primary
care
for
seniors,
the
Walmart
locations
are
a
logical
fit
for
Humana.”
In
23
of
Walmart’s
51
shuttered
health
centers,
Humana
is
opening
CenterWell
Senior
Primary
Care
and
Conviva
Care
Centers,
which
provide
senior
care
and
include
access
to
physicians,
nurse
practitioners,
medical
assistants,
care
coaches,
social
workers,
behavioral
health
specialists
and
clinical
pharmacists.
The
locations
are
in
Florida,
Georgia,
Missouri
and
Texas
and
will
be
open
“no
later”
than
the
first
half
of
2025,
according
to
the
announcement.
“Humana
decided
to
lease
these
locations
because
they
represent
a
unique
opportunity
to
lease
space
from
a
world-class
community
partner
such
as
Walmart
and
offer
seniors
in
these
four
states
greater
access
to
our
integrated
approach
to
care,”
said
Mark
Taylor,
director
of
corporate
communications
for
Humana,
in
an
email.
Leasing
these
centers
is
a
“relatively
inexpensive”
way
to
“fill
in
gaps
in
their
coverage,”
said
Michael
Greeley,
cofounder
and
general
partner
of
Flare
Capital
Partners,
in
an
interview.
He
added
that
Humana
will
likely
be
more
successful
with
these
centers
than
Walmart.
Many
retailers
are
struggling
in
healthcare
because
they
don’t
understand
what
it
takes
to
manage
healthcare
assets
from
an
operational
and
labor
perspective.
Dollar
General
also
recently
ended
its
healthcare
pilot
with
DocGo,
while
Walgreens-backed
VillageMD
has
been
closing
a
series
of
clinics.
“It’s
very
expensive
labor,
and
[these
centers]
can
lose
a
lot
of
money
if
they’re
not
fully
utilized,”
Greeley
said.
“And
so
Humana
—
because
of
the
insurer
relationship
—
can
activate,
engage,
incentivize
insured
lives
to
use
these
facilities.
They
have
the
infrastructure
to
manage
these
people.
…
A
retailer
like
Walmart
doesn’t
come
with
all
of
that
infrastructure
and
had
to
build
it
out.
I
think
the
thesis
Walmart
had
was
intellectually
compelling:
‘We
have
all
this
foot
traffic
in
the
store,
and
so
while
people
are
there,
they’ll
just
go
next
door
into
our
clinics.’
And
I
think
it
was
much
more
of
an
operational
challenge
than
they
expected.”
Another
healthcare
expert
—
Seth
Joseph,
founder
and
managing
partner
of
Boston-based
consulting
firm
Summit
Health
Advisors
—
noted
that
Walmart
was
in
talks
to
acquire
Humana
in
2018,
meaning
the
two
companies
are
fairly
familiar
with
each
other.
“This
is
a
deal
that
makes
sense
between
two
organizations
that
know
each
other,”
he
said.
“Humana
gets
access
to
pre-build
clinical
space
in
attractive
locations,
and
Walmart
gets
a
modest
revenue
stream
while
dramatically
reducing
costs
associated
with
the
clinics
themselves.”
Joseph
noted
that
Humana
likely
chose
to
lease
the
centers
from
Walmart
instead
of
buying
them
because
it’s
an
easier
transaction
with
lower
risk.
Andrews
added
that
there
would
be
some
logistical
challenges
to
buying
since
the
clinics
are
located
in
or
adjacent
to
the
Walmart
store.
The
legal
costs
to
subdivide
a
Walmart
store
for
someone
to
buy
the
clinic
space
would
probably
exceed
the
purchase
price.
What
will
happen
with
the
remaining
28
shuttered
Walmart
clinics?
Health
system
Mercy
announced
last
week
that
it
is
leasing
three
of
them
in
Arkansas.
Joseph
said
it’s
a
possibility
for
Humana
to
lease
additional
locations
in
the
future
depending
on
the
success
of
the
first
23,
though
some
markets
will
make
more
sense
than
others,
so
“Walmart
will
retain
the
right
to
look
for
other
options.”
However,
Joseph
doesn’t
foresee
another
insurer
taking
over
the
clinics.
When
asked
if
Humana
will
pursue
additional
locations,
Taylor,
the
Humana
spokesperson,
said
he
won’t
speculate
on
Humana’s
future
business
plans.
Greeley
stated
it’s
likely
some
of
the
centers
will
have
to
close
completely,
but
hopes
to
see
other
hospital
systems
like
Mercy
pick
up
the
remaining
locations.
“I
think
it
will
be
interesting
how
[aggressively]
the
hospital
systems
get
into
this
market,
versus
the
insurers,”
he
said.
“I
was
pleased
to
see
Mercy.
Maybe
you’ll
see
in
some
of
these
other
markets
where
there
are
stranded
facilities
[that]
the
local
hospital
systems
will
be
more
creative.
…
I
worry,
but
I
don’t
know
this
to
be
true,
that
some
of
these
will
be
in
unattractive
markets,
or
markets
with
financially
weak
healthcare
systems,
and
so
maybe
there
are
some
that
get
shut
down
ultimately.”
Photo:
Dina
Mariani,
Getty
Images