Walmart Health To Acquire Telehealth Provider MeMD -- 3rd Update
May 06 2021 - 7:30PM
Dow Jones News
By Sarah Nassauer and Rolfe Winkler
Walmart Inc. said Thursday it purchased telehealth provider MeMD
and plans to offer nationwide virtual health care services, another
sign of the retail behemoth's healthcare ambitions.
The acquisition will allow Walmart to expand its Walmart Health
service around the country, the company said. The retail giant
didn't disclose the financial details of the transaction.
The strategy comes in response to Amazon.com Inc.'s business
model, according to people familiar with the situation. Amazon
relies on profits from its cloud computing and advertising
businesses to fend off competitors online with fast, but often
less-profitable, home delivery of millions of products.
The MeMD deal opens another front in which Walmart and Amazon
will compete, as Amazon recently announced plans to provide its
telehealth service, Amazon Care, to its nearly 1 million U.S.
employees by summer. Amazon Care, which now serves company workers
in Washington state, will also be offered to other employers.
Just as Amazon leveraged its own data centers to create a new
business selling cloud computing to customers as Amazon Web
Services, both Amazon and Walmart are taking what they learn paying
for the healthcare of their giant workforces to offer expansive
healthcare services to their customers, helping them move into the
huge and growing U.S. healthcare market.
Many of the world's biggest companies continue to have an
interest in transforming healthcare and reducing costs. Amazon
initially sought to do so through a venture called Haven that it
operated with Berkshire Hathaway Inc. and JPMorgan Chase & Co.
It was set up in 2018, and it ended operations in February after
failing to make progress on various pilot projects in healthcare.
The company has also expanded its pharmacy offerings.
The telehealth sector is becoming increasingly competitive as
giants like Walmart and Amazon jump in. Shares of the long-time
sector leader Teladoc Health Inc. dropped 3% in after-hours trading
following the announcement of the deal.
Other retailers are trying to expand further into healthcare.
Walgreens Boots Alliance Inc. and rival CVS Health Corp. are
competing to become treatment centers for patients with costly
conditions. Both have expanded their telehealth offerings during
the pandemic, and last year Walgreens said it would attach doctors'
offices to hundreds of drugstores.
Two years ago, Walmart started opening a handful of clinics in
stores, with doctors and dentists offering flat-fee primary care,
such as $25 dental X-rays and $40 office visits.
Walmart can build its healthcare businesses by catering to
consumers who crave lower prices and more transparency in
healthcare costs, according to some of the people familiar with the
situation, using its around 4,700 stores as a base. There are
currently 20 clinics in stores with more planned for later this
year.
Last year, the executive at the head of Walmart's clinic efforts
left the company. Walmart later elevated the role, hiring Dr.
Cheryl Pegus as executive vice president of health and
wellness.
Walmart already partners with telehealth companies such as
Doctor on Demand Inc. to offer services to its 1.3 million U.S.
workers. During the pandemic, Walmart made virtual visits free for
employees covered by the company's healthcare insurance.
Founded in 2012, MeMD provides virtual healthcare across the
U.S. and runs 24-hour, seven-day-a-week service throughout the
year. Walmart expects the deal to close "in the coming months," the
company said.
MeMD claims on its website that it provides telehealth for
medical and mental-health visits to 5 million members
nationwide.
Kimberly Chin and Sharon Terlep contributed to this article.
Write to Sarah Nassauer at sarah.nassauer@wsj.com and Rolfe
Winkler at rolfe.winkler@wsj.com
(END) Dow Jones Newswires
May 06, 2021 19:15 ET (23:15 GMT)
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