Walmart's healthcare leaders are exiting the company as it taps the brakes on an ambitious clinic rollout

  • A number of Walmart’s healthcare leaders have left the company in recent months.
  • Walmart slowed its push into primary care after a recent change in CEOs. 
  • Now with 9 key healthcare leaders gone, the clinics are no longer in the spotlight.
  • See more stories on Insider’s business page.

At least eight leaders behind Walmart’s push into the health-clinic business have left the company since early 2020, and another is leaving in May.

Walmart launched its first comprehensive health center in September 2019 and now has about 20 of them attached to Walmart stores in four states, including Arkansas, Georgia, Illinois and Florida. The clinics were Walmart’s attempt to get serious about healthcare, compete with other retailers like CVS Health, and capture some of the $3.8 trillion industry.

Some heralded the Walmart Health clinics as a game changer. They sought to disrupt an industry notorious for opaque pricing by offering transparent prices for an array of services, including primary care, dental exams, vision tests, counseling, X-rays, and diagnostics. Seeing a doctor at Walmart’s clinics costs $40, even for patients without insurance.

But now, less than two years since the first clinic opened, much of the team that dreamed up and launched the health centers is no longer working for the retail giant.

The company’s clinics strategy has been in flux, Insider learned from conversations with nine current and former employees, most of whom spoke on condition of anonymity as they were not authorized to speak with the press because of confidentiality agreements. Leadership changes, competing business priorities and healthcare complexity have slowed the clinic rollout, Insider previously reported.

In the past year Walmart has been heavily focused on distributing COVID-19 vaccines and hired on a new team to lead its healthcare business.  Still, some people interviewed worried the departures could hinder the future success of the clinics.

“It for sure will slow things down,” a former Walmart Health employee said. “And they have no restated strategy yet either,” they said, referring to the clinic business model and rollout.

The departures started with Walmart US CEO Greg Foran, who championed the healthcare strategy and got it funded. He left the company in November 2019 and is now the CEO of Air New Zealand Group.

Foran’s replacement, John Furner, the former head of the Walmart subsidiary Sam’s Club, hasn’t devoted the same resources to the health clinics, two current and former employees previously told Insider. Furner instead has been largely focused on Walmart’s e-commerce overhaul and other tech initiatives.

“Unless he does a really good job of bringing in outside talent to replace the old team, there’s no way they can run the business profitably. There’s just simply no way to do it,” one former Walmart executive involved with the health clinics told Insider, speaking of Furner. They were not authorized to speak to the press.

Walmart declined to comment on the departures or share updates about the clinic rollout.

Greg Foran, the former president and CEO of Walmart US, speaks about the company’s Black Friday plans at a store in Secaucus, New Jersey, in 2015.REUTERS/Lucas Jackson

The original Walmart Health team is mostly gone

Foran charged Sean Slovenski, a former Humana executive, to come up with a big idea for Walmart’s healthcare strategy and put together a team.

Slovenski designed the clinic model with Karim Bennis, one of Walmart’s chief operating officers for health and wellness; Dr. Thomas Van Gilder, Walmart’s chief medical officer; and Phil Suiter, who served as the company’s chief wellness officer. Marcus Osborne, the current head of Walmart Health, was also involved.

Three of the five who had a hand in the original clinic design have left Walmart or have announced plans to leave.

Slovenski quit the company in August 2020 to become the CEO of lab-testing startup BioIQ. He also declined to comment.

Osborne was tapped to take over Slovenski’s role, and Walmart brought in Dr. Cheryl Pegus in December to lead the entire health and wellness division, which encompasses the clinics, pharmacies, and other health bets. Pegus previously served as the chief medical officer and president of consumer health solutions at Cambia Health Solutions, a company that operates health plans in four states.

Lori Flees, a former Sam’s Club executive, has been leading operations since the summer.

Walmart declined to say who else has been replaced or brought in to lead Walmart Health.

Suiter, who helped lead clinical operations, departed in March 2020, according to his LinkedIn. He declined to comment for this story.

Van Gilder, who has been with Walmart since December 2018, according to his LinkedIn page, is leaving the company in May to spend time with family and pursue new opportunities, according to an internal memo seen by Insider.

The memo said he led Walmart Health’s first clinical-model design and wrote the policies and procedures guiding the clinics. He did not respond to a request for comment.

Sean Slovenski, Walmart’s president of health and wellness, at the opening of a Walmart Health Center in Georgia.Walmart

Other key health leaders have departed

In recent months, there have been other departures close to the health-clinics business.

Dr. Anand Mehta, the medical director for Walmart Health’s flagship location in Georgia, left to start his own practice in August 2020. 

“Walmart Health was not the culture or the healthcare model I envisioned when I joined, so we parted ways,” he told Insider in a statement.

Two other leaders involved with healthcare businesses left in September 2020.

Jay Picklesimer, who was a senior director of specialty retail, followed Slovenski to BioIQ.

According to his LinkedIn page, Picklesimer oversaw a team that dealt with telehealth and insurance processing for Walmart’s healthcare businesses and handled operations across pharmacy and vision businesses, services that were integrated with the health clinics. Picklesimer did not respond to request for comment. 

Mony Iyer, who oversaw the thousands of vision and dental centers across the country, including some that were a part of a handful of clinics, said he left to pursue a new opportunity. Iyer is now the chief operating officer at Banfield Pet Hospital.

“I am grateful for my time at Walmart and wish them all the best in their endeavors,” Iyer said in an email. 

Walmart lost its chief growth officer for Walmart’s health and wellness business, Daryl Risinger, in late 2020, three people familiar with the matter told Insider. Risinger did not respond to a request for comment. 

The departures at Walmart continued into 2021 with two leaders close to the Walmart Health business.

Evan Schnur, the director of healthcare transformation and strategy, left in March after 13 years at Walmart and is now at a Medicare brokerage startup called Healthpilot. He declined to comment for this story.

Ro Parikh, Walmart’s head of dentistry — a big component of the clinics — left in 2021, according to two people familiar with the matter. He did not respond to a request for comment.

Walmart said it’s still committed to the clinics

A medical professional evaluates a patient at a Walmart Health center in Elm Springs, Arkansas.Walmart

Insider reported in February that Walmart’s rollout of the clinics has slowed compared to an initial long-term plan, which in November 2018 provisioned funds for 125 clinics by the end of 2021, 1,000 clinics by 2024, and 4,000 by 2029. 

These long-term strategies are always subject to change at Walmart, especially if the project doesn’t hit certain benchmarks. But the early clinics were doing well: They increased in-store sales, and the patient volume doubled the health team’s expectations. 

A Walmart spokesperson disputed reporting that the plan for 4,000 clinics had been approved by the board. “Our plan has always been to develop a cost-efficient model and scale it appropriately,” the spokesperson said. 

To date, Walmart is operating 20 health clinics, the company previously told Insider. But Walmart has not been clear about how many new clinics it plans to roll out in 2021. Florida is one of its biggest areas of focus, with the company saying in September that at least seven sites were planned for this year. 

By comparison, CVS plans to open 1,500 “Health Hubs” by the end of 2021, though those are less comprehensive than Walmart’s health centers. CVS ended 2020 with just more than 650 of those sites, CEO Karen Lynch said during the company’s fourth-quarter earnings call in February.

And Walgreens is partnering with primary-care startup VillageMD to build 500 to 700 clinics inside its pharmacies. On March 31, Alex Gourlay, Walgreens’ co-chief operating officer, said the company had 14 of the clinics open and was on track to open the next 40 by the end of the summer.

Several Walmart employees have said the company is still committed to the clinics and is refining the business model before expanding more aggressively. The pandemic also brought unique challenges to the stores and new priorities to the healthcare team. Pegus has led Walmart’s vaccine rollout in 3,800 stores and 48 states. 

The clinics are vulnerable because they are a money-losing operation that, even with a more aggressive rollout, wouldn’t have been profitable for a few years, according to a presentation to the board in 2019.

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