Walmart Inc. is exploring buying a majority stake in ChenMed, a closely held operator of primary care clinics for seniors, according to people familiar with the matter.
The companies are in talks for a deal that would value ChenMed at several billion dollars, the people said, asking not to be identified because the matter is private. A deal could still be weeks away, the people said.
Terms aren’t finalized and talks could still fall apart, the people said. It’s also possible a different potential buyer could emerge.
A Walmart spokesperson declined to comment while a representative for ChenMed didn’t immediately respond to requests for comment.
A deal would come as pharmacy chains, insurers and retailers have been moving deeper into the business of taking care of patients, positioning themselves as entry points to the $4 trillion health-care system. Providing health care is also a way for retailers to get closer to consumers as e-commerce chips away at their traditional business.
Amazon.com Inc. closed a $3.5 billion purchase this year of primary-care concierge provider One Medical, while CVS Health Corp. bought Oak Street Health for $10.6 billion. VillageMD, the primary-care provider controlled by Walgreens Boots Alliance Inc., closed an $8.9 billion deal for Summit Health-CityMD in January.
Biggest Foray
Buying ChenMed would represent Walmart’s biggest foray yet into health care. In 2021, it acquired telehealth provider MeMD and started offering low-cost insulin. Last year, it partnered with UnitedHealth Group Inc. to care for Medicare patients at Walmart Health centers. The company is also building a network of health centers that offer primary care, labs, X-rays and counseling.
Physician Jen-Ling James Chen founded ChenMed after a cancer diagnosis forced him and his family to navigate a health-care system focused on profits, according to its website. That inspired him to create a company that offers affordable care to under-served patients.
Owned by the Chen family, ChenMed is focused on taking care of seniors in payment arrangements where it takes on financial risk for the cost of patients’ medical needs, a structure sometimes called value-based care. That’s meant to incentivize long-term relationships, preventive care and management of chronic diseases to avoid costly hospital visits.
It’s a different model than retail clinics that typically focus on episodic or urgent needs. But health-care giants like UnitedHealth Group Inc. and CVS Health are focusing on this approach, tapping into billions of dollars flowing through private Medicare Advantage.
There are other signs Walmart is exploring this strategy. As part of 10-year deal with UnitedHealth announced last year, the companies offered a co-branded Medicare Advantage plan and said at the time they aimed to eventually serve hundreds of thousands of seniors in value-based arrangements.
--With assistance from Brendan Case and John Tozzi.
Author: Michelle F. Davis
