What’s Behind the Humana-Walmart Lease Deal to Provide Primary Care to Seniors?

The recent news that Humana’s CenterWell would be leasing space to open 23 senior-focused primary care clinics outside former Walmart health clinics initially seemed like a head scratcher.

After all, just three months ago Walmart announced it was closing its 51 Walmart Health centers in five states and exiting its telehealth business, stating that it didn’t see a sustainable business model in primary care.

Now, like the infamous scene from Godfather III, some might be wondering if one or more Walmart executives aren’t muttering, “Just when I thought I was out, they pull me back in.” What in the name of Sam Walton is going on here?

3 Takeaways on the Humana Deal

1 | This is more of a Humana play, than a Walmart play.

The centers will operate adjacent to Walmart stores under the CenterWell Senior Primary Care and Conviva Care Centers brand names, Humana leaders noted. The centers, in various communities in Florida, Georgia, Missouri and Texas, will provide primary care services designed specifically for older adults.

2 | The move will support Humana’s Medicare Advantage business.

Earlier this year, Humana announced that it planned to enter three new markets in North Carolina and Louisiana and add additional centers in eight of its current U.S. markets. Humana is among the many health insurers accelerating its efforts to provide convenient access to its members.

But Humana may have more on the line than some of its competitors, analysts suggest, because of the significant investments it has made in its Medicare Advantage business. The company stated last year that it would exit the employer insurance market in 18-24 months to focus solely on government-sponsored health plans like Medicare and Medicaid.

Early indications from the change in strategy have not been positive. In late January, Humana — the nation’s second largest private Medicare insurer — projected roughly half the profit in 2024 that investors had expected, according to media reports.

3 | Walmart’s health and wellness business stands to benefit.

Company executives see the leasing deal as a win for its older customers as Walmart continues to focus on the pharmacy and optical sides of its health care operations. The centers, they say, will provide convenient access to primary care for seniors.