Many of the same servicesoffered in a traditional primary care setting can be deliveredthrough retail clinics—it's a matter of patients and providersacknowledging that potential.

|

Think about the spectrum of health care services.

|

You get a paper cut. Dig a band-aid out of the first aid box.Done.

|

Or … You have cancer. Exam. Scan. Diagnosis. Surgery. Recovery.Chemo. Recovery. Physical therapy.

|

Those are the bookends, but then there's everything in between.The fastest-growing segment? The retail health clinic. Thesegment's growth has been unprecedented inrecent brick-and-mortar medical history. The sheer number ofwalk-in U.S. clinics has doubled since 2012, to an estimated 2,800by 2018, reports Statistica, a data aggregation site. Market value,according to Grand View Research is expected to top $7billion by 2025.

|

The race to secure market share has led CVS to merge with Aetna, Walgreens to partnerwith Microsoft, and Amazon to add Whole Foods to its stable ofthoroughbreds. While sheer numbers comprises a goal in and ofitself, the desperate build-out is driven by a passel of factors.Among them:

  • Brand awareness: With retail customers surgingthrough the drug stores and grocery stores that house the clinics,the company logos above the walk-in doc-in-a-boxes get plenty ofeyeballs.
  • Increased store sales: People seeking healthcare spend money inside the host retailer. Walmart retail cliniccustomers reportedly spend $40 to $60 per medical visit on otherstore inventory.
  • Increased pharmacy dollars to the hostretailer: If the retail clinic nurse practitionerprescribes antibiotics for your flu symptoms, you will fill it 50feet away, at the store pharmacy. Good-bye, PBMs! Another middlemanbites the dust.
  • Convenience: Patients love it, and nothingshouts convenience more than parking in front of your neighborhoodWalgreens and walking right into the clinic's cozy waitingroom.
  • Access: In theory, retail clinics are designedto offer more basic health services to more people. Patient visitsto traditional clinics that might be postponed or flat outcancelled, due to cost, inconvenience, or both, will be redirectedto the retail site, proponents insist.
  • Cost savings: Again, in theory, trips to thecostly emergency room or the traditional clinic will be diverted tothe retail site, where flat fees already exist in mostlocations.
  • Better overall health: The research jury'sstill out on the quality of care received by patients at retailoutlets. But early returns say it compares favorably in basicmedical situations with care at traditional clinics, and surpassesthat at ERs.

“It is a seller's market, no question about it,” says Todd Wise,MD, area medical director of on-demand and retail services atProvidence Medical Group. Renton, Washington-based Providence plansto double the number of “Express Clinics” it operates nationwide in2019, from about 40 to more than 80. But plenty of challengesremain.

Gaining foot traffic

What's the potential for retail clinic utilization? That dependson the pace of the cultural shift taking place in health care, saysWise. Conceivably, much of the traffic now going to the traditionalprimary care clinic could be diverted to the retail clinic. Many ofthe same services can be delivered through the retail clinics—it'sa matter of patients and providers acknowledging thatpotential.

|

“There is a cultural change occurring in medicine. Thetraditional home clinics have not gone away. There is still a hugeneed for them. But people want to access services in a differentfashion. The days of providing service during bankers' hours at onesite are gone.”

|

But this rapid expansion also faces obstacles to success thatwill likely thwart those who come late to the party and short ofcash. While having sufficient funds to buy into the game iscertainly a huge barrier, one that may well prove even moredefining is staffing. Already, expansion-minded organizations arerunning up against the shortage of qualified medical practitioners.Access to physicians, nurse practitioners, physician assistants andnurses represents a key premise—and promise—of the retail clinic.Without enough medical professionals to man the clinics, operatorswill be in a bind.

|

Wise adds that some physicians feel threatened by this shift.But the change is happening; it's only a matter of time before,according to Wise, “if you need to see someone in person, you go toan Express Care clinics. The model is big medicine in smallplaces.”

|

With clinics serving patients 12 hours a day for a set fee,little room remains for a primary care clinic located in the bellyof a hospital system. At the end of the day, the retail clinic ismore convenient, prescriptions can be picked up in the same placein real time, and Providence studies are finding the quality ofcare “is certainly not inferior in the treatment patients receivein the traditional clinic.” (Several national studies have reachedthe same conclusion.)

|

There are added financial benefits for Providence, which is bothprovider and insurer. Because the retail clinics and urgent carecenters offer fixed fees, they cater to any insurance planmember—or anyone who can pay the fee. The insurance side of theequation benefits from more efficient use of services (especiallyif plan members are diverted from the emergency room forinstance).

|

What about data sharing? Providence is an EPIC informationsystem customer and can easily connect the retail clinic data tothe patient's primary caregiver.

|

It's the staffing piece that will determine how quicklyProvidence can open more clinics.

|

“We are trying to hire a ton of people right now. That's why weare looking at asynchronous patient visits, so we can scale careacross our system and leverage our provider bandwidth.”

Partnering to survive and thrive

Up to now, financial interests (branding, foot traffic, realestate investment) have driven the spread of the retail healthclinic model. The major mergers, acquisitions and partnershipformations that have rocked the health care landscape in the lasttwo years are all about getting there first to stake out turf andget the brand in front of as many eyeballs as possible.

|

The major players may have divergent strategies: Amazonapparently does not want to be part-owner of a health care system,while UnitedHealth clearly intends to dominate the medical deliverysystem as it scoops up clinics nationwide. The CVS/Aetna mergerfocuses more on assembling large numbers of plan members who areboth patient and shopper.

|

Walgreens says its partnership with Microsoft will close gaps inthe existing health care matrix, as well as facilitatinginteroperability among the various pieces of the system. Walgreensalready has senior health clinics at some locations via a Humanapartnership, and boasts general public retail clinics through otherproviders.

|

All players agree that the retail clinic represents a criticalelement in their strategy, offering the prospect of immediatereturns.

|

“We have seen a huge trend for health care providers attractedto retail properties because they want additional exposure and foottraffic,” says Colin Carr, founder and CEO of Carr HealthcareRealty, a Denver-based real estate firm that specializes in healthcare facilities locations.

|

“They want the synergy from other retailers. It's built-inmarketing. As these health care businesses grow and expand, if theyare in a grocery store or strip mall center with high traffic, theyare hoping to build in what could be thousands of people seeingtheir sign and brand every day.”

|

The basic strategy brings under one roof medical care, pharmacyservices, insurance coverage, and the various elements that tiethese together: delivery of the services, continuum of care, datasharing, emphasis on preventive and primary care.

|

Cost efficiency is, of course, a common goal. But while someplayers seek that immediately, others, like Amazon, are will toinvest now in order to scale their invasion of the health caremarketplace.

|

“Amazon doesn't need to make money in health care right away.They can make a lot of investments up front before the results arerealized,” says Michael “Mick” Rodgers, managing partner with AxialBenefits Group in Boston, and an advisor to the Amazon-BerkshireHathaway-JPMorgan health care joint venture announced lastyear.

|

In other words, market domination—Amazon's specialty—takes timeand money, but pays off big down the road. So far, though, theretail clinic is not part of Amazon's empire. Its purchase of WholeFoods gives it a healthy retail chain to use for health carepurposes. But, says Rodgers, it's unclear how Amazon will develop amedical presence in a grocery store. As experts point out, anurgent care clinic in an upscale grocery store would put theregular customers off their feed.

Fitting nicely in the middle

Players with drug store partners are much better poised tobenefit from the retail clinic explosion. CVS/Aetna will do so on amassive scale. But the way Providence Health & Services hasintegrated retail clinics into its system is perhaps a betterroadmap for the retail clinic future.

|

As laid out by Providence's Wise, the retail clinic located inthe local drug store represents a critical element to Providence'scontinuum of care—and to its overall corporate strategy.

|

“What we are trying to do with on demand services is to meetpatients where they are,” he says. “We want to make it asconvenient as possible for them to get care they need.”

|

Providence has developed “a different number of [patient]touches:”

|

1. It offers its “asynchronous care” SmartExam service, whichallows a patient to describe symptoms of common complaints over aphone or computer. A virtual team reviews the content and respondswithin 23 minutes, on average.

|

2. The Express Care virtual visit, also via smartphone orlaptop, which connects the patient to a human provider from 8 a.m.to midnight for a flat fee.

|

3. The retail clinic itself: To see a practitioner live and inperson for a range of common complaints, Providence has its stringof retail health centers located in drug stores in urban areaswhere it has major health centers.

|

4. Next step, patients are referred to Providence's urgent careclinics, which are located near retail clinics throughout theregion.

|

After that, patients enter the hospital system itself.

Standalones: Built to be bought?

Meantime, many standalone retail health clinic companies havesprouted up with the clear intention of being purchased by a healthcare system.

|

“There's a huge trend with the [health retail] indies looking toopen several locations and then get acquired,” says Carr. “We hadtwo such groups in Colorado. Their clinics were not even open ayear or two and they were already acquired by big provider. In onecase, the retailer had one sign on the window before they opened,then they sold out, and opened with a new sign.”

|

In Portland, Oregon, Zoom+Care, a standalone retail healthprovider founded in 2006, was acquired in late 2018 by PeaceHealth,a Vancouver, Washington health care system. The clinics offer anadvantage over many other standalone operators: Its founder madesure Zoom+Care connected its patient records system with thepatient's primary care recordings keeping system. Not allstandalones have done that, which can lead to serious follow-upconsequences.

|

Growth through acquisition is one strategy for the retail clinicspace; partnerships is another. Though Providence's Wise doesn'trule out acquisitions in the future, the company's first focus wasstriking a deal with Walgreen to host its clinics.

|

As the retail clinic boom continues, Dave Chase of HealthRosetta remains unconvinced that the clinics will improve patienthealth or access to quality care. The clinics are “one of many bandaids on the badly undermined primary care system in the U.S. Wisecommunities are realizing adding more band-aids isn't the way torestore primary care to, well, it's primary place in the healthcare system,” he says.

|

But Chase suggests they could be used as a testing ground toreplace the fee-for-service model with a value-based system. “Thusfar, retail health services has just served to perpetuatefee-for-service,” he says. “It's conceivable that forward-lookingorganizations could use the retail [clinic] as a trial mechanismfor a monthly subscription such as direct primary care.”

|

Read more: 

Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.

  • Critical BenefitsPRO information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
  • Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Dan Cook

Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.