Hospital CEOs may have once cast a wary eye when a retail clinic opened in their backyard, but that paradigm has shifted as health systems are increasingly opening their own retail clinics or affiliating with retail clinic operators.
The low-cost and readily accessible "doc-in-a-box" provider has disrupted traditional care scenarios. Where once an acute care episode like an ankle sprain would end up in the physician's office, if the patient could get an appointment, or a hospital emergency department, health systems have had to consider alternative settings as the insured population increases, the supply of primary-care providers falls behind demand, and as payers exert pressure to rein in costs. Long waits in a busy hospital ED for a sprained ankle, while financially lucrative for the hospital in a fee-for-service model, no longer make sense in the population health model for: patient, provider, or payers.
Retail clinics have witnessed robust growth in recent years, increasingly thanks to partnerships with traditional providers such as hospitals and health systems and even unaffiliated physician groups. The numbers are somewhat sketchy. The trade group Convenient Care Association (CCA) puts the number around 1,600, and expects that to nearly double to 3,000 by 2016. Accenture reported in 2013 that the number of retail clinics would double from 1,418 to 2,868 by the end of 2015, providing $800 million in cost savings and adding capacity for 10.8 million patient visits. CVS Caremark, the largest purveyor of retail clinics in the United States, has added 200 new clinics since 2011 and plans to open 850 new ones by 2017.
A Matter of Cost and Quality
Retail clinics are where people go when they can't see their doctor or they don't' have a doctor and need immediate attention. Getting in to see a doctor isn't always easy. The physician search and consulting firm Merritt Hawkins reported the average wait to see a family practitioner in the United States is 19.5 days, and as high as 66 days in Boston. The problem may not get better: the American Association of Medical Colleges (AAMC) estimates a shortage of 45,000 primary care physicians by 2020, while in 10 years 32 million additional Americans under age 65 will have health insurance.
Two drivers make retail clinics attractive in the population health model: lower costs and comparable quality. An analysis of claims data found that costs of care for three acute conditions (ear infection, sore throat and urinary tract infection) were significantly lower at retail clinics compared with physician's offices, urgent care centers or hospital emergency departments ($110 vs. $166, $156 and $570, respectively).1 Prescription costs were similar in retail clinics, physician offices, and urgent care centers ($21, $21 and $22), as were aggregate quality scores (63.6%, 61.0%, and 62.6%) and patient's receipt of preventive care (14.5%, 14.2% and 13.7%). In emergency departments, average prescription costs were higher and aggregate quality scores were significantly lower.
Capital costs of opening a retail clinic depend on its size. Mary Kay Scott, author of "The Retail Clinic Handbook" (2013, Scott & Company), noted that capital costs can vary from $25,000 to $50,000 inside an existing healthcare facility to $90,000 to $120,000 inside a store. Leases can run $20 to $60 a square foot, but spaces are getting smaller, now averaging about 220 square feet. Overhead costs can vary, too: labor represents about 70% of operating costs, rent, supplies and marketing the remainder. But affiliations with existing operators offer providers entrée into the retail clinic space without the capital expense.
Retail's Role in Meeting Care Goals
Numerous healthcare organizations, the Cleveland Clinic among them, have formed partnerships with retail clinics to help manage their patient populations, not only as entry points into their care systems, but also in helping to manage chronic conditions. Here is how retail clinics can help health systems improve outcomes, meet quality measures and control costs for the populations they manage:
1. Treating a focused list of episodic, acute conditions and providing vaccinations. For instance, CVS cares for 36 specific conditions (e.g. otitis media, UTIs, uncomplicated rashes) and immediately refers more significant conditions (e.g. abdominal pain or rash with fever) to an appropriate emergency department or physician's office depending on the condition. Most retail facilities have a medical director or affiliate agreement with a healthcare system to provide 24/7 consultations when more advanced clinical decision making is required.
2. Providing many preventive services, including millions of flu shots and routine/travel immunizations annually.
3. Offering evidence based services related to chronic illness such as hypertension and asthma. Retail clinics have positioned themselves into the continuum of care by having local referral networks of healthcare providers for patients; using electronic records to forward records to primary care providers (if patients have one), or help them find one if they do not; and by participating in state immunization registries and other state and local programs related to promoting appropriate preventive and maintenance healthcare services.
Providers owning retail clinics is not a new phenomenon: A study of retail clinics in Annals of Internal Medicine in 2009 found that among 42 clinic operators, 25 were existing healthcare companies that operated 11% of the clinics, and three were for-profit retail chains that operated 73% of the clinics.2 An article in Health Care Management noted "the involvement of hospital systems in retail clinic ownership is a recent and interesting phenomenon." The authors asked: "Will retail clinics remain as a convenient way for busy insured patients to seek care after hours and on weekends or can they have a more significant impact in a primary care system on the brink of collapse?"3
Models for Collaboration
Retail clinics are striving to answer "yes" to the second half of that question by affiliating with traditional providers. A 2013 RAND Corporation report outlined three models for collaboration between retail clinics and healthcare organizations:4
- Integrated Model. In this model, existing healthcare systems own and operate their own retail clinics. In western Pennsylvania, Heritage Valley Health System operates five of its own freestanding convenient care sites, and once operated clinics in Wal-Mart stores.
- Hybrid Model. This is the alternative to the health system taking on all the capital costs of opening a retail clinic. CVS, for example, has 28 such partnerships that include 133 hospitals. Wal-Mart also affiliates with local health providers when it opens one of its "The Clinic at Wal-Mart" outlets. Franchise retail clinics are another option. Bellin Health of Wisconsin set up its own retail clinics under the FastCare name, and then created a franchise model for other health systems to establish their own FastCare clinics.
- Independent model. This model seems least capable of contributing to population health management. The retail clinic has no affiliation or shared EMR capabilities with an upstream provider, communication is one-way: from the clinic to the primary care physician, and there's no oversight of the retail clinic by the patient-centered medical home or other integrated healthcare system model.
Compatible EMR systems are a cornerstone of these collaborations. Cleveland Clinic and MinuteClinic commenced an affiliation in northeastern Ohio in 2009, and have since integrated their EMR systems. In 2014, MinuteClinic and Lifespan, a health system in Rhode Island, formed an affiliation that will lead to the opening of new MinuteClinics in the state through 2015. Both entities have said they will integrate their EMRs and will eventually migrate data to the Epic system.
For both retail clinics and health systems accountable for population health management, working together may be a matter of survival. An Advisory Board report notes three strategies of retail medicine that are relevant in population health management: convenience, lean cost structures, and a partnership strategy. Convenience of access is integral for patient engagement, the report notes, and makes patients more likely to follow care plans, which means better outcomes and lower total costs. Patients are also more likely to stay within a network if they can always access it.
Retail clinics are here to stay. The question is: What will be your retail clinic population health model?
1. Mehrotra A, Liu H, Adams JL, et al. Comparing costs and quality of care at retail clinics with that of other medical settings for 3 common illnesses. Ann Intern Med. 2009 Sep 1;151(5):321-8.
2. Rudavsky R, Pollack CE, Mehrotra A. The geographic distribution, ownership, prices, and scope of practice at retail clinics. Ann Intern Med. 2009 Sep 1;151(5):315-20.
3. Kaissi A, Charland T. The evolution of retail clinics in the United States, 2006-2012. Health Care Manag (Frederick). 2013 Oct-Dec;32(4):336-42.
4. Pollack CE, Gidengil C, Mehrotra A. The growth of retail clinics and the medical home: two trends in concert or in conflict? Health Aff (Millwood). 2010 May;29(5):998-1003.
Jonathan H. Burroughs, MD, MBA, FACHE, FAAPL, is President and CEO of The Burroughs Healthcare Consulting Network, Inc., and works with some of the nation's top healthcare consulting organizations to provide 'best practice' solutions and training to healthcare organizations throughout the country in the areas of governance, physician-hospital alignment strategies, credentialing, privileging, peer review and performance improvement/patient safety, medical staff development planning, strategic planning, physician performance, and behavior management as well as ways in which physicians and management can work together in new ways to solve quality, safety, operational, and financial challenges.
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