clinical innovations, retail health clinics, Twenty Clinical Innovations to Build Patient-Doctor Trust: Ninth in a Series

How Should Doctors Respond to Retail Health Clinics?

How should doctors respond to retail health clinics? The number of these clinics is exploding in outlets at Wal-Marts, Walgreens, CVS drugstores, Bartell Drugs, Rite-Aids,and Publix grocery stores. 1

Should doctors wait and see if retail clinics, largely run by nurse practitioners and physician assistants, impact their practices? This may not be a bad strategy. After all, walk-in clinics in the 1980s and 1990s had little effect on traditional medical practices.

Should doctors take the position of the American Medical Association, expressing concern about quality, urging more oversight, recommending doctor supervision, and formal referral relationships with local physicians?2

Should doctors follow the lead of the American Academy of Family Physicians. The Academy recommends that retail health clinics have these “desired attributes” – limited scope of services, evidence-based and quality improvement protocols, collaborative relationships with local physicians, and electronic health systems that allow them to transfer patient data to local physicians.?3

Or should physicians take the bit between their teeth, set up retail health clinics on their own, enter the retail market place, and compete head-on with commercially backed clinics? 4

The last path is the one chosen by ProHealth Physicians, Inc., an organization of 200 primary care physicians, nurse practitioners, and physician assistants spread across Connecticut with corporate headquarters in Farmington, Connecticut. ProHealth opened its first clinic in July 2006, in Putnam, Connecticut at a Price Chopper grocery store, plans to open another clinic before the end of the year, and add 6 to 8 more outlets in the first half of 2007. 5 ProHealth Physicians researched its plans for more than a year before deciding to make its move.

Its executive director, Jack Reed, says, “We decided to go with the flow of the market rather than resist it. We will insist upon connections with local physicians who are part of our network. This kind of expansion is not for the faint-hearted. It takes new staffing, new administrative staffing, and new managers. It requires beefing up of privacy policies to handle issues new issues arising in off-site setting and learning how to operate in the retail space, which is different than anything we’ve done before.”

Reed and ProHealth Physicians sense the consumer landscape has changed, and consumers are looking for convenience, greater access to care in off-hours, and lower prices.

ProHealth Physicians may be just taking a hard look at a new reality. The consumer-driven revolution is at hand, and experienced entrepreneurs are moving fast to take advantage of windows of opportunity to expand retail health clinics as quickly as resources and the market will permit. 1

Backers and owners of these clinics project their numbers will grow exponentially over the next decade. The ACP Observer, a publication of the American College of Physicians, contains these projections.4

• MinuteClinic, acquired in June 2006 by the CVS Corporation, which has 6150 stores nationwide, now operates 117 stores and expects to have 250 by the end of 2006. The clinics are currently located in CVS stores, Bartell’s Drugs, QFC, and Cub Foods.

• Solantic Inc, now has 13 outlets in Florida, and anticipates growing to 1000 clinics in the next five years. Their outlets are now a mix of free-standing clinics and clinics located with Wal-Mart stores.


• RediClinics, owned by the Revolution Health Group, Inc., plans to expand from its present 75 locations to over 500 in the next three years. These clinics will be placed in Wal-Mart stores and other retail stores.

• Take Care Health, Inc. now located mostly in Walgreen drugstores, expect to go from 16 to 1400 clinics by 2009.


• Little Clinic, Inc, now in the process of opening five clinics in Publix grocery stores in Orlando, Florida, expects to expand to some of the other 884 Publix stores in the Southeastern United States.

Driving Forces

What is driving this unprecedented retail health phenomenon?

Well-heeled entrepreneurs perceive Americans are seeking legitimate , convenient, low cost care, in their neighborhoods and in retail malls in stores that are open for long hours.

The entrepreneurs include:

•Dr. Glenn Nelson of Minneapolis, surgeon and former senior executive at Medtronic, now serves at chairman of the board of MinuteClinic.

•Rick Scott, who was chief executive officer of the Health Corporation of America until 1997, founded Solantic in 2001.


•Steve Case, who co-founded American Online, left Time Warner in 2005, and put $500 million of his own money into the founding of Revolution Health, which promptly acquired Houston-based RediClinics.

•Hal Rosenthal, who sold his travel business to American Express, founded Take Care Health.1

What do these entrepreneurs share in common?

1)Business or personal experience in the health care arena.

2)Access to capital.

3) The ability to assemble corporate teams to expand, manage and market their new enterprises, in conjunction with established retail outlets who welcome the opportunity to attract more walk-in traffic, sell more prescription drugs, and co-pioneer a new vista in American health care.

As doctors watch these events, they should be aware that the American health system is uniquely innovative and entrepreneurial Here are the late Peter F. Drucker’s comments on the subject,

““The entrepreneurial economy is purely an American phenomenon. Innovation is the specific tool of entrepreneurs. There are fast-growing hospital chains. Even faster growing are ‘freestanding’ health facilities, such as hospices, medical and diagnostic laboratories, surgical centers, maternity homes, ‘walk-in’ clinics, centers for geriatric diagnosis and treatment.”6

The retail health clinic market is another American health phenomenon. This development may be an offspring of the growing consensus that the consumer driven revolution, which puts consumer choice at the center of the health system, is at hand. The Medicare Modernization Act, passed in December 1993, contained a provision that made health savings accounts potentially available to 250 million non-elderly Americans Health savings accounts have been growing slowly, and are now held by 4 million Americans, but their holders are expected to grow to perhaps 21 million by 2010 and will cover 40 to 45 million people. 7,8 The basic premise of HSAs that people spending their own money in from their own account and rolling over unspent HSA monies until the next year. will seek lower cost care.

In addition to the HSA population, there are 47 million uninsured Americans out there looking for convenient, lower cost care. The retail clinics report that 20 to 45% of the patients they see are uninsured. Clinic surveys also indicate that 20 to 40% of patient attending their clinics say they would have gone to emergency rooms had clinic care not been available and 10 to 20% said they would have gone without care entirely.4

One champion of retail health clinics is Uwe Reinhardt, the oft-quoted Princeton-based health economist known heretofore for his advocacy of a single-payer system. This is ironic because in the past Reinhardt has frowned on private and commercial sector care.

Here are some of Reinhardt’s remarks endorsing retail clinics.

“The American medical profession hasn’t made it particularly easy for even insured consumers to get access to them. It’s all on the doctor’s terms. Illness is not a nine-to-five affair.” 4

“Primary are is a neglected field in the United States, lagging other economically advanced countries. The clinics can teach the rest of our health system how primary care could be done and brought to the public."1

“Store chains, with their reputations on the line, will insist that the clinic maintain high standards and low error rates.”1

“That's the beauty of markets. They're forcing doctors, who've historically arranged the world to their convenience, to be more customer-friendly. They see the handwriting on the wall. It's taking patient demand to upgrade primary care in the United States.”9

“Doctors should ask, 'How can I compete with these clinics ? How have we failed the consumer to allow this gap to come about?' “Try not to control or patronize it. Cooperate with the clinics.. See if you can turn the trend. to your advantage. But don’t fight it; it’s a losing battle.” 4

So much for Reinhardt’s opinions. America’s primary care physicians will have to form their own opinions – and act on their beliefs.

Whatever happens it will not be easy for primary care doctors to depart from entrenched practice habits, organize a new business, enter the world of retail, collaborate with commercially-owned clinics, set up new communication and referral systems, and, in some instances, or learn how to capitalize, own, manage, and market their own retail clinics. It will take work – and courage.

References

1.Freudenheim, Milt. “Attention Shoppers: Low Prices on Shots in Clinic,” New York Times, May 14, 2006.
2.Chin, Tyler, “ On-Call Goes Retail: Defining the Doctors’ Role, “ Amednew.com, September 11, 2006.
3.aafp.com, American Academy of Family Physicians; Policy and Advocacy, Retail Health Clinics. Desirable Attributes of Retail Clinics, 2006.
4.Palmer, Ingrid, “Quick Clinics Find Niche in Health Market,” ACP Observer, American College of Physicians, October, 2006.
5.Reed, Jack, CEO of ProHealth Physicians, Inc., personal communication.
6.Drucker, Peter, Innovation and Entrepreneurship: Practice and Principles, Harper & Row, Publishers, New York, Grand Rapids, Philadelphia, St. Lois, San Francisco, London, Singapore, Sydney, Tokyo, Toronto, 1986.
7.Bloche, M, “Consumer-Directed Care,” New England Journal of Medicine, volume 355, pages 1756-1759, October 26, 2006.
8.ustreasury,gov, “Dramatic Growth of Health Savings Accounnts (HSAs).”