Momentum of store-based clinics sparks physicians' interest
■ A medical group opens a clinic at a supermarket, while the acquisition of MinuteClinic by CVS drugstores may signal future growth at a faster clip.
By Tyler Chin — Posted Aug. 7, 2006
After researching the issue for more than a year, ProHealth Physicians Inc., a 155-doctor primary care practice in Farmington, Conn., has decided to open an in-store clinic next month at a supermarket, joining the growing phenomenon of retail-based health clinics staffed by nurse practitioners or physician assistants.
While clinics staffed by nurse practitioners are seemingly being opened daily in supermarkets, drugstores and other retail sites, few are operated by physician groups or hospital systems. The move by ProHealth highlights the powerful appeal of the retail-clinic concept, which offers consumers the opportunity to treat minor, nonurgent conditions at their convenience at a price point that's lower than physicians'. Operators of the clinics are rolling out aggressive expansion plans, attracting widespread coverage from mainstream media outlets.
Underscoring that momentum, CVS Corp. announced July 13 that it agreed to acquire MinuteClinic, Minneapolis, the largest operator of in-store clinics in the country.
The Minneapolis Star Tribune, citing documents sent to MinuteClinic's shareholders, reported that the purchase price was $170 million, which CVS and MinuteClinic declined to confirm or deny to AMNews.
Separately, the California HealthCare Foundation released a report on July 17 offering an overview of in-store or retail-based clinics, their business models and the questions their emergence raises, such as how they will influence consumer behavior and whether they will be profitable. "The question we ask in our report is, 'Is this going to be the fad of the next few years or is this something that's going to catch on?' " said Margaret Laws, CHCF's director of public financing and policy.
The growth of the clinics has led several medical associations to weigh in on the issue. For example, at its Annual Meeting in June, the American Medical Association approved a set of guidelines that operators of the clinics should follow to ensure quality care and patient safety. The AMA also issued its own report detailing the rapid growth of in-store clinics.
"We're concerned about the quality and the care that is provided at these clinics, and that's why the guidelines were issued," said AMA Trustee and Board Secretary Rebecca J. Patchin, MD, an anesthesiologist and pain management specialist in Riverside, Calif.
Under the guidelines, the clinics, among other things, must ensure that the nurse practitioners and physician assistants staffing them have access to and be supervised by MDs and DOs. They also must encourage patients to establish a relationship with a primary care physician to ensure continuity of care and have a well-defined and limited scope consistent with state scope-of-practice laws.
The AMA report stated that in-store clinics which follow its guidelines are consistent with the AMA's support of pluralism, or a variety of ways to deliver services.
Michael Howe, MinuteClinic's CEO, said the company is committed to adhering to the guidelines.
"We're just finishing the process of accreditation with JCAHO, for example, to make it clear that the quality requirements behind the care delivered at these clinics is the highest possible and is complementary to the physician structure that is already in place," Howe said. "We've been very clear that this is not a medical home [for patients]; this is not a replacement for primary care relationships. As a matter of fact, we spend a great deal of time and effort educating people on the importance of that relationship."
That, not the desire to drive prescription sales, is a major reason CVS acquired MinuteClinic, said Chris Bodine, executive vice president of business development at the drugstore chain.
"If you just look at the number of patients that they would treat in a given day it's ... an extremely small number when you look at the thousands of customers who are coming through our doors each day," Bodine said. "The average CVS store does more than 1,000 prescriptions a week. These [in-store] clinics are not going to see more than -- I don't know -- more than 10 or 20 people a day."
One reason CVS acquired MinuteClinic is that the acquisition helps CVS expand its health care businesses, including a specialty pharmacy focused on high-risk patients. "MinuteClinic alone has its own business model whether the prescription is ever filled at CVS or not, right?" Bodine said, noting that the clinics are also hosted inside large employer groups as well as other retailers, including drugstores.
The acquisition of MinuteClinic by CVS will enable the former to open additional clinics at a faster clip, Howe said. MinuteClinic operates 83 clinics in 10 states and plans to have a total of 200 to 250 clinics by the end of the year at both CVS and non-CVS sites.
There are at least 150 clinics operating, based on interviews she conducted for the report that CHCF commissioned, said Mary Kate Scott, principal of Scott & Company and an adjunct professor at the University of Southern California's Marshall School of Business, where she lectures on entrepreneurship in life sciences. And based on individual operators' growth plans, there will be 2,000 to 3,000 clinics open by 2009 to 2010, Scott said.
Lost in all the publicity the clinics have received recently is the fact that the industry is still fairly small and largely untested, Scott said. "One of the things that really struck us and the foundation as we researched this is that there's a lot of interest and excitement about these clinics but not that much in the way of quantifiable data to say this is what the consumer really wants, what they're willing to pay for, and how it's going to work with the wider health care system," she said.
The convenience that walk-in clinics offer patients influenced ProHealth to open one at Price Chopper, a local supermarket chain on the East Coast, said Cheryl Lescarbeau, the group's director of clinical operations at ProHealth Physicians.
The rise of consumer-driven, open-access and point-of-service health plans where patients "don't necessarily have to have a relationship with a primary care physician" also was a factor in the group's decision. "Our main core competencies are really wellness and prevention. We're concerned that for all those reasons people are not going to prioritize primary care [like they used to]," Lescarbeau said. "So, what we need to do is ... to meet the demands of the marketplace and put those [primary care physician] services and build relationships in places where people are spending their time."
Depending on how its store-based clinic does during the next six months, ProHealth may open additional clinics at other supermarkets and drugstores that have pharmacy operations, Lescarbeau said. The in-store clinic will charge $45 for its service and will accept insurance.