New retail health clinic model puts doctors out front

Some companies are betting they can stand out from the in-store clinic market by having physicians on hand to treat patients.

By Pamela Lewis Dolan — Posted Oct. 8, 2007

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While retail-based health clinics generally rely on nurse practitioners and physician assistants to see patients, another model is emerging that staffs entirely with physicians.

Despite the increase in overhead, that new model works, say clinic operators, because of its expanded scope and greater marketing potential. And some big names and deep pockets are jumping behind the concept.

One of the model's early adopters is Jacksonville, Fla.-based Solantic, which recently expanded its stand-alone clinic chain to include clinics located inside Wal-Mart stores.

Solantic's chief medical officer, Nathan Newman, MD, said because physicians are present, Solantic can offer x-ray services and suturing. It's also a good marketing strategy to say each patient will be treated by a board-certified physician, he said.

Solantic is also gaining attention because of one of the names behind it. Richard Scott, who founded Solantic in 2002, gained notoriety for taking two struggling Texas hospitals and creating, through mergers and acquisitions, the Columbia/HCA Healthcare Corp., which became the largest for-profit hospital chain in the world.

However, a massive Medicare fraud investigation cost Scott his job as Columbia/HCA's CEO and president. Scott was never charged with wrongdoing, though other executives were, and HCA -- which dropped the Columbia name -- agreed to pay $1.7 billion in civil penalties and damages to settle the case, without admitting wrongdoing. In 2003, upon the finalization of the settlement, the Justice Dept. called it the largest Medicare fraud settlement ever.

A New York private equity firm recently backed up its belief in Scott and the Solantic business model to the tune of $100 million. That's the amount Welsh, Carson, Anderson & Stowe invested to help Solantic open more than 40 clinics in Florida by the end of 2009.

Meanwhile, a former board member with MinuteClinic, the company often credited with establishing the NP/PA-staffed retail clinic model, is also putting physicians into in-store clinics.

James A. D'Orta, MD, chair of New York-based Consumer Health Services, said his idea for a physician-centric retail clinic model was spawned from his experience with Minneapolis-based MinuteClinic. Dr. D'Orta said before MinuteClinic was bought by CVS Caremark Corp. in 2006, he started to see challenges with a physician-assistant staffed model -- mainly, if you have to pay physicians to oversee the extenders in the clinic, why not just pay physicians to be there?

Dr. D'Orta launched Consumer Health Services last year. It manages four clinics inside Duane Reade pharmacies in the New York area, and is building out 12 additional clinics set to open in November. While CHS provides the management for the Duane Reade clinics and secures the leases, the businesses themselves are owned by private practices, which are responsible for their own hiring. But they must stick to the physician-centric business model.

The company also recently partnered with Continuum Health Partners of New York, the parent company of Beth Israel Medical Center and St. Luke's-Roosevelt Hospital Center, to give clinic doctors admitting privileges and allow referrals to Continuum's specialists.

CHS plans to have 68 clinics in the next two years, just in Duane Reade stores. CHS also added former Health and Human Services Secretary Louis W. Sullivan, MD, to its board in July.

"The market takes a concept, bundles it up and tosses it back for restructuring. I believe [Consumer Health Services] is the restructuring of the nurse-based model," Dr. D'Orta said.

A spokesman for MinuteClinic said that while the company did not have a particular viewpoint on which model is better, "The nurse practitioner model works well for us."

While the physician model is still small compared with the nurse practitioner model, which is expected to grow to more than 1,500 clinics by the end of 2008, there is evidence the physician-staffed concept is gaining traction.

For example, another company, Las Vegas-based Medical Mart, a physician-staffed clinic chain that has been around for three years, says it plans to have 400 clinics by the end of 2009.

Tine Hansen-Turton, the executive director of the Convenient Care Assn., a trade group for retail-clinic operators, confirms more physician groups are exploring the option of retail-based care. Some individual groups have already opened physician-staffed retail clinics.

In response to the interest, the CCA has changed its structure and is supporting both models of retail-based care. It has one physician-staffed model, Burlingame, Calif.-based QwikHealth, as a member.

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