CVS retail chain clinics expand while Walgreens operation stalls

MinuteClinic represents most of the growth in the in-store clinic business, as struggles by its parent company affect the gains of Take Care Clinics.

By Pamela Lewis Dolan — Posted Jan. 23, 2012

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CVS-owned MinuteClinic is the major force in the expansion of the retail clinic business.

In 2011, the company expanded by 98 locations, out of a net growth of 128 for all in-store clinics, according to Merchant Medicine, a retail clinic consultancy firm in Shoreview, Minn. MinuteClinic represented three out of four new clinic openings in the United States, according to a Jan. 6 Merchant Medicine report.

CVS met its 2010 goal to open at least 100 new locations in 2011 -- the first phase of a five-year plan to open more than 500 new clinics, according to the report. However, MinuteClinic also closed other locations, including three in December, sending its net below 100.

As of Jan. 1, MinuteClinic had 549 locations in CVS stores. Overall, there were 1,355 retail clinics open in the United States at the start of 2012, according to Merchant Medicine.

MinuteClinic and Walgreens-owned Take Care Clinics, which has 355 locations, together represent 904 out of all in-store clinics. The two chains represent two out of every three retail clinics nationwide.

Take Care, however, is not growing like MinuteClinic. Merchant Medicine reported that the Walgreens-owned chain had a net loss of two locations in 2011 -- and the analyst doesn't expect that trend to change in 2012.

A contract dispute between Walgreens and the pharmacy benefit management company Express Scripts could limit the pharmaceutical chain's ability to expand its retail clinic business, according to Merchant Medicine.

As of Jan. 1, Walgreens pharmacies stopped accepting Express Scripts pharmacy benefit plans, which covered an estimated 90 million of the 800 million prescriptions filled by its stores each year. In a regulatory filing at the end of 2011, the company said it will be looking at reductions in selling, general and administrative expenses to make up for the loss in revenue it is expecting because of the loss in Express Scripts business.

Gabriel Weissman, spokesman for Take Care, said Walgreens is looking at all areas of the company for cost savings and hasn't "broken out specifically how any one part of the company will be impacted."

But, he added: "Take Care Clinics are an important element in making Walgreens drugstores a health and daily living destination for patients and customers. Take Care Clinics will continue to expand through both new locations and through the provision of new services."

Meanwhile, the number of clinics in Wal-Mart stores increased by 41 to 141, according to Merchant Medicine. Wal-Mart does not own a clinic chain, so Merchant Medicine tracks each Wal-Mart clinic operator as a separate company. Meanwhile, the number of Kroger-owned Little Clinics fell by 37 locations, from 117 to 80, in 2011. The major factor for the decline was another grocery chain, Publix, which announced in May 2011 that it will terminate leases held by Little Clinic locations in its stores.

At the start of 2011, Tom Charland, CEO of Merchant Medicine, predicted that retail clinic growth would average to 200 new clinics per year for a total of nearly 2,300 by 2015. With a net growth of only 128 clinics in 2011, openings would have to accelerate to meet Charland's projection.

In his January market report, Charland listed trends that may impact the retail clinic market in 2012: insurance companies buying hospitals and clinics, which include walk-in urgent care centers and work site clinics; hospitals opening their own walk-in clinics; the rise in virtual visits; and the expansion of services offered by clinics to include weight loss and chronic disease management.

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Retail clinics still growing

The number of retail clinics grew by 128 from January 2011 to January 2012. The two chains dominating the market are MinuteClinic and Take Care Clinics.

Clinic operator Clinics in
January 2011
Clinics in
January 2012
MinuteClinic 451 549
Take Care Clinics 357 355
The Little Clinic 117 80
Target Clinic 36 44
FastCare 26 37
RediClinic 25 29
Baptist Express Care at Walmart 6 18
DR Walk-in Medical Clinic 8 12
Cigna Care Today 10 11
Aurora QuickCare 10 10
Lindora Health Clinics 9 9
Alegent Quick Care 5 6
Avanti Medical Group 0 6
Cox Health at Walmart 5 5
Geisinger CareWorks 5 5
Heritage Valley Health at Walmart 6 5
Southwest Medical at Walmart 2 5
Access Health 4 4
Lancaster General Health Express 4 4
MedPoint Express 4 4
Mercy QuickCare 4 4
Owensboro Medical at Walmart 3 4
St. Vincent Health at Walmart 4 4
Atlantic ImmediCare 3 3
Fairfield Medical Center at Walmart 0 3
Family Medicine Specialists at Walmart 2 3
Family Quick Care 3 3
Intermountain ExpressCare 3 3
MedCheck Express at Walmart 3 3
Memorial Care Health Express 3 3
Mercy Health of OK at Walmart 2 3
Northwest Care Express at Walmart 4 3
OSF Medical Group at Walmart 1 3
Pikeville Medical at Walmart 3 3
Rocky Mt Internal Medicine at Walmart 0 3
St. Dominic Hospital at Walmart 1 3
Sutter Express Care 3 3
Walmart Partners with fewer than 3 clinics 52 70
Other operators with fewer than 3 clinics 32 33
Total 1,227 1,355

Note: Walmart clinics are broken out by owner. Walmart does not operate clinics in its stores.

Source: The ConvUrgentCare Report, Merchant Medicine, January

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