Retail clinics position themselves in bid for rapid expansion

After a down year for openings, operators are counting on greater demand for primary care services by more insured patients to build momentum.

By — Posted Dec. 31, 2012

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A report says retail clinics may be poised for strong growth, despite the number of openings being weaker in 2012 than the previous year.

There are two reasons for this. One is that operators believe that, in their efforts to add more primary care services and ally with local health systems, patients will keep them in mind beyond the fall and winter, when flu vaccinations and seasonal illnesses result in their highest traffic. The other is that with an increasing physician shortage and more patients set to gain insurance because of the Affordable Care Act, patients will find retail clinics a viable alternative when they can’t find physicians with open appointment slots.

There was a net gain of 67 retail clinics from Dec. 1, 2011, to Dec. 1, 2012, pushing the number of clinics to 1,420, according to Merchant Medicine, a Shoreview, Minn.-based retail clinic consultancy and market research company. The number of new locations was about half that in 2011, when 128 premiered.

As in most years, the growth was driven primarily by CVS-owned MinuteClinic, whose locations are all in the company’s pharmacies. It opened 68 clinics from Dec. 1, 2011, to Dec. 1, 2012. With 620 locations, MinuteClinic represents about 44% of retail clinics.

TakeCare, owned by Walgreens, had near-flat growth for the second straight year, opening only five locations in a year’s time, according to Merchant Medicine. As of Dec. 1, it had 362 locations.

Many small clinic operators shut down or scaled back operations in 2012. For example, clinics located in Wal-Mart, which leases space to local hospitals and physician groups but does not own a stake in the locations, declined to 125 as of Dec. 1, down from 142 the previous year.

Looking for new business

Most clinic operators of any size are exploring ways to increase traffic year-round and make the clinics they have more profitable. This has meant the addition of services, including HIV tests and sports physicals, to provide patients with services more quickly than they can get them from primary care physicians.

Andy Sussman, MD, senior vice president and associate chief medical officer and president of MinuteClinic, told analysts at a Dec. 13 meeting that 16% of MinuteClinic’s services are nonacute, reducing the seasonality of its offerings. These services “help us to broaden our patient base and enhance our collaborative role with primary care physicians,” he said.

Urgent care centers, whether they are in retail locations or operate independently, also see an opportunity for new patients as demand for health services grows beyond physicians’ capacity to handle them. Various entitites have predicted physician shortages, accelerated by the 30 million newly insured patients expected to be added under the ACA in coming years.

“In the beginning, retail and urgent care centers saw visit trends due to the seasonal nature of illnesses and season changes,” said Kevin Boehle, DO, MPH, regional medical director for Concentra, a Humana subsidiary that has walk-in and work site clinics in 40 states. “Some of that still exists due to allergy influxes and seasonal activities that create medical issues. … However, with a more mobile society and lack of primary care providers, patients are turning to more prompt resources like retail or urgent care centers for their care.”

Recognizing a looming physician shortage, Humana bought the Concentra urgent care and work site clinic chain in 2010. The chain now markets its primary care services as aggressively as its urgent care. It opened 10 clinics in November.

Large health care organizations, which MinuteClinic is aggressively pursuing, also are recognizing retail clinics’ ability to provide more primary care-type services. MinuteClinic sees an opportunity as more of these organizations move toward patient-centered care models such as accountable care organizations, said Tom Charland, president and CEO of Merchant Medicine.

New partnerships

MinuteClinic has partnered in clinical affiliations with several large health systerms, including Cleveland Clinic, UCLA Medical Center and Indiana University Health. Those affiliations, depending on the deal, may allow the entitites to staff MinuteClinics with nurse practitioners and collaborate with the chain on disease management and patient education. The health systems get signage at the clinic locations and a chance at a referral stream from patients who might need more care than a MinuteClinic provides.

Retail clinics have a role to play in a physician-run, patient-centered medical home concept, said Reid B. Blackwelder, MD, a family physician in Kingsport, Tenn., and president-elect of the American Academy of Family Physicians.

He’s concerned, however, about the fragmentation of care that could come from a lack of communication between the clinics and physicians. He’s also concerned that clinics are providing care that should come from a primary care physician’s office.

“The different pieces that will be part of these patient-centered homes all have a role to play, but those roles are not interchangeable,” Dr. Blackwelder said. Some services require a level of expertise and understanding that only a primary care physician can provide, he said.

Charland said MinuteClinic has made it clear that it is interested only in partnering with large, well-known organizations in the communities they serve. But Dr. Blackwelder said physicians in the communities, particularly those not affiliated with the large groups, need to initiate conversations with the clinics about care coordination.

“I do get nervous when all of a sudden you have a physician involved, and that physician is 60 miles away at a major academic center, and I am two miles down the road,” he said. “I think we’re, again, creating fragmentation and missing the opportunity to coordinate community resources efficiently.”

67 retail clinics opened in 2012, about half the number in 2011.

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