Boom predicted for retail clinics after years-long lull

The number of retail clinics will grow by more than 100% by the end of 2015, according to a report by Accenture. It says that unlike the last growth spurt, retail clinics won't try to compete with doctors — they'll help them manage a growing patient load.

The report estimates that there will be more than 2,800 retail clinics operating in the next three years, with a growth rate between 25% and 30% per year. That projection is based on about 1,400 clinics operating across the country at the end of 2012. The expected addition of millions of newly insured patients when the Affordable Care Act is enacted in full on Jan. 1, 2014, should provide plenty of patients for retail clinics and help take the load off physicians who might be overwhelmed by new patients, Accenture said.

“There had been tremendous growth a few years ago [in retail health clinics], and we expect to see that again,” said Jill Dailey, senior executive and managing director of health strategy at Accenture, a management consulting, technology services and outsourcing company.

Retail clinics grew rapidly from 2001 to 2007, peaking with 442% year-over-year growth in locations in 2005. During that period, Wal-Mart announced that it wanted clinics, owned and operated by local health systems, in 2,500 of its stores.

But clinic operators found their business to be highly seasonal and difficult to make profitable, especially as patients cut back on seeking care because of the 2007-09 recession and the slow growth that followed. The number of clinics grew only 1% in 2009, 3% in 2010, 11% in 2011 and 5% in 2012, Accenture said, with most growth concentrated in CVS-owned MinuteClinic and Walgreens-owned Take Care Clinics, which began expanding services to help reduce seasonal fluctuations in traffic.

Rather than opening 2,500 clinics, Wal-Mart was seeing them close. Its number of stores declined to 125 as of Dec. 1, 2012, down from 142 the previous year, according to Merchant Medicine, a retail clinic consultancy and research company in Shoreview, Minn.

But Accenture said the enactment of the ACA and a growing physician shortage will push demand for retail clinics. Nationwide physician shortages are projected to reach 91,500 by 2020, according to the Assn. of American Colleges' Center for Workforce Studies.

Accenture expects 1,743 clinics to be open by the end of 2013, 2,243 by the end of 2014 and 2,868 by the end of 2015. By 2015, retail clinics will account for 10.8 million patient visits per year, Accenture predicted. That will save about $800 million per year in health care costs, according to the report, in part because the clinics will attract patients who otherwise might rely on a hospital emergency department.

In retail clinics, care is provided by nurse practitioners, who are supervised off-site by physicians. Often, a clinic hires a local health system to provide the supervision and is then allowed to put its name on the local clinic location. Some health systems also operate their own clinics directly.

CVS seen as leader

Although there will be growth in this sector in next two years, the gains probably will be more modest than what Accenture is predicting, said Tom Charland, president and CEO of Merchant Medicine. Instead of about 1,500 new clinics, he said he expects to see between 600 and 800 new clinics, primarily through CVS' MinuteClinics.

“I would say their projections are too optimistic,” Charland said. “Wal-Mart is not opening any [clinics] and has been going downhill, and Walgreens has been flat,” Charland said. “I say [Accenture] is off by about 1,000.”

CVS has been at the forefront of the retail clinic movement, Charland said. The pharmacy chain opened 68 clinics from Dec. 1, 2011, to Dec. 1, 2012. MinuteClinics represented 44% of retail clinics with about 620 locations.

Another reason for MinuteClinic's success has been its ability to form relationships with prominent health systems, Charland said. For instance, MinuteClinic has partnered with Cleveland Clinic, UCLA Medical Center and Indiana University Health.

“CVS will lead the way,” Charland said. “They are the most sophisticated in this area. They are entering agreements with [health systems], and they are putting technology in place. They are leaps and bounds ahead of the rest in their thinking.”

Walgreens' Take Care Clinics may be another big player in the market, although the pharmacy chain's position is less clear, Charland said.

As of Dec. 1, 2012, it had 362 locations. It had nearly flat growth for the second consecutive year in 2012, opening five locations in a years's time, according to Merchant Medicine.

But Walgreens announced in April that it is expanding services at its Take Care Clinics. These include diagnostic and treatment services for common chronic conditions, such as diabetes, hypertension and high cholesterol. Doing so makes Walgreens the first health clinic chain to offer a one-stop shop for diagnosis and treatment for certain chronic diseases.