Why walk-in health care is a fast-growing profit center for retail chains
Sarah Torresen, 16, left, accompanied by her mother, Dianne, middle, is seen by Katherine Skiff, at the Tenleytown CVS MinuteClinic in Washington. The MinuteClinic is a walk-in medical clinic within CVS pharmacies where customers can see nurse practitioners and physician assistants for minor ailments. (Amanda Voisard/For the Washington Post)
By Martha Hamilton
It was a cold Monday in late March, and at 8:30 a.m. 23-year-old Lindsey Menard was second in line to be seen at the MinuteClinic in a CVS Pharmacy in D.C.'s Tenleytown. ¶ "It was the closest place that was open early," she said. Her doctor's office was downtown, and traveling downtown "just seemed like too much of a hassle when I'm dying," said Menard, 23, who lives nearby with her parents and teaches with the Metro D.C. Reading Corps. ¶ CVS is fast expanding its MinuteClinics, exemplifying a trend of retailers opening health-care services to supplement traditional doctors' offices. CVS, the largest retail clinic operator in the Washington area, has 800 clinics nationwide, and it expects to add 150 more this year and to have 1,500 clinics by 2017, or almost as many as the more than 1,600 retail clinics across the country now, according to the Convenient Care Association. ¶ Retail walk-in clinics are relatively new on the health-care landscape, dating to 2000. After several years of very slow growth coinciding with the recession and its aftermath, they are taking off again. Accenture, a global management consulting firm, predicted last year that the number of walk-in retail clinics would almost double by 2015, to nearly 3,000.
Several trends are driving the expansion of health care into retail stores — including pharmacies, big-box stores and grocery stores — and some of those trends will be accelerated by the Affordable Care Act.
One is the growing deficit in primary care doctors. The shortfall is expected to reach 45,000 by 2020, according to the Association of American Medical Colleges. This dearth has been blamed on more doctors choosing higher-paying specialties, too little money for hospital residencies and the aging of the baby boom generation, which now needs more medical care.
The health-care law will only add to the demand. It is designed to provide insurance for millions of additional customers through Medicaid and subsidized private plans and by allowing individuals up to age 26 to remain covered by their parents' health insurance. That will make getting in to see a primary care doctor even harder.
"That's a strong driver of retail clinics," said Ateev Mehrotra, a doctor who is an associate professor at Harvard medical school and a policy analyst at the research organization Rand Corp. "If your primary care provider says you can have an appointment in three days, and you're worried about a urinary tract infection or your daughter has an ear infection, the retail clinics are going to benefit from that."
Retail walk-in clinics treat a variety of non-life-threatening but frequent ill­nesses, including bronchitis, mononucleosis, pink eye and sties, sinus infections and minor injuries. Usually open in the evening and on weekends, they also offer vaccinations for flu, pneumonia, childhood diseases, tetanus and other diseases, physical exams for jobs or team sports and preventive measures such as checking blood sugar.
A study by Mehrotra and colleagues published in 2009 in the Annals of Internal Medicine looked at 700 episodes of each of three common conditions — inflammation of the middle ear, urinary tract infections and pharyngitis, an infection that causes most sore throats. Using 12 quality-of-care measures, it found that treatment was "similar for retail clinics, physician offices and urgent care centers, and lower for [emergency rooms]." The costs of care for each episode averaged $110 at retail clinics, $166 at doctors' offices, $156 at urgent care centers and $570 in emergency departments
Most walk-in clinics are staffed by nurse practitioners or physicians' assistants, and nearly all take private insurance, Medicare and Medicaid. Costs per visit are in the $79 to $89 range, with additional charges for lab tests. A quick strep throat test, for instance, is $30 at a CVS clinic.
Transparency in pricing is one way in which retail clinics reflect growing trends in health care, said Ceci Connolly, managing director of PricewaterhouseCoopers Health Research Institute. "The price is just out there on a giant board" for consumers who want to comparison shop for care the way they shop for other services, she said.
Because many people are buying insurance with higher deductibles, "they are looking for those alternatives to hospital or physicians office visits that are going to be more cost-effective and convenient," Connolly said.
Jeff Gitlin, a principal in PwC's health industries practice, said he foresees walk-in clinics adding to their services — for instance, offering more lab services that require patients to go without eating before the tests. He said the busiest hours for medical testing are between 7 and 10 a.m., hours when a nearby retail clinic that opens early could be attractive.
Patients once might have hesitated before turning to a retail clinic, but that is fast changing. "Five years from now, you won't think twice about taking your kid in there for an ear infection," Gitlin said.
And once you're in the store — whether it's Walgreens or CVS, the two biggest pharmacies with clinics, a big-box store such as Target or a grocery story such as Krogers — you might buy more.
"The pharmacy business is a cutthroat business," said Rand's Mehrotra. "People always go to the same pharmacy. These clinics can be a real carrot to shift where you go for care."
Not everyone is an unabashed fan. The American Academy of Family Physicians has warned that growing use of the clinics might result in a "missed opportunity to address more complex patient needs." It noted that "the overwhelming majority of family physicians offer same-day scheduling" and that many have extended their hours.
In its talking points on retail clinics, the American Academy of Pediatrics says: "There is no such thing as a 'minor illness' when it comes to children. Pediatricians use these 'minor illness' visits to identify other, potentially more serious issues."
For their part, retail clinic executives emphasize that they want to be part of a broad health-care landscape, augmenting rather than replacing what doctors call "the Patient-Centered Medical Home."
"We've evolved the role of the retail clinic to be complementary and supportive," said Andrew J. Sussman, associate chief medical officer of CVS Caremark and president of the MinuteClinic.
All of the clinics have collaborating medical doctors who review charts and to whom clinic staff can turn for advice. The clinics also provide patients with a copy of their notes about the visit and send a copy to patients' doctor, he said. He said that MinuteClinic is now affiliated with 32 health-care providers, including Inova and the Cleveland Clinic, and relies on the most widely used electronic medical records system in the nation to communicate with doctors and other care providers.
Sussman also noted that the clinics have been accredited by the Joint Commission, a nonprofit organization that accredits more than 20,000 health-care organizations and programs nationally.
The recent decision by CVS to stop selling cigarettes at its stores says a lot about the prospects for retail clinics. MinuteClinics recently added weight loss and smoking cessation counseling to its services. "Selling tobacco is not consistent with our purpose as a health-care organization," Sussman said.
The move cost CVS about $2 billion in sales, but that is less than 2 percent of the company's 2013 revenue. And cigarette sales were dropping, while revenue growth from the MinuteClinics is climbing, albeit from a smaller base. "For 2014, we anticipate revenues of approximately $300 million, nearly tripling our total in the past five years," Sussman told stock analysts in December.
Back at the MinuteClinic in Northwest Washington, the five-minute strep test was already registering positive two minutes after nurse practitioner Katie Skiff swabbed Menard's throat for bacteria. Skiff prescribed penicillin and recommended drinking tea with honey and lemon, gargling with salt water and listening to her body about staying off her feet. "We'll give you a call in 48 hours," Skiff said. "We want to make sure you're on the mend."
In parting advice, she said, "The biggest thing with strep throat is changing your toothbrush in 24 hours."
More from Sunday Business:
In a prying world, news organizations are struggling to encrypt their online products
In Germany's east, an economic force emerges from the dust of the Berlin Wall
Case in Point: Why Leica Camera decided to leave its beloved R series behind
Singletary: Meet the IRS's new go-to go-getter