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RETAIL MEDICINE, Medscape: Part 2 — Can You Really Compete With Retail Clinics — and Succeed?

By Leigh Page, Medscape.

READ PART 1 — CLICK HERE …

Should Doctors Differentiate Themselves From Retail Clinics?

journal of retail medicine

New Journal Focuses on Intersection of Retail Medicine, Consumer Healthcare Spending and New Technologies

MARCH 18, 2015 – Proponents of retail clinics argue that primary care physicians (PCPs) should differentiate themselves from retail clinics. They say doctors could easily afford to cede low-acuity patients to the clinics, because physicians are much too busy treating other patients. Academics writing[15] in Social Science & Medicine made this case, predicting that by 2025, virtually all low-acuity cases would shift from PCPs to retail clinics.

Dr Mehrotra thinks this argument has some merit. “I don’t know of PCPs twiddling their thumbs in the office, waiting for visits,” he said, adding that the cases that go to retail clinics are “a narrow subset of what physicians do.”

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However, PCPs might not want to work only on complex cases all day long. They might prefer to keep a mix of patients. Also, low-acuity cases can prompt more significant care, Dr Lee said. “Sore throat and bladder infections are not interesting in themselves,” he said. “But a bladder infection may mean a young woman is sexually active, and that may be brought up.”

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Also, Dr Lee and many other physicians are concerned that not being able to see patients for simple conditions could lead to fragmented care, at a time when they’re expected to closely follow patients in such arrangements as accountable care organizations (ACOs) and patient-centered medical homes.

Another reason to hold on to low-acuity cases is that they make money. Although they pay less per case, physicians can see more of them than higher-paying cases. Sreedhar Samudrala, MD, is a family physician in the Nashville area, which has one of the highest concentrations of retail clinics in the country. “The reason all these clinics are sprouting up,” he said, “is that coughs and colds are the most profitable part of family medicine.”

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Dr Samudrala said physicians need to take a page from the clinics’ playbook and make it easy for patients to see them. He has branded his practice “America’s Family Doctors” and accepts walk-ins 7 days a week at three sites. “There are only so many patients to go around,” he said. “That’s why we do the quick appointments.”

Although practices have yet to lose their low-acuity cases, their ongoing loss of influenza vaccinations to retail operations might provide a glimpse into the future. As recently as 2009, Walgreens stores provided virtually no flu shots, and patients had to go to physicians’ offices to get them. But by 2012, Walgreens pharmacists were providing 5.5 million flu shots a year.

Will Retail Clinics Stay Around?

If physicians make major changes to deal with retail clinics, such as ceding low-acuity patients, can they be sure the clinics will still be there? In many cases, retail clinics don’t make a profit on healthcare operations, which puts into question whether they can survive in the long haul. However, the fact that they bring in patients to buy other items and fill prescriptions works in their favor.

concierge medicine assembly 2015New retail clinics were constantly opening 2005 and 2006, buoyed by enthusiastic investors. But in 2009, owing to the recession, only a handful of new clinics opened and 5% of them closed. Even though volume remained strong, questions about the business model arose. It was noted that many store-based clinics actually lose money on operations, only making for up for those losses when patients’ in-store purchases are included.

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Even the president of the largest and fastest-growing chain—Andrew Sussman, MD, of CVS Health’s MinuteClinic division—hasn’t been totally clear about profitability. In a 2011 interview[16] Dr Sussman reported that the clinics were in the black, with some stipulations. They had “reached break-even on an all-in basis, with all costs and benefits to the company accounted for,” he said. And in 2013, he told Forbes [5] that MinuteClinic was still “in investment mode.”

As the recession subsided, however, CVS resumed its breakneck-speed growth, and doubts about the viability of retail clinics have receded. The company announced it would open 150 clinics during 2014. By November, it had 950 clinics, and Dr Sussman declared a goal of 1500 clinics by 2017.

Walgreens’ operation also has been growing, with a total of more than 400 clinics in its stores in 2014, and Kroger runs 146 clinics. Wal-Mart is refiguring its business model. A few years ago, the retail giant was leasing space to 260 retail clinics operated by outsiders. But it has closed most of them and has started opening clinics that it runs directly, in the manner of CVS and Walgreens.

The next wave of retail clinic proprietors is hospital systems, and they’re also losing money. A 2013 study[17] found that 83 hospital systems owned a total of 262 retail clinics, or 19% of all clinics. But in looking at 19 of those systems, the study found that only four were breaking even on their retail clinics.

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Hospital systems don’t seem bothered by the red ink. They hope to make up for it by attracting patients without doctors into the system. Parkview Health, an eight-hospital system in Fort Wayne, Indiana, operates nine retail clinics. “They are not seen as a money-maker,” said Jim Hauguel, senior vice president and service line leader at Parkview. “We are looking at this as a way to improve access, not to find a new revenue source.”

Can Physicians Limit Retail Clinics’ Activities?

When retail clinics first came to the attention of the medical community some 10 years ago, many physicians wanted them to be strictly regulated. They were concerned that NPs in the clinics might provide inferior care, their services would fragment healthcare delivery, and the pharmacy chains would use the clinics to boost their sales of prescription drugs.

In fact, in 2007 the American Medical Association (AMA) called[18] for a federal investigation into potential conflicts of interest for pharmacy-based clinics. Apparently no such investigation has taken place, and Dr Mehrotra’s 2009 study in Annals of Internal Medicine suggested that this concern was misplaced. It found that per-patient costs of prescriptions written in retail clinics were no higher than those written by doctors for the same conditions.

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Meanwhile, the medical profession called for state legislation to limit retail clinics’ activities. As of 2011, 16 states had considered such bills, according to an analysis[19] by the National Conference of State Legislatures. Only Florida passed one, but it was limited to supervision of NPs in retail clinics, and Massachusetts passed a comprehensive set of regulations. All the other bills failed.

One reason for this failure of legislation was that the Federal Trade Commission warned lawmakers that they could violate federal antitrust laws by placing overly strict limits on clinics’ growth.[20] Another reason is that recent studies have shown that NPs don’t provide lower quality of care for the low-acuity services in a retail clinic. “The research comparing nurse practitioners with doctors on several measures of care has been reassuring,” Dr Mehrotra said.

The Massachusetts regulations do have some teeth. They limit the conditions that retail clinics can treat and require them to develop rules for communicating with and referring patients to practices. But the regulations haven’t stopped retail clinics from entering the state. In fact, CVS alone now operates 52 clinics there, according to its website.

Will Clinics Begin to Cover More Services?

Retail clinics have had to deal with a lopsided calendar, said Thomas Charland, CEO of Merchant Medicine, a consultancy on walk-in healthcare. In the winter, they are crowded with patients with sore throats, strep throat, and sinus infections, but in many cases they sit relatively empty the rest of the year, and some of them have had to close down in the summer.

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To combat this seasonality, Charland said many clinics are adding more services that generate volume at other times of the year. For example, many of them now offer camp physicals in May and school sports physicals in August. Clinics have also taken on preventive services, such as flu shots. And in 2013, Walgreens’ clinics took a big step, adding services for chronic conditions, such as treatment and management of asthma, diabetes, and hypertension. The company recently announced that preventive services, screening, and chronic care visits now make up 50% of all visits, up from 15% in 2013. The rest of the clinics’ services are traditional acute care visits.

Retail clinics have a lot of room to grow. Dr Mehrotra estimated that they could handle 18% of all PCP visits. But it’s up to patients to decide where they want to be treated, and they have different ideas about that, depending on the condition.

The 2012 Harris Poll asked people when they’d go to a retail clinic instead of a doctor’s office. Two thirds preferred going to a retail clinic for a flu shot, and just over one half preferred using them for cold or flu symptoms, but interest fell after that. Whereas 49% would prefer going to retail clinics for a cut or puncture wound and 47% to check blood pressure or cholesterol, the numbers fell to 39% for a possible fracture or sprain and to 36% for an asthma flare-up or low blood sugar.

Will Doctors Start Cooperating With Clinics?

Retail clinics are now trying to build relationships with hospitals and physicians. In the past few years, they have signed affiliation agreements with health systems in each market they operate in. CVS clinics, at last count, had affiliations with 32 health systems, including the Cleveland Clinic, Dartmouth-Hitchcock, and Emory Healthcare. And Walgreens has agreements with SSM Health Care in St Louis, Orlando Health in Florida, and several others.

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These agreements don’t talk about referrals of patients from retail clinics to doctors in the health systems. This could be very lucrative to the health systems, but a formal agreement on them could possibly violate the federal anti-kickback law. Instead, the affiliation agreements are limited to such matters as sharing electronic medical record systems, providing physician-supervisors for NPs in the clinics, and enhancing communication between practices and retail clinics.

Charland sees the agreements as the first stage of more extensive participation in integrated networks. Already, Walgreens is partnering on three separate ACOs with health systems, including Scott & White Healthcare in Texas.

direct primary care journal2SMALLPhysicians, however, are still deeply divided over cooperating with retail clinics. In a 2013 poll[21] by athenahealth, 17% of doctors said they would exchange data with the clinics, 11% said they would accept referrals from them, 7% said they would direct after-hours patients to the clinics, and 39% said they would do all three.

On the other hand, 26% said they would do “none of the above.” And, in another question in the poll, nearly 40% said retail clinics “take business away from PCPs without delivering the same quality of care.”

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Clearly, many doctors are not ready to work with retail clinics, but clinic promoters are hopeful these attitudes will thaw over time. “Things are quieter now,” Charland said. “You hear a lot less passion about retail clinics than when they first came out.”

References

  1. Mehrotra A, Lave JR. Visits to retail clinics grew fourfold from 2007 to 2009, although their share of overall outpatient visits remains low. Health Aff (Millwood). 2012;31:2123-2129. http://content.healthaffairs.org/content/31/9/2123.abstract Accessed December 28, 2014.
  2. American Academy of Family Physicians. Patient centered medical home. How FPs improve patients’ access to care. AAFP Member Profile. January 2013http://www.iaafp.org/documents/filelibrary/pdfs/AAFPMemberProfileBrochure2013_051E07EEE3A27.pdf Accessed January 2, 2015.
  3. Mehrotra A, Liu H, Adams JL, et al. Comparing costs and quality of care at retail clinics with that of other medical settings for 3 common illnesses. Ann Intern Med. 2009;151:321-328. http://annals.org/article.aspx?articleid=744702 Accessed December 27, 2014.
  4. New WSJ.com/Harris Interactive study finds satisfaction with retail-based health clinics remains high. Harris. May 21, 2008. http://www.harrisinteractive.com/NewsRoom/PressReleases/tabid/446/ctl/ReadCustom%20Default/mid/1506/ArticleId/333/Default.aspx Accessed January 4, 2015.
  5. Le V. CVS’ Andy Sussman on how walk-in clinics are changing the healthcare business. Forbes. November 20, 2013. http://www.forbes.com/sites/vannale/2013/11/20/minuteclinic-coo-andrew-sussman-on-how-walk-in-clinics-are-changing-the-healthcare-business/ Accessed January 3, 2015.
  6. Blue Cross and Blue Shield of Minnesota offers no co-pay for use of retail clinics. Business Wire. July 29, 2008. http://www.businesswire.com/news/home/20080729006230/en/Blue-Cross-Blue-Shield-Minnesota-Offers-Co-Pay#.VJeLD50AA Accessed December 20, 2014.
  7. Sussman A. Transforming primary care. CVS Caremark. Analyst Day. December 18, 2012. http://investors.cvshealth.com/~/media/Files/C/CVS-IR/corporate-governance/18-12-2013-docs/08-CVS-Caremark-2013-Analyst-Day-Andy-Sussman-Presentation.pdf Accessed December 31, 2014.
  8. Tu HT, Boukus ER. Despite rapid growth, retail clinic use remains modest. Center for Studying Health System Change. November 2013. http://www.hschange.org/CONTENT/1392/ Accessed January 2, 2015.
  9. Retail clinic counts will double between 2012 and 2015 and save $800 million dollars per year. Accenture. 2014. http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture-Retail-Medical-Clinics-From-Foe-to-Friend.pdf Accessed December 24, 2014.
  10. Mehrotra A. The convenience revolution for treatment of low-acuity conditions. JAMA. 2013;310:35-36. http://jama.jamanetwork.com/article.aspx?articleid=1707731 Accessed December 23, 2014.
  11. Ashwood JS, Reid RO, Setodji CM, Weber E, Gaynor M, Mehrotra A. Trends in retail clinic use among the commercially insured. Am J Manag Care. 2011;17:e443-e448. http://www.ajmc.com/articles/Trends-in-Retail-Clinic-Use-Among-the-Commercially-Insured Accessed January 2, 2015
  12. Larson G. Alternative care facilities are the preferred medical option for younger generation. Vitals. November 19, 2013. http://www.vitals.com/about/posts/press-center/press-releases/alternative-care-facilities-are-the-preferred-medical-option-for-younger-generation Accessed January 6, 2015
  13. Patient choice an increasingly important factor in the age of the “healthcare consumer.” The Harris Poll. September 10, 2012. http://www.harrisinteractive.com/vault/Harris%20Poll%2053%20-%20Health%20consumerism_9%2010%2012.pdf Accessed January 8, 2015.
  14. More patients turning to retail clinics for chronic care and preventive services, new Walgreens study shows. Walgreens. July 17, 2014. http://news.walgreens.com/press-releases/general-news/more-patients-turning-to-retail-clinics-for-chronic-care-and-preventive-services-new-walgreens-study-shows.htm Accessed January 3, 2015.
  15. McKinlay J, Marceau L. When there is no doctor: reasons for the disappearance of primary care physicians in the US during the early 21st century. Soc Sci Med. 2008;67:1481-1491. http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2757942/ Accessed December 23, 2014.
  16. Andrews M. Retail health clinics expanding. Kaiser Health News. June 25, 2012. Accessed December 28, 2014
  17. Kaissi A, Charland T. Hospital-owned retail clinics in the united states: operations, patients and marketing. Primary Health Care. 2013. http://omicsgroup.org/journals/hospital-owned-retail-clinics-in-the-united-states-operations-patients-and-marketing-2167-1079.1000130.pdf Accessed January 2, 2015.
  18. AMA calls for investigation of store-based health clinics. American Medical Association. June 25, 2007. http://www.prnewswire.com/news-releases/ama-calls-for-investigation-of-store-based-health-clinics-58310997.html Accessed January 7, 2015.
  19. Retail health clinics: state legislation and laws. National Conference of State Legislatures. November 2011. http://www.ncsl.org/research/health/retail-health-clinics-state-legislation-and-laws.aspx Accessed December 24, 2014.
  20. Haugland DL, Hughes PJ. Retail health care clinics: filling a gap in the health care system. In: Mason DJ, Leavitt JK, Chaffee MW, eds. Policy & Politics in Nursing and Health Care. 6th ed. http://www.elsevieradvantage.com/samplechapters/9780323242417/Mason%206e%20RR_Ch%2031_0041-ch0031-0252-0259-9780323242417.pdf Accessed December 26, 2014.
  21. Grossman E. Retail clinics: what the data shows. 2013 Retail Clinician Education Conference. athenahealth. http://www.retailcliniciancongress.org/sites/default/files/20130506%20RCEC%20Retail%20Convenience%20presentation%20-%20FINALv2.pdf Accessed January 8, 2015.
SOURCE: Medscape Business of Medicine © 2015  WebMD, LLC; Leigh Page. Can You Really Compete With Retail Clinics — and Succeed? Medscape. Mar 18, 2015.

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