Framing the issue
• The number of retail health clinics could double to 2,400 locations in the next three years with the entrance of tens of millions of patients into the system, Accenture predicts. The firm believes such clinics could tackle 10.8 million visits a year and save $800 million in annual health care spending.
• The Convenient Care Association estimates that 40 percent of patients who show up at retail clinics do not have a primary care doctor. Health systems are partnering with retailers looking to add access points and lend their physician expertise to Walgreens, CVS and Kroger.
• Other hospitals and health systems are finding alternative methods to bring convenient care to their patients, renting retail space in Walmarts, opening their own clinic chains, or offering their physician practices at more convenient hours.
They started with runny noses and flu shots. Now retail health clinics are thinking bigger.
Walgreens turned hospital executives' heads in April when it announced that its clinics would begin diagnosing and treating chronic conditions such as diabetes and hypertension. The chief medical officer of the company's renamed Healthcare Clinic says it wasn't a declaration of war against hospitals. Walgreens isn't acquiring physician practices, doesn't offer imaging and has no space for inpatient beds. Rather, the retail giant wants to be the American health system's primary care front door, and a key piece of the population health puzzle.
"I don't think we compete," says CMO Alan London, M.D., a family physician with more than 30 years' experience in care delivery, health care strategy and business development,including at Cleveland Clinic. "I like to tell hospital executives that our Walgreens stores are already built. They're located on some of the most popular and well-traveled intersections in the country. The lights are on; the air conditioning is on. It's very simple for us to expand our model to locations that help expand the hospital's reach, and not cost them a lot of capital to expand it on their own."
Retail clinics typically are staffed by nurse practitioners and physician assistants. With the shortage of primary care doctors expected to worsen in 2014 and beyond, patients increasingly look to the CVSs, Walgreens and Krogers of the world for basic medical needs. Visits to those top three retail clinic operators quadrupled to almost 6 million from 2007 to 2009, with convenience and after-hours availability being the major catalysts, a recent RAND Corp. study found.
Uniformity from location to location is another lure for patients, says Ateev Mehrotra, M.D., a policy analyst at RAND Corp. and one of the authors of the study. Patients want the same level of service in a similar setting no matter where they might need it — a lot like the consistency in product, setting, service and price they expect when visiting different outlets of their favorite fast-food chain.
Earlier this year, Ann O'Shea felt pressure in her ears and, for the first time, went to the CVS MinuteClinic in the Washington, D.C., suburb where she lives. She was seen promptly and came away feeling the quality of care was equal to or even better than that of her personal physician. Weeks later, while visiting Chicago, O'Shea had a tickle in her throat and opted again for the "speed and convenience" of the nearest MinuteClinic.
"These days, doctors don't have that much time to spend with you," she says. "I feel that, especially when it's just a quick test, not a physical or anything like that, [care at clinics] doesn't really seem that different."
The rapid growth of retail clinics presents both challenges and opportunities for hospitals and health systems, especially as they build out their own primary care networks. Mehrotra estimates that 50 million low-acuity visits a year at $100 apiece represent a $5 billion market. Physician practices and emergency departments — and the health systems that own and operate them — could feel the pinch from lost visits. However, retail clinic operators are competing to partner with health systems and serve as referral sources for patients who need more complex care.
"For many of these simple acute problems that retail clinics handle, we don't need the level of training of a doctor," Mehrotra says. "You can make the example of a really expensive machine. It takes a lot of years of training to make a doctor, so do you want to use that machine to do something simple, or do you want to use someone who has less training to treat that same problem?"
For years, providers, payers and hospitals have tiptoed around retailers. That's changing, and fast. Insurers, once hesitant to pay for visits to retail clinics, have started encouraging members to use them, through preferential payment options. Some hospitals and physicians remain skeptical about the quality of care and possible fragmentation caused by clinics. But with demand for care high and expected to intensify with millions of previously uninsured Americans soon to be eligibile for coverage under the Affordable Care Act, they're looking for a "release valve" to relieve the tension.
Consulting firm Accenture predicts a possible doubling of the number of retail clinics by 2015, up to 2,400. Those could cover some 10.8 million visits a year and save $800 million annually in overall health spending, according to its report, "Retail Medical Clinics: From Foe to Friend?" Opportunistic hospitals and their physicians see a chance to align their brands with retailers to add touch points and spread their reach.
"There are some geographies where the provider organizations, often hospitals and their owned physician groups, are huge proponents of these because it's essentially an access point to new patients and a loyalty builder," Kaveh Safavi, M.D., health industry lead for Accenture, says. "They're trying to create a brand for their services, and they want to use convenience as a differentiator, and the retail clinic availability as a way to make that point."
As of Sept. 23, CVS Caremark's MinuteClinics lead the pack in growth, with some 700 locations in 27 states. The Woonsocket, R.I.-based company has added 150 this year, with hopes of expanding to 1,500 by 2017. The company also aggressively pursues partnerships with top-tier networks — from Sharp HealthCare in San Diego to Carolinas HealthCare System in Charlotte, N.C. So far, it's up to 28 such partnerships, representing 133 hospitals.
CVS views itself as support to the primary care medical home of patients, says Andrew Sussman, M.D., president of MinuteClinic and senior vice president and associate CMO of CVS Caremark. Physicians from the affiliated health systems serve as medical directors over the region's clinics and, in return, the health system gets access points all over its community. MinuteClinic is working to shatter the perception that retailers fragment care; it integrates its electronic health records with affiliated systems and carefully coordinates care among doctors and NPs. Hospital physicians receive an electronic record of each visit, with patients' permission, and MinuteClinic clinicians can access a read-only version.
MinuteClinics' first affiliation was in 2009 with Cleveland Clinic, which now has completely integrated its electronic health record with the retailer. Doctors get pinged immediately when the new record hits the system, says Tod Podl, M.D., a family physician in Beachwood, Ohio. In the past, a physician might have to wait a few days to receive a scribbled fax, which could delay follow-up care.
Tying records together has helped the two sides better coordinate and stay on top of patients' chronic conditions. "It's improved the quality of patient care we can deliver to people, so I think that's what people are most excited about," Podl says.
While CVS has provided some monitoring of and assistance with chronic conditions — checking blood pressure or hemoglobin A1C levels, for instance — Sussman maintains that it's not looking to dive deeper into that realm in the foreseeable future. "Obviously, there's a lot of chronic disease out there, some of it diagnosed, some of it undiagnosed, and we think a good supportive role that's collaborative with the physicians is appropriate," he says. "I know that's not the same as every other entity, but certainly that's been our approach."
Walgreens is the second largest retail clinic operator, though with nearly 400 locations, it's considerably smaller than CVS. CMO London says Walgreens took into account the same factors as its competitors: an aging U.S. population with 10,000 patients a day becoming eligible for Medicare, a severe primary care physician shortage, and possibly tens of millions of newly insured consumers entering the system come 2014. The Deerfield, Ill.-based company, however, chose a somewhat different strategy by encompassing chronic diseases like diabetes and hypertension.
Some worry that Walgreens is overstepping its boundaries. Caroline Steinberg, vice president of trends analysis for the American Hospital Association, says retail clinics fill a need for routine ailments, such as sniffles or bruised knees. Taking on more complex cases might further fragment care, pull patients away from their physicians and disrupt the continuum of care.
"I would say that these clinics are good for episodic care, and that's very helpful and adds to the overall primary care capacity," Steinberg says. "But they're not so good when you're talking about people who need ongoing management of chronic diseases."
Like its chief competitor, Walgreens is working to allay such concerns by aligning itself with health systems. Thus far, the company has announced affiliations with an independent practice association and seven different networks, among them the Valley Health System in Las Vegas, Ochsner Health System in New Orleans and Community Health Network in Indianapolis.
The Indiana partnership is furthest along, officially kicking off in August. Healthcare Clinic locations will provide support to the physician-led health system in managing chronic diseases. Branded with the Community Health Network logo, the clinics also will help patients to schedule follow-up appointments, tests or imaging with the eight-hospital system's doctors and other staff. Walgreens is now working to integrate its EHRs with its affiliate to further coordinate care. The system also will allow patients to schedule appointments electronically at all sites, whether imaging, clinic or physician practices.
Paul Wilson, M.D., a family physician and senior primary care medical director of the Community Physician Network, acknowledged a fair amount of "uneasiness" among doctors when the two sides started courting each other. Physicians asked: Am I going to have less time to spend with my patients? Will my reimbursements go down? What exactly is Walgreens looking to manage? Engaging doctors in the conversation was key to hammering out an agreement between the two sides.
In the end, the ability to add extra access points to their network was too enticing for the physicians to turn down, especially with some 400,000 central Indiana residents expected to be newly insured next year, Wilson says.
Walgreens also has made several other maneuvers aiming to free itself from the drugstore mold in recent years. For example, it partnered with DeKalb Medical in Decatur, Ga., to deliver medications to the bedside from the on-site pharmacy. It formed accountable care organizations with physician groups in New Jersey, Florida and Texas to strengthen collaboration between physicians and pharmacists. And it launched a care transitions program last year called WellTransitions, to help bolster medication adherence and reduce readmission rates and costs.
Rejected by retailers; now what?
What happens to the smaller health systems or community hospitals that can't find a retailer to add access points, spread their reach out of their core market, and relieve any primary care shortage they might be facing? Accenture's Safavi says nothing precludes those organizations from tailoring their services to match what makes retail clinics appealing to consumers — mainly convenience and price transparency.
"The markets are going to demand more convenient care at a lower, more predictable price," Safavi says. "And if you accept the fact that that is a market challenge and you should respond with an alternative, there's no reason to feel threatened by it."
The Little Clinic, based in Nashville, Tenn., is the third-largest retail clinic chain; owned by the grocer Kroger, it has 105 locations. In some markets, health care systems are vying to partner with the organization, says CMO Kenneth Patric, M.D. The Little Clinic chooses partners based on their reputation in the business, as well as values and goals for improving health and wellness. Thus far, it's formed five affiliations, mostly with academic medical centers, which include the Ohio State University and the University of Colorado.
So where does that leave smaller hospitals and health systems? It depends on the dynamics of the local market, Patric says. Some may be forced to consolidate with a larger regional health system that wants more access points for patients, while others may try to create their own version of a retail clinic.
Bellin Health Systems in Green Bay, Wis., decided to take on retail health by itself, rather than with a partner. The experiment started about seven years ago when the system was having a hard time figuring out an alternative to sending self-insured employees with simple maladies to the ED over the weekends. Bellin linked up with Shopco to pilot a retail clinic, says Steve Lazzari, director of its FastCare Retail Health Clinics.
Today, Bellin is the sixth largest retail clinic operator in the country, with 31 locations in nine states. The health system doesn't own the clinics; it lends its expertise to other hospitals, handling the contracting, equipment, signage and marketing plan. FastCare clinics typically are located in independent big box retailers or grocery stores.
Connecting the EHR between the hospital and clinic is a key element in Bellin's model. About 40 percent of the patients who use FastCare do not have a primary care physician, Lazzari says. The organization tries to convert a certain percentage of those patients into primary care users to benefit population health.
"This helps gather in people who don't traditionally come into a health system," Lazzari says. "I don't think retail health is the only component of whether population health will be improved, but it certainly helps. How do you get 40 percent of the population that comes to retail health clinics to show up in your health system if they don't have a primary care physician today? You miss out on that segment."
Walmart offers a much different model from others in the retail clinic game. Rather than operate clinics itself, the big-box retailer leases space to providers. A former Walmart CEO once predicted there would be as many as 2,000 clinics in its stores by 2012, but as of August, there were just 118, according to a spokeswoman, who declined to answer further questions. Walmart reportedly is closing clinics faster than it's opening them. Thomas Charland, founder and CEO of Merchant Medicine, a consulting and research firm that specializes in walk-in medicine, says Walmart included certain restrictions that discouraged providers and failed to vigorously promote the clinics.
Charland questions predictions that the number of clinics will double in three years, but he does expect growth, and urges hospital executives to pay attention. "The most important thing for those hospital-based medical groups is to get on the bandwagon of patient satisfaction and rapid [patient care] turnaround, because that's what people are looking for with these low-end, episodic cases," he says.
Too many hospital leaders are too busy dealing with everyday concerns to think strategically about how they should embrace things like the retail clinic trend. "And unfortunately," Charland says, "there's going to be a lot of disruption in this space."
Q&A with Alan London, M.D. chief medical officer of Walgreens' HealthCare Clinic
Why get involved in treating chronic illness?
LONDON: The health care system is being taxed today with a growing aging population. Obesity, diabetes, hypertension, chronic lung disease, and all of that alone is causing a tremendous demand for services at a time when we have a severe shortage in primary care physician access. That's only going to get worse as more doctors are retiring ... and then you add to that the Obamacare expansion of health benefits, and we're projecting somewhere between 10 and 30 million Americans will have health care coverage this January who currently don't. With all of that and knowing the level of education and training nurse practitioners have and the kind of patients we see and have historically turned away, we made the decision to do whatever we could to enable us to see basic primary chronic diseases in terms of assessment, treatment and ongoing management.
How do you want hospitals to view you?
LONDON: We'd certainly like them to consider us a friend and, in fact, in most of the markets we're in, we have more hospitals interested in partnering with us than we can partner with. Hospitals should view us as an extension of the services they offer. When we partner with a hospital, we affiliate their name with us, so their name is out there in places they currently are not. We are a primary care front door for hospitals in locations that are very convenient and popular with patients, and with very low costs. Where it's working best, the physicians who drive the hospital's clinical operations see this as well and see a future of population management where the more locations convenient to the patient and the more times a pharmacist or nurse practitioner can touch the patient, the better for managing their chronic diseases.
What will Walgreens look like in 10 years?
LONDON: I think we'll be viewed as part of the delivery network. To the degree that we grow our nurse practitioner clinic model, we'll have one of the only national practices of medicine, where you've got standards and guidelines and benchmarks that are consistently delivered across dozens of states, maybe all 50 states. I see us working as part and parcel to large, integrated delivery networks. The networks themselves are going to look more like health plans and the health plans are going to look more like providers, so there will be a blurring of lines. Those combined integrated delivery systems will be our partners and our 8,000 locations will offer a variety of health services that certainly 10 years ago weren't there, and in 10 or 15 years will only grow in size or scope.
'Out-MinuteClinic-ing the MinuteClinic'
A Minnesota-based health system is going beyond brick and mortar to compete with local retail clinics.
HealthPartners — a six-hospital integrated delivery system with a health plan — is located in a competitive marketplace that includes 27 Target Clinics and 28 MinuteClinics. CVS announced in October 2009 that it was forming a partnership with Allina Hospitals & Clinics, one of the largest health networks in Minnesota. That includes aligning clinical operations, referring visitors to each other's services and interfacing electronic records.
HealthPartners responded in 2010 by rolling out an online clinic model called virtuwell, which allows patients to log in, answer a series of questions, receive a diagnosis, and even order a prescription. The interaction all happens from a desktop computer, at a cost of $40 to the patient.
"We've changed ourselves to say, 'We can't be just about seeing patients in exam rooms,' " President and CEO Mary Brainerd told attendees at the Mayo Clinic's Transform 2013 symposium in Rochester, Minn., last month. "We need to be about 'Call, click, come in.' "
In developing virtuwell, "we gave ourselves the challenge of 'out-MinuteClinic-ing' MinuteClinic, and ended up creating some online capabilities for care received through a nurse practitioner for routine, inexpensive acute health conditions," Brainerd said.
Those include 40 common ailments — from acne to bladder infections, sunburn and lice — that are associated with high-diagnostic accuracy and don't require a lab test. In an interview with H&HN in February, HealthPartners leaders said they had treated 51,000 patients from Minnesota and Wisconsin, and saved about $88 in costs per visit, along with 2.5 hours of patient time, compared with more traditional clinic settings.
Kevin Palattao, vice president of virtuwell and of clinic patient care systems, said at the time that leaders were encouraged by the program's success in a competitive market. "Consumers have a lot of choices. And the fact that we're generating these savings when they're already used to going to lower-cost venues than emergency rooms, that was pretty impressive to us," Pallatao said. "And it just says that this thing probably has even bigger legs in other markets where that's not the case." — Marty Stempniak
'We see everyone, but we don't treat everything'
Patrice Perkins' road to treating patients started about 20 years ago. After her father suffered a stroke, he was confined to a bed at a small community hospital in Illinois. Frustrated with the level of care, she tried to get him moved down the hallway to a room closer to the nurses' station.
"I told them, 'I never thought about nursing, but I'll be a better nurse than you've ever been,' " she recalled.
Perkins committed herself to becoming a registered nurse and transforming care with her own hands. She took it for granted that she would work in a traditional health care setting, and landed a job at Advocate Health Care in the Chicago region. Now, at 40, she is clinic practice manager for MinuteClinics in South Chicago, as well as nearby suburbs. Coincidentally, Advocate is affiliated with the 37 MinuteClinic locations in the area.
In a recent interview at the CVS on busy State Street, a few blocks south of the Chicago Theater, Perkins said the store averages about 18 to 25 patient visits a day, and sometimes more, depending on the season. School and sports physicals, as well as flu vaccinations, are among the biggest traffic drivers. For patients who show up and don't have a regular physician, the clinic shares a list of local providers.
The clinic's nurse practitioners typically consult with Advocate doctors over the phone; managers in the region, like Perkins, meet face-to-face with physicians about once a month to discuss clinical guidelines and best practices and ask questions. She believes the affiliation has helped to bring more authority to the CVS brand in the Chicago market.
"When you come in, we have a saying, 'We see everyone, but we don't treat everything,' Perkins noted. "With that said, we may have to refer a person out to a higher level of care, but knowing that we have the trust within Advocate, it helps." — Marty Stempniak
The top 5 retail clinic chains*
1 | MinuteClinic (CVS)
Locations: About 700
Clinics around since: 2000
Employees: About 2,200 NPs and PAs
Patient visits: 17 million since opening
2 | Healthcare Clinic (Walgreens)
Locations: Almost 400
Clinics around since: 2007
Employees: More than 1,000 NPs and PAs
Patient visits: Not provided
3 | The Little Clinic
Clinics around since: 2003
Patient visits: Exceeded 1 million in May 2012
4 | Target Clinic
Clinics around since: 2006
People employed: One or two NPs or PAs per clinic
Patient visits: Not shared
5 | RediClinic
Around since: 2005
Employees: 157 clinicians and clinician assistants
Patient visits: More than 1.2 million since opening
* As of Sept. 23