Hospital systems are eyeing retail clinics as a way to capture patients, but their track record has been spotty.
No, retail clinics haven’t supplanted the family doctor. Nor have their numbers come anywhere near analysts’ initial, giddy estimates. But the fact is, they are evolving. And hospitals and health systems are playing an increasingly important role in that evolution.
Back in 2006 and 2007, some pundits were predicting that as many as 5,000 retail clinics would dot the country in just a couple of years. Today, there are approximately 1,200 clinics in 38 states, according to Tine Hansen-Turton, executive director of the Convenient Care Association, the association for retail clinics.
Indeed, growth has stalled. In March 2009, for example, MinuteClinic, which is owned by CVS Corp., placed 90 of its clinics, or 16 percent of its clinics, on a restricted “seasonal” schedule, in essence, closing them until next flu season. Today, the company operates 500 clinics in 25 states and the District of Columbia. Meanwhile, Take Care Clinics, which was acquired by Walgreens in May 2007, had planned to operate 400 clinics by the end of 2008. Today, it operates about 350. And earlier this year, The Little Clinic, which was acquired by Kroger in February 2010, closed 30 of its 147 clinics, bringing its total to 117 facilities.
Yet clinic operators aren’t glum. To date, clinics have accounted for approximately 17 million patient visits, says Hansen-Turton. And they are looking toward a bright future, one that will likely see an emphasis on chronic disease management, as well as more partnering with hospitals and hospital systems.
Health systems get involved
Health systems remain key players in the retail clinic market. Yes, retail pharmacies, such as CVS and Walgreens, have sophisticated consumer marketing methods, which hospital systems lack, says Tom Charland, CEO of Merchant Medicine, Shoreview, Minn., and former senior vice president of strategy and business development for MinuteClinic. “But the hospital systems have an incredible engine for hiring, and an incredible connection to the physician community. And they can leverage their [electronic medical record systems].”
“There’s probably not a hospital that’s not thinking about it, and how it fits into their larger portfolio,” adds Hansen-Turton, who adds that the biggest growth of retail clinics in terms of numbers lies with hospitals and health systems.
Health-system-operated retail clinics are a win for the health system and the patient, she says. Patients get a low-cost option for care, and the health system gets a new source of inpatient admissions or same-day procedures. “For the hospital, it’s a great community marketing tool.”
Some health systems have embarked on their own retail clinic strategy, with mixed results. Several, such as Aurora Health Care in Milwaukee, Wis., and Sutter Health in Sacramento, Calif., closed a number of clinics in the past 24 months. But that’s just a necessary part of the growth process, says Charland.
“When you’re talking about retail healthcare, some [clinics] will perform well and some won’t,” he says. “I attribute that to a refinement of strategic planning and demographic analysis. But when you compare [the health system closures] to the early days of retail clinics, when we saw massive closures by private-backed clinics, there’s no comparison. Today, months will go by before we see a hospital close a clinic.
“We still see some overreaching, but that’s just people adjusting to the reality of available capital, choosing the right clinics, and having a model predictive of what can be successful and what can’t.”
Some health systems are leveraging their expertise in opening and operating clinics to help others do the same, Charland points out. An example is Bellin Health in Green Bay, Wis., which operates five FastCare clinics in Shopko department stores in northeast Wisconsin, staffed by Bellin providers. FastCare has partnered with 21 other health systems to establish 36 FastCare clinics in nine states, from Idaho to West Virginia.
While health systems continue to open and operate their own clinics, a more potent formula might find systems partnering with established clinic operators or retailers. In the Wal-Mart model, for example, the retailer looks to hospitals and health systems to staff clinics in its stores, while Wal-Mart takes care of physical layout and other aspects. To date, Wal-Mart has more than 90 “Clinic at Wal-Mart ” locations around the country.
Wal-Mart ’s promotional material says it all: “We continue to forge relationships with trusted health care providers nationwide in order to bring the convenience and value of in-store medical clinics to select Wal-Mart stores across the country.”
MinuteClinic has relationships with Cleveland Clinic; Allina Hospitals, Minneapolis, Minn.; Catholic Healthcare West, Phoenix, Ariz.; and, most recently, St. Vincent’s HealthCare in Jacksonville, Fla.
The agreement with St. Vincent’s, signed in July 2010, typifies MinuteClinic’s approach. Under the agreement, St. Vincent’s family physicians will serve as medical directors for MinuteClinic locations in Jacksonville. In addition, MinuteClinic and St. Vincent’s will collaborate on patient education and disease management initiatives, and will inform patients of the services each offers. St. Vincent’s will accept patients who need a level of care that is not provided at MinuteClinic. Signage at MinuteClinic locations will inform patients that each site has a clinical affiliation with St. Vincent’s Primary Care.
In addition, MinuteClinic and St. Vincent’s will work together to integrate their electronic medical record systems. With the patient’s permission, each St. Vincent’s-affiliated MinuteClinic will share medical history and visit summaries with other St. Vincent’s locations in Jacksonville. In the meantime, MinuteClinic will continue its standard practice of sending visit summaries via fax or mail, typically within 24 hours.
“We’ve just gone through healthcare legislation,” says Charland. “We’re anticipating a shortage of primary care physicians, and retail clinics have extra capacity. Delivering access at a time when access is a problem seems to make some sense.”
Chronic disease management
Retail clinic operators have begun to focus on chronic disease management as a way to offset the seasonality of the business. A case in point is MinuteClinic, which in April 2010 introduced “Monitoring Made Easy™,” a series of monitoring services for patients diagnosed with diabetes, asthma, high cholesterol and high blood pressure. The monitoring services are designed to support patients with ongoing health conditions in between visits to their primary care provider or to provide assistance to patients who may not receive regular care, according to the company. MinuteClinic will send all monitoring results to a primary care provider with the patient’s permission.
The move to chronic disease management makes sense for retail clinics, says Hansen-Turton. “You have the perfect provider in the nurse practitioner, who has the background and is known for focusing on chronic disease management,” she says.
“I think time will tell whether it plays out,” says Charland. Providing ongoing monitoring services implies coordination with primary care providers, he says.
“Managing glucose is a complicated, moving target on a 24-hour basis, much less over a patient’s lifetime. How that will be coordinated by retail clinics remains to be seen.
“For someone without a primary care physician, is the retail clinic signing up to take on that role, and will it be reimbursed for that?” he adds. “There’s a lot to be worked out, and I think retail clinics would be the first to say so.”
“It does require a lot of coordination and partnership with hospitals and primary care providers,” says Hansen-Turton. “We see that in the marketplace. But if you have a need for maintenance or education [on disease management], it’s a low-cost option.”