Touch Point

AtlantiCare sees retail clinics as one more way to touch patients, and an opportunity to learn about a new way of offering care.

Just as suburbs crawl farther and farther away from downtown, so too does patient care continue to drift – literally and figuratively – from the acute-care hospital. Physicians perform more procedures in their offices. Surgery centers see greater numbers of patients every year. Urgent-care centers and so-called “doc in a box” outlets continue to gain acceptance. Home care is one of Medicare’s fastest-growing programs

Now, a new form of ambulatory care is sprouting up, in some unlikely places, such as department stores, grocery stores and drug stores. Pioneered by such companies as Minneapolis, Minn.-based MinuteClinic Inc., Conshohocken, Pa.-based Take Care Health Systems, and Houston-based RediClinic LLC, these little clinics treat walk-in patients for a variety of minor maladies, such as ear infections, pink eye, sinus infection, strep throat, poison ivy and cold sores. Typically, care is provided by nurse practitioners or physician assistants. Analysts at Knowledge Source, a Trumbull, Conn.-based market research firm, estimate that as many as 500 retail health clinics are in operation.

Consumers are attracted to the clinics because they offer quick, in-and-out service. Patients are given a pager, so they can shop while waiting to see the nurse practitioner. Visits are brief, and if any complications are detected, the patient is referred to a doctor, hospital or other venue. Upon completion of the visit, the clinic usually faxes a report to the patient’s primary-care doctor.

The clinics are not only convenient, but relatively cheap too. Most conditions can be treated for $50 or $60. Better yet, patients know upfront how much they will pay, because rates are posted on the door. (Insurance coverage is still spotty.)

Up until now, for-profit companies have dominated the market. MinuteClinic made such a splash that drugstore operator CVS Corp. announced its intention in July 2006 to buy the company and operate it as a subsidiary. Not to be outdone, Deerfield, Ill.-based Walgreens opened 50 in-store clinics in five markets in the second half of 2006, and plans to operate a total of 250 nationwide by August 2007.

Now, a few IDNs are setting up retail clinics on their own, figuring that their reputation in their community gives them a leg-up on their for-profit competitors. IDNs view clinics as a way to recruit new patients, reduce inappropriate usage of the emergency department, and extend their mission of providing care in the most appropriate setting. One of these IDNs is Atlantic City, N.J.-based AtlantiCare, operator of a 567-bed teaching hospital and a myriad of inpatient and outpatient care centers.

The Journal of Healthcare Contracting recently spoke with Don Parker, president, and Kevin McDonnell, administrator, of AtlantiCare Health Services, which is AtlantiCare’s ambulatory-care network. In October 2006, AtlantiCare – in collaboration with Wakefern Food Corp., the merchandising and distribution arm for 190 ShopRite grocery stores in New Jersey, New York, Connecticut, Pennsylvania and Delaware – opened its first in-store health center at the ShopRite store in Somers Point, N.J. The IDN plans to open six more HealthRites by the end of 2008.

Located close to ShopRite’s in-store pharmacy, AtlantiCare HealthRite treats anyone 18 months and older. Nurse practitioners, working in collaboration with physicians, provide the care and prescribe medications as necessary.

The Journal of Healthcare Contracting: Why did AtlantiCare decide to open up the HealthRite clinics?

Don Parker: We started with a different perspective than the entrepreneurial companies. We had two things in mind. First, we are constantly researching new and different ways to deliver care. Second, we believed we needed a relationship with a food service provider. ShopRite, as a purveyor of food, is a precursor, “exacerbater” and potential healer of health issues. Our statement to ShopRite was, “We need to bring healthcare and food service providers together to solve the healthcare crisis.” ShopRite was interested in this.

JHC: Did you consider partnering with a drug store chain?

Parker: The volume of traffic in the average ShopRite store is 32,000 visits a week. The average consumer goes to a grocery store 2.4 times a week. They don’t go to the drug store that often.

B>Kevin McDonnell: That’s not to say we didn’t look at drugstores … But it’s a volume game; having more people coming into the store was better.

JHC: Why ShopRite?

Parker: ShopRite is family-owned, but they’re also a large co-op. The value of bringing together a family-owned company and a local hospital provider is name recognition. AtlantiCare is a well-known commodity in our area. We bring a tremendous amount of value to ShopRite, and vice versa.

JHC: Last August, AtlantiCare announced it would open seven HealthRite locations. Have you done so?

Parker: We were expecting to open all seven last year. But the roll-out has been slower than we had expected. We have four in the queue for 2007, and we’ll open the rest in 2008.

JHC: Why the delay?

Parker: ShopRite pays a tremendous amount of attention to every customer who goes through their turnstyles.

A half dozen people wrote letters to the editor saying they didn’t want healthcare delivered in a grocery store, because illness could be spread. We have overcome [these objections].

McDonnell: It has been several months since we’ve seen any backlash in the papers. Don and I personally talked to the people who wrote the letters and assured them we weren’t bringing in more illness than was already being brought in through the pharmacy. Sixty percent of the prescriptions filled in ShopRite every week are for illness-induced medicine, not maintenance. So, sick people have been coming into grocery stores for years and years.

Parker: Our proposition has been that ready access to healthcare is the most important way to stop the spread of illness.

McDonnell: And the clinic isn’t located next to produce. We’re next to the pharmacy, near the beauty aids aisle.

JHC: Who is HealthRite’s primary competitor?

Parker: We were the first to open a retail clinic in New Jersey. Our intention was to get started and to create some barriers to entry [for competitors]. MinuteClinic has opened four centers in North Jersey.

JHC: How are you viewing HealthRite – as a money-maker or as a referral source?

Parker: It is both a defensive and offensive strategy for us. I don’t think retail clinics are anywhere near as profitable as the for-profit companies are talking about. But [at the same time], the entrepreneurial companies don’t have the advantage of getting downstream revenues – patient referrals – as we do. So we think we have an opportunity on both sides.

JHC: Do your docs see you as a competitor?

Parker: We were extremely careful when talking to the doctors. Kevin and I visited a number of area doctors to explain what we were doing. We engaged some prominent practitioners on the design [of HealthRite]. We sought their collaboration on arrangements and protocol. We consulted with the American Academy of Family Physicians to make sure our protocol was consistent with their recommendations.

Our system is set up to minimize the perception of us as a competitor. We don’t accept anything except minor emergencies. We do not accept patients for chronic care. After a patient sees us, we immediately transmit a summary of the visit to their doctor, so [he or she] knows what we did and how.

Also, we did a medical staff development survey and projected a deficit of 41 doctors over the next five years in primary, internal and pediatric medicine, based on age, retirement and new demand. That’s a very, very steep recruitment curve to attack. It’s difficult to get into a doctor’s office. So [HealthRite] can be an advantage.

And we act as a patient finder for our physicians. If you’re at one of our locations and you don’t have a primary care physician, we talk to you about accessing one of our physicians. Over half the people who come in to HealthRite don’t have a primary care physician.

JHC: What’s your competitive advantage in the market?

Parker: Name recognition [and our ability to recruit] good nurse practitioners. Getting good nurse practitioners is a challenge. Based on our own nurses’ experience, we believe this isn’t a job they want to do full-time. There is only a limited menu of services they can perform [in a retail clinic]. We were concerned that nurse practitioners would ‘rust out.’ Our nurse practitioners get to work in multiple locations in the AtlantiCare system. That’s something a private entrepreneur can’t offer them. We also believe that the fact that we have existing contracts with insurers will help us.

And we believe that our reputation in the market will help us find other things to do with ShopRite. We are talking with them about offering nutritional tours of their stores. A doctor could write a prescription [for a tour] for someone who has been recently diagnosed with diabetes. We are also talking to ShopRite about labeling foods that are good for people on special diets. For example, an aisle in the store might have a sign that says “Good for low-sodium diet.” There are a number of other things we can do together. We have a medical equipment business; shoppers could test drive our carts.

[Private companies] don’t have the breadth and depth of what we are talking about. We just finished giving more than a thousand flu shots in two sessions, and we didn’t even advertise that we were doing it.

McDonnell: We have a mobile mammography van that goes to various grocery stores, including ShopRite. So we had a relationship with them before [HealthRite].

JHC: Do you view HealthRite as part of a continuing mission to provide patient care beyond the acute-care walls?

Parker: HealthRite is an extension of our urgent care network, which we started three and a half or four years ago. The network provides alternatives to using the emergency room. We also have a health and fitness facility, and we offer public preschool programs. Our belief is that the more contacts you have with individuals, the more likely they are to use all of your services. In our division [AtlantiCare Health Services] alone, we had 261,000 customer contacts in 2006. We believe the contacts lead to business for the rest of the organization.

JHC: Can you give a profile of the patients who visit the HealthRite clinic?

McDonnell: Twenty to 30 percent are self-paying. We treat children up through seniors.

Parker: The older population is slower to adopt the concept. Patients get a pager to use while they’re shopping. We’re expecting to see moms and kids, who don’t want to go the pediatrician’s office. It’s quick and painless.

JHC: Have the public’s expectations or understanding of HealthRite evolved since you first floated the idea in South Jersey? Have you had to educate the public on what to expect?

McDonnell: We’ve been as clear and concise as we can. But there are probably one or two patients a day asking for services we can’t provide. Being as diverse as we are, we can triage them to a different level of care. If someone needs suturing, we can triage them to an urgent care site. Or we can triage a weekend warrior who thinks he has sprained his ankle.

Parker: We don’t accept you as a patient until we prescreen you. You get an exam before you become a patient. This allows us to figure out whether in fact we can help you. And after you’ve seen us, we will call you 24 to 48 hours later to see how you’re doing. If you’re not on the way to getting better, we’ll call you back in at no charge.

JHC: What’s next for HealthRite? What is the greatest threat to its growth? How about its greatest opportunity?

Parker: We’re committed to opening seven locations with ShopRite. And the model is franchise-able. We’re in discussions with other healthcare systems to offer them a turnkey model, which they can deploy. I’ve been doing a fair amount of speaking to other systems. We’re trying to encourage hospitals to do this as a means of competing with the for-profit companies. It’s another way to contact customers.

The biggest limiting factor is the availability of nurse practitioners. We’ll all be competing for them. And we’re not educating enough to keep up with demand. I talk about them ‘rusting out.’ I think they get bored. That’s why it’s good that our nurse practitioners in Somers Point can work in other AtlantiCare locations.

It’s a fabulous phenomenon to be involved in. AtlantiCare Health Plans has a joint venture with Horizon Blue Cross Blue Shield of New Jersey, which we co-own with Blue Cross Blue Shield. Through that innovative relationship, we are able to … creat[e] initiatives leading to the journey to develop a healthier community. Our interest in retail clinics is to learn how to offer healthcare in a retail way, to make it more convenient for our community to access care. We’re learning how to provide retail care, offering pricing transparency, and other things – and now we have a field in which to do it. Health systems ought to be interested in providing care as a retail activity to increase access to care – an issue we’re facing across the nation.

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