United States: Patient Check-Ups Before Checking Out: Partnering To Bring Health Care Into The "One-Stop Shopping" Sector

Retail clinics—the popular term for walk-in clinics located in pharmacies, supermarkets, and "big-box" stores—are playing an expanding role in the health care market. According to a study published by the New England Journal of Medicine, over 2,000 retail clinics were operating in the U.S. as of 2015.1 Major players, such as CVS Health's MinuteClinic, Walgreens' Healthcare Clinics, and Kroger's Little Clinic, are continuing to grow and adapt their strategy.

Most notably, collaborations between retail clinics and health systems are becoming more prevalent and taking increasingly varied forms. For example, several hospitals and health systems such as Beacon, in Indiana, and Geisinger, in Pennsylvania and New Jersey, have opened their own retail clinics or partnered with them. In large part, the health systems that establish or partner with retail clinics intend for the retail clinics to serve as a lower cost point-of-service facility for patients who might have otherwise presented at a higher cost provider-type like an urgent care center or a hospital emergency room. By serving this function, retail clinics can be appealing for health systems that are looking for new, convenient, and low cost gateways to other and larger healthcare facilities within the health system.

Also driving health systems into the retail space is the opportunity to leverage convenient care models to improve population health. Retail-based care is a platform for facilitating health screenings, regular monitoring, medication management, and participation in chronic care programs. Furthermore, retail clinics can help a health system expand into geographic areas in which the system may not otherwise have a presence. Since many states have certificate of need or other similar laws which may make the establishment of a new, albeit traditional, type of facility too difficult if not impossible to pursue, sparsely regulated retail clinics may be a promising solution for health systems who feel the need to spread their wings.

This post highlights compelling trends and insights that speak to strategy development and the viability of such enterprises, including state regulatory landscapes, the importance of "convenient care" to differentiation, and challenges to the notion that retail clinics reduce medical spending.

State Regulation

States have been, and continue to be, slow to adopt legislation that specifically addresses retail clinics. Nevertheless, there are scattered examples of state laws that are intended to regulate the retail clinic marketplace in much the same way as traditional medical and clinical practices have been regulated for years.

In 2008, Massachusetts reacted to the proliferation of retail clinics in the Commonwealth with the promulgation of rules that specify the treatments that a retail clinic can provide to its patients and prohibit retail clinics from treating children younger than 18 months. The rules also require retail clinics to develop methods to limit the number of repeat visits to the clinics.

Several states — Arizona, Florida, New Hampshire, and Rhode Island — require licensing for retail clinics. The licensing schemes may subject such clinics to facility inspections, accreditation, permits, reporting obligations, and medical record obligations. Florida also requires that retail clinics make patients aware of the cost of services ahead of time. Vermont requires retail clinics to see patients regardless of whether they have health insurance. And in New York, pending legislation2 would specifically define the types of retail clinics that can operate in the State and the scope of services that such a clinic can provide to its patients.

Finally, non-physician medical practitioners traditionally staff retail clinics. Such practitioners include nurse practitioners (NPs), advanced nurse practitioners (ANPs), and physician assistants (PAs). State practices and laws vary regarding the flexibility of these non-physician medical practitioners to prescribe drugs and practice medicine. Therefore, even in those states that do not have laws that directly proscribe the establishment and operation of retail clinics, state scope of practice limitations for non-physician medical practitioners may, in practice, serve as indirect retail clinic rules and regulations.

Health Care Consumerism & Differentiation

Americans are becoming more educated about the health care system and feeling more empowered to make their own decisions regarding care. People are also taking on greater responsibility for managing health care costs and consumption. As we noted in a post some months ago, high-deductible health plans are among the fastest growing health plans in both the individual and group markets. As a result, differentiation is of increasing significance. The retail clinic is one part of the "convenient care industry", which is characterized by consumer-oriented principles such as ease of use (e.g., location, hours of operation, and access to same-day appointments), price transparency, and responsiveness. "Convenient care" approaches evolving alongside the retail clinic model include electronic visits, telemedicine, and urgent care centers.

Effects on Medical Spending

Retail clinics offer less expensive care than either primary care physician offices or emergency departments due to attributes including that care in a retail setting is typically provided by NPs or PAs, low administrative costs, and a small footprint. Recent studies, however, challenge the notion that retail clinics ultimately reduce medical spending because of substitution for more costly loci of care.

Retail clinics offer immediate care for a narrowly defined set of services, the scope of which is generally limited to health screenings, care for minor acute illnesses, and care for some chronic conditions. A recent study from the RAND Corporation suggests that retail clinics may actually increase spending, albeit modestly, because people use these clinics to access care they would not otherwise seek out. Researchers estimated that 58% of visits to retail clinics for low-acuity ailments represented new use of medical services, as opposed to substitution for a visit to a costlier source of care.3 Another study, also a RAND analysis, found that the opening of a retail clinic nearby to an ER did not meaningfully reduce the number of ER visits for low-acuity ailments.4

Care Capacity

Many argue that retail clinics present an appealing solution to the problem of limited care capacity within the nation's healthcare system – a system that is struggling to accommodate the growing number of people who are now able to access the healthcare system through the mandates/opportunities of healthcare reform. Various studies indicate that many retail clinic patients report lacking a regular source for primary care. While, in the early days of the model, most retail clinics did not accept insurance and insurers did not typically cover care at retail clinics, retail clinics now regularly accept commercial insurance, Medicare, and Medicaid, thereby positioning the retail clinic to respond to demand. However, this opportunity is currently constrained, in part, by the legal trends discussed above.

As market players continue to experiment, integrate, coordinate, and innovate with alternative sites of care such as retail clinics, we can expect further exploration of its appropriate and most effective place in the care continuum, and further refinement of its true value proposition.

Footnotes

1 Ji Eun Chang, MS, et al. Convenient Ambulatory Care – Promise, Pitfalls, and Policy. New England Journal of Medicine (2015).

2 New York (State). Legislature. Assembly. An act to amend the public health law, in relation to retail clinics and limited services clinics. (A958). 2017-2018 Reg. Sess. (January 10, 2017). New York State Assembly. Web. 13 April 2017. (Pending committee vote)

3 RAND Corporation. Research Brief: The Evolving Role of Retail Clinics. 2016.

4 Id.

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