Hospitals Opening Retail Clinics to Capture Greater Market Share

Walk-in rapid medical clinics in retail stores are so popular with consumers that now hospitals want in on the action. Some of the nation’s most famous hospitals have inked agreements to put their brand on rapid clinics located inside many of the country’s largest retail and pharmacy chains.

Hospital-branded rapid clinics are inside 25 Wal-Mart stores nationally, according to a New York Times article. Additionally, Cleveland Clinic lent its brand to CVS drugstore clinics in northern Ohio, Mayo Clinic is operating Express Care clinics inside a supermarket and shopping mall in Rochester, Minnesota, and there are others. In fact, one in 10 retail clinics are now connected to a hospital, and more are planned, according to Merchant Medicine News, an online newsletter for the clinic industry.

Consumer Demand for Convenient, Low-Cost Medical Care Moves Hospitals Into Retail Clinic Business

Some primary-care doctors consider these retail clinics cheap, unworthy competitors, but hospitals view them as a way to expand business and build relationships with more patients. While they may not be a huge revenue generator, these clinics attract the type of patients hospitals want, such as women of childbearing age, noted Margaret Laws, a policy expert at the California Health Care Foundation.

With a growing shortage of primary care physicians, hospital administrators say these hospital-linked retail clinics will fill a vital need and reduce the number of people seeking routine medical care in emergency rooms. Staffed by physician assistants or nurse practitioners, hospitals can operate these clinics at a relatively low cost, compared to emergency centers.

Furthermore, these clinics provide a vital community service for the underinsured and uninsured, which, according to a recent Census release, increased from 45.7 million Americans a year ago to 46.3 million today. The average visit for a CVS MinuteClinic, for example, costs $44, compared to $109 for a physician office visit or $120 for an urgent care center.

As the ranks of the uninsured grow, more and more people report visiting a retail clinic. In a survey by Harris Interactive, 11% of participants said they had visited a retail clinic in the last 10 months or someone in their family had. That’s up from 7% in a survey a year ago.

Still many physicians oppose them. Doctors affiliated with Lehigh Valley Health Network in central Pennsylvania had opposed the hospital’s plan to establish retail clinics until Geisinger Health System, a large regional provider, established its brand of retail clinic in their market. One-third of all patients visiting a grocery-store clinic operated by Lehigh Valley Health are uninsured, according to the nurse practitioner in charge, Janelle Sharma.

Dr. David Herman, who supervises Mayo Clinic’s two retail clinics, predicts that some physicians will begin responding to these retail clinics by offering more convenient service. This is likely to include extended, consumer-friendly office hours and walk-in service. Six Mayo Clinic physicians already offer late and weekend office hours.

These developments indicate that the trend of rapid medical clinics in retail stores is likely to become a permanent part of the healthcare scene in the United States. What has yet to be determined is whether these clinics will eventually offer a steadily-growing menu of diagnostic tests. If this happens, it could create a new class of lab testing competitors in the local marketplace. –P.K.

Related Information:

Hospitals Begin to Move Into Supermarkets

Where Lab Tests Are Performed