News stories are reporting that Walgreens is participating in ACOs now forming in New Jersey, Florida, and Texas
Retail clinics are positioning themselves to play a major role in the delivery of basic primary care services. Consumer and payer acceptance of the “convenience care” model has brought the concept to a tipping point in its potential to shift the way that some basic primary care—and medical laboratory testing—services are delivered.
Dark Daily has long predicted that retail clinics would want to expand their services beyond the original formula of a nurse practitioner who handles a basic menu of easy-to-diagnose conditions. Consumers have readily accepted this healthcare delivery model. In fact, a new title has been coined that has its own Wikipedia.com page: Convenient care clinic.
Convenient Care Clinics Will Expand and Offer More Clinical Lab Tests
Accept the premise that convenient care clinics will add new medical services to their menu, and it becomes easy to accept the fact that they will need to make clinical laboratory testing available to their customers. This is a positive development for smaller labs and pathologists, since convenient care clinics will need fast, accessible test services and will value the expertise of pathologists and laboratory scientist who can help interpret medical laboratory test results.
Of course, the operators of convenient care clinics are quick to point out how their business model can contribute to improved patient care. For example, they note that chain stores are ideally situated for providing primary-care services such as flu shots.
“If you had a blank sheet and your goal is to get everyone immunized, what kind of system would you design?” queried, Jeffrey Kang, M.D., Walgreens’ Senior Vice President of Health and Wellness Services. “One that is easy to get to, open 365 days a year with locations on almost every corner in the country. That’s essentially what retail pharmacies are.” Kang, who is also a former chief medical officer of the Medicare program, was quoted from a story originally published in Modern Healthcare (MH).
Consumer and Payer Response Are Driving Expansion of Retail Clinics
Convenient care clinics are located in retail stores, supermarkets and pharmacies. They treat uncomplicated minor illnesses and provide preventative healthcare services. They are usually staffed by nurse practitioners (NPs) or physician assistants (PAs).
Various factors are driving the explosive growth in “convenient care,” according to the MH story. Together, these forces are creating an environment that allows retail chains to swiftly step in to offer a low-cost alternative to the often slow-moving healthcare systems.
One factor contributing to faster growth in the convenience care industry is the fact that health insurers are now willing to reimburse for this low-cost alternative for routine healthcare services. Initially skeptical about the concept of retail clinics, insurers now embrace the convenience-care strategy. Today, for example, close to 90% of CVS Caremark’s MinuteClinic visits are covered by insurance, MH reported. In the early days of the industry, it was only about 20%.
Positive consumer response is another factor driving the explosion of retail clinics. The growth of high-deductible plans is a key reason consumers find retail clinics appealing, according to Kevin Ronneberg, Associate Medical Director of Minneapolis-based Target Corp.
The convenience of one-stop shopping is also a major draw for consumers. Under traditional models, typical non-emergency healthcare services usually required a visit to the primary care physician, then a trip to the drugstore to fill prescriptions.
Retail Clinics Could Ease Lack of Access Due to Physician Shortages
Lack of ready access to primary care physicians is a growing problem for consumers. A recent Massachusetts Medical Society (MMS) study showed that, from 2010 to 2012, the typical wait to see a family physician in Massachusetts increased by over 50%. This was due to the expanded insurance coverage under Massachusetts’ reform law.
CVS cited the MMS study as part of the rationale behind its plans to expand its retail clinics. “When corporations see an opportunity and an unmet consumer need, we can move fast,” observed Kang in the MH story.
“It’s a ball the medical profession dropped, and I don’t think they’ll get their ball back,” added Princeton University economist, Uwe Reinhardt, Ph.D.. “Regular physicians were not responsive enough.”
The fact that the retail clinic industry now has its own organization is evidence of its steady growth. According to Convenient Care Association estimates, there are now more than 1,400 health clinics inside retail chain stores, nationwide, MH noted. That’s double the number from six years ago.
The industry leader currently is Rhode Island-based CVS Caremark Corporation. It now operates 650 MinuteClinics in 25 states and Washington, D.C. The company plans to have 1,500 clinics in 35 states by 2017. It will open 150 new clinics in the coming year.
In the number two position is Walgreens with Take Care clinics in 372 stores. The company projects double-digit growth of in-store clinics this year, according to the MH story.
The retail clinic industry is growing not just through expansion of locations. It was back in December 2011 when DarkDaily pointed out that convenient care clinics were expanding their menu of services to include medical laboratory testing. (See Dark Daily, “MinuteClinics and Axis-Shield Ink Agreement to Provide Point-of-Care Hemoglobin A1c Tests in 600 CVS Pharmacies,” December 30, 2011.)
Walgreens is moving aggressively to offer more services in its Take Care clinics too, the MH story stated. The clinics recently began offering assessment, treatment and management of asthma, diabetes, hypertension and other chronic conditions.
ACOs Have Role for Retail Clinics
In what may be its most significant move yet, Walgreens is moving retail clinics into the accountable care organization (ACO) space, MH reported. It has partnered with Largo, Florida-based Diagnostic Clinic; Marlton, New Jersey-based Advocare; and Temple, Texas-based Scott & White Healthcare to form ACOs.
ACO participation means that Walgreens will share in savings when it helps keep people healthy and lowers healthcare costs.
“That’s a huge shift,” stated Wade Miquelon, Chief Financial Officer at Walgreens. “[Paying health systems for performance allows] players like Walgreens to participate with them, help them bend the cost curve so they can make more money, and we can play more broadly, These things are very disruptive because we can provide, in many areas, the same or better care more conveniently and cheaper than the current alternative.”
For pathologists and clinical laboratory managers, the rapid expansion of retail clinics means that it may become commonplace for pharmacies to draw the patient’s blood, then “sell” the ordered lab tests and collect payment while the consumer is still in the retail store.
—Pamela Scherer McLeod