News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

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Clinical Laboratories and Pathology Groups

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Consumer Trend to Use Walk-In and Urgent Care Clinics Instead of Traditional Primary Care Offices Could Impact Clinical Laboratory Test Ordering/Revenue

Primary care is shifting from traditional office visits to urgent care and walk-in clinics even as large hospital groups continue to buy up independent physician practices, altering where and from whom clinical laboratories receive referrals and test orders

Medical test ordering and referrals from office-based physicians are the financial foundation of the clinical laboratory industry. Thus, recent trends reshaping how and where physicians practice medicine, and the ownership of their medical groups, could have both beneficial and adverse implications for medical laboratories and anatomic pathology groups.

Primary care doctors who own their own medical practices are disappearing from the healthcare landscape at an impressive rate, as large hospital groups expand their share of the primary care market. According to the New York Times (NYT), in 2010, large hospital groups employed 23% of the nation’s primary care physicians. By 2016, that number had increased to 43%.

However, office visits to primary care physicians fell by 18% between 2012 and 2016, according to a report by Health Care Cost Institute (HCCI). During the same period, visits to specialists rose 31%.

Walk-In and Urgent Care Clinics Replacing Traditional Office Visits

An increasing number of patients are selecting different types of providers when seeking medical care. Convenience, low cost, and shorter wait times have many patients choosing urgent care and retail or walk-in clinics instead of traditional office visits. Dark Daily reported on this growing trend last fall in “Five Reasons Why Retail Clinics Are a ‘Game-Changing’ Threat to Traditional Healthcare Providers That Could Strain Clinical Laboratories and Pathologists.”

The number of retail or walk-in clinics in the United States has increased by 14 times over the past decade, according to Statista, a provider of market and consumer data. In 2008, there were only 200 retail clinics in the country. Current projections indicate there will be 2,800 walk-in clinics located throughout the country by the end of this year.

In 2010, retail clinic sales totaled $518 million. By the end of 2016, retail clinic sales were more than $1.4 billion representing an increase of 20.3% per year during that time period, according to the Kalorama report, “Retail Clinics 2017: The Game-Changer in Healthcare.”

Jeffrey D. Le Benger, MD, FACS

“There is huge consolidation in the market right now,” Jeffrey D. Le Benger, MD, FACS (above), Chief Executive Officer of Summit Medical Group in New Jersey, told the NYT. “Everyone is fighting for the primary care patient.” (Photo copyright: Gannett.)

Retail or walk-in health clinics were originally intended for uninsured and underinsured individuals who sought an affordable option for medical services. These clinics are designed to treat non-emergency situations, such as burns, sprains, and minor infections or illnesses. Services at these clinics are usually administered by a nurse practitioner.

Retail walk-in clinics often are located inside larger, popular stores. Examples include:

Providing 24/7 Healthcare Services at Lower Costs

In contrast, urgent care clinics are equipped to handle more serious, non-emergency injuries and conditions and are generally staffed by physicians. The Urgent Care Association of America states that there are more than 7,500 urgent care centers in the US with an annual revenue of $18 billion. This industry is expected to grow by 5.8% in 2018. The largest urgent care group in the country—MedExpress Urgent Care in Morgantown, W.Va.—has 252 locations in 22 states.

Another growing urgent care center—ZoomCare of Portland, Ore.—has 36 locations in Oregon and Washington State. Services offered include: urgent care, primary care, pediatrics, gynecology, orthopedics, dermatology, dental care, ear nose and throat, chiropractic, podiatry, physical therapy, mental health, immunity, imaging, internal medicine, clinical laboratory, and prescriptions. They offer convenient, extended hours and some locations are open seven days a week.

“Our customers are looking for world-class conveniences,” Albert DiPiero, MD, co-founder and Chief Medical Officer at ZoomCare, told Portland Monthly.

ZoomCare lists its menu of services/cost for both insured and self-pay patients on its website. Basic medical laboratory tests include:

  • Strep-$50;
  • Urine-$20;
  • Mononucleosis test-$20;
  • Pregnancy-$20; and,
  • Influenza A/B-$40.

The website states that half of ZoomCare’s medications cost less than $10, and five out of six of the medicines are less than $20.

With such low costs and easy accessibility, it’s understandable why the number of patients seeking care in non-traditional office settings is growing. Clinical laboratories must accept and support these new sites of healthcare delivery to ensure continued procurement of lab test referrals. Staying on top of these trends and adjusting to consumer demand will help labs thrive and survive in healthcare’s ever-changing landscape.

—JP Schlingman

Related Information:

How ZoomCare is Shaking up the Checkup

The Disappearing Doctor: How Mega-Mergers Are Changing the Business of Medical Care

Healthcare Mega Mergers Push Primary Care Clinics Closer to Extinction: Five Takeaways

AETNA and ZoomCare Announce New Accountable Care Collaboration in Oregon

Number of Retail Clinics in the United States from 2008 to 2018

Retail Clinics 2017: The Game-Changer in Healthcare

Urgent Care Industry Hits $18 Billion as Big Players Drive Growth

Five Reasons Why Retail Clinics Are a “Game-Changing” Threat to Traditional Healthcare Providers That Could Strain Clinical Laboratories and Pathologists

CVS Announces Plans to Add More Clinical Services to Its Minute Clinic Locations, Including Certain Medical Laboratory Tests

It’s all about convenience and offering consumers multiple services at a single location. That’s why certain clinical laboratory tests will soon be offered at CVS Health Minute Clinics

As predicted, operators of rapid clinics located in retail pharmacies and other retail stories are adding additional clinical services. In the case of CVS Health, it recently announced plans to add certain clinical laboratory testing services to its Minute Clinic locations.

Consumer demand is driving these decisions. After all, who doesn’t want to save time and money these days? Combining errands into as few trips as possible means getting more at each location. This imperative drove big-box stores Walmart (NYSE:WMT) and Target (NYSE:TGT) to combine their household lines with grocery products all under one roof, and customers loved it!

Thus, it was no surprise when pharmacy chains got in on the act by adding rapid care clinics to retail stores that already included health and beauty products, pharmaceuticals, and limited grocery items. This important trend has been written about by Dark Daily in previous e-briefings.

Now, during a second quarter earnings call, CVS Health revealed that they plan to expand their offerings at Minute Clinic locations to include services intended to help consumers manage chronic health conditions. The move could be considered part of the same trend—providing customers with more options at each visit. However, there’s more to it. The new services aim at empowering chronic disease suffers through population health management tools. For patients and caregivers of chronic disease patients, this could be quite beneficial.

But how will this impact medical laboratories and pathology groups, when patients realize they can employ tools that monitor their chronic conditions at convenient locations where they can likely fulfill other needs as well? Might this impinge on revenues from tests and specimen gathering procedures traditionally performed at clinical laboratories?

Demand for Low-Cost Quality Care Driving Growth in Retail Clinics

There are currently more than 1,100 Minute Clinics located inside CVS stores in 33 states and the District of Columbia. Headquartered in Woonsocket, R.I., CVS expects an escalation in the need for their Minute Clinic services due to:

·       A shortage of primary care physicians;

·       An increase in chronic diseases; and

·       The aging US population.

CVS Health’s initial service offerings will help diabetes patients:

·       Monitor glucose levels;

·       Adhere to medication schedules, and,

·       Modify their lifestyles through education.

During the next two years, CVS plans to add similar services at their Minute Clinic locations for other chronic conditions, including:

·   Asthma;

·   Depression;

·  Hypercholesterolemia (high cholesterol); and,

·   Hypertension.

The Minute Clinics operate seven days a week, with half of their patients seen in the evenings and weekends—times when most traditional medical offices are closed. CVS Health plans to open an additional 150 Minute Clinic locations within the next year.

Patients waiting to be seen by nurse practitioner Marti Wolfson (right) at a Minute Clinic in La Mesa, CA. CVS announced that it will introduce certain clinical laboratory testing services to its chain of rapid care clinics located in CVS retail pharmacies. (Photo copyright: San Diego Union Tribune/John Gastaldo.)

According to a report from the Robert Wood Johnson Foundation and Manatt Health Solutions, there are more than 1,800 retail clinics in the United States and CVS Minute Clinics hold more than 50% of the market. Access to walk-in appointments, convenience, extended hours of service, lower costs, and having no primary source of care are the most common reasons given by people who utilize services at the clinics.

“Patients are looking for easy access to care, good quality, and low cost,” Andrew Sussman, President, Minute Clinic, told the Boston Globe. “That’s part of what’s making us so successful.”

Retail clinics account for 10.5 million healthcare visits annually, which represent about 2% of primary care encounters in the country. The number of retail clinics in the US increased by 900% between 2006 and 2014 and is expected to continue to climb.

According to AMN Healthcare research, the most common reasons for visits to the clinics include:

·       Diagnosis and treatment of new illnesses and symptoms;

·       Vaccinations;

·       Prescription renewals; and,

·       Basic health screenings.

Other major players in the retail clinic industry include Walgreens Healthcare Clinic, Kroger Little Clinic, Walmart Retail Clinic, and Rite Aid RediClinic.

VA Now Referring Vets to Retail Clinics in Phoenix Area

In April, CVS Health, the Department of Veterans Affairs (VA), and TriWest Healthcare Alliance joined forces to improve access to health services for veterans in the Phoenix area. This initiative allows healthcare professionals at the Phoenix VA to refer veterans to Minute Clinic for minor health conditions.

“This new public-private collaboration between CVS, TriWest, and the VA is an important step forward in enhancing choice and flexibility in veterans’ healthcare,” Senator John McCain noted in a CVS Health press release. “I’ve long believed that veterans in need of routine healthcare services should not have to wait in line for weeks to get an appointment when they can visit community health centers like Minute Clinic to receive timely and convenient care.”

Because of this collaboration, 120,000 veterans living in the Phoenix area may now receive care, when appropriate, at the 24 Minute Clinic locations in the metropolitan area.

“Our number one priority is getting veterans access to care when and where they need it. The launch of this partnership will enable VA to provide more care for veterans in their neighborhoods,” stated Baligh Yehia, MD, MPP, MSc, in the CVS Health press release. Yehia is Senior Medical Director at Johns Hopkins Medicine, and Deputy Undersecretary for Health at the US Department of Veterans Affairs.

As retail clinics become more popular a growing number of medical laboratory test samples that traditionally came from office-based physicians may originate from these clinics. Clinical laboratory outreach, physician support, and patient education programs have never been more critical.

—JP Schlingman

Related Information:

CVS Expanding Minute Clinic Chronic Disease Programs

Phoenix VA Healthcare System, TriWest, and CVS Health Partner to Increase Veteran Access to Healthcare Services

CVS Health (CVS) Q2 2017 Results – Earnings Call Transcript

The Value Proposition of Retail Clinics

Convenient Care: Growth and Staffing Trends in Urgent Care and Retail Medicine

Walk-in Clinics Force Big Medicine to Rethink

Five Reasons Why Retail Clinics Are a “Game-Changing” Threat to Traditional Healthcare Providers That Could Strain Clinical Laboratories and Pathologists

Retail Clinics Are Poised to Offer More Health Services, Participate in ACOS, and Offer Expanded Menu of Clinical Pathology Laboratory Tests