Retail Clinics: The Next New Thing
Within a year or two, thousands of retail clinics may be hard-by the neighborhood Starbucks or nestled inside Targets, Wal-Marts and major pharmacy chains – as ubiquitous to the 21st century American shopping experience as pre-washed jeans and organic produce.
“Retail-based companies are offering what they believe their shoppers want: convenient basic medical care at a fair price, stated in advance. (A $40 service at a retail clinic costs as much as $109 in a doctor’s office, $120 at an urgent care facility, or $325 at a hospital emergency room.) If successful, this could change the way many people receive routine, non-urgent medical care, with significant implications for insurers and healthcare providers,” said the California HealthCare Foundation in a report issued last year about the emergence of retail clinics.
Although retail clinics have been operating in the United States for nearly a decade, only a handful of clinics operate in California, virtually all in Northern California. One operator, San Ramon-based Wellness Express, began opening clinics on the premises of three Longs Drugs stores in mid-2005. It had ceased operations by late 2006. Sutter Express Care, a joint venture between Sutter Health and the Rite-Aid pharmacy chain, opened six clinics in the Sacramento area last year, but there appear to be no immediate plans to expand further.
The emergence of retail clinics in California has received a lukewarm reception. Generally, those who have yet to patronize a retail clinic are apprehensive about doing so. Conversely, its patrons are more than willing to return.
Mixed signals aside, corporate America will be making a big push for expanding retail clinics in the next few years. Among the plans:
- MinuteClinic, with more than 180 locations in 19 states, plans to have as many as 1,100 locations by 2009.
- RediClinic, founded by AOL founder Stephen M. Case, has 50 locations in five states, plans to have 1,000 locations by the end of 2007.
- In late May, Walgreen Co., the Chicago-based drugstore chain with more than 5,700 stores, acquired Take Care Health Systems, which operated 51 Convenient Care retail clinics in Chicago, Kansas City and Pittsburgh. Walgreens announced it would use the acquisition to help it operate 400 retail clinics by the end of 2008.
Most clinics are staffed with nurse practitioners (NP), who have had extensive training in diagnosing and treating basic illnesses, are allowed to prescribe medications to patients and are registered with the Drug Enforcement Administration. Their mean national salary is $73,620. In California, the average NP salary is $86,674 – roughly half the compensation of an experienced family physician. NPs in California must be supervised by physicians (23 states do not require such supervision). Even standardized procedures must be developed and approved in conjunction with a physician before an NP may practice. A physician may not supervise more than four NPs at a time, and must be available by telephone when a patient is being examined by an NP.
Retail clinics tend to diagnose and treat simple conditions and illnesses, shying away more complex laboratory procedures subject to federal regulation. Treatment of ear infections, pink eye, bronchitis, strep throat, minor burns and bladder infections are among the most-commonly rendered services. Many provide vaccinations for the flu, school admission and travel. A few will perform physicals for employers or insurance applications. Most retail clinic operators charge about $59 for a walk-in exam, although they may charge more for additional testing. Most also accept commercial health insurance and Medicare fee-for-service coverage. Exams are generally advertised as taking 15 minutes or less. Most locations are open six and sometimes seven days a week, often well into the evening.
In California, virtually all retail clinics must be operated by a medical corporation owned by a physician in accordance with the state’s Corporate Practice of Medicine guidelines. State law does not necessarily bar nurse practitioners from being an active part of a clinic’s corporate entity, but physicians must play a role regarding what diagnostic tests are appropriate for a particular condition; participate in the hiring and firing of staff; and serve as custodian for medical records, among other requirements. Web Golinkin, chief executive officer of RediClinic, noted that California’s regulations would prove a constraint to his company’s entry into the market.
Perhaps to accommodate these restrictions, a somewhat different business model is being pursued by QuickHealth Inc. of Burlingame. It operates nine clinics, mostly in the Bay Area. Unlike many of the other retail clinic operators, its sites are staffed by physicians, which makes adhering to the corporate practice of medicine regulations far easier. Most of the sites are inside Farmacios Remedios stores, a Bay Area pharmacy chain that caters to Latinos, Longs Drugs and Wal-Marts. The company charges $39 for a basic visit and uses electronic health records.
While retail clinics are steadily surging in numbers throughout the United States, their growth in California has been deliberate at best, partly due to the business and regulatory environment. It remains to be seen what their future here will be, but don’t make the mistake of not watching these new kids on the block.