The retail clinic era is over, and why pharmacy-based clinics are doomed to fail

in Physician | 13 responses

Corporations are finding out what primary care doctors already know: it’s hard to make money only doing office visits.

CVS has announced they are closing 90 of the 550 MinuteClinic locations until next fall’s flu season.

As the WSJ Health Blog comments, “the clinics appear to be showing a pattern sort of like the dot-com bubble, in which some will go away while others survive.”

That’s not surprising in the least. Even if these clinics accept health insurance, they are finding out that primary care-style office visits are not a sustainable way to stay in business.

Clinics that rely on cash-only payments are discovering that patients are loathe to spend money on health care during a recession.

So, it appears that the demand for retail clinics has been grossly overstated. And that’s not counting a big, well-publicized, malpractice lawsuit, which I predict will be inevitable, that will finish them off.

Those that survive will be hospital-based systems, who can utilize the retail clinic model as a “loss leader” which can serve to feed a hospital’s revenue-generating services.

Comments

The Happy Hospitalist
loss leader is right. Get them into the system for procedures.
Pay for procedures. Get procedures
Anonymous
“And that’s not counting a big, well-publicized, malpractice lawsuit, which I predict will be inevitable, that will finish them off.”
Kevin, you grossly overstate the effect of a single malpractice lawsuit on corporate America. Particularly a malpractice case, where damages are almost certainly not going to exhaust the insurance policy. You really let your irrational fear drive too many of your conclusions.
Chris
Wow. This is the first nonsensical thing I have seen on your blog. You took the 90 closings completely out of context. I’m shocked.
Beth
I hope this encourages people to utilize a family doctor so that they have “medical homes,” versus visits here and there with no consistent medical record in one spot (future development of common electronic medical record notwithstanding). My fear is, though, that it will lead to more improper use of the ER instead of urgent cares staffed with the same docs at lower cost.
Steve Parker, M.d.
I always figured the prescriptions filled on-site subsidized the practitioner’s salary. If so, I guess the volume didn’t justify the overhead cost.
I know a physician assistant who worked at one of these type clinics for $90,000/year. He enjoyed it: low volume, low stress. Don’t know if his clinic is still open.
-Steve
Anonymous
I think you misinterpret the closings. They report modest demand. There apparently is either not such a crying shortage of primary care afterall, or this is not the kind of primary care that there is a shortage of.
People apparently don’t value this model of care or have a great enough need to pay for it. Don’t tell me they can’t afford it. Stand by the checkout line and see how many ring up that much in cosmetics, liquor, tobacco, and candy.
The question remains whether the kind of primary care that most family docs provide in their office is returning the doctor what it returns them only because of demand inflated by subsidies from government and third parties, or whether the market value of their services are being artificially supressed by those forces. Since every practitioner is a unique product–doctor-patient relationship being such a big part of the value–I imagine the answer differs for each doctor.
The only way to know is to go to cash only practice and see what you can do. I suspect a lot don’t want to find out.
Anonymous
Maybe people have more brains than we give them credit for and see the glaring risks of conflict of interest in having the person who recommends the pharmaceutical working for the pharmacy.
Afterall, one the main reasons for the growth of the pharmacy industry a hundred years ago was a perception of a conflict of interest in having the doctor sell the drugs. Paradoxically, some states that actually outlawed doctor dispensing have these pharmacy clinics now.
Anonymous
I belive you are misinterpreting, too, Kevin. If it were only true…doesn’t jive here in Maryland. The clinic on my block has 2 NP’s with SRO on weekends; arguably not always, though. Source article says 16% have become seasonal; I don’t think as dire as we would like. That much traffic would be worth a loss leader.
Anonymous
Yet there are benefits with urgent care light clinics, so perhaps they may succeed after all:
One possible solution to the occasional lack of access to, or shortage of, primary care doctors is what are known as retail care clinics, or convenience care clinics. The popularity of these clinics continues to increase progressively for a variety of reasons.
Of particular note is that most of these types of clinics is that are normally staffed with nurse practitioners or physician assistant. Both are health care providers and are actually favored by many as treatment providers progressively. Surveys reveal that over half of all people prefer seeing a nurse practitioner at a convenience clinic because the visits do not take up so much of their time, as well as the visits being less expensive than traditional doctor visits.
The growth of such clinics, and the patient volume of each clinic, may slow at times, but the unique benefits of such urgent care light clinics do in fact exist and are desirable for many. While the first retail clinic began in the year 2000, presently, there are over 700 of these convenience care clinics, and that number is speculated by some to increase to thousands within the next few years.
First, I’ll offer a definition of a retail clinic:
A retail clinic is a medical treatment facility that is usually located in a convenient location, such as a shopping area, and is smaller than most doctors’ offices in regards to geographical space. Again, these types of clinics are staffed with a physician assistant or nurse practitioner.
Both types of these health care providers have the ability and authority to provide the same quality care as a primary care physician, and do so with the same if not superior standards regarding accountability and autonomy.
If you happen to go to one for what may be considered a mild ailment, for example, for such conditions as allergies or the flu, you will notice a unique and pleasant experience regarding your medical care at such a clinic in comparison with many other doctor’s offices that often appear to be possibly demoralized if not largely apathetic, in regards to their disposition.
These urgent care light clinics are normally and amazingly quick for a patients who are medically treated at such locations. You as a patient are normally in and out of there within a half hour or so. This includes a thorough assessment and treatment regimen offered by the health care providers at such clinics.
Unlike typical doctor offices, these clinics are walk-in clinics, so there is no over-booking of patients, which is what typically occurs at current offices of doctors. Many are focused on the daily volume of patients for a variety of reasons.
With these convenience care clinics, you as a patient actually dialogue with your health care provider more so than you may have experienced in a traditional doctor’s office due to possibly other doctor offices often being incredibly busy from seeing too many patients during a typical day for reasons described above.
And this is not to imply that the health care providers at typical doctor offices do not care about you and your particular health issues, yet possibly is a result of having limited resources related to patient care. As a result, they may be unable to do so.
The cost of going to such a retail clinic typically is about 25 percent less expensive than a normal doctor visit, others have said. Yet you will likely notice no decline in the quality of care that you receive. In fact, likely you will experience greater quality on many different levels, both from a personal level and treatment level if a patient at such a clinic as a retail clinic, others have said.
Critics of such convenient care clinics include the American Medical Association, and various medical societies. Yet in my opinion, such critics may be simply vexed because of the invasion of these other clinics on their turf and their infiltration into their typical medical practice paradigm without being invited, perhaps.
Or maybe such groups and associations do not see NPs and PAs as having the ability to provide quality medical care as they do as medical doctors. Regardless, most patients seem pleased with the retail clinics and the treatment providers who care for them at these convenience care clinics..
If it is discovered that you need greater medical care or attention than the retail clinic can provide for you during your visit at a urgent care light clinic, you will most likely be referred to a nearby location that can provide the care you are determined to need by the clinic’s heath care provider.
The clinic’s health care provider likely has some familiarity as well as some relationships with the hospitals and others in the medical community for which they serve. It should be noted that both NPs and PAs are quite capable of determining the severity of your illness, and will act accordingly.
So most patients of these retail clinics are pleased with the care they receive from them, which is why such clinics continue to grow in number under different names, as they have become franchises, yet the concept of this ‘pay as you go’ health care is fairly new.
So only the future will tell if this method is preferred by those seeking minor restoration of their health. It seems to be preferred by many presently, once again. And presently, Take Care Health Clinics, owned and located inside Walgreen’s pharmacies, are the market leader with retail clinics. Walgreens plans to add more clinics next year.
These retail clinics are in a way a response to the shortage of PCPs that exist presently, and delays others experience in our health care system when they seek restoration of their health on occasion. In other words, retail clinics are quick when you are sick, yet quality and assessment of your medical condition are not compromised.
One could conclude that the retail clinics seem in a way more authentic than the dominant system, and may be more beneficial ultimately for the public health, with exceptions, of course, depending on the individual circumstances of the patient.
Dan Abshear
Anonymous
Post an abstract of that and I’ll read it.
Anonymous
Several previous posters have it right; People want & need routine convenient care. It's not the concept that's dead, it's certain forms of execution.
It's practically in CVS' DNA to attack a problem with borrowed money & rented real estate. No surprise they applied that 'tried and (un)true formula to their MinuteClinics.
Many, many very basic challenges to be resolved with retail clinics: location & hours information & scheduling – load balancing – are atop the list.
Mike
Misinterpretation? Yeah, I’m sure they closed 90 clinics because business was great! No, they probably started running into the same roadblocks as primary care docs in getting reimbursed. Or maybe they just figured it wasn’t worth all the costs of billing/malpractice/benefits/supplies/etc. In addition, they needed some physician to sign off on it all, since these guys are legally required to run it all by an MD.
There’s only one solution… PAY PRIMARY DOCS MORE!
http://www.blackswanblog.com cj
Ironically, the current health reform plans all greatly increase the role of the primary care physician and their need to reach into the community. They will now be better compensated than specialists in the new hierarchy and the best delivery method is the clinic model, retail or otherwise. Preventive care and diagnostics will also lead to the long term viability of clinics. funny how the events of a few months since March can make an observation like yours appear quite out of touch.

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