Deloitte Touche’s Center for Health Solutions has followed the emergence and growth of small health clinics designed to provide limited services; clinics which have primarily been located in pharmacies, grocery and discount stores and therefore are often referred to as retail clinics. A new report updates the industry status and looks at the future. (Deloitte Report)
There was rapid growth in the number of clinics in 2006, 2007 and 2008, but 2009 will likely see little if any growth. By mid-year there were about 1100 retail clinics in operation. MinuteClinic, owned by CVS, and TakeCare, owned by Walgreen, dominate the market, with 451 and 346 locations, respectively. WalMart and Target currently have a few clinics but have each indicated aggressive expansion plans. Clinics in retail settings are more easily justified by their owners because they may drive sales of prescription drugs and other items. Neither MinuteClinic nor TakeCare, however, are currently profitable.
Deloitte projects that growth will be slow in 2010-11, and then increase in 2012-2014 and the maximum market may end up being around 4000 sites. Consumer and payer acceptance has increased. Surveys find that between 7 and 15% of consumers have used a retail clinic and insurers are paying for around 60-80% of visits, with some payers even waiving copays for retail clinic visits. Deloitte notes that worksite clinics may offer a vehicle for future growth and both TakeCare and MinuteClinic have efforts in that arena. Deloitte does not, however, mention Concentra which has a very significant worksite presence.
Increasingly retailers are partnering with local provider systems–hospitals or large clinics–to staff or support their store clinics. And some of these local providers are opening their own retail clinics. The clinics are increasing looking to add services as a way to increase revenue. Wellness and prevention services, immunizations, infusions, optometry, audiology and even chronic disease management are either being provided or considered by many operators.
Two challenges for the industry will be finding enough qualified nurse practitioners and physician assistants at a reasonable wage and avoiding legislative and regulatory limits advocated by physicians. Efforts by physicians to limit clinic growth may accelerate as the clinics offer more services. Retail clinics have almost certainly been a force for good in the health care system–improving access and convenience, lowering costs and not showing any significant quality issues. They are a wonderful example of how market problems can spur innovative responses and should be encouraged.