You’ve probably heard of retail health clinics (RHCs), “drive-thru” medical centers that offer relatively simple and cheap medical services in stores like CVS and Wal-Mart. They’re all the rage nowadays, with their number doubling over 2007, from 300 to about 600 nationwide. At the end of this year, their numbers are expected to triple, hitting 1,800.
The RHC explosion has caused concern in some circles. Primary care physicians are particularly worried that the clinics represent a threat to their practice and could disrupt continuity of care. Other concerns come from people like yours truly, who worry that the old formula of profit motive plus market opportunity could lead to a feeding frenzy that would compromise the quality of care.
Retail clinics are so new that these concerns can sometimes seem premature; but judging by one 2007 document that I recently came across, my worries are well founded. Even the people trying to grow the RHC market see these health care problems coming—but they view them as business opportunities.
What people often forget about for-profit initiatives like retail clinics is that they’re bent on growth. They may start small, but they don’t want to stay small. The business plan goes beyond today’s headlines. Investors want projections; they want a roadmap to the future; they want to know that challenges have been accounted for. That means that RHCs aren’t just concerned with the here and now, but also how the market can sustain itself in the future. And according to “Business Intelligence to Achieve the Goals of Retail-based Clinics,” a briefing from the Business Intelligence Network authored by Scott Wanless, the only way to do that is to look well beyond the current RHC formula.
Wanless, a consultant with Fujitsu, takes care to lay out the
challenges that lie before RHCs if they are to be a successful business
proposition. In true management jargon, Wanless notes the need for
“Demand Management Analytical Support.” He remarks that “on the retail
floor, demand can spike or drop in an instant.” The idea here is that
clinics have to be ready for overcrowding so that no one is waiting too
long—after all, it’s all about convenience.
But this raises an obvious question: will the need for speed make the
clinics’ care sloppy? Since convenience is the bread and butter of
RHCs, the clinic’s staff—usually nurse practitioners—must prioritize
treating patients ASAP in times of high-volume.
Ah, you say, but RHCs self-consciously limit themselves to simple
treatments for acute illnesses (e.g. treatment for colds, the flu,
allergies, minor burns, ear infections, etc), and simple treatments are
quick treatments. It’s tough to screw up taking someone’s temperature,
even if you do it quickly, right?
That may be the case—for now. But like any good enterprise, retail
clinics need to compete and expand their market share. That means that
the current scope of simple, relatively hard-to-screw-up services will
inevitably be expanded in the future, as clinics scramble to
distinguish themselves in the marketplace. Wanless notes that as more
RHCs open, “the competition will keep upping the ante in terms of
services offered and the prices charged.”
In other words, the current model of RHCs is expected to become
obsolete in the future, as clinics begin to offer more and more
services in order to ensure profit. “This will put pressure on existing
[RHCs] to add staff with greater specialization, to add more equipment
and to upgrade facilities to serve a wider variety of patient
populations,” says Wanless. Eventually “the retail environment” could
basically become “a healthcare campus,” which, he acknowledges, “could
have detrimental service quality effects.”
Such is the basic logic of “product growth and product change.”
Meanwhile, the clinics cannot drop the idea of “convenience”—this is
their raison d’etre. So you have a situation where priority number one
will continue to be expedient care, even as that care becomes
increasingly complex and varied.
Moreover, if a clinic does engage in sloppy care, under the retail
model, the health care providers probably never know about it (barring
a malpractice suit). In retail settings, “the only indication that
something is wrong is that you don’t see the consumer again. This
presents a problem for the clinic,” Wanless notes, “because they don’t
know what went wrong with their service, and they may have to play
catch-up if the consumer comes back.” Translation: quality control is a
big problem because there’s no continuity in the RHC model.
This issue of continuity is one of the most pressing questions
surrounding retail clinics. Organizations like the AMA and the American
Association of Pediatrics (AAP) have spoken out against RHCs on these
very grounds. The AAP in particular has argued that retail clinics
detract from the “medical home model” of care, i.e. a doctor-patient
relationship made up of comprehensive, coordinated, and recurring
long-term care.
Wanless doesn’t disagree. He observes that RHCs “are likely to
experience greater fragmentation in this continuity due to the way
consumers view retail services (episodic) versus professional services
(continuous),” which could spell trouble for people with chronic
conditions and/or special needs.
If Wanless is to be believed, the expansion of retail clinics will in
fact erode the medical home model, by providing increasingly
specialized and complex care through an irregular, one-stop framework.
From the businessman’s point of view, any solution must have
comprehensive follow-up available at a moment’s notice in order to
ensure customer satisfaction. This not only represents a further
encroachment on physicians’ turf, but also brings us back to the issue
of the clinics expanding their services in a way that may not square
with their consumerist, quick-and-dirty bent.
The conflict between physicians and RHCs goes beyond services and into
demographics. Wanless makes it clear that retail clinics need “to watch
[their] demographics to make sure [their] growth plans are on track.”
This is good business sense, but if—as Wanless suggests—a clinic
operates in a community of elderly folks, clinics have to be
Medicare-ready in their regulatory status and service selection.
Regardless of what RHCs are saying today about being a “supplement” to
medical homes, the truth is that they will have to offer both more
services and population-customized services to be successful. In other
words, they step on physicians’ toes both in terms of procedures
offered and patients targeted.
Finally, mini-hospitals inside Wal-Mart will create a captive audience
for Wal-Mart’s products. The for-profit clinics often are owned by the
stores in which they’re situated. Thus Wal-Mart makes a buck off your
visit to an RHC from the moment you step in for the appointment to when
you collect your medication and walk out the door. Translation: retail
clinics have an incentive to over-prescribe.
Wanless recognizes this when he discusses “cross-sell metrics,” saying
that “the bottom line for the host [i.e. the store that houses the
clinic] is that it wants to lift its own sales –in addition to
receiving the space rental revenue.” As a result, “clinic staff may be
pressured to write or fill prescriptions in the affiliated pharmacy,
recommend foods from the host’s grocery aisles or over-the-counter
supplies and equipment from the health and beauty department…this may
hamper their professional clinical judgment to the detriment of their
patients and to their careers.”
Wanless’ candor is breathtaking as he considers how to balance the needs
of the clinic, the host “and, of course…the patient.” But it’s a little
unnerving that those looking to expand RHCs recognize that
“cross-selling” is a fundamental part—indeed, a desirable—part of the
whole enterprise. As Wanless says, “retailers are ruthless when it
comes to getting return on investment from space. Every product and
service must compete daily with other products and services for every
square foot.” They want the maximum bang for their buck—which means
funneling as many patients as possible to the in-store pharmacy and the
shelves.
The ultimate message is this: all of the arguments about what RHCs are
or are not today only make up a part of a much bigger picture. It’s
clear that the folks who want to grow the market know what RHCs need to
be in the future—and as with any other business, it’s this promise of
future success that drives them.
Discussions about the pros and cons of RHCs need to keep this
trajectory in mind—not because it’s a conspiracy, but because good
business sense demands that retail health clinics take on a different
form as the market develops. We need to understand the health care
implications of the growth pattern that lies ahead. Unfortunately, in
the case of retail health clinics, the impending changes—more
convenience, more complicated services, more specialization, more
market customization, and more “cross-selling”—are not conducive to
better quality health care.
I am trying to resolve your argument against RHC’s with for profit medical clinics (a regular dr’s office in a medical park) run by doctors who want to charge enough to pay them a salary. And then there are for profit hospitals, for profit insurance companies, for profit medical technologists, for profit drug companies. There is a profit motive in nearly every aspect of the health care industry. If it takes a Wal-mart to force competition to bring down the cost of average doctor visits – so be it.
I would add “for profit medical oncologists” into the forray. Look where that has gotten us over the last twenty years? The shift from the institution-based, inpatient setting to office-based, ambulatory sites for treating the majority of the nation’s cancer patients has prompted large amounts of additional costs to government and consumers. The chemotherapy concession gave medical oncologists the financial incentive to select certain forms of chemotherapy over others because they received higher reimbursement.
Typically, doctors give patients prescriptions for drugs that are then filled at pharmacies. But medical oncologists bought chemotherapy drugs themselves, often at prices discounted by drug manufacturers trying to sell more of their products and then administered them intravenously to patients in their offices. Not only do the medical oncologists have complete logistical, administrative, marketing and financial control of the process, they also control the knowledge of the process. The result is that the medical oncologist selects the product, selects the vendor, decides the markup, conceals details of the transaction to the degree they wish, and delivers the product on their own terms including time, place and modality.
A patient wants a physician’s decision to be based on experience, clinical information, new basic science insights and the like, not on how much money the doctor gets to keep. A patient should know if there are any financial incentives at work in determining what cancer drugs are being prescribed. Although the new Medicare bill tried to curtail the chemotherapy concession, private insurers still go along with it. What needs to be done is to remove the “profit incentive” from the choice of drug treatments. Medical oncologists should be taken out of the retail pharmacy business and force them be doctors again.
I see no danger in RHC’s and feel they fill a vital need. I have an adult daughter who is working and uninsured. She will suffer through almost anything rather than go to an ER. She went to an ED once for a near syncopal episode. The bill was $2200 for a real basic work-up (cbc, met panel, and pulse ox check). Seeing a private MD with no insurance also requires a hefty deposit if you can be seen at all. When she applied for a Blue Cross policy 1 year later she was denied because there was no diagnosis associated with the ED vist beyond near syncope. A otherwise healthy individual who needs episodic care a couple times a year could care less about continuity of care. There not getting it anyway. The RHC’s offer an affordable and accessable alternative. As far as safety, the RHC’s in my area are very clear on the conditions they will see and those that need to go to an ER. I have not seen any problems in my area.
Unfortunately the destiny of these kind of organisations is always the same. Making the business profitable, being able to catch up with the competition and during this time provide a high-volume service. That`s quite difficult and after some time it ends up in neglection of the quality. As one of the Toronto life insurance brokers I`ve seen a lot of well-established organisations with aim to improve the health care system but they couldn`t find a balanced way to maintain the profit but the great service as well.
forHealth- I think the problem here is that, because RHCs are for-profit and are new, market innovations, they will inevitably undergo drastic transformations as the market irons itself out. so what we hear now about them isn’t the whole story–indeed, it can’t be, since it’s an emerging industry. even if you’re sympathetic to some of RHCs goals–which, in fact, I am–there’s the fact that their success will be determined by a departure from their current model. In other words, they will be a lot more disruptive to health care as it stands than they claim to be–and I’m not convinced that their only effect in the future will be to make visits to the doctor cheaper, as I point out in the post.
ERMurse, I see where you’re coming from. To tell you the truth, I’ve tried to cobble together a post on RHCs in the past but never found that much to talk about, since on the surface it seems like a good supplement to expensive health care. But Wanless’ document, to me, is indication that–as I say above–the current state of affairs is inevitably going to change. Even if patients who go NOW dont care about continuity of care, RHCs want to expand to incorporate patients who need it. And that’s a whole new ballgame, with discomfiting implications.
The comparative advantage of RHCs is in doing a few things well.To imagine them expanding to cover many kinds of health care is a little like expecting a McDonald’s to morph into an emporium with 50 kinds of restaurants.
Putting clinics into wal-marts is a different matter but really doesn’t offer much advantage over their current practice of keeping pharmacies there. The reason Wal-mart charges $4 for generic prescriptions is that it brings people into their stores to shop while their prescriptions are filled.
Marc, do you think medical care will be used as a loss leader item? The whole thing is astounding to me really, but if we want to continue to have for profit medicine then we have to expect market/business innovations that have not truly anticipated the effect on health and health care (they are business men, let’s face it), historically, business are short sighted and like to grab current market share without consideration of future consequences (just look at what has done for american manufacturing, and automobile production), I for one will stand back and put my hands over my ears so the crash wont hurt them.
Nick
You might want to read this as well as you get up to speed. There is a podcast associated with it as well:
http://content.nejm.org/cgi/content/extract/356/8/765
brad
The discussion on retail clinics (RC) would probably benefit from considering the different components of this new business model separately:
-“For profit status”. Yes, they are seeking profit, just as many other providers in the system whose ethics are not put in question.
-“Staffing”. Many of the attacks are focused on the fact that these clinics are staffed with non-physician professionals (certified nurses, PAs). But, 1) some RC (MedicalMarts, DR Walk-in) are already employing physicians, 2) nothing precludes other operators from doing so in the future, 3) nurses and PAs are qualified to provide a limited scope of services with adequate support and supervision.
-“Location”. RC hosts (WalMart, CVS, etc) do indeed expect to benefit from increased traffic and exploit cross-selling opportunities. I don´t see anything wrong with that. If the patient decides to fill her prescription in the store it´s probably because it is more convenient, but no one forces her to do so.
-“Continuity of Care”. It is unfair to demand high standards for continuity of care to RC when the overall system is quite fragmented. Does, for instance, going to the ER for an episode of sore throat add anything in terms of continuity? Plus, most RC use electronic health records (whereas many other provider settings don´t).
RC have succeeded so far in creating a new channel for the provision of healthcare services. They offer value to the consumer by increasing accessibility, convenience and usually lower prices. That is, in my opinion, their core value proposition, which could be delivered by means other than the prevalent model today. Indeed, as the industry matures, we should expect more divergence in business models and competitive strategies (expanding the scope of services provided, using physicians instead of nurse practitioners, etc).
If we do our job right when establishing a national patient database of diseases and physician treatments and best practices, hopefully we’ll see some comparisons and competition on the basis of physician skills. There’ll be some welcome fallout as lesser-capable physicians stand out and look for greener pastures in retail clinics treating minor ailments.
If we pass what I think really should be passed — Medicare-for-all — RHCs will survive financially by billing FFS as they do now to Medicare.
The retail/in-store clinic movement is more than a highly beneficial strain of “disruption” to the primary healthcare delivery system. Looking forward, it should also be a significant catalyst and test-bed to improve community health status.
This strategy entails e-collaboration with a robust referral care network harmonizing enabling tools related to consumer-directed wellness, early disease detection and disease management services. Add a hefty dash of one-on-one customer rewarding based on health risk appraisal completion. Follow up with sequential adherence-based economic incentives fulfilled through behavioral target marketing with customized couponing triggered by the HRA findings, seasonal drivers, and respondent demographics. Similar reward triggering could be based on benchmark attainment within disease management protocols.
Win-wins arise building loyal families in touch with new teams of wellness providers. It’s opt-in and HIPAA immune, and is freed from the babble generated by a zillion committees, taskforces, and “working” groups intent on cyber transacting everything. To the extent progressive local and regional health systems are included, the smoother the political sailing. For example, a Blue Cross plan could co-venture production of selected services. Local VNA and health departments would continue to make excellent staffing partners for short-lived campaigns such as back-to-school vaccinations. With insurance coverage arising and rising, the customer is the beneficiary regardless of the chosen production function.
Service demand can be continuously driven by demographic (gender and age) thresholds per U.S Public Health Service guidelines. Such info is captured within the HRA completion process to trigger sentinel announcements (for example, 50th birthday) and invites along with customized coupons to promote visiting the clinic and the store. Intervention opportunities also arise seasonally. Examples include the promotion of back-to-school and vacation-prompting vaccinations, flu season shots with pneumonia piggy-backed on, spring and fall seasonal allergies, and national body part (i.e., Breast Cancer) of the month campaigns.
Why Retail Clinics as the Locus for Change?
Incumbents in the retail clinic space grow because their business case is compelling, enterprises are sufficiently capitalized and customer experiences are highly scored by all relevant satisfaction metrics. These operations are still in early growth facing normal start-up woes:
Uncertain ROIs and break-even points, staffing, information capture and work-flow patterns
“Without the doc” risk-averse service menus, voluntary script dispensing/selling firewalls, constrained spatial layouts and low-ball pricing.
Thus, there is plenty of wiggle room to now plan additional functionality as the kinks get worked out and consumer acceptance grows. As competition increases, investment drivers include the need for continuous product improvement and differentiation as well as for satisfying large customer cohorts shifting from latent to expressed demand for diagnostic, immunization and screening services. In-store worker-focused risk assessments add icing to the convenience cake, especially by filling in off-peak appointment slots, smoothing work flow and reducing queues and wait times. (Workers’ rewards must be nondiscriminatory per U.S. Department of Labor regs compared with customers’ rewards.)
Like Lipitor, the “daughter products” released after its ingestion are more beneficial than the original dose. Sensible protocol-based and decision-supported adult primary care is the core retail clinic output platform now in place. Providing appropriate consumer-assisting programs with health systems co-venturers builds upon sunk investments at low marginal cost.
In many urban and rural communities, the default locus for free “medical advice” has traditionally been the neighborhood pharmacist. The retail clinic can expand this tradition with one-on-one assistive and practical care in terms of fuller primary prevention services that are disease- or body-part specific.
Many screening and testing services have been battle-tested in drug stores, at health fairs and convention lobbies and within assorted clinics of all stripes. More recently, based on strong empirical evidence from workplace wellness settings, providing customized incentives and rewards is essential to “get people to the last mile” to initiate behavioral change. This might become an especially compelling strategy with the deployment of emerging home-based disease management products incorporating remote monitoring. Incentives could take many forms from reward programs to price discounts on in-store goods and services.
Convenient Primary Prevention Would Gain Equal Footing with Convenient Care
Given pervasive techno-chaos within the overall healthcare industry, it takes business discipline and standardization to harmonize appropriate processes and technology. Just consider the hundreds of options flowing from web-based and traditional programming in risk assessment and personal auditing and tracking programming including health risk appraisals, HSAs and derivative financial products, mini personal health records, electronic medical records, chronic disease management with remote monitoring, behavioral targeting and one-on-one relationship marketing and loyalty card systems.
Each of these now operate under different parentage – from health departments, governments, self-insured large employers, progressive unions, managed care organizations, classic insurers, marketing services firms and, increasingly, by customers themselves. Many have or will become zero-priced commodities. The good news is that all are adjunctive to enhancing the retail clinics’ care and caring missions.
The retail clinic could assume employers’ traditional role in health risk appraisal to get incentive packages, monitoring and benchmarking locked and loaded. Then, many follow-through tests and procedures are done in store with out-referral when appropriate. Record keeping would be online and really simple. It’s like installing training wheels for the emerging PHR and EMR systems. These convergent systems are typified by early developer groups such as WebMD while Google is constructing a PHR system.
Caring Processes are Inseparable from Care Processes
Retail Clinic 2.0 positioning is not glitzy PR to deflect the opening blows by organized physician groups that wrongly perceive negative competition from nurse practitioners and others. The reality is all PCPs (and, more importantly, their patients) will be universally better off if they begin to mimic some of the critical convenience, staffing, IT and pricing success factors put in place by the retailers.
The docs are far from being disintermediated; they can be emancipated from the routine sniffles and scratches while remaining wired in, utilizing their time and skills more appropriately and productively. Ditto for our under-funded public health clinics that will face huge work flow and staffing problems as prevention and wellness eventually obtain public and private core financing. Latent demand for the 55-year-olds and kids is likely to explode if Medicare expands down and SCHIP widens.
Recent AMA opening moves challenging the emerging retail clinic industry’s usurpation of physician roles and functions were inevitable. It’s fuming again but will lose the battle because:
Their economic self-interest becomes more visible than their patients’,
The inherent cost-effectiveness of the current approaches is readily apparent to customers (especially where services are insured), and
Business groups, governments, employers, public health associations and insurers all welcome price and quality competition wherever and whenever they find it.
Personal Health Records allows patient to provide doctors with valuable health information that can help improve the quality of care that patient receives. Personal Health Records can help to reduce or eliminate duplicate tests and allow you to receive faster, safer treatment and care in an emergency and helps to play a more active role in yours and your loved ones’ healthcare.
I couldn’t get a clear idea about RHC. Could you be a bit more clear please..
https://www.yousendit.com/transfer.php?action=batch_download&send_id=817789614&email=7cff47bb7cdcb76fbfa15e66c81a1961