Why retailers like Wal-Mart are eying primary care

Kaiser Health News explores growing opportunities for retail clinics

Retailers like Wal-Mart and CVS may be gearing up to expand their in-store clinics and capture a larger share of the U.S. primary care market, Kaiser Health News reports. 

Wal-Mart last week made headlines when its confidential plan to become "the largest provider of primary health care services in the nation" was leaked. Although the retail giant has since backed away from that statementKHN reports that Wal-Mart and other retail clinic operators—like CVS Caremark and Walgreensare "clearly...looking for ways to expand services."

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Clinics offer appeal to payers, patients
The nation's first retail clinics were launched in 2000, and nearly 1,200 were in operation by 2010, according to a RAND study. That fast growth may reflect the clinics' appeal to payers and patients alike—and highlight an opportunity for out-of-industry competitors to capture a slice of the health care market.

According to a recent American Journal of Managed Care study, the clinics:

  • Provide care that is 30% to 40% less expensive than care at a physician's office and 80% less expensive than ED care;
  • Saw a tenfold increase in insured patients' use from 2007 and 2009; and
  • Accounted for about 7% of U.S. medical visits for 11 common acute ailments.

Meanwhile, consumers say that retail clinics offer fixed, predictable prices, which can be hard to find from other health providers. The clinics also can improve patient access to care, given a general shortage of primary care physicians.

In addition, employers are turning to retail clinics for wellness program partnerships. The federal health reform law creates incentives for small business that provide employee wellness programs, but most small businesses are unable to afford corporate wellness programs.

Outsiders still have major challenges before reinventing primary care
For retailers like Wal-Mart, the clinic market presents "a pure business opportunity based on consumer convenience and cost savings," KHN reports. The retailers also may be able to use their negotiating clout and marketing savviness to tackle long-running problems in health care, like access delays and systemic waste.

However, KHN cites a number of obstacles that may undermine the clinic model's growth and complicate retailers' expansion plans.

Notably, retail clinics' success at low-cost care for simple conditions may not translate to chronic disease management. Myriad state laws also restrict clinics' ability to directly employ physicians, nurse practitioners, or physician assistants. Many states limit the ability of nurses and physician assistants, which comprise most of the clinics' staffs, to treat patients autonomously, too.

In addition, many physician groups are concerned that retail clinics will profit off the country's healthiest patients while leaving primary care physicians with only the most complex cases. Clinic leaders, however, see themselves as an ally for overburdened physicians. According to Caroline Ridgway, the policy and communications director for the Convenient Care Association, the clinics can triage patients, allowing physician to "use their training and skill to focus on patients with long term needs" (Appleby, KHN, 11/17).

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