Retail Medical Clinics Draw Patients & Payers

A growing number of health plans are adding these clinics in retail stores to their networks and are realizing savings

Retail health clinics. All the major health plans are adding them to their networks. Busy families are demanding simpler ways to deal with routine health problems, and some of them are turning to the local grocery store.

Consumers want convenience in their daily lives and in their health care options. Traditionally, access to health care for minor routine illnesses has been anything but convenient. Says James Woodburn, MD, chief medical officer at MinuteClinic: “As much as good physicians and clinicians have tried for 20 to 30 years, it is not put together right so that people can get in and get out for those simple conditions in a timely, convenient, and cost-effective way. That is the fuel.”

Historically, if you needed to see a physician for a minor illness outside of regular office hours, your options were limited. You could go to an urgent care clinic, or an emergency department, wait six hours, and pay a higher copayment than for a regular office visit or even more if the visit was not covered.

Retail clinics in grocery stores, pharmacy chains, and mass merchandisers are changing the way consumers obtain treatment for common family illnesses such as strep throat and ear, eye, sinus, bladder, and bronchial infections. Instead of a physician, patients see either a nurse practitioner or a physician’s assistant, who is aided in diagnosing a patient by a computer program. If there is a wait, the patient is given a pager allowing her to do her shopping while waiting to be seen in the clinic, which is generally open when physicians’ offices are closed. Prices are posted on a menu board, and often the patient just needs to make the copayment required by her health plan. If the patient needs to have a prescription filled, there is often a pharmacy in the building. She can shop for groceries while waiting.

Market acceptance

Consumers and insurers seem to be embracing the idea of retail health clinics, but primary care physicians are less positive (see “Physicians Voice Concerns About Quality at Clinics”).

Physicians voice concerns about quality at retail clinics

In an attempt to dissuade patients from running to the nearest retail clinic for their health care needs, the Ohio chapter of the American Academy of Pediatrics has prepared a handout discouraging patients from making their own health care choices before consulting their own physician. The title alone, “Your Primary Care Physician vs. Retail Health Clinics,” sets the tone.

The handout lists the pros and cons of retail health clinics, with more cons than pros. Not surprisingly, the handout tells patients that when their child is sick, the physician should be contacted and that he will make the appropriate recommendation on where the child should be seen. In an article published in the American Academy of Family Physicians journal, Missouri AFP President Thomas Kelley, MD, sums up the opposing view: “Medicine has to have quality and accountability because you are dealing with people’s lives, not fast food. We want to be cautious when they present this as a health care model when it appears to more closely resemble a business model.”

Peter Catanzaro, MD, a pediatrician, sees a real problem with retail clinics being staffed by nurse practitioners. He says that treatment guidelines are pretty straightforward. “But what you want is a person who can look at the protocol, understand the data behind it, decide when to apply it and when not to.” When patients go to their pediatrician, he says, they trust that physician’s training and expertise in dealing with both sick and well children.

“If you are worried enough about your child to go the doctor, you should expect the best, and get a provider who has trained specifically for dealing with children.”

James Woodburn, MD, CMO of MinuteClinic, notes that physicians’ opinions do vary. “There are those docs who are pretty upset and frustrated,” and on the other side, those who say that they love retail clinics.

MinuteClinic, based in Minnesota, where the retail clinic concept has become entrenched, is the market leader, operating 73 clinics in nine states. There is a handful of competitors, and some heavy hitters are throwing their efforts into the market. America Online co-founder Steve Case has made an investment in Revolution Health, which owns RediClinic. RediClinic is a newcomer, expected to expand rapidly with Case’s backing.

It’s about convenience says Wendy Sherry, assistant vice president for strategy, product, and marketing at Cigna. Sherry took a lead role in the addition of retail clinics to the Cigna network. “Convenience is about integrating health solutions with the lifestyles of our members. Our lifestyles are pretty crazy. This helps our members get the right care, at the right time, in the right setting,” she says.

“These clinics are embedded in the lifestyles of the members. When they are going out and picking up groceries or other items that they need, these retail health clinics are right there in their path.”

Don Liss, MD, Mid-Atlantic regional medical director at Aetna, has overseen a pilot program with MinuteClinic in the Baltimore region and agrees with Sherry. Aetna had good results with the pilot and announced in early March that it was expanding its coverage of MinuteClinics to members in additional states. “The primary reason is convenience for consumers, giving consumers essentially more control over how and when they seek care for the narrow group of conditions that are appropriately handled in one of these places,” Liss says.

Sherry argues that retail clinics not only provide a benefit for the consumer, but also for the primary care physician. They provide an alternative to that busy physician’s practice on Monday morning when everyone who got sick over the weekend floods the office.

Neil Rolland, vice president for payer relations at MinuteClinic, says that insurers are quickly adding retail clinics to their networks because when employers compare one insurer with another, they demand similar networks. “To drive membership, if you are pursuing an employer that is with a competitor of yours, the first things they are going to ask is, does your network have the same or better than where I am coming from?'” says Rolland.

From a practicing pediatrician’s standpoint, Peter Catanzaro, MD, of Cleveland, sees a problem with these clinics. “The value of a pediatric residency cannot be understated — it gives the physician a handle on how to recognize the truly sick child, gives one a greater knowledge of therapies available [for common illnesses] and ultimately makes one a more critical thinker, which is key in our information-overload society,” he says.

“What you want is a person who can look at the protocol and understand the data behind it, decide when to apply and when not.” Catanzaro also sees follow-up as an issue, for that patient who develops a rash or other problem after visiting a retail clinic.

Catanzaro does agree that from a business standpoint, physician practices will need to make adjustments. “A significant amount of what we see is common illness in pediatrics. The more they see, the less we see. However, we can certainly adjust to that in the long term by offering more convenient hours,” says Catanzaro.

According to Blue Cross Blue Shield of Minnesota data compiled on retail clinic visits, over 80 percent of ailments that bring patients through MinuteClinic doors are for upper respiratory infections, earaches, sinusitis, sore throats, and bronchitis. Also, most of those who are going through retail clinic doors are not severely ill.

Catanzaro says, “Given the option of seeing your trusted pediatrician at a convenient time versus an unknown provider at a slightly more convenient time, I think most people will opt for the former.”

“It has its niche and it certainly seems to be a responsible way to have your health care delivered for simple and straightforward problems,” says Liss.


It’s not just about convenience to patients, of course. Insurers are adding retail health clinics to their network because of the potential savings. A trip to a retail clinic is simply a cost-effective way to provide care for simple illnesses.

Cigna thinks retail clinics are a good buy. Cigna recently decided to provide retail clinic services for all of its members across its entire book of business and is the only large insurer to do so. According to Sherry, the decision was based on a variety of factors. “We do believe that it will help to control health care costs. There is a productivity gain for employers with these services because people do not have to take off time from work to take care of their health care needs and also we believe that it really helps to drive improvement in member satisfaction, so that really weighed into our decision to have this as an offering across our entire book of business,” she says.

Some insurers have created incentives for patients to make retail-health clinics as a first choice option in receiving health care for certain illnesses. “For example, a self-insured employer will make the copay rather small or even zero, so that the patient is motivated to go to the retail clinic and not to the emergency room or not to the urgent care center,” says David Plocher, MD, the senior medical officer at Blue Cross Blue Shield of Minnesota.

“They may have an even lower copayment than if they went to their own doctor’s office and so you can perhaps see the type of behavior change we are encouraging for these very minor conditions,” Plocher says.

After analyzing 23,000 MinuteClinic visits from June 2004 to May 2005, Plocher says that retail clinics are delivering what they claim — savings. “The punch line after doing the economic analysis is that it is about half as expensive. We do know on a per-patient visit — it looks like a better buy,” he says.

Plocher is also doing further analysis on a larger population study to see the extent to which ER visits have dropped.

Retail clinics and consumer-directed health care model

Price transparency and choice are two of the driving factors in the push toward the consumer-directed health care model. Retail clinics have addressed both factors in their business strategies, with apparent success. Consumer-directed health plans promise to deliver real choice and value for people taking charge of their own health care.

Retail clinics, as part of their strategy, are bringing price transparency to the delivery of health care. To that end, MinuteClinic has established a single price for an office visit — $49 or $59, depending on the state. James Woodburn, MD, MinuteClinic’s CMO, says that MinuteClinic’s contracts with the major payers reflect that pricing structure.

Woodburn sees the short-term success of retail clinics like MinuteClinic directly related to increased penetration of the consumer-directed health plan and products.

Woodburn says, “We are perfect. A home run for consumer-directed health products.”

Wendy Sherry, assistant vice president for strategy, product, and marketing at Cigna, says that it’s about people saying: It’s my money and I am making decisions about my health care. “I do think this is largely coming up as a result of the drive toward consumerism as people are taking ownership over the dollars they are spending on their health care and they are getting more involved in their health care management.”

Don Liss, MD, Mid-Atlantic regional medical director at Aetna, agrees. “This is certainly part of the more general consumerism movement, to the extent that people are interested in better information regardless of whether it’s because of their financial risk or just an effort to improve the way they and their family seek care,” he says.

Liss says that consumer expectations have changed. “Twenty years ago you would not have thought that your bank would be open on a Saturday. Now if your bank was closed, you would find a new bank.”

David Plocher, MD, the senior medical officer at Blue Cross Blue Shield of Minnesota, expects the growth of consumer-directed health plans to spur the growth of retail health clinics. In a study he conducted on the impact of consumer-directed health plans on the demand for retail health clinics, he found that because of the consumer-directed health boom right now, those enrolled in this model were more likely to use MinuteClinic. “Seven percent of the MinuteClinic patients were enrolled in the health savings account model, while only 3.5 percent of the non-MinuteClinic patients for the same diagnosis had a health savings account or a consumer-directed product,” says Plocher.

He suggests, “The concept is that when you have a health savings account, you are watching your pennies a little more closely. So rather than have a $100 emergency room copay, wouldn’t you rather go to the MinuteClinic?”

In the end, however, when asked if these clinics are being added because of the new consumer-directed health model, Plocher says, “I think that this is a coincidence, to be honest.”

Sherry adds, “Five years ago we did not have all of these consumer driven plans. Part of the growth is aligned with the shift towards consumerism and lifestyles becoming more and more hectic. Timing is everything.”

Amanda Brower is a freelance business writer in Cleveland Heights, Ohio.