June 25, 2008

A Consumer Revolution in Retail Medicine: Where is It Heading?

By Kolar, Ray

You can head to a convenient medical clinic (CMC) seven days a week to have a minor ailment such as a bladder infection or strep throat treated or to get a flu or tetanus shot. If you could visit a CMC at your convenience and pay a reasonable copayment for preventive medical care, would you consider that as an alternative to waiting two to four weeks for a slot on your primary care physician's schedule? I sure would! CMCs made their debut in 2000 and quickly became part of the healthcare landscape. Their rapid growth and popularity was indicative of the American consumer's desire for quick, convenient, accessible medical care. CMCs have had a varied track record, with some flourishing while others faltered. Recently, a large, privately backed Las Vegas CMC company, which was distinguished by using physicians rather than nurse practitioners as providers, closed its doors with the investors saying they were going to head in a different direction. This group had staffed clinics in Illinois, Missouri, Utah, and Virginia. The company is currently listed as "closed." Its overhead expense with physician staffing was possibly the iceberg that sank the ship.

The CMC concept appears to have received a shot in the arm with Wal-Mart's February 2008 announcement of an affiliated relationship with Rite Aid with support from local hospitals. Wal-Mart stated that "this is the first step toward opening 400 cobranded clinics by 2010." Wal-Mart appears committed to achieving success in this market. In addition, other venture firms, as well as hospital-owned and -operated retail medical clinics, are expected to open across the country this year.

More than 7 percent of American consumers have visited a retail clinic. CMCs have grown from fewer than 50 in 2005 to more than 900 in 35 states at present, and the number is expected to top 2,000 by the end of 2008. Those who speculated as to whether this was a fad or here to stay need only observe that a new CMC location is unveiled almost daily. Why, you may ask, does the retail medicine concept continue to gain support? There are two key reasons: First, the American consumer is driving this retail medicine bus, and second, the investment dollars are plentiful.

The Evolutionary Path

The question now becomes: How far will retail medicine evolve? What will CMCs look like in three, five, or 10 years?

Donna Mikulecky, CEO of CHRISTUS Medical Group in Houston, says, "I think CMCs will look to continue to expand their services where and when appropriate. Some of this increase will come with significant focus on preventive health and wellness screenings. CMCs will need to continue to balance this scope of service so as to remain transparent in pricing and efficiency and with minimal time required for the appointment." The key appears to be keeping whatever services are offered within the realm of convenience to meet the needs of those driving the bus.

Regarding what additional services, if any, CMCs might offer in the future, Terry Deis, COO for Parma Community General Hospital, Parma, Ohio, comments, "I could see adding some additional screening and mobile imaging services, such as DEXA scans, even if only on a rotating or temporary basis. It is important to remember, though, that as a community hospital, we want to work with our physicians, not compete with them."

This line of reasoning introduces into the equation the importance of gaining the acceptance of the medical community. It is vital to have physician buy-in, both now and in the future. Rick Cicero, senior vice president of business development for Lake Hospital Systems in Concord Township, Ohio, agrees, adding, "At first glance, they [CMCs] appear as competition for the local physician, but the CMCs will most likely increase referrals to urgent care centers and physician offices, mainly primary care offices."

Mikulecky goes a step further, stating, "As technology continues to improve and devices become smaller and more mobile, I think more services will be performed in these clinics. Many scans can be performed using small devices that would be easily accommodated in these settings."

The inception of the urgent care clinics in the 1980s brought about a phenomenon that was initially an alternative to emergency departments for urgent, nonserious medical needs. Later in the 1980s, the urgent care clinics began a journey of growth as a result of changes in the economy and payment that would challenge not only their ability to deliver health care, but also their very existence. Urgent care clinics became dedicated to delivering high-quality and affordable health care that would meet the needs of working people who were short on both time and money. As a result of these challenges, urgent care clinics developed into hybrids best described as "providers of family medical care" with ease of access at a reasonable price. These hybrids quickly evolved into facilities that were staffed not only by physicians, but also by nurses, nurse practitioners, physician assistants, radiology technicians, and medical assistants.

Many of the urgent care clinics began to incorporate the use of X- rays, laboratories, and board-certified providers, including certifications from family practice, ambulatory medicine, and various physician extenders. Soon, most urgent care clinics began accepting local insurance carriers and their evolution into family medical practices where patients could return for follow-up care was complete. They had departed from their original vision to find themselves in uncharted waters.

The Road Ahead

What lies ahead for CMCs? Will investors be satisfied with limited services providing care for simple maladies such as sinusitis, otitis media, strep throat, and wart removal? Is there a larger piece of the healthcare pie that retail medicine can seize?

Are they continuing to evolve? Mikulecky says, "They have already 'morphed' from their initial size of an average of 200 to 300 square feet to 400 to 500 square feet. In addition, most now have exam tables and restrooms, whereas the initial models did not. They were more chairs versus exam tables."

For the answer, we need to go back to the main driver of the CMCs' success, and the reason for their expansion, namely, access. American consumers often find themselves in a frenzied state of rushing between work, family, child care, entertainment, sports activities, household duties, automobile repairs-the list is endless. Who has the time nowadays to schedule an appointment, wait two to four weeks for that appointment, take time off work, and wait in the physician's office, often to be referred elsewhere for lab tests, X-rays, and other services?

What about preventive care? What services could CMCs add to their menu board to:

* Attract consumers?

* Provide a community service?

* Turn a profit for the CMC venture company?

What service does the primary care physician currently provide that the CMC is not providing? Or better yet, what service does the primary care physician provide that consumers have difficulty accessing? That is the question yet to be answered.

What's Next?

Rick Cicero perhaps sums it up best when asked to comment on expanded scope of services and the future of the CMC: "I think there is an opportunity for convenient medical clinics to become a significant part of the Healthcare continuum; however, it may require regulations to make sure they are not creating an additional risk for the patient, and they do not provide services beyond their capabilities. If managed correctly and linked to local reputable providers, CMCs may become a new entry point to the healthcare system."

Terry Deis concurs, stating, "I think the general community will accept them sooner than the medical community. However, I think between the economic forces trying to rein in healthcare costs and the continued apparent shortage of primary care physicians, the clinics will eventually find their way into the mainstream. Someone is going to be opening them, and the question will be, 'Why not us?'"

So whether the future of CMCs encompasses additional screenings, lab tests, imaging, a greater emphasis on preventive medicine, full body scans, or something much wider in scope remains to be seen. Remember it wasn't so long ago that we dialed rotary phones and stocked up on carbon paper and WiteOut(R) for our Selectric typewriters. The babyboomer generation knows all too well that the revolution has begun.


* Convenient medical clinics (CMCs) have established themselves as a viable site (or Healthcare services.

* CMCs continue to gain support because the American consumer is driving this retail medicine bus and investment dollars are plentiful.

* Whether CMCs will last appears to depend on whether they continue to offer convenient services that meet the needs of those driving the bus.

Those who speculated as to whether this was a fad or here to stay need only observe that a new convenient medical clinic location is unveiled almost daily.


Steve Case, chairman and CEO, Revolution Health Group, and cofounder, America Online, will discuss the consumer's role in healthcare transformation at HFM A's 2008 ANI: The Healthcare Finance Conference, June 23-26 in Las Vegas. For details and to register, visit hfma.org/ani or call (800) 252-4362, ext.2. BENEFITS OF CONVENIENT MEDICAL CLINICS

Convenient medical clinics offer the following benefits to patients:

* Clinics are open seven days a week, with evening and holiday hours

* Appointments are not necessary.

* Visits are convenient, taking 15 minutes or less.

* Prices for services are available in a visible place outside of the examination room.

* Services are affordable, even to uninsured patients.

* Convenient Care Association member clinics use electronic health records to coordinate care and ensure safety.

* Convenient Care Association member clinics support the medical home model by connecting patients with primary care providers.

Source: Convenient Care Association (www.convenientcareassociation.com).

Whether the future of CMGs encompasses additional screenings, lab tests, imaging, a greater emphasis on preventive medicine, full body scans, or something much wider in scope remains to be seen.

Ray Kolar is vice president, DMI Transitions, Inc., Brecksville, Ohio ([email protected]).

Copyright Healthcare Financial Management Association Jun 2008

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