Posted Monday, February 2nd, 2009 by HLPRonline editorial staff
Out of the Box: The Future of Retail Medical Clinics
by WILLIAM M. SAGE
Last year, retail medical clinics seemed to be the next wave in American health care. Following the example set by banks and beauticians, dozens of cheap, convenient sites offering basic medical diagnosis and treatment, usually from nurse practitioners, opened in brand-name chain drugstores, supermarkets, and “big box” discounters. Investors flocked to them. Business school professors labeled them “disruptive innovation.” Policy experts lauded their potential. And, tellingly, the organized medical profession huddled together against their gathering storm in ways reminiscent of physicians’ response to managed care organizations a decade ago.
Then the wave broke. Start-up costs proved unexpectedly high, and revenues failed to meet projections. Some markets became saturated. Others ran into regulatory or staffing barriers. A few clinic chains failed; others retrenched. Retail care providers reached accommodation with established professional groups. Financing of services was absorbed into health insurance. Commentators began to analogize retail clinics to the “doc-in-the-box” craze and other medical fads.5 The novelty, it seemed, had worn off. Perhaps more importantly, the threat to the medical establishment appeared to fade as well.
Are retail clinics the future? The answer depends, as a former President might have argued, on what “are” means. If retail clinics are merely another attempt to dazzle Wall Street with growth and profit potential by moving private health care revenue streams onto publicly tradable balance sheets, the current economic downturn will kill them quickly. If retail clinics are neighborhood sites for strep tests, flu shots, and migraine treatments, they should survive but will remain merely a niche player in the health care system. However, if retail clinics continue to anticipate and meet patients’
needs, they may represent the beginning of a movement to derive value from the connection between medical care as commonly understood and non-medical determinants of health.
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