Editor’s Note: Since first emerging on the healthcare landscape more than 15 years ago, retail clinics have seen significant growth. There are now 10.5 million patient visits occurring annually at 1,800 retail clinics.1,2 As the nation’s healthcare system enters a period of profound change, retail clinics offer an important locus of patient access within large retail establishments. In a new report for the Robert Wood Johnson Foundation, Manatt Health examines the potential value proposition of retail clinics in building a Culture of Health. The report reviews evidence of the impact retail clinics have had on expanding access to lower-cost, routine primary care services, the quality of those services, and opportunities for better supporting disease prevention and chronic care management. It also considers how retail clinics can serve as a platform for offering services not traditionally delivered in retail settings. Finally, it proposes a set of strategic recommendations to optimize the value proposition of retail clinics. Below is an executive summary capturing key highlights. Click here to download a free copy of the full report.
Retail clinics offer convenient, low-cost basic primary care treatment, screening and diagnostic services in a variety of settings. Increasingly, these clinics are an integral part of a U.S. healthcare system in the throes of massive change as payers and providers migrate toward the Triple Aim goals of improved patient care, population health and reduced costs.
Many retail clinics are adapting their offerings to provide basic chronic care management services and forming partnerships with area health systems to become better integrated with other community providers. Some retailers are leveraging other assets within their stores, including pharmacies and healthy foods, to create a package of enhanced services for customers and payers. A few have gone a step beyond and are exploiting the enormous foot traffic they generate to offer additional services not traditionally found in their stores, including enrollment assistance and access to public nutrition programs.
As the role of retail clinics evolves, they face a series of challenges and opportunities to integrate this business model into a healthcare system reconfiguring to advance Triple Aim goals and contribute more broadly to a Culture of Health.
The Retail Clinic Landscape
Retail clinics typically employ nurse practitioners (NPs) and physician assistants (PAs) to handle most patient interactions. Like many primary care providers, retail clinics are more prevalent in higher-income, urban and suburban areas, though they also can be found in rural and underserved communities. The majority of retail clinics accept commercial, Medicare and Medicaid coverage and all accept cash payment regardless of insurance status.
The cost of providing care and treating patients has been found to be lower at retail clinics when compared to other settings. However, it remains unclear if retail clinics reduce the total cost of care by replacing other primary care encounters. In addition, while some performance measures indicate that the quality of care offered at retail clinics is comparable to other settings, there is less evidence of how clinics impact clinical outcomes.
To date, more than 100 partnerships between retail clinics and health systems have been formed, linking care between retail sites and primary care medical homes, expanding after-hours care options and enabling health systems to provide patients with alternatives to emergency departments (EDs). In fact, one study estimated that up to 27% of ED visits would be handled appropriately at retail clinics and urgent care centers, offering cost savings of $4.4 billion per year. The full benefits of these partnerships can only be realized when care is coordinated, protocols are adopted and information systems are effectively linked.
The reach and effectiveness of retail clinics can be constrained by varying and restrictive state scope-of-practice rules that increase the administrative costs of retail clinic operators and limit their practitioners’ scope of services. Health system partners have helped resolve some of these issues by providing physician oversight, though that can add to overhead and cost.
Increasingly, retailers are bundling clinic services with pharmacy, nutrition, lifestyle and obesity management programs to deliver more comprehensive offerings. The business cases for providing those services can be compelling, especially when they are aligned with incentives from payers. Finally, the astonishing foot traffic that these retailers generate can serve as a platform for offering services not traditionally delivered in a retail setting, such as enrollment assistance for public or private coverage and housing support.
Retail clinics have demonstrated that their value proposition in a Culture of Health is convenient, low-cost, transparent and accessible primary care. To the extent they are able to coordinate care with health system partners, their value will be further enhanced.
Additional research is warranted to examine the expanded role retail clinics can play in supporting public health initiatives, the benefits of tightly coupling and bundling services that better leverage retailer assets, and the ways stronger ties to a range of services not widely accessible through retailers that address underlying social determinants of healthcare can be created and sustained.
Recommendations for Optimizing Value and Advancing a Culture of Health
The following are strategic, interdependent recommendations for optimizing the value of retail clinics in delivering healthcare to individuals and enabling the health of communities:
- Integrating into the delivery system, through better linkages between retail clinics and health system partners.
- Measuring and reporting the quality of care using a more complete set of clinical outcome measures that assesses performance against other primary care providers.
- Improving access in underserved communities through partnerships between municipalities and state governments to open new retail stores with clinics in disadvantaged areas.
- Providing services to young children by removing obstacles preventing the appropriate administration of vaccines and provision of routine primary care in retail clinics to children over 18 months.
- Standardizing scope of practice rules for NPs and PAs and removing restrictions that prevent NPs and PAs from practicing to the full extent of their license and training.
- Requiring Medicare and all other payers to reimburse retail clinics for appropriate telehealth services.
- Examining more expansive roles that retail clinics can play in supporting public health and emergency response efforts.
- Making the business case to payers to broaden and bundle services.
- Researching the business case for a broader range of services, including insurance enrollment assistance and access to nutrition, housing and other programs.
Retail clinics are now a part of the healthcare landscape in every state. There are two key determinants of their long-term impact: their ability to integrate with the healthcare system at large and economics.
Retail clinics’ ability to coordinate care effectively with other health system partners and engage payers to reimburse for a more expansive set of integrated services will largely determine the greater role retail clinics play in our healthcare systems. Retail clinics operate on thin margins and, like any other low-margin business, they must pay close attention to reimbursement for the services they provide and the direct and indirect revenue they generate for the retailer. In addition, while retailers, health systems and payers recognize the impact of social determinants on health outcomes, most have not yet embraced initiatives that help improve population access to in-store offerings and public programs that address their nonclinical needs.
These are weighty challenges. If retail clinics overcome them, they have the potential to become a much more powerful enabler of the Culture of Health.