Editor’s note: Retail clinics—offering convenient, low-cost primary care treatment, screening and diagnostic services—are becoming an integral part of a U.S. healthcare system facing a growing shortage of primary care physicians. With the demand for accessible primary care treatment surging while the number of available providers declines, it is not surprising that retail clinics are becoming increasingly prevalent, now accounting for 10.5 million patient visits annually. What impact are these clinics having on cost, access and quality? Manatt Health responds to research suggesting that retail clinics increase utilization and cost in a recent post for the Health Affairs Blog, summarized below. To read the full post, click here.

In addition, Manatt Health prepared a white paper for the Robert Wood Johnson Foundation, taking an in-depth look at the value proposition of retail clinics in building a culture of health. To download a free PDF of the white paper, click here.


Once the stepchild of the American healthcare system, primary care is now the linchpin of efforts to improve healthcare and reduce costs. The problem is that we have a shortage of primary care physicians—already acute in some areas and expected to grow significantly—just as the demand for accessible primary care treatment, including through retail clinics, is on the rise.

In the March 2016 edition of Health Affairs, J. Scott Ashwood and coauthors published a study that addressed the impact on spending related to the use of retail clinics. The researchers found that 58 percent of retail clinic visits represent new utilization rather than substitution for more costly primary care or emergency department visits. The net cost of this new utilization was determined to be $14 per person per year.

Since convenience is central to retail clinics’ business model, one would expect that retail clinics trigger new utilization, as well as substitution for more costly services. While the study found that retail clinics increased costs by creating new utilization, it did not consider the value of the new utilization for patients who previously did not or could not access such services.

We would posit that given the small amount of spending associated with the additional utilization, retail clinics have a meaningful role to play in improving access to primary care for patients with low-acuity conditions, especially for underserved and uninsured individuals. In short, the increased utilization may be well worth the associated costs.

The Cost of Enhanced Access

Retail clinics emerged more than 15 years ago to solve the problem of how to make routine primary care services convenient and accessible. Their model of low-cost, basic primary care services in settings that most Americans can readily access has proven popular. There are now more than 1,800 retail clinics across the country.

It’s important to note that the findings in the Ashwood study—that 58 percent of retail clinic cases represent new utilization, with an associated cost of $14 per person per year net increase in spending—did not consider uninsured individuals or Medicaid beneficiaries. These populations are less likely to have a usual source of care or less able to access care during regular business hours. Therefore, for these individuals, retail clinics may be a much needed access point.

What does $14 per person per year really mean when considering the cost of providing healthcare services for an entire population? Only 3 percent of the Aetna enrollees studied in the Ashwood research actually used a retail clinic. If we spread $14 across all Aetna enrollees, the cost per member would be 42 cents per year—less than 4 cents per month.

Could we use this cost in any better way to improve primary care access? We are assuming there is value in both the kind of care received at retail clinics and improving access to that care. There are some data to back these assumptions:

  • Approximately 50,000 adults die nationally from vaccine-preventable diseases in the United States. Nearly one in five adults receives a vaccination in a retail or pharmacy clinic. If we removed retail clinics as a vaccination source, how many more people might suffer an adverse outcome?
  • More than half of uninsured retail clinic users went to a retail clinic, because they did not have a usual source of care.

It is hard to fathom a better way to increase access, at low cost, in a manner that doesn’t generate excess utilization.

The Perfect Storm—More Coverage, Fewer Providers

Since implementation of the Affordable Care Act, 20 million people have gained coverage, approximately 12 million through Medicaid. These newly-covered individuals are seeking primary care in the midst of an expected shortfall of 31,000 primary care physicians. As many as 65 million people nationwide—many who live in rural and poor communities—live in “primary care deserts” with no providers.

Filling the Primary Care Gap

Most families that use retail clinics do so because of their long hours of operation, location and walk-in policies, in addition to low costs. These are especially critical attributes for many lower income and uninsured individuals who may not have a regular source of care, are less mobile and have less flexible work schedules. Retail clinics with extended hours, no appointments and little wait time can serve as an effective complement to primary care providers—as long as they open their doors in neighborhoods where these populations work and live.

So far, retail clinics have not stepped up fully to fill the gaping primary care void. Retail clinics tend to be placed in higher income, urban and suburban settings. If retail clinics are to be part of the solution to primary care shortages in underserved neighborhoods, they’ll need to open more clinics in those communities.

Ensuring the Value Proposition of Retail Clinics

The excess utilization driven by retail clinics would seem to be a tiny price to pay for the increased primary care access they enable. Indeed, the lower cost of retail clinics is the very reason to assure that we are maximizing their value and that means, among other things, linking retail clinics or integrating them into health systems to support care coordination, chronic disease management and prevention. Incorporating retail clinics into accountable care arrangements in partnership with regional health systems and making all parties accountable for cost, access and quality would prove a powerful motivator to ensure appropriate access and utilization across all sites of care.

For those who do not have a usual source of care, having access to a provider to confirm that a fever isn’t strep throat or just to get a flu shot is enough value for them. It is difficult to contemplate the harm that comes from a potentially unnecessary visit to a retail clinic. Policy and business decisions should focus on how to maximize the intrinsic value that retail clinics can provide and minimize the waste they may generate, rather than on their use as a blunt instrument to reduce healthcare costs.