Retail clinics gain in popularity

The use of retail clinics for medical services is on the rise, according to a new survey from healthcare market research publisher Kalorama Information, which reports 21.3 percent of U.S. adults have visited a retail clinic, up from about 10 percent six years ago.

In its report, “Retail Clinics 2012: Growth of Stores, Consumer Opinion Surveys, Winning Competitors, Supplier Sales of Products to Clinics, Clinic Sales Forecasts and Trends,” Kalorama notes that customers have responded well to retail clinics due mainly to the convenience of appointment-free services, expanded hours compared to the average physician office and lower costs.

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Retail clinics are generally located in drugstores and retailers such as Wal-Mart. A nurse practitioner or physician assistant typically administers services.

Bruce Carlson, Kalorama’s publisher, believes one reason for the uptick in usage is the change in the business model over the past few years.

“Clinics were free-standing, privately operated and just operating within the retail store paying rent. This model did not bode well for traffic, though it still is used in many cases – the clinics at Wal-Mart, for instance, are privately operated,” said Carlson. “Now the bulk of retail clinics are owned and operated by drug store chains and are well-promoted within the store with signage and notes on customer receipts. Instead of being a foreign element in the store, they are part of management’s strategy to build revenue and repeat visits to the store. Drug stores as a location tend to have the benefit of reaching a customer already focused on healthcare, who trusts the store to deliver pharmacy services, versus a grocery store.”

The business model takes advantage of heavy retail traffic, said Carlson, who expects to see usage continue to rise in the next few years.

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“We expect that when we re-survey the number of adults who have visited a retail clinic, it will go up,” he said.

The growth in the use of retail clinics is being driven in part by patient demand for convenience and cost savings, said Scot Latimer, managing director of the Healthcare Solutions group at Chicago-based financial services firm Jones Lang LaSalle.

“This trend is driven by consumerism, the need and desire for the public to get some of the very basic services – flu shots and strep throat tests – taken care of in the fastest, most economic means possible,” said Latimer.

Although Latimer notes the clinics are not being used for complex health issues, he believes they are “… a means for retailers like Walgreens, Wal-Mart and the like to deliver volume business that has a relatively high profit margin.”

In order to compete with retail clinics, hospitals and health systems will have to re-think their real estate strategies, said Latimer.

“Hospitals and systems really owe it to themselves to consider any and all opportunities that provide them with access to their customer base – existing or targeted – at an affordable or competitive rate. Such an approach will mean they need to think out of the proverbial box, which may put them into settings that they would not necessarily have planned for a decade ago, but which make a great deal of sense today,” he said.