I’m not feeling so hot. Actually, I am feeling a little hot. And cold. Achy. Maybe I have mono? I duck into a MinuteClinic tucked in a back corner of a
Retail medical clinics, where a nurse practitioner handles routine issues such as colds, pinkeye, and bug bites, have gone from an experiment to a phenomenon in just a few years. There are now about 350 for-profit clinics run by some 40 different companies; the number of outlets could more than triple by the end of 2007. “We’re seeing a tipping point,” says Steve Wunker, an analyst for the health-care consulting firm Innosight. The industry has been boasting about its happy customers: It claims a 98% satisfaction rate.
Many doctors are decidedly less enthusiastic. The American Medical Association and many of its members have consistently bristled as the clinics have invaded their turf. The AMA even issued “nine principles” for acceptable clinic care last year. “There were all sorts of ways that the clinics appeared not to be adhering to the same standards for doctors in their offices,” says Dr. Peter Carmel, an AMA board member. “We don’t want to lose sight of patient quality in our haste to pay a cheaper price.”
So are these clinics fast-food medicine, a potentially more dangerous sibling to fast-food dining? Or could they be a solution to our intractable health-care-cost problems?
This past June, the AMA issued “Resolution 705,” which asked regulators to launch an investigation into, among other things, potential conflicts of interest posed by joint ventures between the clinics and their retailers. (CVS, for example, acquired MinuteClinic in 2006.) “When a pharmacy chain owns a clinic whose business it is to give prescriptions, it’s easy to imagine ways in which that relationship could be abused,” explains Carmel.
These intimations have the clinic industry firing back. “It’s interesting that one part of the medical community wants to maintain the status quo in a system that everyone agrees is broken,” complains Michael Howe, CEO of MinuteClinic. “They have not sat down with us to study the model.”
Howe is a perfect prism through which to gauge the clinic business. He is himself the product of the fast-food industry: a onetime KFC executive and CEO of Arby’s. When you study the business model of retail medical clinics, it does mimic the secrets of the fast-food industry’s success. The clinics seek to offer convenient, predictable service and transparent pricing. Building costs are affordable and standard. Most clinics cost about $75,000 to $100,000 to set up; there’s no capital-intensive equipment, such as imaging machines or costly additions such as lead-lined walls. Computerized systems help nurses–who have master’s degrees or the equivalent–move systematically through a diagnosis.
In describing the industry’s planned hypergrowth, analyst Wunker says, “The skill that’s required is standardizing the service across a broad network of outlets. That’s not a medical skill, that’s a fast-food skill. Arby’s is a good fit.”
Of course, the fast-food industry has blossomed in part because it provides a cost-efficient solution for customers. So too with medical clinics: A visit typically runs about half that of a doctor’s office visit, $43 as compared to $87, and less than half for other costs like lab tests, according to the first in-depth survey of clinics, performed by Blue Cross and Blue Shield of Minnesota.
The clinics are adamant that they aren’t trying to create an alternate health-care system but fit within the current one. “There are clear, clinical guidelines when to refer someone to a doctor or emergency room,” says Web Golinkin, CEO of the RediClinic chain (which counts AOL founder Steve Case’s Revolution Health Group as a major investor). MinuteClinic’s Howe insists that the use of electronic medical records assures continuity of care. Although they’re picking the low-hanging fruit of the health-care business, clinics typically work under the supervision of a doctor. Members of the industry’s new trade association claim to exceed the AMA’s nine points by using the nonprofit independent health-care evaluator Joint Commission’s 180 standards and 600 elements of performance.
Not all doctors and health systems are resistant to the idea of these businesses. Geisinger, a regional health system in Pennsylvania, has opened four clinics in the past year inside Weis Markets, a local grocery chain. Two more are under way. “If we didn’t do it, someone else would in our own back yard,” says Dean Lin, VP at Geisinger and CEO of its CareWorks clinic business. Worries that it would be competing with its own physician practices have proved unfounded. “About 30% of our customers have no physician,” he adds. It’s hard to argue with the math. “For strep throat, a doctor’s visit would average $329, urgent care $109, and we’re $55,” he says.
Ultimately, it’s the sniffling masses who will make or break the clinic wave. So far customer complaints are nonexistent. Clinic customers may even be more compliant patients, according to the Minnesota study: They were more likely to fill a prescription or seek follow-up care. And a solid 20% were also repeat customers. “It’s a sticky service,” Wunker says.
I can see why. Four days after my visit, I got a note from my fast-food nurse. THANKS FOR STOPPING IN, said the preprinted card. And in a careful, legible hand: “Ellen, don’t forget to take time and slow down.”