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Report: Retail health clinic growth to slow then pick up

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WASHINGTON — Despite tailing off slightly over the next couple of years, growth in the retail health clinic market stands to remain robust going forward, according a report by the Deloitte Center for Health Solutions.

The overall retail clinic market grew about 15% over past two years, but that growth rate likely will slow to 10% to 15% from 2010 to 2012 and then accelerate to above 30% from 2013 to 2014, said the Deloitte report, released Monday.

As of July, the United States had 1,107 retail health clinics in operation. Dominating the market are CVS Caremark Corp.’s MinuteClinic, with a 41% share and 451 locations, and Walgreen Co.’s Take Care Health System, with a 31% share and 346 clinics, the report said.

The next largest operators are The Little Clinic (9% market share, 103 clinics), Wal-Mart Stores Inc. (3% share, 36 clinics), Target Corp. (3% share, 28 clinics) and RediClinic (2% share, 21 clinics), Deloitte reported.

Most retail clinics operate in drug stores (82%), followed by supermarkets (12%) and big-box discount stores (6%). This year has seen a rise in activity by acute care organizations entering retail medicine through pacts with drug store and supermarket chains, according to the report.

"The growth and evolution of retail clinics reflect opportunities for disruptive innovation and an improved value proposition of price, quality and service for the U.S. health care system," Paul Keckley, executive director of the Deloitte Center for Health Solutions, said in a statement. "While the current economic downturn has incited a period of contraction, the retail clinic industry will emerge with a more refined business model to drive a second, albeit slower, wave of growth in the next three years."

Drug stores hold the strongest potential for retail clinic growth, Deloitte said, noting that there are 801 clinics in 10,000 retail pharmacies. Yet discount stores and supermarkets also present strong expansion opportunities, given that there are only 58 clinics in more than 5,000 discount stores and 115 clinics in more than 5,000 supermarkets.

And patient volume remains strong. According to the report and Deloitte’s 2009 Survey of Health Care Consumers, 33% of consumers — especially younger and middle-aged working adults — are willing to use a retail clinic. Also, 30% of consumers indicated they likely would go to a clinic if it cost them 50% less than seeing their doctor.

"Retail clinics represent a new channel that can deliver primary care services more conveniently and at lower cost to consumers," Keckley explained. "Clinic services are typically safe and effective, due in large measure to medical management programs that are evidence-based and supported by electronic medical records. Additionally, health insurance plans are increasingly offering coverage of retail clinic visits in their benefits packages for individuals and employers — ‘covered lives’ is a key to growth."

Core services at retail clinics typically include preventive health screenings, prescription and over-the-counter medications and uncomplicated primary care. But Deloitte said the business model could support such other revenue streams as medication management; health coaching for chronic issues; employee wellness; care management services for chronic issues; referral management services for acute, specialty or O-T-C issues; and health insurance for individuals or groups.

"To consumers, health plans and employers, retail clinics offer an important health care alternative with a strong value proposition," Keckley stated. "Therefore, we expect this new sector to mature while growing its scope of services, locations and impact on population-based health status."


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