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Report sees bright long-term future for in-store clinics

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WASHINGTON — The number of retail health clinics in chain drug stores and other venues grew about 15% in the last two years, according to a report by the Deloitte Center for Health Solutions.

But Deloitte also says retail clinic market growth will slow to as little as 10% from next year through 2012 before accelerating again above 30% from 2013 through 2014.

Deloitte’s report, “Retail Clinics: Update and Implications,” suggests that consumer adoption of retail medicine is growing and that the industry’s potential to expand revenue opportunities will support its long-term sustainability.

It identifies four factors that will likely contribute to the sector’s growth: greater customer satisfaction, greater use and acceptance by commercial health plans and large employers, additional services provided through the retail medicine model, and a heightened demand for preventive and primary health care services as a result of health care reform and consumer demand.

“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,” states Paul Keckley, executive director of the center.

According to a 2009 Deloitte poll of health care consumers, 33% of respondents — especially younger and middle-age working adults — indicated that they are willing to use a retail clinic, and 30% said they are likely to use a retail clinic if it would cost them half as much as they pay to see their physician.

“Retail clinics represent a new channel that can deliver primary care services more conveniently and at lower cost to consumers,” Keckley explains. “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.”

The report finds that most retail clinics operate in pharmacy settings (82%), with the rest operating as departments or wholly owned subsidiaries of the host organization, such as a grocery store (12%) or big-box discount store (6%). This year also has seen more instances of acute care organizations entering retail medicine through contractual arrangements with drug store and grocery chains.

The market potential for retail clinics remains strongest in stores with pharmacies, although big-box discount stores and grocery stores have expansion opportunities if these channels leverage services selectively, according to Deloitte.

The report says the core services at retail clinics typically comprise preventive health screenings, prescription and over-the-counter therapeutics, and uncomplicated primary care.

But the study also concludes that the retail clinic business model can support additional revenue streams that are unrelated to its core operations, including such areas as medication management, health coaching for chronic issues and employee wellness.

Despite those opportunities, the report cites some challenges to growth, including labor shortages, price pressures from new entrants and regulatory pressures from state governments.

The study points out that in some states and localities, regulators fear that retail clinics represent a compromise to safe and effective care and that some local physicians have campaigned against retail clinic openings and advised patients to seek care elsewhere.


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