Latest Retail Niche: Clinics

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http://www.truthout.org/issues_06/072006HA.shtml

 

Latest Retail Niche: Clinics

By Daniel Yi

The Los Angeles Times

Tuesday 18 July 2006 Healthcare operators are gearing up to add

thousands of storefront sites offering quick aid. Coming soon to a store

near you: health clinics. Seeking to capitalize on the country's costly

and often slow healthcare delivery system, a number of start-ups are building

storefront clinics that offer quick and cheap medical services inside chain

pharmacies and large retailers such as Wal-Mart Stores Inc. and Target Corp.

There are currently more than 150 such clinics nationwide. None are in Southern

California, but thousands of new clinics are planned nationwide in the next year

or two, according to a report to be released today by the California Healthcare

Foundation, an independent Oakland-based research institute that advocates for

affordable healthcare. Los Angeles could have its first retail clinic this year.

Retail clinics are small, typically no bigger than a sandwich shop. They are

open seven days a week and treat minor,

non- urgent illnesses including strep throat and ear infections. Appointments

are not necessary and most visits last 15 minutes for treatments that cost $40

to $70, which are clearly posted on menu-style boards on the wall.

" Imagine if Starbucks was running your doctor's office, " said Dave Mandelkern,

chief executive of Burlingame, Calif.-based QuickHealth Inc., which has three

clinics in Northern California and plans to open seven more before year's end,

including one in Los Angeles. Doctors and some consumers have raised

concerns that these clinics may jeopardize the quality of care in the name of

convenience and cost cutting. Most facilities are staffed by nurse

practitioners, not physicians. But proponents say retail clinics could be

the answer for millions of patients, including the uninsured and underinsured

who often can't afford medical care even when their illnesses are easily

treatable. For the insured, the clinics are mainly a convenience, a

better option than waiting for a doctor's appointment or waiting hours at an

emergency room over a minor ailment. For the industry, the trend - still

relatively new, with the first clinics opening in 2000 - points to further

segmentation of the country's healthcare delivery system. Traditionally,

doctors' offices and hospitals provided the bulk of medical services, including

treating simple rashes and performing heart bypass surgeries. But over the

years, an array of specialized facilities, from ambulatory surgery centers to

urgent care clinics, have divided healthcare into niche markets. Retail clinics

represent one of the latest. " Is there any reason why medicine should be

practiced exactly the way it was 20 years ago? " said Margaret Laws, director of

public financing for the California Healthcare Foundation. " I don't think anyone

would agree that you need 12 years of training as a doctor to treat a strep

throat. " The foundation's report likens

retail clinics to discount stock brokerage firms or no-frills airlines that

have found ways to cut costs by eliminating things consumers are willing to do

without or don't need in certain circumstances. Health insurers are

cautiously optimistic about the trend and its potential to drive down costs.

About 40% of retail clinics accept insurance, the foundation report said.

The clinics say they are not trying to replace doctors or hospitals, and when

patients need a higher level of care they are directed to go to them. But

doctors and hospitals " treat a broader range of conditions, and when you are at

a doctor's office you may be waiting behind a person who has a broken bone or a

laceration, " said Web Golinkin, chief executive of Houston-based InterFit

Health. Its RediClinic division owns 11 clinics around the country with 75 more

on the way, mostly outlets in Wal-Mart stores. At RediClinic outlets,

patients are told that their treatments won't take

longer than 15 minutes, Golinkin said, and they are given a pager so that they

can shop while they wait. The hosting stores or pharmacies often lease the

space to the clinics and benefit from higher traffic. " The clinics

increase our portfolio of offerings, " said Kevin Gardner, a spokesman for

Wal-Mart, which hosts 12 clinics and has plans to add 38 more by year's end.

Gardner said it was too early to call the store additions a success, but said

the company was satisfied with the initial reaction by customers.

Convenience is key. The tag line for Minneapolis-based MinuteClinic Inc., with

86 locations and 250 more on the way, is: " You're sick. We're quick. "

California - with only three clinics - is lagging behind the trend, the

foundation report said. Strict state regulations regarding physician oversight

of medical treatment make retail clinics harder to implement, the report said,

but the California market is too big for companies to ignore and

most have plans to open clinics soon. QuickHealth plans to have 35

clinics in California by the end of next year, CEO Mandelkern said. He declined

to discuss details, but said the company would partner with a large chain.

The company runs clinics in San Francisco and Oakland at Farmacia Remedios

drugstores, which cater to Latinos, and a third at a Longs Drug Stores Corp.

site in San Mateo. Unlike many clinic operators, QuickHealth staffs its

sites with a physician and medical assistant and, to keep costs down, does not

accept insurance. A basic office visit costs $39. " The real cost savings

are in the overhead, " Mandelkern said. " The chief cost [for health clinics] is

insurance billings. We don't have that. We don't have appointments so we don't

need a receptionist. We don't have fancy offices for the doctors to hide away

from the patients. " But some doctors are concerned. The American Medical

Assn. released a report last month that said

retail clinics could lead to inconsistent care and cited a recent poll showing

that consumers, although interested in retail clinics, were worried about

quality. But as co-pays and deductibles rise, retail clinics may become

more enticing for many patients, the California Health Foundation said. " You may

not like going to Wal-Mart " for medical treatment, Laws said. " But you might

like it better than the alternative. "

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