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Retail clinics are coming


Forget "doc in a box" and start thinking "nurse practitioner in a box." That is the latest trend in retail health clinics popping up nationwide.

Forget "doc in a box" and start thinking "nurse practitioner in a box." That is the latesttrend in retail health clinics popping up nationwide.

"Our patients are going to retail clinics because we are not providing the kinds of servicesthey want," said John Bachman, MD, department of family medicine at the Mayo Clinic in Rochester,Minnesota. "You are going to see more of them."

Retail health clinics are the kind of disruptive technology that transform an industry. Tinysteel mills called minimills decimated traditional large steel mills in the last decades of the 20thcentury, Dr. Bachman told a discussion forum at the American Academy of Family Physicians 2007Scientific Assembly in Chicago on Saturday.

A similar transformation hit cardiac surgery. Twenty years ago, treating severe cardiac diseasealmost always meant cardiac surgery. Then a new technology arrived - angiography - which evolved intoangioplasty and then into stenting.

"Cardiac surgeons are looking for jobs today," Dr. Bachman said. "That's one possible outcome from adisruptive technology."

Retail health clinics represent a similar threat to family physicians, internists, and otherphysician groups, Dr. Bachman continued. A retail clinic firm associated with the CVS drug chainalready has 300 locations open and is opening new clinics at the rate of 20 a month. Most other drugchains, as well as big box retailers such as Wal-Mart and Target, have retail clinics already open orhave some in the works.

So does the Mayo Clinic.

Rochester is getting three retail clinics in the next three months alone, said StevenAdamson, MD, also from the Mayo Clinic's family medicine department. However, the giant provider hasmultiple concerns, he explained.

One is fragmentation of patient records. Mayo has invested heavily in its electronic medicalrecord system that gives care providers access a patient's entire health record. The advantage tocare that comes from more complete patient information would be compromised if a significant numberof Mayo Clinic patients started using outside providers.

"Providing similar services in our own retail clinic that is linked to our own integratedrecord system would be a tremendous value add for us and for our patients," Dr. Adamson said.

Use is another potential advantage. Exit polls at retail clinics suggest that approximately30% of patients used the retail provider instead of a local hospital emergency department. That couldbe good news for the Mayo Clinic, where costs are governed by cost per member per month.

"We are betting a retail clinic will divert low acuity ER business, especially in the eveningand on weekends," Dr. Adamson explained. "We need that extra capacity and we need to compete againstthis new entry into the market."

The investment needed to create a retail clinic is relatively low, he added. Mayo is lookingat stand-alone sites in large mall settings rather than a location within some other brand nameretail outlet. Rent for a 450- to 500-square-foot space will run between $16 and $20 per square foot,he said, which compares favorably with the $56 per square foot cost at the Mayo Clinic.The clinic will be open all day and into the evening, staffed by a single nurse practitioner who doeseverything from reception to patient care to cleaning. The financial breakeven point is about 14patients per day, he added. At 16 to 18 patients per day, the facility starts to turn aprofit.

At 80% to 90% of capacity, he added, the projected return on investment is between 20% and25%.

"I would encourage practices to consider opening their own retail boxes," he said. "It's nota huge investment and you won't lose money."

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