ISSUES & IDEAS
No Waiting Room Required
Retail clinics, offering lower fees and better hours than traditional doctors, are shaking up the health care business.
Ruth Cappag injured her leg when she fell on an icy sidewalk on her way to work in February. The doctor who treated the small wound advised her to get a follow-up tetanus shot. Later that month, Cappag walked into a MinuteClinic inside a CVS drugstore in Arlington, Va., and in less than 15 minutes she had received the shot at a cost of $45 and was out the door.
Cappag, a 37-year-old District resident, was pleased--she didn't have to make an appointment, and her health insurance covered the charge. Anne Pohnert, the clinic's manager and a nurse practitioner, notes that most customers have a similar reaction. "They say, 'Wow! That was easy!'" Pohnert said. "And then they say, 'How can I buy MinuteClinic stock?'"
As medical costs continue to rise and tens of millions of Americans try to get by without health insurance, more and more people are using retail clinics. Run by nurse practitioners and physician assistants with supervision from doctors, the clinics offer flu shots, vaccinations, and treatment for many ailments, from minor burns to strep throat.
The companies that run retail clinics say that their prices are as much as 50 percent lower than fees for the same services in a traditional doctor's office. The clinics are open seven days a week, and patients don't have to make appointments or wait long hours to be seen. They can pay using cash, a credit card, or their health insurance coverage.
But even as retail clinics are establishing a foothold in the country's health care system, doctors and state regulators are mounting efforts to slow their growth. Physicians say that the clinics undermine the professions of both family and primary-care medicine, compromise the quality of care, and erode the doctor-patient relationship that is crucial in tracking and coordinating a person's medical needs. Doctors have expressed particular concern that the quality of children's care could be affected.
"We think there is a better way to take care of patients," said James King, president of the American Academy of Family Physicians. "I truly think people should use their primary-care physicians first."
The conflict has been growing since the first clinic, QuickMedx, opened in 2000 in a food store in the Minneapolis-St. Paul area. The name was later changed to MinuteClinic, and by 2004 the company was operating 19 clinics in Minnesota and Maryland. In June 2005, Michael Howe, the former CEO of Arby's, became the CEO of MinuteClinic. He applied the philosophy of a fast-food company and expanded the chain nationally. In September 2006, CVS acquired MinuteClinic with Howe staying on as CEO.
The American Medical Association, the American Academy of Family Physicians, and other physician groups are pushing states to limit the clinics' scope of services and are insisting on strict regulation. As state rules mount for the retail clinics, however, the federal government has shown no interest in setting a national policy for such services.
"You would never get a national standard for these kinds of services," said Tine Han-sen-Turton, executive director of the Convenient Care Association, a trade group that advocates for the retail clinics. Rep. Pete Stark, D-Calif., a leading voice in Congress on health care policy, agrees: "We have no federal jurisdiction to regulate them."
The various states working on regulations are taking different approaches. Some are limiting the work of nurse practitioners, the backbone of the retail clinics. Texas has some of the strictest rules, requiring on-site supervision by a doctor 20 percent of the time. South Dakota and Alabama mandate on-site doctor supervision 10 percent of the time, while Georgia requires a physician to be present four hours a month and Illinois requires one doctor visit a month. Illinois is also working on a rule that would ban tobacco sales in stores that have retail clinics.
Massachusetts has allowed MinuteClinic to open several locations in the state but requires that clinics be licensed individually. It also limits treatment of children to those older than 24 months. Some states put the cutoff at 18 months.
Bruce Auerbach, president-elect of the Massachusetts Medical Society, said that the regulations are "an improvement over the direction that the states were going to permit the retail clinics initially, in the sense that they addressed everything from sanitation to handicap accessibility."
Retail clinic companies say that the stricter rules would require them to hire more doctors to supervise their activities and would force them to relocate clinics outside of established retail stores into more-costly, stand-alone storefronts.
"These clinics are not unregulated, as some physician organizations would contend," said Caroline Ridgway, the CCA's senior policy associate. "The reality is that these clinics are regulated just like any other health care provider and adhere to all relevant guidelines and standards."
On another issue, the American Medical Association last year called for investigations of retail clinics and "potential conflicts of interest posed by joint ventures between store-based health clinics and pharmacy chains." The AMA said that the clinics might be inclined to prescribe drugs that are carried by the stores in which they are located.
Retail clinics strongly reject that contention. "The question is, what is the conflict of interest?" Howe said. "Is it a conflict of interest when a physician writes a prescription and the patient buys it in the hospital or at the same clinic [where the physician is employed]?" Howe pointed out that MinuteClinic writes prescriptions that can be used at any pharmacy.
As the debate continues, the number of retail clinics is rising--there are more than 1,000 in the United States, according to the CCA. A study by the California HealthCare Foundation projects that as many as 6,000 clinics will be operating by 2012.
MinuteClinic, the largest among more than 20 retail clinic companies, boasts that it has 500 operations in 25 states. The firm plans to open 150 to 250 clinics this year, according to CEO Howe, who in 2006 was named by Fast Company magazine as one of the top 50 people who will influence how Americans work and live over the next decade.
"It is about access to health care, affordability, and quality," Howe said. He said that more than 1.5 million people have visited his clinics since the company opened its first eight years ago.
Howe is not alone in the retail clinic game. Hal Rosenbluth, the former chairman and CEO of Rosenbluth International Travel, is a co-founder of Take Care Health Systems, and Steve Case, a co-founder of AOL, has invested millions of dollars in the RediClinic chain.
The fact that all of these businessmen are running health care companies has heightened doctors' concerns that making a profit is their primary objective. But while the physicians' organizations are opposed, consumers are welcoming the option.
Harris Interactive polls conducted for The Wall Street Journal in 2005 and 2007 indicated that although fewer people used retail clinics in 2007 (7 percent in 2005 versus 5 percent in 2007), the responses to the experience were more positive--people were less concerned about the staff's ability to diagnose their ailment (75 percent in 2005 versus 68 percent in 2007). The polls also showed that 22 percent of the patients were uninsured when they visited the clinics. MinuteClinic says that almost half of its clients are uninsured.
"I think they are fabulous. They are a wonderful market response to what people need," said Grace-Marie Turner, president of the Galen Institute, which studies health policy. She said that retail clinics might help cut the cost of health care in the United States. "People go to an emergency room that costs hundreds, if not thousands, of dollars," Turner said. "[Retail clinics] will help people save their money."
Moreover, in a response to consumer demand spurred by the clinics, physician organizations are now encouraging doctors to extend their office hours and to offer same-day and walk-in patient appointments. Jay Berkelhamer, immediate past president of the American Academy of Pediatrics, said that more doctors are providing services during the most-convenient times for families, are extending their office hours, and are accepting walk-ins.
Howe sees good years ahead for his company as a business. "I think you will see continuous growth for the clinics and will see more and more individual companies jump into this," he predicts.
Still, the battle between physicians and retail clinic operators over regulations is not going away. Both sides will be lobbying hard in state capitals.
"We will be involved in discussing issues in states that may not be favorable to the clinics," the CCA's Hansen-Turton said. Berkelhamer counters: "We have chapters in each state, and those local chapters will advocate for the best care of children."
