Health and wellness has been a frequently invoked mantra as food retailers try to emphasize the many products and services in their stores that support a healthy lifestyle.
But will more retailers move more deeply into the health and wellness business by opening health clinics?
The number of in-store clinics, which have had a checkered history since their inception in 2000, currently stands at 1,397, about two-thirds at CVS/pharmacy and Walgreens stores, and the rest (450) at Wal-Mart Stores, Kroger Co. and Target Corp. outlets and a mix of other supermarket and drug stores, according to Merchant Medicine, Shoreview, Minn., and other sources (see chart below). CVS, Walgreens and Kroger all own their clinics while most of the other retailers, including Wal-Mart, lease out space to third-party operators.
CVS Caremark, Woonsocket, R.I., owner of CVS/pharmacy and MinuteClinic, operates 587 clinics inside CVS/pharmacy stores in 25 states and the District of Columbia. Another 50 clinics are likely to open by the end of the year, said Dr. Andrew Sussman, president, MinuteClinic, and senior vice president/associate chief medical officer, CVS Caremark. “We are opening approximately 100 clinics a year through 2016 and expect to be at 1,000 clinics by 2016.”
With its volume and revenue growing at a compound annual growth rate above 40% for the past five years, MinuteClinic broke even on an “all-in” basis at the conclusion of the fourth quarter in 2011, said Sussman.
Kroger has wholly owned clinics under The Little Clinic name in 89 stores across three banners (Kroger, Fry’s and King Soopers). The latest clinic opened in Atlanta last week, and another is slated to debut in Dayton, Ohio, next month. In addition to a nurse practitioner on site, the clinics have collaborating off-site physicians in all of their markets, said Mike Alday, a spokesman for The Little Clinic, Nashville, Tenn.
“We will continue to expand The Little Clinic within Kroger,” said Alday, declining to be specific. “Kroger believes this is a viable concept.”
Wal-Mart has put new leases on hold and last November sent out a request for information seeking clinic partners, said Tom Charland, chief executive officer of Merchant Medicine, adding. “I think we’re going to see some changes there.” Wal-Mart did not respond to a request for comment.
Safeway, Pleasanton, Calif., has not opened any clinics yet but has built “a whole bunch” in existing stores, said Charland. Asked to comment on Safeway’s plans for clinics, Brian Dowling, vice president, public affairs, said, “We do not have any health clinics in our stores as classically defined. However, our pharmacists are all certified to provide immunizations and certain other services. We have a tremendous amount of knowledge in this area and strive to meet our customers’ health and wellness needs.”
Overall, there remains much room for supermarkets and drug chains to grow with in-store clinics, Charland noted. “Comparing the number of stores to the number of clinics, retailers have just scratched the surface.” He expects the number of clinics to grow by 10% this year, with much of the activity taking place in the second half.
REFRESH Blog: In-Store Clinics Address Health ... and Beauty
Tine Hansen-Turton, executive director, Convenient Care Association, Philadelphia, which represents retail clinics, noted that she receives “one to two calls per week” from supermarket chains thinking about opening clinics. She expects to see a few hundred new retail clinics open on an annual basis over the next few years. Some of that expansion will be driven by hospitals seeking to open clinics in stores to increase their market share, she added.
Obamacare's Impact
A number of factors are falling into place with the potential to significantly strengthen the business case for retail clinics. Most notably, assuming the Patient Protection and Affordable Care Act — popularly known as “Obamacare” — gradually goes into full effect by 2014, as many as 30 million currently uninsured Americans will gain access to health insurance, ramping up demand for medical services. “If demand for primary medical care drives longer wait times to see a doctor, as it has following health care reform in Massachusetts, then this could drive greater demand for convenient alternatives such as retail clinics,” said Dr. Ateev Mehrotra, an associate professor at the University of Pittsburgh School of Medicine and a researcher at RAND Corp., Santa Monica, Calif., which released a study on retail clinics this month.
In some areas, there will not be enough primary care providers to accommodate all of the newly insured, making room for a greater role for retail clinics and urgent care clinics. “We simply do not and will not have enough primary care physicians to meet all of these urgent medical needs, and we think MinuteClinic is well positioned to fill these gaps, in collaboration with patients’ primary care medical home,” said Sussman. On the other hand, said Charland, many of the uninsured already use retail clinics, so the uptick may not be that great.
At the same time, the Affordable Care Act is attempting to restrain exploding health care costs by focusing on preventive care and overall health outcomes, which plays to the clinics’ strength. This approach will be needed to address the epidemic of obesity that affects nearly a third of Americans and the related diabetes that could impact 75 million Americans in 10 years, said Sussman (left).
Add to that the medical needs of an aging Baby Boomer population, which is turning 65 at the rate of about 8,000 per day, according to the American Association of Retired Persons (AARP). Many older Americans have already found their way into retail clinics: The RAND study determined that the proportion of clinic patients over age 65 grew to 19% from 8% between 2007 and 2009, helping to drive a fourfold overall increase in visits.
The clinics’ convenience — they are typically open seven days a week and have evening hours — is proving to be a powerful attraction for seniors as well as other groups, such as parents of young children. More than 44% of visits to the clinics in the RAND study took place on the weekend or other hours when physician offices are usually closed. Prescriptions stemming from the visits can be readily filled on-site at the store’s pharmacy, boosting sales there and potentially in other areas of the store.
One woman who brought her under-the-weather 4-year-old daughter to a CVS/pharmacy MinuteClinic in Southbury, Conn., on a recent Sunday, said she appreciated the one-stop aspect of in-store clinics. “You can get your prescription right here; it’s so fast,” she said after checking in at a kiosk and waiting to be seen, adding, “I think she has strep throat.” The woman noted that if her regular pharmacy were at a supermarket that offered a clinic, she would regard that store the same way.
Technology like check-in kiosks and electronic medical records are becoming more common in clinics. Last year Rite Aid, in partnership with OptumHealth, introduced a “virtual clinic” telemedicine system in nine stores in the Detroit area. The service, called NowClinic Online Care, offers customers real-time, web-based access to medical care, information and resources from doctors ($45 for a 10-minute consultation) and nurses (free). The service is also available at www.mynowclinic.com/riteaid.
Read more: In-Store Clinics Add New Services
Clinics are appealing to more people by broadening their range of health services, which are typically priced below those of primary care doctors and backed by most insurance plans. For example, the Southbury CVS, which listed its services (and costs) on an electronic screen, not only treats minor illnesses and injuries (such as flu-like symptoms, ear ache, sore throat, pink eye, burns, bug bites and sprains) but also offers wellness exams (such as physicals; asthma, diabetes and cholesterol screening; and vitamin B12 injections), health monitoring (for diabetes, high blood pressure, asthma and high cholesterol) and an array of vaccinations (flu, hepatitis A and B, polio and meningitis, among others).
“As we get into what the Affordable Care Act means to patients, we’re going to see retail clinics expand [their services to include] chronic care for obesity and diabetes,” in conjunction with the pharmacy and nutritional guidance, said Cathy Polley, vice president, health and wellness, Food Marketing Institute, Arlington, Va. She sees the clinics serving a supplemental role with other health care providers. “It’s a growth opportunity for supermarkets.”
Hansen-Turton of the Convenient Care Association observed that her member clinics are already “getting more into health maintenance, screening and follow-up with primary care providers to provide continuity of care for chronic illnesses.”
Supermarkets are in a position to enhance the value of clinics by leveraging their food connection as part of nutrition and weight counseling. “Kroger’s vision of The Little Clinic (above left) is to use the grocery platform to reach out and help people to become healthier,” Charland said. H.E. Butt Grocery, San Antonio, offers weight-loss assistance in its RediClinics (below right), he added. “Supermarkets need to take another look at clinics, and a lot of them are.”
But to succeed with clinics food retailers will need to beware the headwinds that have limited their success in the past, including the seasonality of the business, pushback from physician groups and the vicissitudes of the venture-capital-funded entities that have run clinics. Also supermarkets have tended to be less committed to clinics than drug chains, which are more dependent on the prescriptions that come from clinic users.
Just last year, for example, Publix Super Markets, Lakeland, Fla., exited the clinic segment with the closing of 40 Little Clinics (now a subsidiary of Kroger) in Florida and Georgia. The chain decided to focus “on our core pharmacy business and enhancing the programs we offer our customers for total health and wellness, such as our diabetes program and free antibiotic programs,” said Maria Brous, a Publix spokeswoman.
New Incentives
Apart from boosting the number of Americans who can access health insurance, the Affordable Care Act promotes the concept of the Accountable Care Organization (ACO), which seeks to lower costs and maintain the overall health of a population. While the initial ACOs are affiliated with the Medicare program, similar programs are being launched by private “narrow networks” of health care providers that operate on a local, regional and national basis, explained Charland. Both ACOs and narrow networks are guided by an approach that would foster partnerships between physicians and retail clinics, eliminating the competition that has constrained the relationship in the past and opening the door for clinics to grow, he said.
Under the traditional model, doctors are paid fees for services rendered — “not for healthy individuals or lower costs,” Charland said. “But if new economic incentives, based on lower costs and healthier people, truly takes hold, then physicians will be incented to find the most cost-effective and highest-quality care within the narrow networks. In that situation, we could see a lot more cooperation with retail clinics, because they no longer see them as competition, but as a vehicle to deliver low-level services at a fraction of the cost. Then the whole environment changes for retail clinics.”
For example, diabetics need to be continually monitored to ensure that the disease does not worsen, though often that monitoring is not consistently done. But for such patients and others with chronic diseases, retail clinics “could clearly play a role” by making it easier and more affordable for patients to manage the disease.
Hansen-Turton of the Convenient Care Association is also seeing changes taking place in the economics of the health care system, such as hospitals being penalized if patients are readmitted within 30 days. “A lot of readmissions are due to patients not being compliant with medications or not getting follow-up care,” she said. Hospitals are also looking to retail clinics to alleviate the burden and cost of emergency-room care, she said.
Already, some narrow health care networks are contracting with large self-insured employers to care for their employees in this fashion, Charland said. Indeed some retail clinics may be designed specifically to cater to the employees of such companies, and be staffed or supervised by family practitioners, he said.
MinuteClinic is collaborating with employers that use CVS Caremark’s PMB (pharmacy benefit manager) services. “Providing access to both acute and chronic care for the 60 million Caremark members is an important integration sweet spot for our company,” said Sussman. To facilitate this care, Caremark is now offering companies the opportunity to change their benefit structure to reduce, and in some cases eliminate, copays at MinuteClinic in order to lower overall health care costs.
In addition to its 360 Take Care clinics (left) in stores (for which appointments can be made online), Walgreens also operates more than 350 clinics at employer worksites, said Walgreens spokesman Jim Cohn. “One of the real benefits for employers is the ability to foster a culture of health and wellness among employees and to develop a health center tailored to meet their needs and health care objectives.”
Partnerships with retail clinics help clinics address one of their Achilles’ heels — seasonality. “The only business they can count on now comes in January to March for colds and flu; in the summer, it’s a different story, with very low volume,” said Charland. “But having partnerships through narrow networks extends service offerings, smooths out seasonality, and clinics can now become profitable — on top of adding new prescriptions.” (For other ways to address clinics’ seasonality, see In-Store Clinics Add New Services.)
CVS, Brown's Partnerships
CVS is an example of a retailer that is collaborating with ACOs and other integrated health systems around the country. The company has also formed partnerships with multiple health care systems, which Charland sees as the first stage of more extensive participation in integrated networks.
“We have formed affiliations with some of the largest and most prominent medical delivery organizations in the country, including Cleveland Clinic, UCLA Health System, Emory Healthcare and Henry Ford Health System,” said Sussman. “Many are led by physicians and medical groups. Taken together, the 19 health systems represent 159 hospitals and more than 40,000 physicians.”
Under these agreements, the hospital system physicians serve as medical directors for MinuteClinic in the regions they mutually serve, Sussman said. MinuteClinic integrates its electronic medical records with the hospital systems, sharing clinical information with patient permission. The hospital systems also collaborate with MinuteClinic on patient education and disease management initiatives. “Based on these collaborations, the health systems will accept patients requiring a level of care outside the scope of MinuteClinic’s walk-in services,” he added. “MinuteClinic may also be recommended to patients when health system physicians are not available.”
MinuteClinic also attracts patients via advertising, direct response (mail and email), in-store promotion, public relations and social media as well as positive word of mouth, said Sussman. “We enjoy extremely high patient satisfaction ratings — 94% overall satisfaction — once patients visit a MinuteClinic.” In a promotion announced last week, customers will receive a “CVS/pharmacy Shopping Pass” when they get a flu shot at CVS/pharmacy or MinuteClinic. The Shopping Pass can be used with CVS/pharmacy’s ExtraCare card to save 20% off non-pharmacy purchases up to $100.
One example of a food retailer forming hospital partnerships is Brown’s Super Stores, Bellmawr, N.J., which operates 10 ShopRite stores and is known nationally for running stores in “food desert” communities. Last December the retailer, through its nonprofit community development group UpLift Solutions, opened a 550-square-foot Einstein FastCare clinic in a store in an underserved neighborhood of Cheltenham, Pa., and plans to open another clinic in the Parkside ShopRite in Philadelphia next year. Since opening, the Cheltenham store has treated more than 400 patients in addition to screening 150 people for chronic conditions.
UpLift Solutions received a grant from the William Penn Foundation to help establish more clinics in Philadelphia-area supermarkets and elsewhere. It is helping set up a clinic for Klein’s Family Markets, Philadelphia, at a store in the Howard Park section of Baltimore.
Though most clinics are located in the suburbs, “areas that lack access to supermarkets probably lack access to health care as well,” said Jeff Brown, president and CEO of Brown’s Super Stores, and chairman of UpLift Solutions. He is working on adding a dietitian to the Cheltenham store as well as self-service technology shoppers can use to monitor their health. The clinic also has an advocacy service that helps shoppers apply electronically for all government entitlement programs for which they are eligible, such as SNAP (Supplemental Nutrition Assistance Program) and Medicaid.
UpLift Solutions partnered with two other entities in establishing the Cheltenham store’s clinic — the Einstein Healthcare Network, Philadelphia, which employs the clinic’s nurse practitioner, and FastCare, a health clinic business run by Bellin Health Care Systems, Green Bay, Wis., which set up the clinic and leases the space from Brown. For the Parkside store clinic, UpLift is partnering with the Mercy Health system, Conshohocken, Pa., and Bellin.
By joining forces with health care networks, UpLift Solutions is also helping clinic patients become part of the larger health care system if they aren’t already in it, said Donna Leuchten, director of health innovations for UpLift Solutions.
In low-income communities, many residents who will be newly insured as a result of the Affordable Care Act “have no primary care provider in most cases,” she noted. The clinics thus become an “access point” to the health care system, where conditions can be treated before they become a major medical issue.
At the same time, many people in urban areas need to be steered away from using hospital emergency rooms as a primary source of care and educated on choosing clinics instead for less immediate health issues.
The Cheltenham store is finding that many people who use the clinic were not previously shoppers, but then became shoppers, both at the pharmacy and the rest of the store, said Leuchten. About half of the people who use the clinic have private or government health insurance; the clinic charges a flat fee of $57.
Another small retail chain, Dahl’s Foods, Des Moines, Iowa, offers some medical services, such as cholesterol, blood sugar and blood pressure screening, as well as an INR (international normalized ratio) check for people taking the anticoagulant drug warfarin, at the pharmacy in each of its 13 stores. In three stores, the retailer also has a nurse practitioner-staffed Quick Care clinic leased and operated by Mercy Medical Center, Des Moines.
The clinics, promoted in ads and outside signage, attract people who never shopped at Dahl’s, especially those without medical insurance, because the clinic “is a lot less expensive than private practice,” said Megan Myers, Dahl’s wellness coordinator and a pharmacist, adding that those newcomers boost sales at the store pharmacy. But the convenience factor gives the clinics general appeal. “The other day we had a patient with a sinus infection come into the clinic because her doctor couldn’t see her that day,” she said. Overall, the clinic sees five to 10 patients per day.
As a pharmacist, Myers said she appreciates the presence of a nurse practitioner who can offer a second opinion on a thorny medical question posed by a shopper. “We’re able to offer better service,” she said.
Read more: In-Store Clinics Add New Services
United Supermarkets, Lubbock, Texas, which operates 50 stores under three banners, leases clinics in four stores in three markets (Lubbock, Amarillo and Coppell), using a different medical provider in each market.
“The clinics were slow getting started, but have steadily become profitable and successful, except for our Amarillo clinic, which was a hit almost from the beginning because it is located across the street from another clinic and got a lot of overflow business,” said Eddie Owens, director of communications and public relations for United. “We are actively negotiating with our partners for additional locations.”
Sidebar: Know Your Vitals
While Kroger Co. has opened health clinics called The Little Clinic in 89 stores, the company announced this month that it will place self-use health screening kiosks at all 1,950 pharmacy locations nationwide.
The Kroger HealthCenter kiosks, provided by Stayhealthy, Monrovia, Calif., allow customers to measure, monitor and improve body composition and other clinical conditions. Assessments include blood pressure, weight, body composition, body mass index (BMI) and color vision. Kroger customers will be able to create personal health record accounts, which they can access at any time at Kroger.com.
REFRESH Blog: In-Store Clinics Address Health ... and Beauty
“Our customers tell us they want to make healthy choices but don’t always know where to start,” said Matthew Feltman, Kroger’s health strategy coordinator, in a statement. “We’re pleased to expand the availability of Kroger HealthCenters to help customers take their first steps toward overall health and wellness.”
Kroger has been piloting the HealthCenters in approximately 275 pharmacy locations since January. The kiosks are currently accessible to customers in Cincinnati; Lexington, Ky.; and Denver. Kroger expects most other pharmacy locations will have the kiosks by early 2013.
Sidebar: Keeping Truckers Healthy
PHILADELPHIA — Last year the Convenient Care Association (CCA) here, which represents retail health clinics, and the Healthy Trucking Association of America (HTAA), Montgomery, Ala., announced that retail clinics nationwide would begin offering Department of Transportation exams, expanded medical treatments and wellness services designed specifically for transportation industry employees.
“CCA clinics are much more accessible and affordable for drivers than traditional doctors’ offices or emergency rooms,” said Tine Hansen-Turton, executive director of the CCA, in a statement. “Retail-based convenient care clinics provide a perfect venue for employees, and their families, to receive accessible, affordable, high-quality services.”
The clinics offer truckers vital services like weight management and health screenings, she noted. Moreover, stores with clinics typically have parking spaces for large tractor-trailers, something other health care facilities may lack.
“Lots of fleets are making use of it,” she said.
Retailers themselves are encouraging their own employees — both in their truck fleets and their stores — to use the clinics, said Hansen-Turton.
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