From a niche option for busy parents to a $16 billion ubiquitous sub-industry, retail healthcare clinics are offering more choices for a range of ailments. And there are a lot more opportunities to evolve the model.
Two national health insurers have been involved in more than $2 billion worth of deals for walk-in clinics this year alone.
In March, Humana sold Concentra, the country's largest urgent care chain, for $1.05 billion in cash to a joint venture between rehab hospital operator Select Medical Holdings and Welsh, Carson, Anderson & Stowe--the same private equity firm the insurer bought Concentra from in 2010 for $790 million.
Barely a month later, UnitedHealth Group's Optum subsidiary announced the acquisition of MedExpress Urgent Care, a West Virginia-based operator of 141 clinics in 11 states started by emergency care physicians in 2001.
UHG paid $1.5 billion for the company. Highmark Health owned a 10 percent stake in MedExpress and earned $100 million for it. (The Blue Cross insurer told state regulators the proceeds are being invested in its Allegheny Health Network, including a new maternity ward at Jefferson Hospital and a system-wide EHR system, as the Pittsburgh Business Times noted.) UHG is planning to expand the MedExpress footprint along with its 9 Optum Clinics, which are targeting both the low-income spectrum and the high-end in competitive markets like Texas--offering cosmetic services like wrinkle relaxers and subscriptions with annual physicals and discounts on hearing aids.
CVS, Walgreens and other drug store chains operate clinics in many locations and Walmart is also opening up its own retail clinics, after years of partnering with regional providers. Meanwhile, private equity outfits have had a large share in the space. Among the urgent care chains, MedExpress was backed by General Atlantic LLC and Sequoia Capital, and NextCare has investment from Enhanced Equity Fund. About 30 percent of the country's 10,000-plus urgent care clinics are owned by corporate firms or investors, 20 percent are owned by physicians groups, 14 percent by solo practices, and 25 percent by hospital systems, according to an analysis by Elliott Jeter of VMG.
The walk-in/urgent care clinic space is valued at $16 billion--and it's expected to keep growing. "Your eyes aren't deceiving you: You really are seeing urgent care centers popping up everywhere," as Blue Cross and Blue Shield of Michigan notes in "When you should and shouldn't go to urgent care,"
While retail clinics have proliferated, it still remains to be seen how they are received by Americans and whether they not only fill gaps between primary and emergency care but draw on the two settings as a new, improved experience for all involved.
BCBSM tells its members that "the best first step when seeking non-emergency care is to speak with your primary care doctor." Assuming you can't be seen or consulted by your physician at, say 7 p.m., urgent care clinics are good for back pain, mild asthma, minor headaches, sprains and muscle strains, nausea and vomiting, cough and sore throats, and eye pain, the insurer said.
Some doctors find fault with the urgent care model, which often rely heavily on nurse practitioners and physician's assistants. Aside from pulling away their low acuity patients, skeptical MDs will point to the chances for misdiagnosis.
But retail clinics, combined with another growing piece of consumer-driven medicine, the virtual visit, also present an opportunity to give patients more affordable, convenient options and providers better settings for their consults. If ER doctors don't have to filter through less-than-acutely ill patients, they can focus more time with patients who come in. Likewise, some patients going to urgent care rather than making an appointment could free up primary care doctors to spend more than 20 minutes consulting their diabetic patients. All of that, though, rests on good coordination--and currently, there is still a lot of fragmentation.
Some health systems want to use urgent care to offer a new kind of healthcare experience. Jefferson Health, the newly-merged Philadelphia network of Thomas Jefferson University Hospitals and Abington Health, is banking on walk-in care and telehealth to meet the vision of serving patients closer to home, in community hospitals or where they live.
Jefferson Health's CEO Steve Klasko, MD, a loquacious 61-year-old ob-gyn and Wharton MBA, describes the health system as a "hub and hub" as opposed to a "hub and spoke," the regional referral network dominated by an urban teaching hospital. Klasko's vision, in his third year as CEO of Jefferson, is "going from a Blockbuster model to Netflix model, bringing Jefferson care and Jefferson and Abington care to the patients as close as they can be."
The new system spans Philadelphia and its northern suburbs with five hospitals, nine outpatient centers and four urgent care centers, plus telehealth options inside and outside of hospitals--virtual hospital rounds with specialists or family members and on-demand virtual consults via the American Well telehealth company.
The aim is to "get patients to the most efficient and effective place for them to get care," Klasko said. "That might be their home with telehealth. That might be a Jeff Connect urgent care center. That might be a freestanding ER, or if they're really, really sick, they should go to the most expensive, high acuity ER at the hospital. We believe that 65 percent or so of patients who end up in a hospital's emergency rooms don't need to be there, and because it could not just be five hours of a patient's life but $1,500 of their deductible."
Klasko can recall being at an academic medical center conference in 2010 when Walgreens announced the launch of its walk-in clinics: "What a stupid business model," was the reaction Klasko remembered. "Who's going to go to a drugstore to have their kid be seen with an earache?"
Billions of dollars later, retail clinics are one of the fastest growing parts of healthcare. "The reason isn't because everybody was excited about going to the drugstore to have their kid be seen," Klasko said. "The reason was, back then, if your kid had an earache you would be told by your pediatrician in many places that we could see you in two days. Well by then your kid was either better or had gone to the emergency room."