Retail clinic growth falling short of expectations

It's beginning to look like the more ambitious projections for the growth of the retail clinics were, uh, a bit ambitious. While some pundits were expecting to see 2,500 retail clinics in operation by 2010, it now appears that the industry will fall far short of that number. In fact, that it's more likely the retail clinic sector will instead continue to retrench and consolidate over the next year or so.

For example, CVS's MinuteClinic closed 100 of its clinics for the summer, leaving 452 in operations. Meanwhile, Wal-Mart has closed a large number of its retail clinics, with the number it hosted falling from almost 80 to just 30. Execs now admit that the chain won't meet its 2007 goal of having 400 retail clinics up and running by 2010.

Why is the retail clinic market's growth slowing? For one thing, it's costly to get into the market--one clinic can cost nearly three-quarters of a million dollars to open--and it's proving harder to make a profit than investors expected.

The slow pace of growth has turned off many of the venture capitalists who fueled the initial wave of retail clinic expansion. Now, many retail leaders are now looking to partner with hospitals instead, whose brand names are likely to help with marketing and whose finances can better handle the long-term investment required to make the clinics work. However, hospitals move slowly, so those who'd hoped to charge into the market and open scores of new clinics are likely to find them frustrating partners.

To learn more about the state of the retail market:
- read this American Medical News piece

Related Articles:
Retail clinics get high marks in cost savings study
Retail clinic market growth slowing
Start-up closes 23 Wal-Mart retail clinics
Wal-Mart plans 2,000 retail clinics

Post a comment