Retail clinic market growth slowing

With the U.S. economy facing problems and investment firms tired of waiting for a payoff, the retail clinic market expansion is slowing down, according one industry watcher. According to research and consulting firm Merchant Medicine, which advises providers and employers on how to work within the retail clinic industry, the number of retail clinics in the U.S. fell by 12 last month to a total of 969. This was the first net drop the firm had recorded in the two years it had been following the sector. A year ago, in contrast, the clinics were opening at a rate of roughly one per day, according to the firm.

In today's market, clinics that are backed by giants--such as Walgreens, which bought clinic operator Take Care Health Systems--are doing better than those that lease space from retailers and run their operations independently. Even being based in a high-traffic location like a Wal-Mart offers no guarantee of success. For example, early this year New York-based CheckUps closed up 23 retail clinic locations based in Wal-Marts, unable to pay all of its bills. (Wal-Mart has since said that it plans to focus more on partnering with hospitals on retail clinics.)

Part of the reason for slowing expansion in this niche may be the relatively long time it takes for such ventures to become profitable. For example, while Walgreens' retail clinics are seeing a profit in St. Louis and Kansas City, Mo., it took two years for them to get there. Particularly given today's difficult credit market, any private investors are reluctant to wait that long, researchers note. For example, investors recently pulled out funding for a physician-staffed model of retail medicine known as Medical Marts.

To learn more about this trend:
- read this Chicago Tribune piece

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