Wal-Mart

Mexican firm opens U.S. retail clinics

Anne Zieger — Mon, 18 Aug 2008 09:10:11 -0400

A Mexican healthcare company has opened three Miami-area retail pharmacies with a largely Latino clientèle, putting a new, ethnically-focused twist on the U.S. retail clinic market. The clinics are owned by Mexico City-based Samoho, which operates retail clinics in a few Wal-Mart stores there. They're affiliated with Miami's Mercy Hospital, and staffed by local physicians, rather than nurse practitioners, as is usually the case with such clinics. The clinics are based in locations of a local chain, Navarro Discount Pharmacies. Samoho already operates an urgent care center in Miami under the MediGo name, and it plans to open more retail clinics and urgent care centers in South Florida over the next few years. As with its competitors, Samoho expects the clinics to become profitable within two years.

While the retail clinic market seems to be consolidating, with some locations closing and poorly capitalized chains folding, this strategy seems likely to succeed. A slow, careful expansion in markets where Samoho has a cultural and linguistic advantage should give it a leg up over those firms that have jumped quickly into the market with little to differentiate themselves. The only question is whether they'll be able to sustain a model based on higher physician salaries. We'll see.

To learn more about this story:
- read this Wall Street Journal piece

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Retail clinics begin closing

Retail clinics begin closing

Anne Zieger — Tue, 12 Aug 2008 14:32:20 -0400

While nobody's suggesting that the retail clinic market is about to dry up and blow away, signs continue to suggest that its first major growth phase is at an end--and that it's not going to be as easy for smaller players to enter as it has been in the past. The biggest sign of this is the fact that there's been a rash of clinic closings of late, including the following:

* 44 outlets have closed in Wal-Mart stores, under the brands SmartCare, My Healthy Access and Checkups.

* Seven MedBasics Family Health Centers closed in Texas and Arkansas.

* MinuteClinic closed three Minnesota outlets, each freestanding, to focus on its CVS-based outlets.

Analyst firm Merchant Medicine, which focuses on retail clinics, is arguing that the industry is "close to saturation" and predicts that execs are going to be "more thoughtful" about where they expand. I'd argue that this is a mischaracterization, however, I believe execs have been trying out business models and are now pulling back, in some cases two years into the game, when it becomes clear that one variation of the business model doesn't pull as well. While there seems to have been some rash expansions, particularly in the case of CheckUps, the industry has otherwise built in a steady fashion.

When it comes to retail clinics, look for pharmacy rather than other retail-based clinics to advance, and affiliations with existing healthcare players (especially hospital systems) rather than deals with independent players. However, don't expect independent players to go away. Slow and steady players should still be able to build quite a nice business if they move slowly. Retail clinics are entering the next growth phase.

To learn more about this trend:
- read this Minneapolis Star-Tribune article

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Retail clinic market growth slowing

Anne Zieger — Wed, 30 Jul 2008 10:18:15 -0400

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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New TX venture offers twist on retail clinic model

Anne Zieger — Mon, 28 Jul 2008 08:46:06 -0400

In an interesting mashup of retail clinic and telemedical models, a group of Houston-based Wal-Marts will soon begin offering walk-in telemedical consults. The service is being offered by a partnership between retail clinic operator My Healthy Access and NuPhysicia, which operates using telemedicine approaches developed by the University of Texas Medical Branch.

Under the agreement, paramedics will do the patient examination under a doctor's direct supervision, using NuPhysicia's telemedical technology. In this model of retail care, the telemedicine consult replaces the traditional retail clinic visit, under which patients are managed by nurse practitioners under a physician's broad oversight.

To our knowledge, Wal-Mart is the first major player that is experimenting with offering telemedicine as a retail care approach. However, Wal-Mart's experiment is likely to generate followers if it's even slightly successful, as recruiting local nurse practitioners for clinics is always a challenge.

To learn more about this model:
- read this Healthcare IT News piece
- read this press release

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Expansion of retail clinics slowing

Sterling Meyers — Thu, 24 Jul 2008 11:19:13 -0400

Merchant Medicine, a Minneapolis-based research and retail clinic consulting firm, found that 12 retail clinics were shut down in June--a sign of the slow, but steady growth for retail clinics. The clinics were shuttered because of a weak economy and investment firms that have grown impatient, according to Merchant Medicine, which has been tracking the progress of retail clinics for two years. Although there are 969 retail clinics in the United States, June was the first month the firm has seen a net drop, said Tom Charland, the firm's chief executive.

The clinics that seem to shut down with the most regularity are those that are not financed by private investors who partner with large retailers. Charland said that when big retail clinics close, it's likely because they're backed by private investors rather than by large retailers. Figures show that in 2007, retail clinics opened at a rate of one each day, and despite last month's decrease, Charland said that this month's numbers have shown continued growth, thus far.

Walgreens plans to have 400 clinics--operating under the Take Care Health Systems brand--in place by the start of 2009. A spokesman for Walgreens noted that it has taken about three years for the retail clinics to start turning a profit consistently. Wal-Mart said it will open 400 in the next three years.

To learn more about this:
- read this Inside Health Care piece

FTC slams IL physicians' retail clinic rules

Anne Zieger — Mon, 16 Jun 2008 09:13:53 -0400

In a move that could set back national physician efforts to control the evolution of retail clinics, the Federal Trade Commission has labeled retail clinic regs backed by Illinois doctors as anti-competitive and bad for consumers. The FTC letter criticizes a bill pending in the Illinois state legislature that would require permits for the facilities, limit their capacity for advertising and mandate greater physician involvement in their operations. It issued the critique at the request of a state legislator who asked for the agency's input on the pending bill.

The FTC, in short, said it didn't like what it saw. "Because several of the bill's requirements would pertain only to retail clinics--and not other health-care facilities offering the same services or staffing--those requirements could put retail clinics at a competitive disadvantage without offering countervailing consumer benefits," the agency said.

Even this critique may not stop the Illinois State Medical Society, which has been a vocal opponent of retail clinic models. However, the FTC's input has shaped how regulations have evolved in other states, such as Massachusetts, where state health officials dropped proposals to regulate retail clinic ads on FTC advice.

To learn more about the FTC's position:
- read this Chicago Tribune piece

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ALSO NOTED: EDs working harder to divert non-urgent patients; Identity thefts hit UC Irvine; and much more...

Wed, 11 Jun 2008 06:59:50 -0400

> Hoping to cut down on costly unneeded care--too much of which goes unpaid--hospitals are working hard of late to move non-emergent patients to outpatient settings. FierceHealthFinance

> A large-scale series of identity thefts at UC Irvine seem to be due to a data breach within health plan UnitedHealthcare. FierceHealthIT

> Safeway has joined rivals like Wal-Mart and Target this week, offering a selection of generic prescription drugs for $4 per script. FiercePharma

> A new brain cancer vaccine seems to double patient survival times for those with glioblastoma multiforme. FierceVaccines

And Finally... Short of sleep? Maybe it's not as bad as you think. Article

FTC comes down on IL bill restricting retail clinics

Wed, 04 Jun 2008 06:59:58 -0400

The Federal Trade Commission has let it be known that it isn't thrilled with pending legislation that could place limits on the state's growing retail clinic industry. The agency found that the bill, which is backed by the Illinois State Medical Society, could "excessively restrict retail clinics to the detriment of Illinois healthcare consumers." The 12-page analysis, which was requested by state Rep. Elaine Nekritz, found a number of problems with the bill, including a definition it said could be interpreted to exempt retail clinics owned by hospitals or physicians from the rules.

It also objected to several other provisions, including proposed rules limiting medical directors to overseeing no more than two clinics; prohibiting payers from negotiating lower co-pays and deductibles for retail clinic services; barring retail clinics from opening in establishments that sell alcohol or tobacco; and requiring that retail clinics have a designated receptions and waiting area.

The controversy over this bill is not the first conflict over retail clinic regulations--a few states, including Massachusetts, have already seen heated battles over this issue--and it probably won't be the last. For example, the AMA continues to challenge the safety of retail clinic services, as well as their potential for posing a conflict of interest by being housed where prescription drugs are sold. Other critics (such as Boston's Mayor Thomas Menino) have proposed rules barring clinics from operating where tobacco is sold, which de facto prevents the clinics from operating in drugstores that rely on tobacco income.

To learn more about the FTC analysis:
- read this Modern Healthcare piece (reg. req.)

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Kroger chain invests in retail clinic operator

Tue, 03 Jun 2008 06:59:58 -0400

Retail grocery chain Kroger Co. made what it terms a "significant investment" this week in The Little Clinic LLC, a Brentwood, TN-based chain of retail clinics. The Little Clinic already operates centers inside of 26 Kroger stores, using nurse practitioners and physicians' assistants. It's operated by Solera Capital, a private equity firm that acquired the retail clinic operator's predecessor in 2005.

With the investment in hand, The Little Clinic will begin a "substantial" clinic rollout across the retailer's family of stores. It's unlikely that the pace of its rollout will allow it to catch up with competitors like Wal-Mart, which as of a year ago was beginning a 2,000-store introduction of retail clinics in its stores. However, with Wal-Mart recently hitting a snag as one of its partners fell apart financially, perhaps Kroger and The Little Clinic see an opportunity to gain some sort of ground. All told, Kroger operates a total of 2,486 supermarkets in 31 states.

To learn more about this deal:
- read this piece in The Tennessean
- read this Kroger press release

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More pluses than minuses in eventful week for retail clinics

Fri, 14 Mar 2008 07:59:59 -0400

So, it looks like retail clinic news has been a matter of two steps forward, one step back. For example, Cigna has just announced that it would pay for care delivered at another retail clinic chain, increasing its reach to quite a large number of such clinics. This bodes well for other larger commercial insurers to take similar steps, which can only help accelerate the growth of the industry.

On the negative side of the column, meanwhile, retail clinic chain Medical Marts has shuttered operations. And more worrisome, for people pushing the retail clinic model, the state of Illinois is pondering rules that would slip in a provision preventing stores that host clinics from selling tobacco or alcohol, a requirement most retailers just couldn't afford. My gut feeling is that this won't pass, though you never know how regional politics will play out. It seems transparently on the punitive side, which will turn off all but the most ardent clinic opponents.

Still, there's no sign that the industry as a whole is slowing down. For example, Walgreens has already rolled out almost 150 Take Care brand clinics, and plans to have 400 in its stores by the end of 2008. CVS/Caremark, for its part, opened its 500th clinic last week. And let's, by no means, forget about Wal-Mart, which is steamrolling ahead toward its larger goal of implementing about 2,000 clinics over the next several years--at this point, focusing largely on partnerships with providers.

Sure, if they can get away with it, state medical societies are going to continue to push measures that will limit or even prevent the emergence of retail clinics. But I don't think they will. From where I sit, the retail clinic industry may be evolving into a model where existing providers, rather than smaller entrepreneurial companies, are likely to drive the train, but I'm pretty confident the train will keep rolling. - Anne