When I moved into my current neighborhood four years ago, I noticed that there were two pharmacy-based retail clinics within walking distance. Personally, the convenience of access to routine care that these clinics provide, such as vaccination and simple diagnostics, has always been a strong selling point. I have gone to these clinics to deal with issues ranging from stomach aches to annual flu shots.
A couple of weeks ago, HealthAffairs highlighted retail clinics as driving new healthcare utilization. Citing a recently published study in the same publication, the blog indicated that nearly 60% of retail clinic visits were made by those who were visiting for the first time. Moreover, the net cost of these visits was just $14 per person per year, implying that improved convenience was not too costly. Over the past 2-3 years, more people have recognized the retail clinic model as a disruptive alternative for primary care, and today, these clinics receive more than 10 million annual visits.
The reality, however, is that 10 million visits still only represent just 2% of the U.S. primary care market. Moreover, competition is growing from major hospital networks launching urgent care centers that can do much more than what these clinics offer. Even in my neighborhood, an urgent care center, run by a network of hospitals led by the Massachusetts General Hospital and the Brigham and Women’s Hospital, has been in service for more than a year. These centers usually have a physician on site, and they can handle more medical issues than retail clinics can. In an effort to compete, more retail clinics are aligning with medical centers to expand access to physicians and to expand their service menu. These clinics are now trying to be part of the hospital network.
Unfortunately, even if retail clinics attempt to do more of what hospitals and emergency departments do, they still won’t be as good as the urgent care centers who also offer convenience. Without first gaining sustainable market traction based on new and differentiated services, trying to compete directly against urgent care centers will only put retail clinics at a disadvantage. Urgent care centers will eventually win the battle, and the new environment will be just as it is today- full of expensive urgent care centers and hospitals. A potentially disruptive model will have been stifled.
In order to avoid such a disappointing outcome, retail clinics need to avoid too quickly emulating established healthcare services. Instead, they need to continue exploring how to expand their disruptive presence by offering new products and services that established competitors might overlook. Here, we recommend three such ideas:
- Gather patients’ personal health data
When we visit doctors’ offices, we fill out fairly extensive personal health questionnaires that end up in the hospital’s computer server, never to be seen again. Retail clinics should also routinely gather such information on all patients coming in for consultation. In doing so, patient data can be used for consultations and follow-ups. Where they can really differentiate themselves, however, is by gathering data from devices like wearables and sensors which could provide clinics with views on patients that established health systems would never be able to replicate. By routinely following up on their patients with valuable health data, retail clinics could quietly build a competing primary care business.
- Be more convenient
Typically, traditional health systems struggle with resource allocation, as most of their resources are over-stretched. Given that, it is surprising that in my neighborhood, for example, the urgent care center is open for 12 hours when retail clinics are open for just 8-10 hours. When data suggests that most people use retail clinics on weekends, we wonder whether such behavior is born out of retail clinics not being available at the most needed times during the week – the late evening hours. By design, retail clinics cannot yet match or surpass established health systems in their service menu. But, the one area in which retail clinics should always beat hospitals is convenience.
- Healthcare recommendations
When I need to consult a specialist, I often ask my family, friends, and co-workers for recommendations. Like me, most people struggle to navigate the complex healthcare environment to find doctors or interpret health information we gather from the Internet. A retail clinic could be a fantastic alternative for consumers to get quick and timely feedback and recommendations on many of these non-clinical but vital medical issues. Over a very short time period, retail clinics would disrupt the traditional patient-doctor relationship by developing even closer relationships with clinic-goers who turn to clinics for health advice.
Retail clinics were launched because hospitals could not offer routine care conveniently. The gradual success of clinics, however, has led hospitals to compete in this new market. While the initial reaction for clinics is to defend their market share by competing with the services hospitals and urgent care centers offer, consumers have different needs they want met. Otherwise, retail clinics would not have been needed in the first place. The operators of these clinics must realize that their real long-term value does not come from aligning with hospitals or attempting to replicate the services they offer. Instead, retail clinics should focus on overlooked services such as, collecting patient data, offering convenience, and providing non-clinical healthcare recommendations. That is how retail clinics will disrupt healthcare.