Key questions about what to invest in for retail health clinics.
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Convenient Care Beyond 2016
Michael Silver, Ph. D., ERDMAN, August 2016

 
The current healthcare environment presents challenges to policy makers, regulators, payers, employers and consumers to control the cost and quality of health services and drive greater value.  More effective focus on wellness, preventive care, low acuity primary care, and consumer health engagement are fundamental to these efforts. Convenient care services, i.e., urgent care and retail health centers address these concerns at lower costs at rapidly growing rates. In 2016, they represent more than $18 billion on health and wellness spending; services that are widely promoted by payers and employers for efficiency and cost effectiveness. Convenient care services are rapidly growing, health and wellness serving, consumer-facing markets that warrant considerations by every health system and primary care provider organization.

 

When exploring solutions for improved value and performance, health system executives and physician leaders should consider the following questions:
 
  • What is it like to be your primary care customer, 24 x 7?
  • What is your primary care strategy for adding unique market value 24 x 7?  Does it include convenient care services?
  • How effective and relevant are your primary care, consumer and patient engagement strategies for driving market share and revenue growth?
  • What is your market strategy for controlling costs and engaging consumers as you explore population health care delivery models?

The growth, performance, and market acceptance of these convenient care services warrants consideration as an ingredient for every health system's integrated market strategy.

Since the first nurse practitioner-staffed retail health clinics opened in 2000, more than 2500 retail clinics have been established, mostly in convenient pharmacies and big box stores. From initial strategies focusing on minor illnesses, wellness issues, preventive care and physicals, these clinics have evolved into second generation models serving as integrated care portals to health system primary care services and third generation clinics preparing to serve population health and accountable care delivery models.  Empowered by health reform, new health insurance payment models, high deductible healthcare plans, rising out-of-pocket healthcare spending, and primary care physician shortages, consumers are prepared to spend their money for better healthcare outcomes, more convenient care  and better healthcare experiences.  This evolving healthcare consumerism is creating new challenges and opportunities for providers to become either transactional suppliers or preferred partners in an increasingly value-focused health market. Healthcare provider organizations will experience increasing pressure to deliver more consumer-friendly and lower cost, effective health and wellness services that deliver against these needs and expectations.

 
MedPost Kids and Urgent Care, Completed 2016

The question today is less about “should we invest in a retail health clinic”? It should be about:
 
  • How do urgent care and retail clinics drive market share growth and improve clinical or business performance?
  • What model of convenient care clinic is the best solution for a post-2016 market?   
  • Is it more effective to adopt an existing branded  center or develop one’s own, consumer friendly, easy access,  branded convenience care center?
  • How does one best differentiate retail and urgent care clinic offerings?
 
The current healthcare environment, characterized by rapidly growing individual healthcare costs, high deductible health plans and consumer choice are helping to drive the growth of consumer friendly urgent care and retail health services.  In a strong sense, retail health clinics are viewed by a large percentage of the working population as an excellent value that provides care that is “good enough” to meet consumer expectations and immediate clinical needs.

However the market factors that led to the initial growth of these consumer-directed health services are evolving, leading to competitive services and a continued evolution of retail and urgent care centers business models as well.  In particular, the market focus on quality, value and continuum of care integration enabled by system integration, quality initiatives and new payment models is driving the evolution of these consumer health services.

One of the unique challenges facing integrated health systems is an understanding of the consumer behavior issues that will drive a successful wellness, lifestyle and healthcare venture. Among the solutions to be addressed when effectively planning to implement new convenient care services:

 
  • Market analytics for location, market segmentation and targeted strategy development
  • Location, branding strategies and strategic partners
  • Consumer/patient experience that  integrates with the targeted market segmentation strategy
  • Integration of the convenience care strategy with longer term market strategies for risk management, accountable care and potential population health management
 
New tools are available for market analytics that enable potential convenience care providers to analyze and segment potential market areas in order to identify those demographics that are the primary and secondary target markets within a geographic area. Using geomapping technologies and proprietary databases it is possible to develop multiple targeted strategies and potential clinic locations that would have the greatest possibility of success and growth.

 
These tools enable more effective analysis in support of market strategies such as hub and spoke market strategies, phased implementation of convenience care centers, and the adoption of convenient care centers as new market growth outposts.

A typical retail health center sees less than 10 patients per day which leaves excess capacity for expanded health system services such as expanded preventive care and vaccinations, chronic care management and integrated medical home program support, leaving primary care physicians office time for less routine and higher revenue care services. That also means higher revenues for these retail clinics.  Second generation urgent care centers provide an opportunity to actively engage customers/patients who do not yet have primary care physicians, to provide more effective 24 x 7 care for the target market, to supplement after hours ED services with more efficient and consumer/patient friendly services and to generally grow the market capture funnel for IDN primary care and specialty services. In some markets specialty-focused urgent care services such as pediatric or musculoskeletal urgent care services have also been highly successful.  At the bottom line, convenient care services are opportunities to engage consumers and patients, enhance market relevancy and to grow market share/revenue for primary care and specialty services while enhancing operating margins with lower cost services and sites of care.  These services will shape wellness and primary care service access within their markets. How will they impact the evolution of patient access, consumer engagement, and primary care market share in your market?