PRINT THIS STORY:

CHANGE TEXT SIZE:

IN-STORE HEALTH CLINICS TURN PATIENTS INTO CUSTOMERS

By Karen M. Kroll

Health clinics springing up in discount, grocery and big-box stores across the U.S. are offering patients fast, inexpensive treatment and generating traffic for retailers.

These chains, with such names as MedXpress, MinuteClinic and RediClinic, are serving patients with the kinds of minor ailments that do not require the attention of a physician. Increasingly, these clinics are popping up inside CVS, Kroger, Walgreens and Wal-Mart stores, among others. Some even occupy their own spaces in centers.

Patients like the convenience and affordability of these walk-in clinics, retailers see opportunity to sell more products, and landlords welcome the foot traffic. Pharmacies especially stand to benefit, some say.

“Clinics expand the portfolio of health care offerings for our consumers,” said Kevin Gardner, a spokesman for Wal-Mart Stores. “They allow them to better manage their health and wellness.”

Wal-Mart was operating a total of 12 clinics as of early August and plans to open 50 more by the end of January, Gardner says. Though it is too early to speculate on the long-term impact of the clinics on Wal-Mart, consumers seem to really like them, he says.

Health clinics are a natural partner for pharmacies, says Erin Pensa, a spokeswoman for Woonsocket, R.I.-based CVS. “We are a health care brand, and the new relationship with MinuteClinic helps to deliver a valued health care service to customers in a quick and efficient way,” Pensa said.

These clinics are also a good way to get baby boomers to return to shopping centers, according to a 2004 report by Jones Lang LaSalle titled How to Bring Boomers Back to the Malls. They allow customers to “combine their increasingly frequent doctor visits with a trip to the mall,” the report says. “Baby boomers are very health-conscious,” said Greg Maloney, who heads Jones Lang LaSalle’s retail group, in Atlanta. “They want to stay healthy, look younger and live longer.” By making it easy for boomers to take care of such things as getting their cholesterol checked, the clinics are likely to keep them coming to the shopping centers.

Nurse practitioners and physician assistants staff the units, diagnosing common illnesses and writing prescriptions (in most states), among other services. Services generally cost between $50 and $70 dollars, about half the cost of a doctor visit, and one-fifth the cost of a trip to the emergency room. Given the limited range of conditions clinic staff will see (the chains offer tests for strep throat, treatments for poison ivy and the like), the typical waiting time for patients is 15 minutes or less.

“There’s a disciplined scope of practice,” said Michael Howe, CEO of Minneapolis-based MinuteClinic. A patient whose condition is found to be serious or who needs continued attention gets referred to a doctor or hospital.

Companies are entering and expanding within the market at a dizzying pace. Among them:

• MedXpress, a Dallas-based firm that has announced plans to open five clinics by the end of the year within Minyard grocery stores and 500 clinics, some outside Minyard, over the next five years.

• MinuteClinic, with 84 clinics now, the company plans to expand to about 200 by year-end. Most of the units are in CVS drugstores and Cub food stores, though two occupy their own spaces in enclosed Minnesota malls.

• Quick Quality Care, with corporate offices in Boca Raton, Fla., and New York City, had three clinics as of early summer in Wal-Mart Supercenters in Florida. The company expects to open more units in the Southeast by the end of the year and plans to rename itself CheckUps, says founder Neal Krouse, a doctor.

• RediClinics, which are located within Duane Reade drug stores, HEB and Wal Mart stores, currently has about a dozen locations in New York and the Southwestern U.S. The company plans to open another 75 by the middle of next year, and a further 500 by 2009.

• SmartCare Family Medical Centers, Greenwood Village, Colo., will open in six Kerr Drug stores in the Carolinas this summer and has agreed to open in select Wal-Mart stores out West this year. SmartCare executives say they plan to build 1,050 clinics within the next five years.

• Take Care Health Systems, based in Consohocken, Pa., operates nine clinics in Kansas City, Kan.-area Walgreens stores and seven inside Rite Aid drugstores in Portland, Ore. The company will open about 10 in St. Louis before the end of the fall and then expand to the East Coast by year-end, says spokeswoman Lauren Tierney. The company plans to have 200 centers by mid-2007.

Aggressive as these expansion plans may seem, they are realistic, says Charles Wetzel, COO of Buxton, a customer-analytic and site-selection firm based in Fort Worth, Texas, that works with most of these chains. “Convenience care clinics are not cost-prohibitive to put up,” he said, explaining that most of them cost between $75,000 and $250,000 to build.

Once permits are obtained, constructing the clinics typically takes less than a month, says RediClinics CEO Webster Golinkin. Most units measure just 200 square feet to 600 square feet, though the ones with two examining rooms may be as large as 1,500 square feet. And other than water and sewer hookups for the rest rooms, they generally require no special build-outs.

Of course, access to capital plays an important part in bringing these plans to fruition. “Retailers are signing multiple contracts with multiple vendors [clinics],” said Wetzel. “Then they’ll see who’s the most successfully banked and the most successful in executing.” Generally, it is difficult to determine how well financed these companies are, though, because they keep this information under wraps. Take Care is an exception. In March the company disclosed that it had received $77 million to fund expansion.

Given that everyone gets sick at one time or another, it would seem reasonable that any location near a large population center would do for one of these units. But the situation is actually more complicated, executives say. These clinics are likely to appeal to different groups of people for different reasons, says Brian Jones, CEO of MedXpress. Consumers on fixed budgets will appreciate the low prices, while those who are strapped for time will like the convenience. So management must start by identifying the target customer — the suburban mom, the underinsured, a local business — and then identify the specific location where the said customer is well represented. If the chain will be working with a retailer, the next thing is to identify the retailers most likely to reach those customers.

Because many of the companies in this sector are just starting out and are still privately held, financial data are unavailable. But based on that rough estimate of between $50 and $70 for basic services, it is possible to calculate a ballpark revenue figure. If a MinuteClinic typically sees between 25 and 40 patients a day, as Howe says, and each patient requires one service, the clinic would generate about $700,000 in a year. And given the typical clinic measurement of between 200 square feet and 600 square feet, a unit would generate somewhere between $1,100 and $3,400 per square foot annually. The clinics publicize their services over the Internet and by mailings. The mailings frequently go out with those of the host retailers. “That can drive traffic to the stores,” Wetzel said.

These offerings will be a welcome benefit to Americans who are underinsured or who lack health coverage completely, clinic executives say. “Right now there are close to 72 million Americans uninsured,” said Krouse. “We feel we’ve got an answer.”

Even so, just how successful the clinics will be is anyone’s guess at this point. “People say they want convenience, but we have to see if they use them,” said Richard Gundling, vice president of the Chicago-based Health Care Financial Management Association. People may decide that they are most comfortable with their family physicians, no matter the cost, he says.

Further, finding qualified nurse practitioners to staff the clinics promises to become more challenging as more clinics open, says Tierney. Take Care, for instance, prefers to hire practitioners with at least one year of experience.

For all that, “clearly, most major retailers have endorsed the concept,” Gundling said. Done right, he says, offering this store-within-a-store should help retailers boost sales.

The overall market for retail clinics must have a natural limit, however, and Howe estimates that there will be between 3,000 and 5,000 clinics overall in about 10 years. “This isn’t something you can generate demand for,” he said. “It’s not an impulse stop.”

© 2012 ICSC. All rights reserved. | Terms and Conditions | Privacy Policy | Contact ICSC | ICSC Home |