The race to secure market share has led CVS to merge with Aetna, Walgreens to partner with Microsoft, and Amazon to add Whole Foods to its stable of thoroughbreds. While sheer numbers comprises a goal in and of itself, the desperate build-out is driven by a passel of factors. Among them:

• Brand awareness: With retail customers surging through the drug stores and grocery stores that house the clinics, the company logos above the walk-in doc-in-a-boxes get plenty of eyeballs.
• Increased store sales: People seeking health care spend money inside the host retailer. Walmart retail clinic customers reportedly spend $40 to $60 per medical visit on other store inventory.
• Increased pharmacy dollars to the host retailer: If the retail clinic nurse practitioner prescribes antibiotics for your flu symptoms, you will fill it 50 feet away, at the store pharmacy. Good-bye, PBMs! Another middleman bites the dust.
• Convenience: Patients love it, and nothing shouts convenience more than parking in front of your neighborhood Walgreens and walking right into the clinic's cozy waiting room.
• Access: In theory, retail clinics are designed to offer more basic health services to more people. Patient visits to traditional clinics that might be postponed or flat out cancelled, due to cost, inconvenience, or both, will be redirected to the retail site, proponents insist.
• Cost savings: Again, in theory, trips to the costly emergency room or the traditional clinic will be diverted to the retail site, where flat fees already exist in most locations.
• Better overall health: The research jury's still out on the quality of care received by patients at retail outlets. But early returns say it compares favorably in basic medical situations with care at traditional clinics, and surpasses that at ERs.

“It is a seller's market, no question about it,” says Todd Wise, MD, area medical director of on-demand and retail services at Providence Medical Group. Renton, Washington-based Providence plans to double the number of “Express Clinics” it operates nationwide in 2019, from about 40 to more than 80. But plenty of challenges remain.

Gaining foot traffic

What's the potential for retail clinic utilization? That depends on the pace of the cultural shift taking place in health care, says Wise. Conceivably, much of the traffic now going to the traditional primary care clinic could be diverted to the retail clinic. Many of the same services can be delivered through the retail clinics—it's a matter of patients and providers acknowledging that potential.

“There is a cultural change occurring in medicine. The traditional home clinics have not gone away. There is still a huge need for them. But people want to access services in a different fashion. The days of providing service during bankers' hours at one site are gone.”

But this rapid expansion also faces obstacles to success that will likely thwart those who come late to the party and short of cash. While having sufficient funds to buy into the game is certainly a huge barrier, one that may well prove even more defining is staffing. Already, expansion-minded organizations are running up against the shortage of qualified medical practitioners. Access to physicians, nurse practitioners, physician assistants and nurses represents a key premise—and promise—of the retail clinic. Without enough medical professionals to man the clinics, operators will be in a bind.

Wise adds that some physicians feel threatened by this shift. But the change is happening; it's only a matter of time before, according to Wise, “if you need to see someone in person, you go to an Express Care clinics. The model is big medicine in small places.”

With clinics serving patients 12 hours a day for a set fee, little room remains for a primary care clinic located in the belly of a hospital system. At the end of the day, the retail clinic is more convenient, prescriptions can be picked up in the same place in real time, and Providence studies are finding the quality of care “is certainly not inferior in the treatment patients receive in the traditional clinic.” (Several national studies have reached the same conclusion.)

There are added financial benefits for Providence, which is both provider and insurer. Because the retail clinics and urgent care centers offer fixed fees, they cater to any insurance plan member—or anyone who can pay the fee. The insurance side of the equation benefits from more efficient use of services (especially if plan members are diverted from the emergency room for instance).

What about data sharing? Providence is an EPIC information system customer and can easily connect the retail clinic data to the patient's primary caregiver.

It's the staffing piece that will determine how quickly Providence can open more clinics.

“We are trying to hire a ton of people right now. That's why we are looking at asynchronous patient visits, so we can scale care across our system and leverage our provider bandwidth.”

Partnering to survive and thrive

Up to now, financial interests (branding, foot traffic, real estate investment) have driven the spread of the retail health clinic model. The major mergers, acquisitions and partnership formations that have rocked the health care landscape in the last two years are all about getting there first to stake out turf and get the brand in front of as many eyeballs as possible.

The major players may have divergent strategies: Amazon apparently does not want to be part-owner of a health care system, while UnitedHealth clearly intends to dominate the medical delivery system as it scoops up clinics nationwide. The CVS/Aetna merger focuses more on assembling large numbers of plan members who are both patient and shopper.

Walgreens says its partnership with Microsoft will close gaps in the existing health care matrix, as well as facilitating interoperability among the various pieces of the system. Walgreens already has senior health clinics at some locations via a Humana partnership, and boasts general public retail clinics through other providers.

All players agree that the retail clinic represents a critical element in their strategy, offering the prospect of immediate returns.

“We have seen a huge trend for health care providers attracted to retail properties because they want additional exposure and foot traffic,” says Colin Carr, founder and CEO of Carr Healthcare Realty, a Denver-based real estate firm that specializes in health care facilities locations.

“They want the synergy from other retailers. It's built-in marketing. As these health care businesses grow and expand, if they are in a grocery store or strip mall center with high traffic, they are hoping to build in what could be thousands of people seeing their sign and brand every day.”

The basic strategy brings under one roof medical care, pharmacy services, insurance coverage, and the various elements that tie these together: delivery of the services, continuum of care, data sharing, emphasis on preventive and primary care.

Cost efficiency is, of course, a common goal. But while some players seek that immediately, others, like Amazon, are will to invest now in order to scale their invasion of the health care marketplace.

“Amazon doesn't need to make money in health care right away. They can make a lot of investments up front before the results are realized,” says Michael “Mick” Rodgers, managing partner with Axial Benefits Group in Boston, and an advisor to the Amazon-Berkshire Hathaway-JPMorgan health care joint venture announced last year.

In other words, market domination—Amazon's specialty—takes time and money, but pays off big down the road. So far, though, the retail clinic is not part of Amazon's empire. Its purchase of Whole Foods gives it a healthy retail chain to use for health care purposes. But, says Rodgers, it's unclear how Amazon will develop a medical presence in a grocery store. As experts point out, an urgent care clinic in an upscale grocery store would put the regular customers off their feed.

Fitting nicely in the middle

Players with drug store partners are much better poised to benefit from the retail clinic explosion. CVS/Aetna will do so on a massive scale. But the way Providence Health & Services has integrated retail clinics into its system is perhaps a better roadmap for the retail clinic future.

As laid out by Providence's Wise, the retail clinic located in the local drug store represents a critical element to Providence's continuum of care—and to its overall corporate strategy.

“What we are trying to do with on demand services is to meet patients where they are,” he says. “We want to make it as convenient as possible for them to get care they need.”

Providence has developed “a different number of [patient] touches:”

1. It offers its “asynchronous care” SmartExam service, which allows a patient to describe symptoms of common complaints over a phone or computer. A virtual team reviews the content and responds within 23 minutes, on average.

2. The Express Care virtual visit, also via smartphone or laptop, which connects the patient to a human provider from 8 a.m. to midnight for a flat fee.

3. The retail clinic itself: To see a practitioner live and in person for a range of common complaints, Providence has its string of retail health centers located in drug stores in urban areas where it has major health centers.

4. Next step, patients are referred to Providence's urgent care clinics, which are located near retail clinics throughout the region.

After that, patients enter the hospital system itself.

Standalones: Built to be bought?

Meantime, many standalone retail health clinic companies have sprouted up with the clear intention of being purchased by a health care system.

“There's a huge trend with the [health retail] indies looking to open several locations and then get acquired,” says Carr. “We had two such groups in Colorado. Their clinics were not even open a year or two and they were already acquired by big provider. In one case, the retailer had one sign on the window before they opened, then they sold out, and opened with a new sign.”

In Portland, Oregon, Zoom+Care, a standalone retail health provider founded in 2006, was acquired in late 2018 by PeaceHealth, a Vancouver, Washington health care system. The clinics offer an advantage over many other standalone operators: Its founder made sure Zoom+Care connected its patient records system with the patient's primary care recordings keeping system. Not all standalones have done that, which can lead to serious follow-up consequences.

Growth through acquisition is one strategy for the retail clinic space; partnerships is another. Though Providence's Wise doesn't rule out acquisitions in the future, the company's first focus was striking a deal with Walgreen to host its clinics.

As the retail clinic boom continues, Dave Chase of Health Rosetta remains unconvinced that the clinics will improve patient health or access to quality care. The clinics are “one of many band aids on the badly undermined primary care system in the U.S. Wise communities are realizing adding more band-aids isn't the way to restore primary care to, well, it's primary place in the health care system,” he says.

But Chase suggests they could be used as a testing ground to replace the fee-for-service model with a value-based system. “Thus far, retail health services has just served to perpetuate fee-for-service,” he says. “It's conceivable that forward-looking organizations could use the retail [clinic] as a trial mechanism for a monthly subscription such as direct primary care.”

Read more: 

• How to “retail-ize” health care and free the unicorns
• To compete with Amazon, CVS dips a toe into the online retail business
• Quality care isn't enough to meet the expectations of today's health care consumers