High out-of-pocket costs fueling retail clinic growth

When Chelsi Carlson thought she might have picked up an eye infection at the daycare where she works, she didn't call her doctor. She went to MinuteClinic, a walk-in health clinic.

Not long ago, Chelsi would have had to go to a doctor's office, an urgent care, or an emergency room for a check on something common such as strep throat.

But these days, treatment is widely available at pharmacies, grocery stores and discount retailers. For many consumers, the convenient option comes at the right time, given dramatic increases in out-of-pocket health care costs.

MinuteClinic's roots are in the Twin Cities. The business started 15 years ago, built around convenience. It was a bet that people would jump at the option of getting basic care during the day, evening — even weekends — without an appointment.

The clinic's relatively low cost, and convenience, make Carlson and many others repeat customers.

"It's just quick," she said.

The MinuteClinic concept took off. CVSPharmacy snatched up the chain several years ago and now operates 970 locations across the nation.

While convenience was the impetus for retail clinics, their relatively low cost is fueling their growth. Consumers, even people with health insurance, are paying more out of pocket for care. According to the Commonwealth Fund, a non-partisan health research organization, the average deductible for individual coverage in Minnesota has soared to about $1,400.

Retail clinics save people a lot of money, said Tine Hansen-Turton executive director of the Convenient Care Association, an industry trade group.

"Our average cost is about $75 per encounter," she said. "That's manageable, versus showing up in an emergency room or an urgent care."

In those places, she said, patients likely would have to pay up to $600 in out-of-pocket costs.

Hansen-Turton said one out of four emergency room visits could have been handled in a retail clinic.

Retail clinics staffed with physician assistants or nurse practitioners are reshaping American health care, said Christopher Kerns, who tracks health care trends for the Advisory Board Company, an industry-funded research group.

"I'd say they're changing health care delivery," he said. "I wouldn't say they quite revolutionized it just yet, but they certainly have the potential to do so and they seem to be in the process of doing so."

Kerns said retail clinics are needed to help keep up with demand for health care driven, in part, by the Affordable Care Act's requirement that people carry health insurance.

"There are more people seeking care and fewer primary care physicians to see them," he said. "Those two forces together seem to be fueling a lot of this new demand for retail and urgent care."

While retail clinic operators say they want to complement physician care, some national doctors' groups have come out against them.

"My recommendation to patients is, call your doctor first," said Robert Wergin, president of the American Academy of Family Physicians. Wergin, a Nebraska doctor, said people who choose retail clinics miss out on important benefits of having a doctor who knows your various health concerns.

"The downside is [the loss of] that continuous relationship-based care and then the lost opportunities to maybe address other issues because we have that relationship and I have your chart," he said.

The Convenient Care Association counters that four out of 10 people who visit retail clinics don't have a doctor and that it tries to link those people with a local clinic.

But with their low operating expenses, retail clinics have gained acceptance in the health care economy. Many insurers include them in their provider networks. Nancy Gagliano, MinuteClinic's chief medical officer expects retail clinics will broaden relationships with conventional providers to manage chronic diseases.

Access to retail care likely will continue to rapidly expand. The industry projects there will be 3,000 retail clinics by the end of next year, an increase of nearly 60 percent from today.

"There's an epidemic of obesity and diabetes in our country and we have to make it easier for people to take care of those illnesses," she said. "So what we are doing is connecting our electronic medical records with our health system affiliates, then we can co-manage chronic disease and hopefully improve the quality of care for chronic disease."