Quick store clinics rise with cost of health care

MinuteClinic is among several companies jockeying for space in major retail outlets


MinuteClinic is closing its six locations at Target outlets in the Baltimore area next month, but opening seven in nearby CVS drugstores. The shift doesn't represent a retreat for the concept of basic-care clinics in retail stores. In fact, it signals the opposite - a jockeying for position as quick clinics enter a period of rapid expansion and increased competition.

"As we looked at the future, we believe strategically we will be able to grow quicker through CVS," said Michael Howe, MinuteClinic's chief executive.

Leases at the six local Targets and five Targets in Minnesota will expire May 31, he said, and MinuteClinic decided to move all those clinics into nearby CVS stores.

MinuteClinic opened in Target stores in the Baltimore area about a year and a half ago - its second market after its home base of Minneapolis-St. Paul., where Target Corp. also is headquartered. Target officials did not return phone calls. Since then, MinuteClinic has grown from about a dozen locations to 84, 46 of them in CVS stores.

At the same time, new - and well-financed - rivals have entered the quick-clinic business, negotiating deals with big-box retailers (including Wal-Mart), pharmacies (including Walgreen and Rite-Aid) and supermarkets.

From about 160 quick clinics nationally now, Howe predicts the number could grow to 500 to 800 by the end of the year.

Most follow the basic MinuteClinic model, which Howe describes as "at the intersection of two streets - retail and health care. It's health care, but we're service-oriented and consumer-centric."

The small leased spaces are staffed by nurse practitioners, who have masters-degree-level training and can write prescriptions.

The clinics do some immunizations and tests. Nurse practitioners also treat two dozen or so common ailments such as bladder and ear infections, pink eye, poison ivy, athlete's foot and cold sores. Prices for each service are posted.

At MinuteClinic, most visits cost $59 - less than a typical physician's office visit and much less than what is charged at a more comprehensive urgent-care center or hospital emergency room.

Patients can drop in without an appointment, including evenings and weekends.

Waits are usually short, and the patient can pick up a pager and do some shopping in the interim. And if they need prescriptions filled, they can do it right in the store (MinuteClinic studies show most do).

"They certainly seem to be increasing in popularity, because people like nurses and like convenience," said Jonathan Weiner, a professor at the Johns Hopkins Bloomberg School of Public Health.

The category doesn't yet have an agreed-upon name. Howe said he has heard the terms "convenience care" and "retail clinics," but prefers "the minute-clinic category."

Weiner, mindful of the somewhat derisive "doc-in-a-box" term applied to urgent care centers, suggested "they are more like a nurse in a cubbyhole."

With or without a name, the concept is rapidly gaining:

No. 1 retailer Wal-Mart Stores Inc. entered the fray last fall. It now leases space to five different clinic operators at 13 stores, none in this area, and plans to open 49 more this year, according to Kevin Gardner, a Wal-Mart spokesman.

Walgreen Co., the nation's largest pharmacy chain in revenue (CVS Corp. has more stores), this week announced plans to open 20 clinics in stores in the Kansas City and St. Louis markets this summer, and said a larger expansion will follow.

Take Care Health Systems, the company that will operate in 20 Walgreen stores, is already operating 16 clinics, including seven in Rite-Aid outlets in Portland, Ore. Last month, Pennsylvania-based Take Care announced it had completed a $77 million financing round to help fuel its planned expansion to 200 clinics over the next 12 months.

RediClinic also announced a deal with Walgreen this week, although the number and stores weren't specified. It currently operates in three Wal-Marts in Arkansas and Oklahoma, as well in several Texas supermarkets and a Manhattan pharmacy. In October, Revolution Health Group, an investment company headed by Stephen M. Case, founder of America Online, pumped an undisclosed amount of money into the company.

Web Golinkin, CEO of RediClinic parent InterFit, said his company plans 75 clinics within the next 12 months and 500 in the next three years.

Top 50 markets

Golinkin said he expected most clinic operators to concentrate on the top 50 markets, which would inevitably lead to head-to-head competition, and eventually to shakeout and consolidation.

"We think there is a need for this, yet it's not like Starbucks," Golinkin said. "It's health care and it needs to be done systematically."

Insurers are generally willing to pay for visits to quick clinics.

"We see them as being convenient alternatives for certain types of primary care," said Walt Cherniak, a spokesman for health insurer Aetna Inc., which includes MinuteClinic in its network.

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