The era of retail healthcare has arrived, with Definitive Healthcare’s latest report showing that retail clinic claims volumes have tripled since 2017, outpacing growth in urgent centers, EDs, and physician practices.
Definitive’s deep dive gives a great overview of the current landscape and lays out several paths for traditional providers to respond to the wave of new entrants gunning for market share.
Big retailers dominate the market, with 85% of the nation’s 1,800 retail clinics owned by major players like CVS (63% share), Kroger (12%), and Walgreens / VillageMD (8%).
- These clinics are more likely to be in high density areas where they’re easier to staff and can reach a larger population, but it was still surprising to see that only 2% of them are in rural areas considering how often retail clinics are touted as a way to improve access.
- Retail clinics’ most popular use cases in 2022 were immunizations (39%) and COVID exposure (31%), but claims were still up 21% after excluding COVID-related procedures.
Definitive lays out three options for provider orgs wondering whether to partner or compete as retail clinics start capturing patients with promises of lower costs and greater convenience.
1) Partner with retailers. As a partner, retailers bring large store footprints, robust consumer analytics, and provide an important referral stream for both PCPs and specialists.
- Ex. Target retail clinics in some Southern California stores are staffed with Kaiser Permanente clinicians, giving Target a well-established healthcare brand to draw customers into its stores and giving KP a way to attract new members with high-traffic locations that don’t require a huge infrastructure investment.
2) Compete with retail-like strategies. Traditional providers can start leveraging consumer-first strategies to prevent patients from flocking to retail clinics for convenience.
- Ex. That might look like offering extended hours and more walk-in appointments to meet patients when they’re available. Definitive cites a Robert Wood Johnson survey that found 59% of consumers choose retail clinics because of convenient hours, while 56% choose them because they don’t need to make an appointment.
3) Consider acquiring retail clinics. Health systems can acquire retail clinics to add access points while leveraging their brands, NPs to staff clinics, and physicians for oversight.
- Ex. When Walgreens shuttered 160 retail clinics in 2019, Advocate Health and Piedmont Healthcare acquired ownership to benefit from the already-established clinical spaces and their ability to generate demand based on pre-existing trust in local communities.
