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Can retail clinics lower the cost of health care?

Earlier this month, Kaiser Health News and NPR reported that Walmart had issued a document seeking vendors and partners to help the company “build a national, integrated, low-cost primary care health care platform that will provide preventative and chronic care services that are currently out of reach for millions of Americans.” Although the president of Walmart U.S. Health and Wellness later claimed the plan “was overwritten and incorrect,” the event raised the question of what impact Walmart or other large retailers could have on how health care is delivered in a time of escalating costs and health care reform.

Retail health clinics, also known as convenient care clinics, already exist in most states across the nation, including Colorado. In these clinics, a patient can obtain care for certain acute conditions, such as the flu or seasonal allergies, and limited preventive services such as blood pressure checks and common vaccinations. The Walmart document expressed interest in expanding its services to provide care and management for chronic conditions, such as diabetes, asthma and heart disease.

Retail clinics typically are run by nurse practitioners (NPs) and are designed to provide easy access to certain services by being located in existing retail outlets, not requiring appointments, and providing services on evenings and weekends. Similar to your typical doctor’s office, they accept many insurance plans, but unlike what you’ve probably seen, the prices are clearly posted, such as these from The Little Clinic.

The RAND Corporation reported that retail clinics have the potential to make health care more accessible. Although half of retail clinics are located in five states, more than one-quarter of the U.S. population lives within a 10-minute drive of a retail clinic. The two major chains operating clinics in Colorado are the Take Care Clinic at Walgreens and The Little Clinic at King Soopers locations. Between them, they account for 25 clinics in the state, although they are concentrated along the Front Range. Walmart currently operates almost 40 stores throughout the state.

With the extended clinic hours and convenient locations, the retail model has the potential to reduce health care expenditures by providing care to those who might otherwise seek out an expensive emergency room for non-urgent care. The transparent and low-priced services also draw from uninsured patients and patients covered by Medicaid.

Along with the promise, however, there is some peril that these clinics can negatively affect quality and drive overall costs up. One question is whether retail clinics will primarily provide needed care to those without a usual source of care further or further fragment health care for those with a usual provider. Retail clinics also pose potential competition to primary care practices, although they can also generate referrals for primary care providers. Another issue centers around demand. Under health reform, demand for nurse practitioners already is expected to be high. Increased demand could drive salaries and costs up for both retail clinics and private practices.

Whether Walmart really will up the ante for retail health care remains to be seen. As former President and CEO H. Lee Scott reflected on his company’s actions after Katrina: "We can't do any more than our own part. We are not the federal government. There is a portion we can do, and we can do it darn well." Keep an eye out.

Athena Dodd is a research analyst at CHI.