Retail Clinics for Chronic Conditions Like Asthma, Hypertension, Lipids and Diabetes Mellitus: A Look At the Value Proposition

Is there a business model in there?

To the delight of skeptics, pundits and bloggers everywhere, U.S. health reform continues to follow its predicted trajectory: fiscal shortfalls are now biting the nominally "wealthy," the Feds aren't about to admit that they're in over their head on implementing their health insurance exchanges, opportunities for cronyism are increasing and the DMCB spouse is wondering why her supposedly expert-husband can't find health insurance for less than a thousand a month.

In the meantime, there's no sign that Washington DC will ease up on the "accomodative" money-printing presses that are feeding "QE Infinity."  That's no problem, though, because Europe is reminding us that once the paper currency is undermined, selling gold is a handy way to quell grumpy voters and prop up the welfare state.

Yet, Clayton Christensen tells us a fix is at hand: much of health care's quality and costs travails, he says, can be solved by embracing the disruptive innovation of non-physician treatment of acute and chronic conditions.  His supporters are undoubtedly cheering Walgreens' recent decision to to have its 330 Take Care Clinics add hypertension, diabetes, high cholesterol and asthma care to its portfolio of nurse practitioner services.

After reading the usual retail clinic policy tomes both for ("access to care") and against ("health care balkanization" plus "missed diagnoses"), the Disease Management Care Blog isn't convinced that Walgreens' decision is such a slam dunk.

That's because these clinics' business proposition is less about innovation and more about being a loss leader that increases retail pharmacy foot-traffic. In fact, offering free retail clinic services has been tried. The premise is that the retail customer-patients will stop by the pharmacy window for new drugs and, while they're at it, renew those other high margin prescriptions.  If they pick up some diapers and nail polish while making their way to the front of the store, all the better.

While that certainly sounds good, retail clinics are not a build-it-and-they-will-come cash machine.  Recall that CVS had to pull the plug on its retail clinics several years ago.  Foot traffic didn't materialize and the supposed loss leader turned into a money pit. 

The good news for Walgreens is that they have Jeffrey Kang in their corner.  Prior to this, he led health insurer CIGNA's disease management initiatives. He undoubtedly understands retail, population-based outcomes and care coordination. If anyone can pull this off, he can.

The DMCB's conclusions?

It won't be easy. While Walgreens' we-accept-all-insurance plans-VISA-Mastercard-and-American Express foray into primary care might work, it could also fail. Large health care systems use their primary care providers to feed their high margin and still-profitable specialty care services.  On the other side, small physician-owned practices are learning that hustling, high service standards, attention to overhead, accurate billing, patient mix and ancillaries can be profitable. Walgreens has neither. It remains to be seen whether this publicly owned company's bottom line will be aided by salaried NPs chasing pharmaceuticals' narrowing margins.

Speaking of margins, the DMCB wonders if Walgreens will use its clinics to steer patients toward favored formularies or aid rebate and market share agreements. Could they also use and eventually monetize the Big Data like Target to further the company's business interests? If any one knows, please contact the DMCB.

Commoditization?  The DMCB thinks so and it's not alone. Over time, the professionals staffing these clinics may find primary care is more complex and that they and their patients deserve better.

Ease of Exit? For who? Given that this is ultimately a business, it would be corporate malfeasance if Walgreens didn't have an exit strategy. Unfortunately, one company's exit could be another patient's abandonment. That's a real risk for the patients who come to count on Walgreens for their longitudinal care.

Patient Centered Medical Home Threat... or Friend?  The DMCB doesn't think so. If the medical home offers the value that its advocates say, savvy health care consumers will be able to vote with their feet. If the PCMH falters, it won't be because of Walgreens; in fact, the threat of competition may force help medical homes be more efficient.  In the meantime, medical homes should treat retail clinics like a community resource and refer (or outsource) appropriate patients for routine health care. Why not?

Retail Clinics and Usual Primary Care: Both Respond to Rising Numbers of Unemployed the Same Way

If you, like the Disease Management Care Blog, take the time to read Managed Care Magazine, you already know a lot about Clayton Christensen's view that Retail Clinics are a disruptive innovation in healthcare. Maybe they are, but the DMCB was reminded today of just how similar that business is to 'usual' physician-based outpatient primary care.

Today there was a news release on how Walgreen's Take Care Clinics will be offering free acute care services to persons who can prove they are unemployed and show up between the hours of 11 AM and 3 PM. Remarkable you say? Give them a Gold Star for being socially conscious you say?

Not really. Before the news release described above, the DMCB recently broke bread with some community based primary care physicians and chatted about the bad economy and its impact on their practices. All three physicians described how many patients with 'good' insurance were a) losing their jobs, switching into COBRA and using their insurance to 'catch up' on all that previously foregone testing while it was still covered, b) going onto the Medicaid rolls or c) becoming uninsured. The DMCB asked if the docs were tempted to 'drop' the patients without good insurance from their practices. Their response was not surprising, when you think about it.

The answer was 'no.' All three physicians were seasoned businessmen who had been through previous economic downturns. They had seen this before. Today's patients with no or non-remunerative insurance were not only yesterday's richly insured but tomorrow's also. These providers know that when the economy eventually turns around, these patients are going to join the ranks of the employed/insured. By the way, continuing to care for these patients is the right thing to do, but from a business perspective, this is a loss-leader and an investment in the future. In contrast to Walgreens, there are no press releases.

Press releases aside, the same business logic applies to Walgreen's Take Care. Like the usual primary care providers the DMCB spoke to, Walgreen's is interested in serving today's uninsured, because tomorrow they'll be paying patients who will appreciate what Walgreen's has done for them. The positive word of mouth will help, there will be good press and lastly, while at Walgreens, these patients are likely to buy prescription and over-the-counter meds and while they're at it, print out some photos and pick up some diapers (and, by the way, hopefully NOT be tempted to buy any tobacco products). This is shrewd business sense in the field of primary care. It wasn't discovered by Walgreens.

The DMCB wonders if, with time, the stark differences between Retail Clinics (nurse practitioners using decision support with health information technology to treat common medical conditions) and usual primary care (which will use decision support with HIT to intelligently manage most medical conditions) will fade away. The response of both to the rising numbers of unemployed makes the DMCB wonder if there are more similarities than we've suspected.

"Disruptive?" Maybe not.