News

Walk-in clinics at US retail outlets run into financial problems

BMJ 2008; 336 doi: https://doi.org/10.1136/bmj.39584.559074.DB (Published 22 May 2008) Cite this as: BMJ 2008;336:1150
  1. Fred Charatan
  1. 1Florida

    A boom in walk-in health clinics located within large retail stores, supermarkets, and pharmacies is showing signs of slowing.

    CVS Caremark Corporation, the giant pharmacy chain that pioneered walk-in facilities called MinuteClinics in 2000, and which now has 500 such centres, has reduced its expansion plans for this year from 200 to 100 new clinics. It also plans to close some MinuteClinics that are not in CVS pharmacies.

    Merchant Medicine LLC, an industry consultant, said that the number of walk-in clinics was still growing during March but at a greatly reduced rate. The number of walk-in clinics nationwide was 948 at the end of March, but had only increased by 15, to 963, by the end of April.

    Twenty-six new clinics had been opened by three chains: MinuteClinics (10), TakeCare (11), and Little Clinic (five), but a chain called Wellspot closed the doors of its 11 clinics in Alabama, South Carolina, and Tennessee.

    Earlier this year, CheckUps, a New York clinic operator, abruptly closed 23 clinics that it operated inside Wal-Marts in Florida, Mississippi, Alabama, and Louisiana. Wal-Mart did not replace any of these clinics, nor did it, or another retailer Target, open any new ones.

    Walk-in clinics took off in the US because they are seen as an alternative to the family doctor, of whom there is a serious shortage (BMJ 2008;336:350; doi:10.1136/bmj.39489.654178.DB). A visit to a walk-in clinic also tends to cost less, because they are mostly staffed by nurse practitioners who can write prescriptions and treat minor ailments, rather than doctors. The cost of a visit is normally covered by a patient’s insurance.

    If a walk-in clinic cannot treat someone because an ailment is too serious, most clinics refer patients free of charge to a local doctor or hospital emergency room.

    Tom Charland, the owner of Merchant Medicine LLC, and former vice president for strategy at MinuteClinic, said, “The big mistake was for people [setting up such clinics] to think they could reach break even in 6 months. People are learning this is an 18-24 month process to get to break even.”

    Company spokesman for CheckUps William Armstrong said, “You have to have a critical mass of stores seeing a high number of patients to get somewhere…new clinics need to spend a lot of money on marketing to build public awareness.”

    Tina Galasso, an analyst who follows the retail clinic industry for Verispan LLC, said that the cost of setting up an in-store clinic runs at about $500 000 (£256 000; €325 000). That is why most walk-in clinics are joint ventures between clinic owners and deep pocketed retail superstores or established hospitals.

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