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Retail Clinics Catering to Uninsured Hispanics

At Farmacia Remedios in the Fruitvale district of Oakland, Hispanic families fill their carts with throat lozenges, soap, Band-Aids and other pharmacy mainstays. Before they total their purchases at the checkout, however, many add another commodity to their shopping list: face time with a doctor.

Like any other product, medical services at the pharmacy’s in-store health clinic have standard price tags — $39 for a 15-minute visit with a physician or a pelvic exam and $29 for a cholesterol screening — and customers pay at the time of care. This new consumer-focused, transactional medicine is taking off nationwide and, unexpectedly, it seems to be catching on quickly with California’s uninsured Hispanics, long a group difficult to reach with public programs.

Indeed, connecting Hispanics with health care has been an ongoing challenge for state policymakers. In spite of outreach efforts, Spanish-speaking communities have low Medi-Cal participation rates, and in 2004, more than one half of California’s 6.5 million uninsured residents were Hispanic.

Farmacia Remedios and QuickHealth, the company that runs the clinics inside Remedios stores, are among the first to focus explicitly on this overlooked consumer segment. Optimists believe their market approach may succeed in connecting California’s Hispanic communities with primary care where public programs have failed. Detractors see the approach as symptom of a dysfunctional and two-tiered health system, which relegates the poor and uninsured to substandard medical care.

Hispanic Health Entrepreneurs

QuickHealth was launched by physician Paul Gorman and entrepreneur David Mandelkern in 2004. Their vision: to build a chain of retail health clinics where patients with simple complaints –¬ ear aches, sore throats, the stomach flu –¬ could be seen by a physician immediately and for a very low price.

When they opened their first clinic in San Mateo, Gorman and Mandelkern noticed an unexpected trend: about one quarter of their patients were Hispanic. The two entrepreneurs wondered if they had stumbled upon an unmet need and began exploring a joint venture with Farmacia Remedios, a startup pharmacy chain focused on serving the Spanish-speaking community.

“When we visited Farmacia Remedios we saw immediately that their customer base would fit because their customers were likely to have inadequate or no health insurance,” Gorman explains.

QuickHealth does not accept insurance, a strategy designed to reduce overhead costs and keep retail prices low.

“There are inefficiencies associated with collections and negotiating discounts [with third party payers]. Delays in getting reimbursements becomes very burdensome,” Gorman says, estimating that 65% to 80% of his clientele are uninsured and 60% to 85% are native Spanish speakers.

Both companies see Hispanics as a huge untapped market. Data from Kalarama Market Research show that this fastest-growing minority group has $680 billion in purchasing power, a figure that is expected to grow at a rate of 8% per year.

QuickHealth now operates clinics in all three of the Farmacia Remedios stores in the Bay Area in addition to its clinics in other stores. Each one is staffed with a bilingual nurse practitioner or physician assistant, and many — but not all — include Spanish-speaking physicians. Similarly, Remedios stores recruit workers who are both bilingual and bicultural, and pharmacists are expected to establish personal relationships with customers ¬– a role which many community pharmacists play in immigrants’ home countries in Latin America.

Friendly and efficient personnel are key to both companies’ success — customer service is the lynch pin of QuickHealth’s marketing strategy and the company relies almost entirely on word of mouth referrals for its business.

Farmacia Remedios and QuickHealth have another advantage over public health clinics and programs: they aren’t affiliated with the government, a characteristic that appeals to immigrants leery of contact with official agencies.

“We don’t ask about immigration status and we don’t tell,” Gorman says. “That would have a huge negative impact on our business.”

The QuickHealth plan appears to be working. The company recently opened a fifth clinic in the Wal-Mart store in Rohnert Park and says it plans to have 10 stores open by the end of 2006 and dozens by the end of 2007.

Farmacia Remedios also is experiencing rapid growth. The Hispanic-focused retailer expects to open 22 new stores within five years.

“Our success is based on a combination of meeting the specific needs of our consumer, product mix, language, cultural understanding,” Ben Singer, founder of the Remedios chain, says.

In-Store Special: Throat Culture, Aisle 3

Why is QuickHealth succeeding where other efforts have faltered? Could this be the new face of health care for California’s uninsured?

It’s too soon to answer these questions, but one thing is clear: QuickHealth’s appeal lies partly in its discrete, culturally sensitive, and convenient service delivered at a reasonable price. Consumers of all ethnic backgrounds might be ready for an alternative to the current style of health care.

A recent Harris Interactive poll found that among those who have used an on-site health clinic in a pharmacy or retail chain, 89% of respondents said they were somewhat or very were satisfied with the quality of care, 80% were satisfied with the cost and 92% were satisfied with the level of convenience.

Indeed, location and convenience are key to retail clinics’ success. Minneapolis-based MinuteClinic has 86 locations in Target and CVS stores and hopes to grow to 300 clinics this year. Other competitors such as RediClinic and the Little Clinic also plan aggressive expansion.

Few of these retail health competitors have entered the California market, and Sutter Health is hoping to capitalize on that lag. The hospital system will launch its own version of retail medicine in Greater Sacramento Rite Aid stores this fall.

Access or Isolation?

But in spite of the current momentum around retail clinics, skeptics see the innovation as a piecemeal solution that will only exacerbate existing problems with fragmented care and poor disease management.

“These services give people a false sense that they are receiving health care,” says Dr. Jane Delgado, president of the National Alliance for Hispanic Health. “They’re not — they’re getting a spot check.”

Delgado points out that while Hispanics are more likely to be uninsured, they’re also more likely to have chronic illnesses that require ongoing disease management. Retail clinics can’t offer the kind of “whole person” care that a primary care physician would provide, she says.

Delgado says, “Hispanic patients need comprehensive care in the context of their individual lives. Who will they call after hours if they have a problem with their medication?”

Critics of retail clinics caution that such outfits are isolated from other interconnected elements of the health care system — physician groups, hospitals and health plans — and that they prevent patients from establishing a “medical home,” or central hub where their medical histories are stored and monitored.

Gorman agrees that QuickHealth’s clinics are somewhat segmented from other health services. But the company is tackling an undeniably unmet need that no one else has been able to address, he says.

While some have criticized retail clinics’ inability to serve as a substitute for primary care because of their limited scope — they focus on simple diagnostic procedures, immunizations and minor ailments — Gorman says
this accusation isn’t supported by the data. QuickHealth physicians are able to address the needs of the vast majority of their patients.

“If we can’t treat a patient, we refer to county hospitals. But we have a
very, very low referral rate — only about 2% to 3% of the patients we see,” Gorman says.

Still, the clinics are unlikely to address the underlying fault lines that have created a fragmented and two-tiered health care system currently inaccessible to the uninsured, now one-fifth of all Californians.

They are instead a stopgap solution that Hispanic consumers appear to like. And that is the bottom line, Gorman says. “We’re providing an opening for the uninsured and underinsured population by offering high quality, low cost primary care.”

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