Retail Clinics Make Inroads in California, Despite Some Hesitation

The California market is opening its doors to a new trend in medical treatment: the neighborhood clinics featuring quick care and long hours, while requiring no appointments.

The clinics have been around for years, notably in the Midwest, but didn’t make any significant headway in California until very recently. The Sutter Health System opened six in Rite Aid stores in the Sacramento area within the past year, and Minute Clinic, a subsidiary of the CVS drug chain, in September jumped into the market in a big way. It now has more than 40 locations in CVS drug stores in Los Angeles, Orange, Riverside and San Diego counties.

California was a slow starter compared with many other states because it has more strict regulatory oversight. California law requires a physician supervisor on call for every four nurse practitioners who staff the clinics. In many other states, nurse practitioners can operate the facilities without a physician on call for consultations.

Treatments for colds, flu and strep throat are offered at the clinics, along with vaccinations, pregnancy tests and physicals required by school athletic programs.

Minute Clinic, with more than 400 locations nationwide, is the biggest player right now. But it faces some huge potential competition: Wal-Mart has plans to open more than 2,000 clinics in its stores over the next several years, and other companies — including Rite Aid, which houses the Sutter clinics — also have ambitious plans.

Consumers Seem Interested

The California clinics have been embraced by consumers, said Terry Keene, a nurse practitioner who is the director of operations for Minute Clinics in California, Arizona, Nevada and Washington state. “California is going to be a great and growing market,” she predicted.

Health insurers Aetna and Cigna cover visits to Minute Clinics, but some of the biggest health insurers in the state are moving very tentatively into the new business.

Blue Cross of California has contracted with the new retail clinics operated by Sutter. These clinics “are the only ones currently in the (Blue Cross) network,” according to Blue Cross public relations Director Peggy Hinz. “As others are coming into the state, we will be exploring relationships with them, but we have nothing else to announce at this time.”

At Blue Shield of California, “we don’t have any (retail clinics) as part of our networks at the moment, but we are paying close attention to their growth,” said spokesman David Seldin.

This wait-and-see attitude makes sense, said Christopher Ohman, president and CEO of the California Association of Health Plans. “It’s all new, and we need to see where it goes,” he said. “Plans need to get a sense of the track record of the clinics, and this speaks to issues of quality, access and cost.”

Expanded Hours of Operation

However, Ohman said he thinks the concept is an attractive one. “Anything in the delivery of care that can lower cost and improve access is a great thing,” he said. “Twenty years ago, you only had access to your money during bankers’ hours. Now there is 24-7 access, with ATMs, online banking and customer service lines.”

The clinics are open typically from 8 a.m. to 8 p.m. during the week and 10 a.m. to 4 p.m. on weekends.

Ron Lopp, a spokesperson for the California Medical Association, says that “people who use these clinics should understand what (the clinics’) limits are — for treatment of colds, sore throats, bee stings and for flu shots. Anything more serious should be seen by a doctor.” Patients with chronic diseases, such as diabetes and heart disease, should go to their own doctors rather than the clinics, according to Lopp.

That said, Lopp said he believes the clinics can help take some of the burden off overcrowded hospital emergency departments.

Some people going to EDs may have problems that can be effectively treated at the clinics. For example, take the case of a worried parent with a child coughing and sneezing and complaining of a sore throat in the evening or a weekend when the family doctor’s office is closed. Taking the child to a clinic may be an alternative to the ED.

The Sutter Health system– which includes hospitals, as well as physician groups — has seen 10,000 patients in its six new clinics in the Sacramento area, the first of which opened in December 2006, according to Peter Dzwilewski, program director for its Sutter Express Care unit.

About 50% of patients going to the clinics were enrolled in health plans offered by Sutter Health, requiring them to pay the same copayment, typically $10, as if they visited a doctor’s office affiliated with the Sutter system.

Sutter offers health plans through a network of hospitals and physicians’ groups serving more than 100 northern California communities. Those who were not enrolled in Sutter pay $59 for a visit to the Express Care clinic.

The goal is for each clinic to treat at least 20 patients a day, said Dzwilewski.

The Sutter Web site describes the services this way:

“Every Sutter Express Care medical clinic is staffed by a Certified Nurse Practitioner who has advanced training to diagnose and prescribe medication for common ailments like the flu and strep throat. With physician oversight, and following physician-developed protocols, the clinics also provide a variety of routine medical services including physical exams and immunizations.”

A Tie-in With Clinics and Drug Sales

Health care marketing experts see a great potential tie-in for the clinics and the drug stores where they are located, with an opportunity to increase their sales of medications.

“A huge issue driving this is the prescription drug side of it,” said Ed Kaplan, national health practice leader for the Segal Company, a benefits consulting firm. There is a high profit margin in dispensing drugs, he noted. “You can get a prescription from the clinic and walk across the store to fill it. If you increase your drug dispensing by 10% or 20%, maybe you pay for that clinic.”

The prescriptions written at the clinics can be filled at any drug store, but convenience and accessibility make it almost certain people will fill them in the store where the clinic is located.

A big part of the appeal of California for the clinic operators likely will be convenience rather than low cost, although it nonetheless remains hard to predict precisely how successful the clinics will be in California.

“Will consumers flock to them? Who knows?” said Kaplan of the Segal Company.

But the state always has been friendly to business innovation, and this is a new wrinkle in the business of health care delivery.

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