A Clinic on Every Corner: The Retailization of Healthcare

More and more consumers are utilizing retail clinics, urgent care centers and freestanding ERs to get medical care when and where they want it.¹ In this interview, Joy Henderson of Truven Health Analytics®, part of the IBM Watson Health™ business, offers advice to hospitals looking to expand into this new frontier.

A Fellow in the American College of Healthcare Executives, Joy Henderson is a National Director for Planning Solutions at Truven Health Analytics®, part of the IBM Watson Health™ business. She has more than 20 years of experience in the healthcare industry with a focus on strategic planning and analytics to help hospitals make informed decisions.

JH: The most important reason is that their consumers are demanding it. Our PULSE survey data shows that younger segments are much more likely to use urgent care than the average across the U.S. They're less likely to have a relationship with a primary care physician—they care more about convenience. Sixty percent of ED visits aren't emergent. If we took 10% of those visits and moved them to the urgent care setting, that would save about $1,000 each, or $8 billion out of national healthcare spending. We can't ignore that opportunity.

JH: Value-based care models vary widely, but retail can play a key part in models focused on the cost and quality of a defined population, like the Medicare Shared Savings Program. According to our MarketScan claims database, the average payment for an ED visit is nearly nine times the cost of an urgent care visit. The utilization of less expensive care settings for low-risk visits can help reduce the overall cost of care. And it logically follows that if the location is convenient and lower cost, a patient could be more likely to use it or get their care earlier, before it progresses and requires a more intensive and costly care setting.

JH: Absolutely. Regardless of changes in regulation or reimbursement, I believe value-based care is here to stay. Even without value-based care, we are anticipating that consumers will continue to demand convenient locations.¹ Even ignoring consumer demand, medical advances are shifting care to outpatient settings. At Truven, we forecast inpatient volume growth of less than 3% over the next decade, while outpatient volume is expected to grow by over 20%. Within that outpatient volume, we forecast that urgent care services are expected to grow 120%. Many factors are pushing us in the direction of retail.

JH: Location, location, location! Patients won't utilize your outpatient center or retail center as readily if it's not in a convenient location, so don't just look at your population growth or your volume growth by zip code. Narrow your plans down to block groups or neighborhoods, and look at data, such as traffic patterns. Consider what businesses are adjacent to it. What's the ease of access? How close is it to public transportation? For large projects especially, hire a consultant with specific knowledge in healthcare retail. It's a multimillion dollar investment and you only have one chance to locate it in the right place – it's worth the investment to get that right.

Footnotes

1. According to an April 2017 report from Kalorama Information: http://www.prnewswire.com/news-releases/urgent-care-market-reaches-15-billion-as-locations-patient-visits-rise-300435256.html.