Retail Healthcare News

Not only have big-box names like CVS Corp. and Rite-Aid Corp. opened local retail-based health clinics, at least two hospital organizations — Palomar Pomerado Health and Sharp Health Care — have expressed interest in the trend.

In November, CVS and MinuteClinic Inc., a Minneapolis-based retail-based health clinic provider, said it would open 18 clinics in San Diego County. It has opened 493 clinics in 25 states since 2000.

This month, Rite-Aid and partner Costa Mesa-based Lindora Inc. will offer basic services and weight-loss management at sites in Encinitas and Del Mar.

Profile Raised

Local professionals said they started hearing about the retail-based-clinic concept years ago but the addition of Wal-Mart Stores Inc., Longs Drugs Stores Corp. and Walgreen Co. to the national market has raised the clinic profile.

(None have announced plans to expand into San Diego.)

Health care basics — treatments for common ailments like strep throat, pink eye and sinusitis — are offered under the watchful eye of a nurse practitioner.

Some clinics offer additional services, such as flu shots or weight-loss programs that can increase profits. The PPH express care health centers are ready to open, pending state approval, at two Albertsons in North County, according to Andy Hoang, hospital spokesman.

Alison Fleury, senior vice president of business development at Sharp, said clinics can alleviate emergency room traffic and she is actively considering her own clinics.

“It’s a good, low-cost option,” she said. But costs, which Fleury estimates at $100,000 for each initial investment and $400,000 in annual upkeep, make the idea somewhat risky.

In a recent study conducted by the Deloitte Center for Health Solutions, only 16 percent of participants said they had used a retail-based clinic, but nearly 35 percent said they would and 44 percent stated they are comfortable with the care offered.

The 2008 Survey for Health Care Consumers was released Feb. 20 by the Washington, D.C.-based nonprofit organization.

According to Fleury, clinics need to treat 18 to 25 patients a day to break even. At a Lindora Health Clinic, treatment costs range from $25 to $95. (Statistics show the number of uninsured and insured patients who seek clinic treatment is split 50/50.)

“You need that perfect level of supply and demand to keep up the level of convenience,” she said. The average size of a clinic is 160 to 170 square feet and one to two employees, Fleury added.

Staffing Levels

The Lindora clinics, of which there are nine in Southern California, have seen success partly due to the combination of weight- loss programs and family health services.

Staffed by two people — a nurse practitioner or a physician and a support employee — each clinic is 300 to 400 square feet, a little larger that the CVS model, according to Cynthia Stamper Graff, president and chief executive officer of Lindora Medical Clinics.

For the weight-loss programs, which make up 75 percent of patient volume, participants visit the clinic weekly for 10 weeks for treatment but often find themselves utilizing the health care services.

Lindora clinics average 20 patients per day, a higher volume than any other clinic, according to Graff.

While the retail-based clinics are estimated to make up only 10 percent of Lindora’s revenue this year, Graff said she expects revenues from the clinics to exceed the traditional revenue sources, such as the company’s medical weight control programs, within five years.

Lindora is a private company that reports revenues in “excess of $40 million, although that is a little low,” according to Graff.

“We see the future. Retail-based clinics will be significant in health care delivery. There is a need for greater access and that will be a large part of our growth.”

Source: San Diego Business Journal
Original Publication Date: March 3, 2008