The days of pale, stuffy waiting rooms at the primary care physician for a flu shot or strep throat test are diminishing as retail clinics and urgent-care operators proliferate in the low-acuity care space. As the industry booms consolidation is inevitable, as is a tightened focus on quality metrics.
Consolidation of key healthcare players, including retail clinics and urgent-care chains, is prevalent across the U.S. as providers look to expand their footprints, clout, and shared savings opportunities. CVS Health recently acquired Target’s pharmacy and retail clinic business, and Walgreens Healthcare Clinic is set to acquire Rite Aid and its RediClinics in 2016. UnitedHealth’s Optum purchased MedExpress in April 2015, and HCA acquired 14 urgent-care centers from Urgent Care Extra in Las Vegas in November 2015.
Optum and HCA have both indicated more acquisitions are on the radar for 2016, and we expect these kinds of acquisitions to accelerate in 2016 among other powerful players, particularly those in states that have not expanded Medicaid. In those states, emergency departments are often overrun by low-acuity care patients who could be better served in a cheaper, less crowded urgent-care setting. Community Health Systems and LifePoint Health (both based in Tennessee, a non-expansion state) may be the best contenders for acquisitions, given their top positions in the for-profit sector alongside HCA and Tenet Healthcare, which have both assumed urgent-care operations. We also expect smaller urgent-care chains to be eaten up by larger, more profitable chains like MedExpress, NextCare Urgent Care, and the rapidly growing FastMed Urgent Care.
Among the most prominent developments in the convenient care industry is the evolving relationship between store-based clinics and the brick-and-mortar physician office. No longer are traditional physician practices watching from the sidelines with furrowed brows. Today they are striking affiliations with walk-in clinics to integrate patient records and provide a steady referral stream.
Payers have also capitalized on the abundant healthcare access points, designing networks inclusive of urgent care and retail clinics.
Some of these clinics have been used as part of ACO strategies, as in the case of Heritage Provider Network in Southern California. This network of physicians partners with Rite Aid to improve chronic care management, disease education, and medication adherence programs. Walgreens also has a Medicare Shared Savings Program ACO contract in place in Largo, Fla., with Diagnostic Clinic Medical Group, a 100-provider multispecialty practice and subsidiary of Florida Blue.
CVS/minuteclinic is still new to the game, having signed its first ACO clinical affiliation with an already-established ACO called Arizona Connected Care in April 2015. With growing emphasis on the importance of integrated care and patient savings, look for one of CVS/minuteclinics 70+ clinical affiliations with health systems and provider groups to evolve into a formally established ACO with quality metrics and shared savings possibilities. CVS Health’s July 2015 partnership with IBM Health no doubt foretells the use of advanced analytics to drive patient-focused care management, especially for patients with chronic disease.