The Aetna-CVS merger may be the impetus for an industry revamp of retail healthcare, as the combined company positions walk-in clinics to play an integral role in the cost-management of the Aetna population. Stay tuned over the next few weeks as we explore the broader implications of retail clinics through various lenses.

Retail clinics through the provider lens

The term retail clinics is becoming synonymous with retail healthcare, a type of delivery system founded on the principles of easy accessibility, price transparency, and extended availability. The threat of retail clinics to traditional providers persists—mainly that they skim off low-acuity patients and disrupt the relationship between patients and primary-care physicians if the clinic is not affiliated with that patient’s provider—but the opportunities for providers as collaborators abound. Increasingly, retail clinics are paving the way for integrated delivery networks to assume greater control over their patient population, especially seniors and those most at-risk for hospital readmissions. Here’s how:

  1. Retail clinics amplify population health management. Providers that own, or affiliate with, retail clinics are uniquely positioned to establish incentive programs—in partnership with the retail store—that lure the patient to the in-store medical clinic for tests or preventive checkups. Programs could be as broad as Walgreens’ Balance Rewards points or as narrow as in-store discounts on specific products like healthy foods and vitamins. Even without incentive programs, the growing footprint of retail clinics nationwide makes them convenient for patients to follow providers’ regimens of chronic disease management, such as high blood pressure, diabetes, and obesity checks. Gaining control over patient outcomes can increase providers’ reimbursements in the value-based environment and allow providers to exert leverage with payers during narrow network negotiations. Rumors that CVS Health may be investing in urgent care next, coupled with Walgreens’ attached MedExpress pilot stores around the country, further highlight drugstores’ shift toward more advanced care with the end goals of population health management and cost containment.
  2. Retail clinics give patients access to more advanced services at partner IDNs. Providers that own or affiliate with retail clinics can use the clinics as referral centers to more specialized services. Most IDNs that own and operate retail clinics inside Walgreens locations are rated as Intermediate or Advanced on DRG’s Continuum of Care* scale for IDNs, meaning they possess a broad range of services that include high-acuity service lines such as transplant and oncology. These more advanced IDNs are using retail clinics to help contain the patient experience (by ensuring patients use even the lowest-cost, lower-acuity services in-house), integrate patients into the system’s electronic medical record, and refer patients needing complex care to affiliated specialists and hospitals.
  3. Retail clinics play an emerging role in senior health.  In November 2018, CVS’ MinuteClinic announced a partnership to help improve midlevel providers’ understanding of senior needs and pilot “Age-Friendly” services (such as addressing falls and delirium) at MinuteClinics nationwide. The overarching goal is to bring seniors from the pharmacy counter to the clinic to improve chronic disease management (especially for asthma, depression, diabetes, hyperlipidemia, and hypertension) and associated drug adherence. By lowering seniors' high readmission rates—something CVS Health CEO Larry Merlo addressed in the recent Evercore ISI HealthCONx conference call—CVS Health can trend Aetna’s managed Medicare cost curve downward, improve star ratings, and sharpen the insurer’s competitive edge with leading Medicare Advantage players Humana and UnitedHealthcare. Walgreens also targets senior health by offering in-store services for conditions such as emphysema and osteoporosis in addition to new, senior-focused primary-care clinics in partnership with Humana in certain Walgreens stores in Missouri.

Ultimately, CVS Health’s plan to develop health hubs and expand in-house services could pull retail clinics from the corners of stores and patient minds to the frontlines of chronic disease management and health maintenance. Keep an eye on powerful IDNs and the nation’s growing clinically integrated networks as providers learn to navigate, and capitalize on, the transforming retail health landscape.
*Insights from
Healthbase, a product that illuminates alignments between systems down to the individual provider level and ascertains the market control of IDNs across U.S. markets and patient populations.

Continue reading: Go to Part I or Part III


Michelle La Vone Richardson is a Market Analyst at DRG whose work appears in Health Plan Analysis and Market Overviews. Follow her @mlavoneDRG on Twitter for #retailclinic and #convenientcare updates.

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