You wouldn’t pick on a sophomore, would you?

You wouldn’t pick on a sophomore would you?

That is more or less what I told an executive from a mid-tier pharmaceutical manufacturer at a business conference I attended several weeks ago, one of several conversations I had over the course of the event regarding the current state and the future of retail clinics in America. I couldn’t help but recall that conversation as I read a recent Wall Street Journal report about the relatively small number of clinics that had been forced to shut down.

You see, most people these days want to talk about the growth, which, at the time of that conference, was up about 800 percent over the prior year, and was on pace, as it still is, to more or less double year over year for the next three to five years.

But a few others want to know what we think about the small number of clinic closings, a cruel and somewhat predictable result of the early evolution of the retail clinic model. Predictable not because these were bad companies that did not know how to run clinics; predictable, because you had to believe, with as much venture capital that was coming at this whole thing in the very early days, that there was going to be some kind of shakeout—and some degree of consolidation to be sure—before this industry even began to sense its own maturation.

At one point, The Drug Store News Group had tracked more than 40 companies that had emerged as clinic providers. We never imagined it would stay that way for long. If the typical retail pharmacy takes two to three years before it begins to reach profitability, why would the expectation for a new clinic be much different? The truth is the models are quite similar from that standpoint. While these companies are not openly reporting these numbers, Drug Store News has learned that where their clinics have been up and running for about two years, the convenient care industry’s leading operators have reached profitability in these more mature markets. Many more of these markets are going to be hitting this maturation point over the next six months to a year.

Still, some people—it would seem even fewer than the actual number of clinics that have closed in recent months—aren’t quite convinced of the viability of the model.

“What about the doctors?” they ask.

You tell them that all the top operators actively build their referral networks with the local physicians, urgent cares and hospitals in the communities where they operate their clinics, and that in general, the AMA is on board; that it was only ever a handful of splinter groups within the AMA that ever really challenged the clinics at all.

“What about the nursing shortage?” they ask. As much as I hate to answer a question with a question, what about the dwindling ranks of America’s family physicians? The number of third-year medical students who opt to pursue a career in general internal medicine has plummeted over the past 10 years while the number of nurse practitioners continues to grow.

Moreover, if you take a look at job satisfaction among nurse practitioners working in a retail clinic setting like we do—The Drug Store News Group polls Retail Clinician magazine readers, which now include several thousand nurse practitioners, twice a year—you would know that getting NPs to migrate over from other practice settings to work in the clinics isn’t really a very tough sell. Almost 99 percent of our readers describe themselves as very or extremely satisfied in their current positions, and as almost 90 percent came either from a physician’s office or an urgent care or a hospital setting, they have a frame of reference to compare it to. Our readers use words like “empowered” and “energized” to describe practicing in a retail clinic environment.

And then there are other signs out there; sure signs that retail clinics are still in their relative infancy in terms of the impact they can make on health care and how it is delivered in this country. Indeed, 1,000 retail clinics is only the tip of the iceberg. Drug Store News online recently reported on the nation’s first retail-based dental clinic, All Smiles Dental, which last month opened in a Carnival Food Store in Plano, Texas. Then there is Hear At Last, which earlier this year opened its first retail “hearing solutions” retail outlet in south Florida, its first U.S. location. While that store is a freestanding location, the company also operates 18 of its hearing aid clinics, which use high-tech equipment to assess the cause of hearing loss and match customers up with the appropriate system in Wal-Mart stores in Canada.

Or, you could just concentrate on the leaders: CVS, recently celebrated the opening of MinuteClinic No. 500, and although it recently trimmed back its projected clinic openings for the year from 200 to about 100, the company has earned a solid reputation for setting conservative goals and then blowing the doors off those goals. Meanwhile, in addition to about 160 retail-based clinics currently in operation and plans for as many as 250 more by the end of the year, Walgreens will now look to transition the more than 350 corporate-based clinics it acquired from I-Trax/Whole Health Management over to the Take Care brand. And, to help build national awareness for the Take Care brand, Walgreens is sending 10 RVs on the road to 300 U.S. cities this year to provide free health screenings and counseling to customers across the country, as part of its Take Care Health Tour.

To be sure, while Take Care and MinuteClinic and a few other clinic operators have been at it longer than that, this is really just year two for the organized retail clinic industry. It may be a slightly awkward time, to be sure, as evidenced by the recent fallout in the industry. Still, in the span of just two years, more than 1,000 of these retail-based clinics opened in this country, and only 69 of them have closed; that’s not too shabby—not even for a sophomore.

The bottom line is that if you are a pharmaceutical manufacturer, branded or generic, or an OTC drug maker and you aren’t trying to make a meaningful connection with this key group of influencers, that is, the nurse practitioners, physicians assistants and in some cases, physicians, that are staffing these clinics and pioneering this brave new frontier of health care—and most important prescribing and recommending your products, or NOT—you are missing a major opportunity.

Drug Store News knows that this model of care is a major part of the future of health care in America, and how it will be delivered. We know this because we have watched and reported as growing numbers of payers and patients have embraced the model. And why not? In terms of closing the gap on access and affordability to health care in this country it is probably the single most progressive idea to come along since Lyndon Johnson’s Great Society created Medicare.

It also is the best piece of evidence that the free market can come up with a solution to America’s healthcare crisis. And in this election year—particularly as the Clinton campaign, running purely on fumes, chokes to a halt—Drug Store News believes this nod to the age of healthcare consumerism that is the rise of the retail clinic industry will not go unnoticed.

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