Are Retail Clinics Driving Patients Away from Traditional Healthcare Settings in the U.S. Market?

The first retail clinic was opened in Minnesota by Rick Krieger, the co-founder of MinuteClinic. The business idea of setting up a facility for convenient, quick diagnosis and treatment of minor health conditions emerged from Mr. Krieger’s personal experience of having to wait for hours in an urgent care center to get his son tested for strep throat. Today, there are over 2,700 retail clinics in the U.S. that support more than 15 million patient visits annually. These clinics have evolved from providing basic screening, diagnostic and treatment services to playing a more active role in primary and chronic care management.

Some of the key points that highlight the meteoric growth of the U.S. retail clinics market are as follows:

• The number of retail clinics in the U.S. has grown from around 1,200 in 2010 to over 2,700 in 2017 at a compound annual growth rate (CAGR) of over 12%.


• In 2017, the U.S. retail clinics market is estimated to have generated revenues of around US$1.2 billion.


• CVS Health, Walgreens Boots Alliance, Wal-Mart, and Kroger are some of the major players operating retail clinics in the U.S. market.

Industry Outlook

The rise in popularity of retail clinics has been driven by a shift in patient behavior due to rising healthcare costs and the need for more patient-centric healthcare services. An opinion poll conducted by HealthSparq concluded that a lack of medical billing transparency is one of the key factors that is driving U.S. consumers away from traditional healthcare settings such as hospitals and clinics. Some of the other drivers for the growth of retail clinics in the U.S. market are as follows:

• Greater convenience – Retail clinics operate 7 days a week, need no prior appointments and also have less complex payment options.


• Shorter waiting period – The average waiting for patients visiting a retail clinic in less than 15 minutes.


• Higher affordability – The cost of healthcare services in a retail clinic is around 30% lower that clinics and 80% lower than the Emergency Department.


• Retail clinics can play an important role in filling the gap due to the shortage of doctors, especially in rural areas

"Why are retail clinics expected to play a stronger role in the provision of healthcare services in the U.S. market?"

The healthcare for tomorrow is bound to shift from hospitals to outpatient settings. This will be driven by various factors such as rising healthcare costs; growing demand for healthcare services due to an aging population and expanding health insurance coverage; regulatory changes intended to promote this shift and hospital groups joining the retail clinic bandwagon.

• The U.S. spent an estimated US$3.5 trillion on healthcare in 2017 with the per capita healthcare spending of around US$10,500.


• The population aged 65 years and over is projected to more than double from 46 million in 2016 to 98 million in 2060


• The Affordable Care Act has provided health insurance to an additional 20 million U.S. citizens putting a strain on the already burdened healthcare system.


• Various states in the U.S. are passing regulations to improve the autonomy of nurse practitioners and physician assistants

Amita Health, which is one of the largest hospital groups in Illinois, have started retail-like immediate care centers to treat non-emergency illnesses and injuries.

Results of various studies in relation to the proportion of current visits to traditional healthcare settings such as primary care offices and emergency departments (EDs) that can be managed by the consumer-centric healthcare settings such as retail clinics, urgent care centers, and telemedicine contradict each other. For example, some studies have concluded that over 100 million visits to primary care offices and around 50 million visits to the emergency department can be managed by consumer-centric healthcare settings whereas as the Centers for Disease Control & Prevention (CDC) says that only 5.5% of ED visits can be considered non-urgent based on the presenting symptoms and not the final diagnosis.

At present, retail clinics, in terms on number of annual visits, accounts for only around 2-3% of the primary care market. This is expected to change in the future with better coordination between retail clinics and traditional healthcare settings, increased reimbursement from public health insurance programs and a shift towards value-based healthcare.