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  • Retail Clinics: Bad for Health care?

    With rising health care costs, retail clinics, typically staffed by nurse practitioners, have increased in popularity (about 6 million visitors in 2009) due to easier access. These clinics are usually located in convenient locations and patients can visit these clinics after hours. Most importantly, these retail clinics are significantly cheaper than regular primary care physician visits. Most patients visit these clinics for simple acute conditions and these clinics are usually appropriate (and cost efficient) for diagnosing these ailments rather than visiting larger hospitals. Interestingly, a new RAND study of health insurance records, finds that these retail clinic visits reduce visiting primary care for subsequent acute new conditions by about 27% and that continuity of care is hampered leaving some health experts worried.

    Should we be worried about the takeoff of retail clinics? No. They are a welcome addition to the health care landscape that craves quality care. First there is a significant underserved population that is being served by these clinics. A recent poll cited that only 65% of retail clinic patients used their health insurance and that most patients were satisfied with the quality of their care. Also, think about rural areas where care is hampered and these clinics (when opened) can be terrific for these communities. Treating these underserved patients will also reduce long-run health care costs to the system. Second, as people get used to these clinics, the problem of continuity of care will resolve itself (to an extent) because people will start patronizing the same clinics. Moreover, electronic records will mitigate the problems of lack of continuity. Third, these clinics will get better in terms of preventive services and expand the scope of care and consequently will attract more customers. This will also be made possible because medical advances will move the once “expert-only” solutions to “rules-based” solutions that can be executed by anyone with reasonable medical training.

    From a policy viewpoint, high quality entrepreneurship founding rates will increase with more doctors and nurses embarking on entrepreneurial ventures.  Costs will come down because we’re not over-solving our minor ailments. Hospitals can then focus on complex conditions. These are good things for everyone concerned.

    Raj Echambadi
    Professor of Business Administration and
    James F. Towey Faculty Fellow and
    Executive MBA Academic Director