In this episode, we’re pleased to welcome Todd Bellemare, SVP of Strategic Solutions at Definitive Healthcare, to discuss retail clinics and how providers can adapt.Learn how to listen to The Hospital Finance Podcast® on your mobile device.
Highlights of this episode include:
- Definitive Healthcare’s recent retailers and healthcare report
- Takeaways from the report
- Why retail clinics have seen so much growth recently
- Impact on traditional healthcare systems
- Which retail chains that are dominating this space
- Impact to underserved communities
- What traditional healthcare providers can learn from the success of these retail clinics
Kelly Wisness: Hi, this is Kelly Wisness. Welcome back to the award-winning Hospital Finance Podcast. We’re pleased to welcome Todd Bellemare, SVP of Strategic Solutions at Definitive Healthcare. Todd has spent his executive leadership career building healthcare provider and patient analytics. He has grown powerful data and professional services teams at Definitive Healthcare and DRG and has helped thousands of leading life sciences and technology companies build their commercialization strategies through a deep understanding of the healthcare facilities, physicians, and patient landscape. With more than 20 years of experience in the hospital equipment, medical device, clinical trials, technology, and data and analytics fields, Todd brings a complete picture to his analysis and discussions. In this episode, we’re discussing retail clinics and how providers can adapt. Thank you for joining us today, Todd.
Todd Bellemare: I’m very happy to be here. Thank you, Kelly.
Kelly: Well, great. Well, let’s jump in. How did you gather the data for Definitive Healthcare’s recent retailers and healthcare report?
Todd: So, a few different ways actually. So, one way, of course, is looking at the different sorts of surveys and PubMed articles that are out there on some of the changes in the healthcare retail market that have happened over the last five or six years or so. We also have here at Definitive Healthcare, basically the foundational claims data asset called the Atlas all-payer claims dataset, which includes data from clearing houses all over the U.S. that allows us to longitudinally track patients; where they are seeking out healthcare and the sorts of things that they’re going through, what’s being billed for them at those places of service. And so really kind of tracking, not anecdotal, but actual real data that’s happening, real world data that is going out through those clearing houses and into the Definitive asset that allows us to really kind of track trends and do some analytics around what is happening and what sort of trends are transpiring across the different settings of care in the U.S. healthcare system.
Kelly: Very interesting. So, what are your top takeaways from the report? What surprised you the most?
Todd: So, one thing I always found interesting about retail clinics is sort of the convenience of them. I think as a parent myself on a Saturday morning thinking, “Oh man, my daughter has a real heavy cold.” I’m worried about it. I don’t want to go to an ER, or her doctor’s office may be closed, but the MinuteClinic or the retail clinic down the street is open. They’re taking appointments, and you can do it really quickly, very conveniently, and it’s within a five-to-ten-minute drive from my house. And so with that in mind, kind of looking at the behavior spread throughout the last five years or so of those really taking off, and really, it’s just the sheer volume is the surprising aspect to it. So, in the report, we talk about a 200% increase in a five-year span of those retail clinics, just the activity, the patient volume going through those clinics, and obviously a lot of that was spurned by the COVID pandemic and the number of patients coming in for vaccinations. But even without that, when you strip that away, and certainly since the pandemic has waned a bit, you do see a decrease in the total volume from those highs, but still excluding all of the vaccinations and the COVID visits, you do see a major increase of over 20% over the 2017 numbers and into 2020 and ’21 as you look across time and sort of trend that analysis. So, the volume for sure, and then I always think, “Oh, I’m thinking of something a certain way,” but then to see everybody is thinking that same way and going into those clinics is not surprising, I suppose, but the volume certainly was a big surprising piece of it.
Kelly: Those are some great takeaways. Why have retail clinics seen so much growth recently, and is this pace sustainable?
Todd: That’s an interesting question about sustainability. I do think that the reason we’re seeing it is the diversification of some of those really large companies that are getting involved. So, you have places like CVS and Walgreens and Walmart and Kroger that see just a huge amount of foot traffic. And they’re looking to diversify their offerings, and most of them have some sort of pharmacy involved. And so it’s kind of a natural progression from seeing patients come in to pick up their prescriptions to thinking, “Well, what else could we do for those people? They’re already here in our building, what can we do to expand our services?” And the healthcare market is massive, right? At $4.3 trillion per year and growing. So, it’s only natural for those types of companies to sort of look at that as an opportunity. They’re seeing those patients. Especially if you’re going to a pharmacy that’s in any of these retail spaces, you already have your healthcare in mind. And so having them be able to expand on that and start offering the clinics or almost like a PCP visit at some point is what these are turning into. So I do think in terms of the expansion of this, we’re going to see this more and more. You see in California with Kaiser Permanente working with Target, that’s an interesting sort of combination that we see happening out there in California. When you see those sorts of collaborations happen, they’re two really large companies working together for a common goal. They’re two winning companies, and it’s kind of hard to bet against them is the point, I suppose. But I do think that as we go forward, looking at some of the healthcare systems, almost losing a little bit of market share or patient share, so to speak, to those retail clinics, you’re probably going to see some more collaboration between those health systems and the retail clinics themselves, whether that’s buying out a retail clinic or buying some of the locations from them to be able to service their patients better from the health system’s perspective, or those partnerships, just like with Kaiser and Target. I think that’s sort of the way of the future, and people are seeing that as patients are– our busy lives are only getting more busy, and the convenience factor of having some of those facilities or those retail clinics so close by is just hard to ignore.
Kelly: No, it makes a lot of sense. How has this growth impacted traditional healthcare systems?
Todd: So, I do see that when you have a patient going to a retail clinic, they’re not always getting referred back to their PCP. So, you do see some of that PCP-like behavior meaning, I’m going to go see my doctor for my chronic pain management or chronic condition management or even just for a yearly checkup. A lot of those things where they used to go to their PCPs office, they’re slowly starting to use retail clinics for that. And so what the traditional providers are seeing is a little bit of a dip in the number of patient visits they’re going to see. And obviously, those patient visits translate to real money that they are making on a day-to-day basis. So that’s sort of the reason why I think that as those traditional providers see more and more of these retail clinics spring up in their neighborhood, they’re going to start to look for opportunities to partner or collaborate in some way because it is taking a little bit of a bite. It’s not a big change right now. They’re not losing millions upon millions of dollars to these retail clinics, but you do see that trend line is increasing over time and somewhat unabated.
Kelly: Sure. Which retail chains are dominating this space and why?
Todd: So, CVS certainly is the top one in the market in terms of the, I think, 60 something percent they have in– of all the retail clinics CVS Minute Clinics are about 63-ish percent, I believe it is. So that is something that they really leaned into hard a number of years ago. And again, it’s really increasing. We actually interviewed a member of the CVS Health retail clinic group in our podcast, and she was talking about their expansion into behavioral health. And so I do think CVS is going to take another step in that direction. Some of the other folks out there that are obviously working hard and building out their retail strategy, you have Walmart and Kroger and Walgreens. So those are the other ones in the market. And obviously Amazon is sort of a big player. It’s starting to become a big player in healthcare with their purchase of PillPack, a number of years ago, and now the One MD acquisition. That is more of a– it’s not really a retail clinic, so to speak, but you can imagine as the margins for this business and just the size of the pie that’s out there, you’re going to see some of those larger players start to get into that market like Amazon and possibly even Apple, with the Apple Watch is slowly becoming almost a medical device. So, you can imagine them sort of having some sort of segue into the healthcare market even deeper as we go along these next couple of years or so.
Kelly: Sure, those are a lot of large familiar names there. Are underserved communities benefiting from this rapid growth, why or why not?
Todd: So, I would say not as much as we would hope to. And I think it’s partially a question of real estate, and what I mean by that is you look at where a lot of these, the companies that I just mentioned, Walgreens, CVS, Kroger, the majority of their locations are in urban areas. And so they’re not really in rural communities that traditionally have been underserved by the healthcare market in general. And the rural communities really have been missing out a lot in the last five years or so with the number of– sort of the dearth of healthcare services being offered in those areas. And so right now, if you look at the footprint of where those retail clinics are, they’re really not reaching into the right places when it comes to a more diverse patient population, especially the ones that have been traditionally underserved. So it’s not right now. The hope, of course, is in the future is we can sort of slowly creep out from some of the urban areas and start to have some of these facilities in, again, those underserved areas. That is the hope, of course. But again, you had mentioned– we talked about these being big names, and so they’re big corporations. And so big corporations, they’re going to look for the right population that would be coming into a retail place of service, right? So, they’re looking for people who are coming in to buy their laundry detergent and the deodorant and toothpaste and so on and so forth, in addition to maybe trying to go in and have a flu shot or maybe have [inaudible] checkup on a cold or maybe get a medication or something like that. And so if you think of it from that perspective, they’re looking at geographies that meet their expected income levels and the populations that they want to serve. So, it is a concern that we haven’t been there yet. We, being just the healthcare market in general. But the hope is, of course, that with the lower cost profile of some of these facilities, that they may be able to get into these more underserved communities.
Kelly: Sure, that would be great, too. What can traditional healthcare providers learn from the success of these retail clinics?
Todd: So, I do think– talking about the collaboration piece, I think that is really important because, again, I had said at the top that a lot of this patient behavior is centered around the convenience, so being able to kind of go down the street and get an appointment quickly and easily. So, I think that when the traditional providers look at that, sort of that strategy or how it’s been built, it’s a question of a few things. One is the convenience, having hours that are outside of the normal physician groups office hours, or it could be the ease in which you can get an appointment, or it could just be the location, and the vast number of locations that each of these retail clinics have, it kind of puts those traditional providers who are centrally located. Maybe they have one clinic here or there. Again, it does come to a real estate sort of question where if I’m a large health system, and I’m trying to replicate the success of some of these retail clinics, it may be cheaper and easier to partner with a lot of the clinics that are already out there just because you don’t have to go buy that real estate. Real estate is very expensive, especially in some of the areas where a lot of the health systems are. So rather than trying to grab land and then build something and build your own system, partnering with those systems that are already existing and maybe there’s some revenue share model or there’s some sort of agreement that can be put in place that allows all parties to benefit, especially the patient. I think that that is the way of the future.
Kelly: Yes, that makes a lot of sense. Thank you so much for joining us today, Todd, and for sharing your valuable insights on this trending topic.
Todd: Absolutely, very happy to be here, Kelly, and any time. Just give me a call.
Kelly: Great. And if a listener wants to learn more or contact you to discuss this topic further, how best can they do that?
Todd: Sure. Yeah. You can contact me on LinkedIn. I’m up there. Just search for Todd Bellemare, and you’ll find me right away.
Kelly: Awesome. And thank you all for joining us for this episode of the Hospital Finance Podcast. Until next time…
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