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Retail Clinics Increase Medical Spending, Research Shows

By John Commins  
   March 08, 2016

By creating a new demand for previously unmet medical services, retail clinics are driving up medical spending, a study from RAND Corporation and Harvard University concludes. But one of the nation's largest retail clinic chains, MinuteClinic, refutes the findings.

Retail clinics by design provide easier access to basic healthcare services that cost significantly less than a trip to the doctor's office or the emergency department.

While that care may be less expensive, retail clinics still drive up medical spending by creating a new demand for previously unmet medical services, according to a study from RAND Corporation and Harvard University published in Health Affairs.

"The question before us was do these retail clinics substitute for more expensive options for care, in which case we might see a decrease in spending," says study lead author Scott Ashwood, an associate policy researcher at RAND. "Or, does that convenience drive people to seek care at clinics who would otherwise not have gone, in which case we might see an increase in spending?"

Ashwood and his colleagues examined enrollee data from health plans offered by a commercial health insurer in 22 cities between 2010 and 2012. They focused on 11 low-acuity conditions that account for more than 60% of visits to retail clinics.

The experiences of 519,542 enrollees with at least one retail clinic visit were compared with a random sample of 861,557 other enrollees who did not receive care at a retail clinic. Researchers estimated that 42% of the visits to retail clinics substituted for a visit to a physician office or emergency department, and 58% represented new use of medical services.

"Most of the visits appear to be new visits," Ashwood says.

The overall spending increase linked to retail clinics was $14 per enrollee per year. A further breakdown showed that each use of retail clinics for new medical services increased per-person spending by an average of $35 per year, which was partly offset by $21 in savings from people whose visit to a retail clinic substituted for higher-priced medical care.

Not Necessarily a Concern for Payers
Ashwood says the study findings should not be seen as a rap against retail clinics, which are fulfilling their mission, or necessarily a cause for concern for payers.

"If you just take that snapshot, then maybe it's a cause for concern. They're going to see an increase in spending by covering these clinics, but in the grand scheme of things it is not a massive increase," he says. "To the extent that these health plans care about their customers' well-being or potentially have the opportunity to take this initial entry into the system and do something positive with it, that might be something they'd be glad to see."

Previous research has shown that the people who frequent retail clinics are often younger, healthier, and don't have a primary care physician. If that's the case, Ashwood says the new use of medical services is undertaken in a cost-effective setting is a positive sign.

"That is an important insight as we think about the healthcare system," he says. "If plans and provider groups see this as an access issue that is driving people into healthcare, there is an opportunity there to bring people into a healthcare system and start to get primary and preventive care, the kinds of things we think of as very cost-effective care."

"If it is the case that you are now getting someone acquainted with the healthcare system in a positive way and that leads to a long-term cost-efficient relationship, that initial increase in spending that we are seeing is paid back in the long run."

John Commins is a senior editor at HealthLeaders.

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