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Retail Clinics Increase Medical Spending, Research Shows

News  |  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."

Industry Reaction

MinuteClinic, operated by CVS Health, is one of the nation's largest retail clinic chains. It challenged the accuracy of the study.

"Half of our MinuteClinic patients do not have a physician and these patients need low-cost sites of care, such as retail clinics. The authors' conclusion that this represents new care and new costs is a step backwards, and fails to recognize that reaching this underserved population is not excess utilization; rather it is the underlying objective of many health system innovations," MinuteClinic said in a written response to HealthLeaders Media.

"In addition, millions of newly insured Americans are seeking care under the ACA.  With the profound shortage of primary care physicians, retail clinics can help keep patients healthy and provide overall health care savings.  A patient with the flu who does not have a physician can get convenient, inexpensive care at a retail clinic, even on the weekend, before their condition worsens. This care can prevent a costly hospitalization, improving health and saving resources that are not measured by this limited study design. Other peer-reviewed research has demonstrated the significant value and overall cost savings for patients who use retail clinics."

MinuteClinic said its retail clinic visits are 40 to 80% less costly than physician office and emergency room visits.

"According to the authors, the majority of retail clinic expenses replace more-costly sites of care, covering all but $14 per capita," MinuteClinic said. "This tiny difference, a little more than one tenth of one percent of total health care spending, is more than made up by overall total medical expense savings, which was not evaluated by these authors." 

MinuteClinic said the study also relies on data that is 5 to 10 years old, and doesn't consider that 40% of retail clinic care now provided for preventative services, wellness and chronic disease, which keep costs down.

"For example, identifying a patient with high blood pressure at MinuteClinic and referring them for follow up care to a physician practice should be viewed as an investment in health and prevention of more-costly illness, not as an excessive cost," MinuteClinic said. "Despite the flawed conclusions of this study, many millions of patients and their insurers appreciate all the medical care access benefits and expense savings that retail clinics provide."

'Voting with Their Feet'
Rather than focusing on retail clinics adding costs, Ashwood says the rapid growth of the clinics across the nation show they're addressing an unmet demand.

"Patients are voting with their feet. They are coming to the clinic and using it when it's there," he says. "Some of the clinics view themselves as a source of community care. Some clinics are in urban areas that may not have convenient access to other kinds of care. We focused on a particular set of conditions, low-acuity care. In that case, retail clinics have met that need. If you spend more on it, then that's not such a bad thing because there is some value that is being added as well."

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

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