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Insight
Health Systems Take On The Big Shots
103 Clinics Now Operated Under Health System Brands

Although we’ve seen a significant slowing of retail clinic growth over the past five months, that doesn’t mean growth has stopped.  We will continue to see net growth in the number of clinics across the country and that growth will come from two primary sources:  the major operators, especially TakeCare, MinuteClinic, RediClinic and The Little Clinic; as well as from hospital systems who are entering the retail clinic business.

And when you look at new entrants into the retail clinic business by ownership type, i.e. retailers, private investors and hospital systems, it is the hospital systems that represent the greatest source of new entrants.
Hospital systems getting into this business is not a new phenomenon.  Aurora in Milwaukee was the first hospital system to get into the business back in late 2004 and early 2005.  Others soon followed, including Geisinger (central PA); Mercy (DesMoines); Alegent (Omaha) and Sutter (Sacramento).  There are now 103 retail clinics operated by hospital systems.  This does not include hospital systems that are working with major operators to provide collaborative physicians and/or referral arrangements.

The majority of hospital-based operators are just that: operators.  Usually in partnership with their physician group(s), they sign a lease agreement with a local retailer and open a clinic under the hospital system name.  But we are seeing the development of a new model that could be the beginning of local hospital systems becoming national players.

Bellin Health System, based in Green Bay, WI, is the best example we’ve seen of this new model.  And Bellin is moving quickly to establish itself as the market leader.  The model involves two pieces:  operating clinics directly and helping other hospital systems through a licensing/consulting arrangement.

A little over two years ago, Bellin, like many health systems, had many important initiatives on its plate.  Retail clinics was one of them.  But when Wal-Mart started talking about opening clinics in the Green Bay market, things moved into high gear.

“We didn’t want to see the disruption or disintegration of our primary care system,” says Ken Berndt, Director of Business Development at Bellin.  “We also didn’t like the idea of not knowing what was happening to our patients if they went to one of these clinics.  So we moved ahead and opened two clinics right away under the Bellin FastCare brand.”

Today Bellin directly operates five FastCare clinics in Eastern Wisconsin.  But unlike other hospital-based operators, Bellin didn’t stop there.

“Since we’re hospital system based, we wanted to help out other hospital systems,” says Berndt.  “We see ourselves helping to neutralize the threat from non-hospital systems opening retail clinics.  We also look for hospital systems who agree that the retail clinic should be integrated into their system of primary care medicine.”

In addition to the clinics Bellin operates directly, the system has now helped eleven other hospital systems get started.  The chart on page one shows where Bellin operates its own clinics and where it is helping other health systems.

Bellin provides three major elements to other health systems: a brand (FastCare); a retail platform (Shopko); and a business model template.

The Brand
It may not sound like much, but finding a suitable brand for retail clinics is nearly impossible.  Just about every conceivable retail clinic brand concoction has been legally acquired over the past five years of the retail clinic rush.  So for an organization to come to provide a brand that needs no legal research, that’s a major headache removed.

The Retail Platform
Bellin has an exclusive arrangement with Shopko, a mass merchant that operates 133 stores in 13 states, predominantly in the Midwest and Northwest regions of the country.  Shopko is headquartered in Green Bay, WI; same city as Bellin’s headquarters.  And it is privately held by Sun Capital Partners.  The company operates its stores in predominantly middle-market cities like Aberdeen-SD, Austin-MN, Ogden-UT, or Billings-MT.  Pharmacy and healthcare is one of the company’s fastest growing segments.
“Shopko has a company personality much like our own,” says Berndt.  “We both want the same things for our customers and patients.”

One symbol of the cooperation is signage.  Very few retail clinic operators are able to get exterior signage for their clinics.  But Shopko makes every effort to make sure passersby know there is a retail clinic inside.
“We’ve seen a lot of retailers take a passive role in their retail clinic programs,” says Mike Bettiga, Shopko executive vice president of health services. “I think many of the operators that went out of business can attribute some of the failure to their retail partners.  We know we have a stake in this, so we’re doing everything we can to help FastCare operators succeed.”

Bellin essentially has done the negotiations for space and rent, something many retail clinic operators complain takes more time than it should.   “It’s been an excellent fit,” says Berndt.  “We expect that by early November we’ll have 22 Fast Care locations, located in four states.  We are also negotiating clinics in Idaho, Ohio, Iowa, and Nebraska so we could have 30 clinics by Christmas.”

There may be another benefit to the partnership: the big operators of retail clinics until now have bypassed the middle- and small-market cities where Shopko has its stores.  Of the 828 clinics run by the four largest companies (MinuteClinic, TakeCare, The Little Clinic and RediClinic), only 39 are located in markets outside of the top 50 metropolitan statistical areas.  More specifically, of the 117 Shopko markets, there are only five clinics run by any of the top four operators.

All five are TakeCare clinics inside Walgreens stores in Madison, Appleton, and Green Bay, WI.  Bellin and its hospital system partners are essentially neutralizing their territory before the competition shows up.  Sometimes that means the competition won’t show up.

Basics of the Model
The clinic build out is consistent across all stores.  From the day discussions begin until the day the clinic opens, Bellin handles everything: architecture, rough-in, millwork, furniture, supplies, and marketing.  All clinics have the same look and feel, including a dedicated bathroom and a waiting room.  Although stores are not exactly the same, most clinics are in the front of the store to gain maximum visibility, usually next to the pharmacy.

Included with the service is a complete marketing handbook so operators can hit the ground running.  The marketing handbook even contains a TV commercial that can be easily adapted with the health system logo and locations.  In just over two years Bellin’s own primary care patient panel is up 4.5% a year.  One thing they didn’t anticipate is how many people don’t have a medical home.

“It’s 30 percent of our visits,” says Berndt.  “So we make sure people understand that they can’t keep living that way.  Without a medical home, there is no early intervention, therefore the chance of the severity increases.  So we’re fixing the medical home problem and increasing our patient visits at the same time.”

The second thing they didn’t anticipate is that about 20 percent of their visits are from competitive hospital systems or medical groups.

“These are patients who’ve decided not to tolerate long waits and poor customer service,” says Berndt.  “So we’re ending up with new patient relationships.”

One of the major concerns about many hospital systems exploring retail clinics is their own ability to quickly implement a retail model. 

“Something we recognized early on was that, as hospital systems, we have limits,” says Berndt.   “We move slowly.  When we go to build something new, even if it’s supposed to be small, it ends up being very hospital like.  Building a 500 square foot clinic is very hard for hospital systems to conceive.  So, having gone through this ourselves, we knew we could bring some knowledge and speed to the table.”

 

More Insight
June 1, 2014
Point of Departure
What does MinuteClinic know that others don't?

In almost any industry, the leading competitors seldom do anything alone. That is certainly the case with retail pharmacies. But when it comes to retail clinics, it appears we are at the early stages of divergent paths, with CVS Caremark pulling away. When paths diverge, it leads to the obvious question: What does CVS Caremark know about the retail clinic market that its competitors don’t?

See Full Article
May 1, 2014
Joint Ventures Growing In Popularity
Hospitals Get An Assist From Private Urgent Care Operators

Don’t look now, but a partnership might be in your future. Private walk-in clinic operators and hospitals seem to be teaming up at an accelerated rate. The trend includes both retail and urgent care clinics, and if it continues, there may be very few walk-in clinic operators who don’t get into some form of partnership with local hospital systems.

See Full Article
April 1, 2014
Opportunity Amid Chaos
Health Insurance Reform Meets Walk-In Medicine

Two years ago we published an article entitled, “Is It Too Early To Think About ACOs?” It turns out it wasn’t too early. In fact, that was the time to start thinking about healthcare reform more broadly.

See Full Article
March 1, 2014
Intelligent Marketing
Walk-In Medicine Seeks New Levels of Sophistication

To a great extent, the disruption facing brick-and-mortar retail companies today represents what walk-in medicine companies will face in the coming years. Disruption in any industry is an ongoing threat. But what is clear is that sophisticated marketing tactics almost always win out when new competition emerges.

See Full Article
February 1, 2014
Strong Momentum for Walk-In Medicine
2014 Forecast Issue

If there was a consistent theme coming out of the 2014 ConvUrgentCare Strategy Symposium it was, “This is going to be a big year.”

See Full Article
January 1, 2014
2013 Year In Review
Still Lots of Eyes on the Walk-in Space

The walk-in clinic market continued to draw a substantial amount of attention in 2013.  Simply put, it is seen as a substantially more cost-effective and convenient solution for many routine medical situations.

See Full Article
December 1, 2013
The Changing Employer Landscape: Part 2
Case Studies on Engaging with Employers

Walk-in clinic operators have numerous opportunities to play a larger role in the health of the population, including partnering with employers to provide healthcare solutions for their employees.

See Full Article
November 1, 2013
The Changing Employer Landscape: Part 1
Understanding What Employers Are Facing

Any operator of walk-in clinics will tell you that engaging with employers is one of the more intimidating activities on the to-do list. But if you don’t engage with employers, you are missing an opportunity.

See Full Article
October 1, 2013
Time And Space
Connecting Patients To The Shortest Wait Time Creates Competitive Advantage

Open Google Maps on an iPhone and you can see traffic volume on virtually any metro highway system in the United States.  With that information you can choose a route with the shortest drive time.  Open the Great Clips mobile app and discover wait times at the salons closest to your current location.  Determine which one makes the most sense and check in.  Download any number of restaurant or hotel apps and you can find a table or a room wherever you happen to be at a given time.  It’s about time, space and available inventory.   Healthcare lags in the development and deployment of these technologies.  But walk-in medicine is moving rapidly to catch up.

See Full Article
September 1, 2013
The Case For Optimism
Annual Symposium Issue

To many observers of the walk-in medicine world, these are not the best of times.  There is no question that walk-in medicine faces threats on the horizon.  But the opportunities overshadow the threats, and the 2014 ConvUrgentCare Strategy Symposium will demonstrate why.

See Full Article
August 1, 2013
The Emergence of Direct Primary Care
Threat or Opportunity to Walk-In Clinics?

For years, entrepreneurial urgent care operators, as well as a number of primary care physicians, have tested the waters with membership programs and concierge medicine. But there is a new wave of enthusiasm for this business model and many who predict concierge medicine is about to take off under a new umbrella called direct primary care (DPC).

See Full Article
July 1, 2013
A Shifting Walk-in Landscape
2013 Mid-Year Review

For the urgent care and retail clinic markets, the first half of 2013 presented some anticipatory shifts in the walk-in landscape.

See Full Article
June 1, 2013
New Markets For Walk-In Services
The Number of Small Self-Insured Employers Could Explode

Employers with smaller group sizes are starting to move to self-insured arrangements.  With new health insurance products for these smaller employers, the momentum in this direction could accelerate and yield an unprecedented market for new, direct-bill healthcare services.

See Full Article
May 1, 2013
Virtual and Walk-In Converge
Telehealth Takes Aim At The Mass Market

The telemedicine industry is 20 years old.  So why are we hearing so much about telemedicine today if the industry has been around for so long?


See Full Article
April 1, 2013
The Gold Mine Within
The Evolution of Customer Service in Immediate Care Medicine

Delight, enchantment, service excellence. That’s what companies like American Express, Target and Apple call it. The big question is whether any of that customer service sophistication is showing up in the walk-in medicine industry.

See Full Article
March 1, 2013
Worksite Clinics On And Off Campus
More Complex Care Models and Payment Schemes

There is new-found energy in the worksite clinic business. Everyone wants in, from the largest health systems to the smallest insurance broker.

See Full Article
February 1, 2013
The Push For 2020 Starts Now
2013 Forecast Issue

As we look ahead to 2013, all indications are that the urgent care market will continue to gain steam, while retail clinics will see only modest growth.

See Full Article
January 1, 2013
Urgent Care Is Still Hot
2012 Year In Review
Retail clinics may still get a lot of attention in the press, but urgent care continued to be where the action was during the past 12 months.
See Full Article
December 1, 2012
Filling The Primary Care Void
New Services Are Changing The DNA Of Walk-In Medicine
TB Testing. Camp and Sports Physicals. Chronic disease management. Weight loss. Smoking cessation. And full primary care services.The reasons are up for debate, but the facts are clear: new services are showing up at local urgent care and retail clinics that weren’t there five years ago.
See Full Article
November 1, 2012
Health Insurance Buys Into Urgent Care
What's Behind Recent Acquisitions And Investments
If the last two years are any indication, large health insurance companies appear to have an appetite for acquiring or investing in urgent care networks. The rationale for these investments appears simple enough: provide more patient convenience and reduced emergency room costs. But is there more to it than that?
See Full Article

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Insight