Retailers across the industry are growing in-store healthcare services

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Retailers across the industry are growing in-store healthcare services

By Sandra Levy - 11/06/2019

It’s 4 p.m. at the CVS Pharmacy on Main Street in New City, N.Y. A man is having his eyes examined in the optical department, while a woman in another room is inquiring about orthodontics from SmileDirect for her teenage daughter. 

At a Walgreens in Alachua, Fla., a woman is having routine laboratory work carried out by LabCorp. 

Inside Gateway Pharmacy, a Good Neighbor Pharmacy in Phoenixville, Pa., a woman is working out in the gym in the pharmacy’s new Victus Health and Wellness Center, where a certified personal trainer, a registered dietitian and a licensed clinical social worker are available for consultations. 

Scenes similar to these are being played out daily in roughly 3,000 in-store clinics and with numerous other in-store services, through which pharmacy chains, supermarkets, large retail stores and independent pharmacies have expanded their services.

Many retailers are moving beyond simply offering clinics designed solely for treating minor ailments and injuries, offering optical, dental, audiology, laboratory tests, health screenings and monitorings, behavioral health, and speech and physical therapy options within the store. 

With their expansion, retailers and pharmacies have the opportunity to boost revenue from clinic service fees, increase prescription and OTC sales, attract new pharmacy and grocery customers, ensure patient satisfaction and retention, and differentiate themselves from the competition.

Their foray into new convenient and low-cost services comes at a time when there is an increased need for them. According to the Census Bureau’s September report, 27.5 million people, or 8.5% of the population, lacked health insurance in 2018, a 9% increase from a year earlier. Additionally, the number of Americans covered by Medicaid and the Children’s Health Insurance Program fell by more than 1.6 million last year.  

MaryKate Scott, owner of Los Angeles-based consultancy firm The Scott Group, said convenient care clinic services appeal to many Americans, particularly those who recently have been edged out of Medicaid eligibility and cannot afford health insurance — which increasingly has become more expensive to purchase — or those who are commercially insured and are very time pressured.

“You have this segment who is almost self-insuring. They forego health insurance and bear the risk, and then when they need something, they’ll turn to a retail clinic and OTC products,” Scott said. “A good portion of these Americans are relatively young and relatively healthy, and about 14.8% of these uninsured are the twentysomethings. They’ve only had a life of digital engagement. They are used to proactively searching for information and making their own decisions. It’s not surprising to see them embrace the retail clinic, which is a way of finding their own solution to getting health care.”

Tine Hansen-Turton, founding executive administrator and director of the Convenient Care Association, which formed in September 2006 when there were fewer than 100 in-store clinics, agreed that the time is ripe for clinics to expand their services. Sixty percent of people served by more than 3,000 clinics today don’t have a primary care provider, even if they have health insurance. She said that since “day one, this industry has been about providing accessible, affordable, quality care to people at the community level, and providing care at the right place in the right location.”

In-store clinics have adapted to the needs and demands of the population both in terms of where they want care and how they want to receive it. “A focus on convenience really opens up the opportunity for growth in the industry. We are seeing that patient preference for health care and their knowledge about primary care has changed dramatically over the last decade,” Hansen-Turton said. “The full complement of primary care health services available at conveniently located in-store clinics is driven by a community demand pushing and saying, ‘Provide more services.’” This, she said, is market-driven healthcare consumerism in action. 

Multiple Models

As more consumers gravitate to in-store clinics, more pharmacies and retailers are forming partnerships with companies that specialize in an array of healthcare services. 

Brian Owens, Kantar Consulting’s senior vice president of retail insights, believes that partnerships are a less expensive conduit for retailers to expand their healthcare services.

“You’re seeing more and more partnerships happening, where the retailers are bringing in the credible or the established companies, where the retailers don’t necessarily have to have the capital liability associated with delivering these things,” Owens said. “You’re seeing a lot more of these services showing up across retail in all different types of formats and experiences, and geographically, but it’s less in the traditional sense, where they are going to bill it themselves or run it themselves. You’re seeing them doing more outsourcing or consignment relationships.” 

These partnerships have the potential to catapult retailers into such new areas as behavioral health. A good example is Boston-based Beacon, a large managed care organization that provides behavioral health management, which recently joined CCA. 

“There is a lack of access to behavioral health services in communities,” Hansen-Turton said. “That’s a new foray, where a national player is thinking there is space for us in retail pharmacy settings, where we can get care into the community.” 

Take the case of Walgreens, which jumped on the in-store clinic bandwagon more than a decade ago, and which currently has roughly 400 Walgreens stores that offer a healthcare clinic or other provider retail clinic services. 

In some markets, the Walgreens Healthcare Clinics are owned and operated by Walgreens, and in other markets, Walgreens has collaborated with Health Systems that runs retail clinics inside its stores. Community Health Network, for example, owns and operates several Community Clinic at Walgreens locations in the Indianapolis market.

Separate from retail clinics, Walgreens has a collaboration with LabCorp, through which the chain currently has 52 locations in nine states, and at least 600 LabCorps at Walgreens patient service centers are set to open by 2022. 

Chet Robson, Walgreens’ acting chief medical officer, said that in addition to the retail clinics, for patients with acute medical needs in its stores, the chain has collaborated with urgent care and primary care providers.

In October 2018, in collaboration with Humana, Walgreens opened two Partners in Primary Care centers for seniors in the Kansas City, Mo. area. Since then, a third center also has opened. “The doctors and pharmacists in store are working very well together,” Robson said. “For example, each day our Walgreens pharmacist at each location joins the morning huddle with the Partners in Primary Care team as they plan how best to deliver care to each individual.”

Additionally, Walgreens announced a primary care collaboration with VillageMD. “Together, we are opening up five Village Medical at Walgreens primary care offices in the Houston area later this year. Village Medical at Walgreens will provide a primary care offering for the full adult continuum  that will go beyond addressing acute and immediate issues, but rather focus on providing a long-term relationship with their patients,” Robson said.

Rite Aid’s RediClinic model, which has joint ventures with health systems, is yet another example of how partnerships potentially are beneficial. Rite Aid locations in New Jersey have a joint venture with health system Hackensack Meridian. 

“We serve as a convenient, affordable option for patients with acute needs. RediClinic also provides after-hours care and, when clinically appropriate, functions as an alternative to the more expensive care settings, such as Urgent Cares and ERs,” said Jocelyn Konrad, Rite Aid vice president of pharmacy and retail operations. “When a patient is not connected to a PCP for continuum of care, RediClinic will make a recommendation based on patient needs. An oversight physician is also provided by our healthcare partner to promote exceptional clinical quality, continued growth for our clinicians and mentorship when needed.”

Yet, another formidable player expanding clinical offerings is CVS Health, which in June announced a significant expansion of HealthHUB locations at CVS Pharmacy stores across the country, following its HealthHUB pilot in three stores in Houston. Additional locations in Houston, Atlanta, Philadelphia, southern New Jersey and Tampa, Fla., are planned this year, and the company expects to have 1,500 HealthHUB locations operating by the end of 2021.

With the new format, more than 20% of the store is now dedicated to health services, including new durable medical equipment and supplies, and new product and service combinations for sleep apnea and diabetes care. With personalized pharmacy support programs and MinuteClinic services, the HUB team cares for patients managing chronic conditions, with a focus on recommending next best clinical actions and driving medical costs savings.

Then there’s Walmart, which operates retail care clinics in Georgia, South Carolina and Texas. In September, the retailer debuted the first Walmart Health center in Dallas, Ga., a stand-alone primary care health clinic located next to a newly remodeled Walmart Supercenter. 

Affordable services include primary care, labs, X-ray and EKG, counseling, dental, optical, hearing, select specialty services, health insurance education and enrollment, and community health — nutritional services and fitness. The unit is operated by physicians, nurse practitioners, dentists, behavioral health providers and optometrists.

Owens compared Walmart’s latest move into primary care with CVS’ HealthHUB. 

“They understand that the cost of care is expensive. In a retail environment, if they are able to come up with a solution that appeals to the masses, why wouldn’t Walmart scale that? There’s an opportunity to get into dental, primary care counseling and audiology because that’s what their shopper wants and needs,” Owens said. “In specific communities, they will focus more of these models where there is no rural hospital, and in places where the community is being left behind. Based on whatever the demographic or municipal challenges are, you’ll see Walmart, CVS and other retailers try to move in to becoming the supplemental care solutions because primary care solutions or systems may be failing these communities.”

Scott, who has consulted for Walmart and other leading retailers, agreed that retailers have realized that they can fill a void in communities that lack quick accessible care and, if they offer affordable health care in their stores, they’ll get shoppers to stay in their stores and spend more.

“For customers that live paycheck-to-paycheck, when prices increase for a truly essential item like health care, they spend less at the cash register. Retailers think about consumers’ share of wallet and what the consumer has to spend in their store,” she said. “They are thinking strategically about primary care and increasing their space for retail health clinics to meet the needs of both the income and time-pressured consumer. Family, food, finance and health are No. 1 on their consumers’ minds. If you spend more on health care, you’ll spend less on other items at a retailer.”

Aside from the potential to attract and retain consumers, reimbursement by the federal government is motivating retailers to expand their health services.  

“We’re moving to a direction where everything in the physical store can be part of a healthcare solution. Walmart or CVS can own or understand how health care is delivered and what goes into it,” Owens said. “This improves their chances of potentially getting reimbursed by the federal government for Medicaid programs and things like that. Building up their infrastructure associated with health care is important because it gives more input into adherence needs and what other things in that store can count as a healthcare solution.” 

Increasing access to health care close to where consumers live appears to be the new mission of retailers and pharmacies. Walgreens’ Robson said that patients are indeed benefiting from more convenient access by Walgreens offering primary care and urgent care, as well as retail clinics for patients with acute medical needs. “It is part of our ongoing commitment to create neighborhood health destinations that provide retail health services and patient care across the communities we serve.”

Tom Van Gilder, Walmart’s chief medical officer, echoed Robson’s sentiments. “We want our Dallas, Ga., customers to get the right care at the right time, right in their community. We want to meet them where they live. We will use our location in Dallas, Ga., to learn how best to deliver the quality, affordable and accessible care customers want with the goal to take the Walmart Health center model to the other communities we serve,” he said.

Whole-Store Health

One of the experienced players that delivers care where customers live and also shop for groceries is Kroger. The grocer, which purchased The Little Clinic in 2010, operates more than 220 in-store clinics across several Kroger divisions in Ohio, Kansas, Kentucky, Tennessee, Arizona, Georgia, Indiana, Virginia and Colorado.   

“At Kroger Health, we believe in food as medicine. Kroger’s been America’s trusted grocer for 152 years — we know food. This positions us as the food authority and equips us to really deliver on our food as medicine strategy,” said Marc Watkins, chief medical officer at Kroger Health, who also chairs CCA’s board of directors.

One of the areas Kroger has been beefing up since 2016 is dietitian services. This involves a registered dietitian who walks the grocery aisles with customers, helping them to find healthy foods. 

Kroger stores in three divisions currently have nutrition techs, who are considered “nutrition ambassadors” in the grocery aisles. The company is planning to roll out nutrition techs in additional divisions, Watkins said. 

Kroger also has a food prescription pilot, in which a provider writes a physical food prescription, which the patient then takes to a Kroger store, where their nutrition technician fills the prescription. “We are also working with the biggest health insurance payers on multiple pilots, with the ultimate goal of health insurance covering healthy food for its members,” Watkins said. 

Gateway Pharmacy also is focusing on nutrition with the addition of a registered dietitian nutritionist and licensed clinical social worker, who can assist with behavior changes related to disordered eating and chronic disease. “We wanted to give people some sustainable lifestyle interventions to help them with their health,” said pharmacist Nick Katra, who helped launch the 2,800-sq.-ft. wellness center in the pharmacy.

By offering behavioral health counseling, Owens believes retailers can respond to an unmet need in the community. “It’s a whole new world, especially since the country is facing up to the idea that if you put the cost of behavioral health on the patient and exclude it from coverage and insurance, only a small slice of the populace that needs it is going to get it,” Owens said.

Walmart’s entrance into primary care is proof of Owens’ perspective. “Our existing service of the Dallas community, strengths in health and wellness, and low-price leadership make us uniquely positioned to deliver access to key health services that may be currently out of reach for many customers, regardless of health insurance coverage,” Van Gilder said. “We are also working closely with several on-the-ground providers to offer our services, along with specialized community health resources, online education and in-center workshops to educate the community about preventive health and wellness.”

What’s Ahead?

What does the future hold for retailers as they expand in the brave new world of health care?

Michael Abrams, managing partner of global healthcare firm Numerof & Associates, described the recent flurry of activity from large retailers as experimentation to see how much they can drive down their underlying cost for the services and how much demand they can build within the consumer segment. “Over time, these nontraditional players will make up their minds about the suitability of the services they’re offering. They’ll choose those that offer the best combination of margins, and ones in which their marketing savvy allows them to leverage all the things they bring in terms of advantages, and that have the least downside risks,” Abrams said. 

If Rite Aid’s recent success with RediClinic Express is a harbinger of things to come, more retailers will be launching telehealth solutions. Konrad noted that though Rite Aid launched telehealth six years ago, patients began gravitating toward it more this summer after the retailer’s virtual visit was introduced within RediClinic. 

“It’s a hub and spoke model for RediClinic, so we can touch more patients at more locations with one nurse practitioner or physician assistant and a clinic assistant,” Konrad said. “Utilizing high-tech devices, the clinician can conduct an entire exam virtually, as if it were a face-to-face visit. The devices allow for the patient to participate in the experience, along with the clinician. As the clinic assistant utilizes each device based on the patient’s needs, the patient will see exactly what the clinician is able to see and make the visit as interactive and detailed as the patient would like.”

Kroger also has a telehealth service, called Telenutrition, which offers a virtual visit with dieticians from the customer’s home.

Noting that health plans are beginning to cover telehealth visits, and many of those plans consider Rite Aid’s high tech virtual visit more similar to a typical clinic visit, Konrad is optimistic about the future. “The consumer really wants the convenience of care, and they are embracing the convenience of care inside retail establishments because it’s a high level of care. You’re not sacrificing anything to come to a clinic inside a drug store,” she said.