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What economic theory can teach physicians about retail clinics

Kyle Morawski, MD and Joshua Liao, MD
Policy
August 11, 2016
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As clinicians continue to debate the merits and limitations of retail clinics, it is increasingly clear that they are here to stay. These nontraditional sites have proliferated around the country, appealing directly to patients’ desires for convenience in ways that many traditional primary care practices do not. A report by the Robert Wood Johnson Foundation found that retail clinics have increased by 900 percent over the last decade, an expansion that represented 10.5 million patient visits in 2012.

Although some concerns about this trend have merit, retail clinics could also create positive disruption for the medical community. As one new facet of the emerging value-based health care system, they can nudge clinician organizations to grapple with strategies for interacting with and caring for patients who utilize both traditional and nontraditional care settings. This a welcome tension to the degree that it leads traditional sites to provide better care and innovate more rapidly in the name of better health.

With continued policy reforms, and the fact that retail clinics still represent only a small minority of overall market share, it remains to be seen exactly how traditional and retail clinics will interact going forward. However, economic theory may provide some insight into the potential dynamics. On a supply-and-demand level, the health care services provided by the two can be thought of as either substitutes (i.e., similar, competing services) or complements (i.e., services that supplement or add to each other).

As a simple example, beef and chicken can be reasonably thought of as substitute goods. If one form of meat is cheaper, people are likely to buy more of it for consumption and, as a result, less of the other. In contrast, beef and potatoes might be viewed as complements if having more beef encourages people to buy more potatoes.

The same can be true of retail and traditional care clinicians. If and when the two provide substitute services, the “lower cost” (i.e., added convenience, greater access, etc.) offered by retail clinics could encourage people to use them more and ultimately reduce the demand for traditional care settings. For example, women who could seek care for uncomplicated urinary tract infections in either retail or primary care clinics may increasingly choose the former if the transactional ease is greater.

In other situations, retail and traditional clinicians can offer complementary, rather than substitutionary, services. For example, patients who are newly diagnosed with chronic conditions such as diabetes or heart failure invariably require long-term follow-up with multidisciplinary teams that comprise physicians, nurses, pharmacists, and other health professionals. For patients with limited access to traditional care sites, retail clinics may increase initial utilization that subsequently leads to increased use of traditional clinics. In both cases, retail sites can increase access, downstream demand, and utilization in traditional care settings.

Early evidence suggests that both effects may be at play. In a recent analysis of where patients sought care for low-acuity conditions, such as upper respiratory infections and urinary tract infections, researchers estimated that 42 percent of retail clinic visits represented substitution over traditional care sites while 58 percent represented new utilization altogether. While the study was limited and more work is obviously needed, the point holds. Depending on clinical situation, retail clinics can conceivably exert both substitutionary and potentially complementary effects.

What can clinicians learn from these insights? First, clinicians and organizational leaders must clearly identify and strategize around substitutionary services that retail clinics are likely to provide. For scenarios such as uncomplicated upper respiratory infections, scheduled vaccinations, or straightforward medication titration, for example, some clinics have begun innovating by extending hours, communicating with patients using digital platforms, integrating with urgent care clinicians, and redesigning care processes to reduce wait times. In addition to better meeting patient needs, these methods allow sites to offer more competitive services.

Second, traditional clinicians can more actively engage nontraditional care sites to coordinate care for potentially complementary services. For example, MedStar Health, a large health care organization with 6,000 associated physicians in the Washington, D.C., area, established integrated electronic medical records with CVS Health and their Minute Clinics so that clinicians could access records for patients receiving care at both retail and traditional care sites. Such connections, which highlight the potential in interoperability and have been established by hundreds of other clinician organizations and retail clinics, could facilitate the provision of complementary services and become a feature of the broader expansion of electronic health records.

Ultimately, strategies will vary by individual clinician organizations and their local patient and market factors. The jury remains out in terms of how retail clinics will affect overall health care value and costs in different clinical scenarios. However, just as Blockbuster, the erstwhile video store giant, was toppled in part because it failed to keep stride with competitors in recognizing the early importance of digital streaming services, indecision about new care delivery strategies may be the only inappropriate decision for many clinicians.

Instead, thoughtful consideration of different strategies, guided by an economic framework and paired with systematic approaches to implementation and delivery science, can help clinicians focus on what matters most in the emergence of retail clinics: striving to provide the highest-value patient-centric care possible.

Kyle Morawski and Joshua Liao are internal medicine physicians. Dr. Liao and can be reached on Twitter @JoshuaLiaoMD and his self-titled site, Joshua Liao.  This article originally appeared in ACP Internist.

Image credit: Shutterstock.com

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