A study in Health Affairs finds that retail clinics achieve cost-savings for primary care maladies. However, an aspect of this story illustrates Roemer’s Law: that the health care market suffers from supply-induced demand.
In plain English: the more supply of health services you add to the market, the more costs will be incurred. Or in Health Economics 101 as taught by Paul Feldstein, we learned it this way: “A built bed is a filled bed is a billed bed.”
On the upside: Use And Costs Of Care In Retail Clinics Versus Traditional Care Sites finds that retail clinic visits are cost-effective for enrollees in HealthPartners, the Minnesota health plan. By treating patients in MinuteClinics (one of the largest retail clinic chains), HealthPartners saved as much as $55 from the cost of a primary care doctor treating a patient with the same malady. There are 26 MinuteClinics in the Twin Cities metro area.

Researchers focused on five primary care ailments — conjunctivitis; otitis media without surgery; tonsillitis, adenoiditis, or pharyngitis, without surgery; acute sinusitis; and, infection of the lower genitourinary system. The 5 conditions comprise 77% of MinuteClinic’s business in the Twin Cities.

The study found that the same percentage of MinuteClnic patients and physician-visiting patients needed follow-up visits, at just over 14% of each patient population. uality appears to be similar in both physician practice and retail clinic settings.

 Another major plus to retail clinics is that they provide an on-ramp to primary care. RAND published research this week that demonstrates retail clinics’ access point for people without ‘regular medical providers’ (read: medical homes).

On the downside: Overall costs of care to HealthPartners enrolled population increased. Why? Notwithstanding lower prices charged at MinuteClinics, the added supply and availability of this ‘disruptive’ service induced more visits among HealthPartners enrollees. HealthPartners found that costs for the five disease episodes increased by about 4.5% a year.
Health Populi’s Hot Points: One of the most important aspects of the expansion of retail clinics is that they provide access to people who do not have a regular medical home, as the RAND study attests. They also offer a degree of convenience that many American consumers are seeking from an inhospitable, tough-to-navigate health system. Thus, supply-induced demand in this case may be seen as a good thing — by increasing access to people who otherwise would not seek care for conditions that did indeed require medical intervention.

Thus costs increased. But on the other hand, emergency department visits may have been averted which would have hit HealthPartners medical loss ratios harder than the primary care clinic costs.

With that access comes another cost, though — the potential lack of continuity of care through more fragmentation of medical records, diagnostic histories and ultimate patient outcomes.

Is the retail medical clinic concept incompatible with the medical home? Not necessarily. If the clinic’s information system can be integrated into an electronic health record at the patient’s medical home, or via a patient’s self-maintained personal health record, some of the fragmentation can be addressed.

There’s another emerging clinic model that’s worth considering: the employer-based clinic. Obviously, these do nothing to provide access to uninsured folks in the employee’s community, or for those employed at firms who don’t provide these services. However, it’s worth learning from these provider sites, where employees can receive truly targeted care to manage medical conditions.

One operator of such centers, CHS, has found that employer-based clinics can save hard dollars for companies. You can learn more about this development in an article published by the Society for Human Resource Management here.

Do read the September 2008 Health Affairs special issue: it covers Innovations in Health Care Delivery and covers important turf.