In strip malls, pharmacies and big-box stores nationwide, retail clinics are booming as consumers seek new options for accessing cost-effective and convenient non-emergent healthcare.

A 2013 survey found that 35% of consumers had visited a retail clinic within the previous year, up from just under 10% in 2007.1 Currently, an estimated 1,800 retail clinics are in operation across the U.S.; that number is expected to increase to 3,000 by the end of 2016.2

David Schultz, founder and president of Albany, N.Y.-based Media Logic, told HealthLeadersMedia recently that the retail clinic boom has been fueled in part by the growth of consumer-driven health insurance, or plans that require higher co-pays and deductibles.3

The greater out-of-pocket costs, he said, have “unleased the brutally efficient ‘American shopper’ on all of the providers who – until this time – had been selling services to consumers who never really knew what things cost.”4

“Now, patients are asking questions about whether services are needed, how much they cost and why,” Schultz said. “This spells opportunity for alternative providers, especially retail healthcare clinics.”

Survival strategies

Walk-in service, convenient locales and price transparency are hallmarks of the retail clinic experience. While the approach may represent a competitive threat to many traditional practices, strategies are emerging to mitigate the risk.

Increasingly, established provider organizations are looking for ways to collaborate with the upstart clinics. Many of the major players in the niche – including retail giants CVS Health and Walgreens – have sought out partnerships with existing healthcare organizations to staff or oversee the clinics. 5

Kaiser Permanente, for example, recently announced that it was partnering with retail giant Target to staff clinics in some California stores. The arrangement will utilize telemedicine to extend clinical capabilities beyond traditional retail clinic services.6

Beneficial relationships

Smaller provider organizations also can benefit by affiliating with retail clinics, experts say. Simon Samaha, a principal in PriceWaterhouse Cooper’s Health Industries practice, noted that an estimated 50% of patients who visit retail clinics don’t have established doctors.7

Samaha told that because clinics are more likely to refer patients with acute needs to practices or organizations that they have relationships with, it is worthwhile for physician groups to establish links with unaffiliated clinics.8

In fact, groups that are operating at or near full capacity may want to cultivate retail clinics as “low-acuity triage channels” for their practices. Referring simpler cases to a retail clinic through a formalized arrangement can ease scheduling pressure and allow doctors to concentrate on more complex, higher-reimbursement cases.9

Other physician groups are highlighting their perceived competitive advantages over retail clinics, including better continuity of care, access to existing medical records, a ‘personal touch’ and more extensive wellness visits, according to a recent article in

Bringing in new patients

Still others have decided to compete directly with retail clinics by developing their own walk-in options. Saint Luke’s Internal Medicine, 15-physician group owned by Kansas City-based Saint Luke’s Health System, recently opened three retail clinics at existing physician offices in the Kansas City metro area. The clinics are open from 7 a.m. until 7 p.m. on weekdays and from 8 a.m. until noon on Saturdays.

Staffed by nurse practitioners, the clinics target ailments like pink eye, sinus conditions, sore throats and skin rashes, along with sprains, bruises and minor burns or cuts. Lab services and vaccinations are also available.

Michael Munger, MD, vice president of medical affairs for Saint Luke’s Medical Group, said the clinics are performing much better than expected since the first one opened last fall. Initial volume projections were about 300 patients per month, but the clinics now are averaging closer to 500 patients monthly. Significantly, he said, 19% of the traffic represents new patients.

“We didn’t anticipate that level of new patients at all,” he said, adding that all the clinics have moved past break-even and are operating profitably.

Although simple word-of-mouth promotion has driven growth thus far, Saint Luke’s plans to emphasize care coordination and continuity as key differentiators when it begins advertising for the clinics.

“I think that’s what really separates us from other retail clinic options,” he said. “But I firmly believe that retail clinics are not going away. So if a practice is not capable of doing something on their own, then I think they’re going to need to decide how they can work collaboratively with existing clinics to help provide critically important continuity of care.”

1“$2.8 Trillion U.S. Healthcare Market Threatened by Disruptive New Entrants Like Those That Reshaped Retail, Banking and Travel, According to PwC’s Health Research Institute,”PricewaterhouseCoopers, April 10, 2014.
2“Growing Retail Clinic Industry Employs, Empowers Nurse Practitioners,”Robert Wood Johnson Foundation, Feb. 20, 2015.
3Christopher Cheney, “Retail Clinics Solidify Their Market Niche,”HealthLeaders Media, Dec. 9, 2014. 
6Adam Rubenfire, “Kaiser to staff clinics in California Target stores,”Modern Healthcare, Nov. 22, 2014.
7Aubrey Westgate, “Retail-Based Clinics vs. Private Medical Practices,”, March 30, 2015. 


About the author

McKesson Business Performance Services offers services and consulting to help hospitals, health systems, and physician practices improve business performance, boost margins and transition successfully to value-based care.