Retail-based Health Clinics and Patient Care: Nuisance or Necessity

May 2, 2014

Retail-based health clinics can help ensure patient access to care as more gain insurance, but they also raise price transparency and reimbursement issues.

As the Affordable Care Act (ACA) falls into place, the healthcare industry continues to look for solutions to anticipated problems.  One potential problem is the projected disparity between patients who will use their benefits under the ACA and the limited pool of primary-care doctors who will treat them.  The growing shortage of primary-care doctors, expected to reach 45,000 by 2020, may cause longer wait times or discourage care altogether. 

Retail health clinics, like the CVS Minute Clinics, are gaining momentum as a potential solution.  These clinics attract patients for a variety of reasons.  First, they allow patients to see a clinician immediately rather than wait days, or even weeks, to see their primary-care doctor.  Additionally, the prices are transparent.  For the primary-care doctors who are overloaded with patients, this new practice may be beneficial.  But price transparency, while theoretically a good thing, may make waves in the industry.  

Retail clinics offer a literal “price menu,” which allows patients to know their responsibility up front, and sheds light on the actual cost of healthcare to the consumer.  In a hospital or private practice, the opposite occurs.  Aside from patient copays, coinsurance, or deductibles, payments for services rendered typically fly under the radar - and it’s not because they’re trying to hide something. 

The reimbursement process is complex. Any given claim submitted to a third-party insurance carrier goes through a variety of filters, such as multiple procedure reductions, bundling, prior authorization penalties, referral penalties, procedure specific deductible or co-insurance application - and the list goes on and on.  

To further complicate things, contracted rates between healthcare providers and third-party payers can vary from one payer to the next, and some providers participate in independent physician associations, which typically have a higher contracted rate with third-party payers.  All of these variables have made it difficult for providers to settle on a single rate for any given service.  But retail clinics are subject to the same variables.  So why are they posting their rates while other providers are not?

In a retail setting, prices are listed everywhere.  The very nature of this environment is prices, discounts, and two for one deals. With ads like, “Youth Sports and Camp Physicals only $49,” the patient becomes a consumer, and with that expects quick, anonymous treatment at a good price.  There are no expectations of long standing doctor/patient relationships.  The subliminal message is quantity over quality.   This is, traditionally, not the brand doctors in private practice or hospitals typically wish to project.  But for retail clinics, that brand is the selling point.

Perhaps everything is falling into place as it should.  When more routine care is provided at retail clinics by less expensive providers, providers in private practice and hospitals can devote more time and attention to more complex medical issues.  However, if that is the case, then there is still room for improvement.  For starters, the reimbursement rates need to reflect the difference, and patients must understand that.