Walk-in Clinics Offer Cheaper Health Care

Will your next trip to Wal-Mart or CVS include an examination for strep throat? It could.

By Martha Lynn Craver, Associate Editor, The Kiplinger Letter

June 8, 2007

They're the wave of the future: Walk-in health clinics will double in number to 700 by year end, with brisk growth continuing for at least the next several years, according to the Convenient Care Association, an industry trade group. The clinics are usually located in drug, grocery or retail stores and are open seven days a week with no appointment necessary. Nurse practitioners or physician assistants staff the clinics and treat basic ailments such as strep throats or ear infections. Some states even allow them to write prescriptions.

Driving demand are consumers, who now have to pay for more of their health care. The clinics, which usually display prices prominently, offer basic medical services at cheaper rates than doctors or hospital emergency rooms. For example, treating strep throat at a retail clinic costs about $100 compared to $120 at a physician's office or $330 at an emergency room. More insurance companies now cover clinic care and encourage their use.

Big retailers are taking advantage of bullish demand. Wal-Mart plans to contract with local or regional hospitals to open as many as 400 in-store clinics in the next couple of years. CVS/Caremark Corp. recently bought the retail clinic company Minute Clinic, and Walgreens Co. purchased another clinic firm, Take Care Health Systems. Both drug store chains have ambitious expansion plans for the next few years. "It's a good fit for these drug stores. These clinics tend to treat the kind of ailments that are conducive to an easy prescription, which can be conveniently filled right in the store," says Tom Billet, of Watson Wyatt Worldwide, a benefits consulting firm.

Clinic growth is likely to vary by state. Some states are considering legislation that would make it easier to operate clinics. In Texas and Wyoming, for example, lawmakers are mulling proposals to reduce physician oversight for those who staff clinics. In Illinois, on the other hand, there's a legislation that would limit the number of nurses and physicians assistants that one physician can oversee. And a bill in New York would limit the scope of practice of physician assistants.

Some physician groups are behind the push for stricter rules. Proponents of the clinics say the doctors are sore about losing high margin business to these clinics, but the physicians say they are simply trying to ensure that patients get quality medical care.

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