Another Setback for In-Store Clinics

Discussion
Jun 25, 2008

By George Anderson

A May 7 piece on the Wall Street Journal’s website discussed how the bloom was off the walk-in clinic rose in retail stores with 69 locations having closed in 15 states over a period of a few months. The same article discussed how MinuteClinic was scaling back its expansion plans.

Now, comes word that another operator, SmartCare Family Medical Centers, has closed 15 in-store clinics in Wal-Mart stores in Colorado without notifying the retailer.

In a written statement to Denver’s 9News, Wal-Mart said, “We were notified today (June 20, 2008) that SmartCare has decided to close its clinics in Wal-Mart stores effective today. We are working diligently to understand and minimize the impact on our customers. As we find out more, we will keep them informed. We remain committed to working with local and regional hospitals to open additional clinics in our stores.”

William Wertz, a Wal-Mart company spokesperson, told the Rocky Mountain News that the company had not decided what to do with vacated space but that it might seek a partnership with a local medical center to continue providing health services to its customers.

Discussion Questions: Does news of in-store clinics closing affect consumer perceptions and decrease the likelihood that they will visit one of these facilities for a minor medical issue? How, if at all, does the closing of a clinic affect consumers’ opinion of the retail store where it operated?

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14 Comments on "Another Setback for In-Store Clinics"


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Nikki Baird
Guest
Nikki Baird
13 years 10 months ago

I just don’t think the in-store clinics fit into the way health care is organized in the US – yet. I understand the intent – to serve uninsured or under-insured – which is a necessary niche given that it’s the rare insurance provider that is going to sign up right away to cover services offered at an in-store clinic.

But few uninsured people use preventive services (as hospital emergency rooms will attest), and even if it’s inexpensive, I can’t see people who can’t afford it suddenly deciding that they’re going to go see a Physician’s Assistant because they have a cold and it happens to be at their store.

If the health care model changes in the US, or if these providers can get insurance companies to cover their services, then maybe they stand a chance. But I suspect that for a lot of people, the last place they would think to go when they’re sick is Wal-Mart.

David Biernbaum
Guest
13 years 10 months ago

The sudden closing of the walk-in clinics will hurt the consumer’s perception of the stability and integrity of the walk-in concept. Consumers want to believe that walk-in clinics are reliable and efficacious. Consumers will lose some confidence in the concept once they realize that these walk-in clinics are independent businesses that are not directly associated with the retailer.

More important, is why did the clinic in this case go out of business and disappear without warning? The selection of businesses to become walk-in clinics will need a lot of careful diligence well before they are given the “franchise” and all during the time they are in place. These add-on businesses cannot be treated the same as if they are independent pretzel stands.

Janis Cram
Guest
Janis Cram
13 years 10 months ago

I don’t think the impact will affect the retailer. If Wal-Mart doesn’t own and/or operate their clinics, they aren’t responsible for their closings.

George Anderson
Guest
George Anderson
13 years 10 months ago

Ultimately it comes down to the operator. SmartCare ups and closes clinics in Wal-Mart but yesterday Take Care announced expansion plans for Walgreens in Colorado and Wisconsin.

David Livingston
Guest
13 years 10 months ago

Every walk-in clinic I’ve seen, and I’ve seen a lot of them, is dead with the nurse sitting around reading a magazine. In reality they cannot provide any meaningful services other than do a basic assessment and refer you to a doctor in one of their larger clinics.

The emergency room is the lowest cost option for the poor and uninsured. In-store clinics need cash or a credit card and emergency rooms don’t. Since the poor and uninsured probably don’t have an intention of paying, in-store clinics are not an option for them. Trying going to an in-store clinic the next time you get a prostate infection. Easy to diagnose and cure but certainly not at an in-store clinic. They will charge you $49 and tell you to go see a urologist. In-store clinics will need to do more than just hand holding or they will be out of business.

Ian Percy
Guest
13 years 10 months ago

At some point, maybe in the after-life, we’ll acknowledge that many brands can’t extend into dissonant directions. That’s like buying a hybrid Hummer or having dollar shop eye surgery. The intention, as several have said, is admirable, even essential. But in retail branding the old adage that “A rose by any other name is still a rose” holds true. Wal-Mart is Wal-Mart. A health clinic is a health clinic. But Wal-Mart isn’t a health clinic. My hunch is that if the walk-in clinic instead of a walk-through clinic it would make a huge difference.

Alison Chaltas
Guest
Alison Chaltas
13 years 10 months ago

Most shoppers view these in-store clinics as a separate brand for the retailer so perceived equity damage should be negligible. That said, the sudden closings certainly damage the clinic concept and will likely hurt all in-store clinics.

The damage to retailers is threefold:
1) More operational to rebuild new prototypes around the space.
2) Financial with the loss of that traffic.
3) Lost opportunity for that health care halo the clinics bring to a store.

We still believe in-store clinics are a great idea. Figuring out how to make them work is more complicated than many expected. Should have known nothing is easy in the US health care market!

Max Goldberg
Guest
13 years 10 months ago

The sudden closing of in-store clinics will have a negative impact on consumer confidence in the clinics and on Wal-Mart. Any unexpected development impacts consumers. It causes a loss of faith in clinics. WM also needs to consider whether it is worthwhile to offer the space to another clinic, when so many are experiencing problems. What is the impact on the WM brand and on its consumer loyalty?

All of these issues should be explored by WM before opening future clinics.

Mel Kleiman
Guest
13 years 10 months ago

It will not have a major effect in the long run. We are looking at a new model of providing services and many organizations jumped into the market thinking it was going to be easy to make a profit. They are now finding that it is taking time for consumers to adapt.

Also, I think organizations are finding that the target user may have been different from what was perceived as the main target users of these clinics. The model just needs some refining.

Everyone I have talked to who has used a walk-in clinic has nothing but positive things to say.

Dan Desmarais
Guest
Dan Desmarais
13 years 10 months ago

This is a disappointing step in the evolution of the healthcare system. Separately, empty space at the front of any retail store is always a big blow to the perception of that retailer’s business.

The clinics offer a one-stop service that is a necessity with today’s gas prices. They are also much cheaper for the over all healthcare system than the same people lining up in Emergency departments.

Hopefully, more remaining clinics can stay the course and continue this great service.

M. Jericho Banks PhD
Guest
M. Jericho Banks PhD
13 years 10 months ago
The way for retailers like Wal-Mart to retain and promote their in-store clinics is to provide health plans for all of their employees and make the store’s clinics the first point of care. This would dramatically increase the clinics’ traffic and volume, which would then attract qualified staff and generate interest among shoppers. Also, at least four additional bonuses would accrue to the retailer: 1.) Prescriptions issued by the clinics for store employees would be filled in the store’s pharmacy. 2.) By making their clinics the mandatory first stop for their employee health plan, the store is in position to monitor care and eliminate bogus worker’s compensation claims and treatments (this is huge, as I learned while consulting for the City Of San Francisco and a Hollywood studio regarding worker’s comp). 3.) The store employees’ families would be included in the plan, increasing traffic and volume even more. 4.) Store employees could no longer call in sick without first checking in with their clinic. As I’ve previously mentioned several times in these spaces, Kaiser-Permanente began… Read more »
Mark Lilien
Guest
13 years 10 months ago

Closing a walk-in clinic doesn’t hurt the store. What hurts: keeping a money-loser open. Every store needs to maximize the profit per square foot. If the clinic makes less money than an expanded jeans department, the jeans department wins the space. If an expanded shoe department is more profitable than an expanded jeans department, make the jeans department smaller and expand the shoes. Decades ago, J.C. Penney sold refrigerators, just like all the other department stores. Dumping the refrigerators and giving the space to more clothing only improved profits.

If very few people use the clinics, then very few folks will miss the clinics when they’re gone. No retailer can please everyone, and any retailer who tries is just asking for directions to oblivion.

Dave Wendland
Guest
13 years 10 months ago

The general financial model and sustainability of walk-in clinics remains suspect, however I have seen some positive steps and closer integration with the pharmacy operation. The real question remains – does this help the escalating costs of healthcare? If so, the format needs to be embraced by all of healthcare (including physicians and emergency room operators) so that it becomes part of the “system.” Functioning as a distant cousin may lead others to peril.

Mark Malone
Guest
Mark Malone
13 years 10 months ago
No, Wal-Mart will not be affected in the least. On the contrary, this likely will speed up their plans to join with hospital/medical groups to attain a bigger return and achieve their ultimate. My conjecture of course. Wal-Mart has been the gorilla landlord heretofore. They have had their hand in most of the decisions SmartCare has made i.e., which Electronic Health Record system would be utilized, advertising, etc. under a guise of protecting their interests. I believe WM has been waiting to see which of the clinic companies would come out on top and then partially or completely take over. Wal-Mart could never have complete control due to the AMA and local medical community scrutiny, but would have to be in partnership with a larger hospital organization, or larger medical group. In regards to the question of patient perception, patients will always follow the path of least resistance. If they perceive a new clinic as this path, they will follow it. C’mon, if you woke up with a cold and “knew” you needed to be… Read more »
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