The easy money that many saw in opening in-store clinics was a bit harder to come by than expected so fewer new facilities are being opened as companies in the space try to bring operational expenses in-line with the realities of the marketplace.
As a piece in The Wall Street Journal pointed out, a number of operators have been forced to close in-store clinics. The paper's website puts the number of clinic closings at 69 in 15 states in recent months.
The biggest operator of in-store clinics, CVS Caremark, recently announced that it was scaling back plans to open new locations. The company, which opened its 500th location back in March, has gone from plans to open up between 150 and 250 additional clinics in 2008 to adding another 100 locations instead.
Tom Charland, the owner of Merchant Medicine and a former vice president for strategy at MinuteClinic, told The Journal, "We have seen fallout in this industry, on a smaller scale, that is not unlike the dot-com bubble. The big mistake was for people to think they could reach break-even in six months. People are learning this is an 18-to-24-month process to get to break-even."
While MinuteClinic scales back, it appears as though its full steam ahead for Walgreens' Take Care health clinics. The company is looking to open roughly 240 new clinics before the year's end.
While CVS and Walgreens chose to buy in-store clinic companies, Wal-Mart has taken the approach of working with partners including hospital systems in local areas to operate co-branded facilities. The retailer plans to have up to 400 clinics open inside its stores by 2010. It currently has roughly 50 sites with in-store clinics.
Discussion Questions: What is your take on developments in the in-store clinic business? Are recent closings along with plans by some to slow openings a temporary blip that signals the business is slightly ahead of consumers or is it an indication that this is not the money making opportunity that evangelists predicted?