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Retail health clinics set to emerge as channel partner market

Healthcare-oriented channel partners should keep tabs on the emerging retail health clinic space, which could harbor systems integration and consulting opportunities.

By all accounts, retail health clinics and the technology used to support patient's visits at these facilities is an expanding segment of the healthcare industry. Given this fact, technology and service providers looking to expand their client base should consider the opportunities in this burgeoning market.

As the country continues to undergo healthcare reform, retail health clinics, which are located in pharmacies, retail chains and supermarkets, provide acute and preventative care such as medical screenings and diagnostic services to patients usually at a lower cost than a doctor's office visit. This model of care is increasingly being viewed as an important component in the nation's plans to increase access to healthcare.

Channel partners have begun to take notice. According to a recently published report from Accenture, an IT professional services and consulting company, there will be a 47% increase in the number of retail health clinics between 2014 and 2017 when there will be more than 2,800 retail clinics operating across the U.S. Accenture's analysis also shows that those who find walk-in visits without an appointment a convenient way to access care will increase from 16 million in 2014 to 25 million in 2017.

Retail health clinics have yet to hit their stride as a channel partner market. But over time, industry executives expect opportunities to emerge in consulting and systems integration as clinics enter relationships with health systems, medical practices and other health organizations.

Retail health clinics: The business case

The business case for retail health clinics' viability and sustainability has solidified in recent years. For a start, under the Patient Protection and Affordable Care Act more than 17 million people have gained health insurance coverage, and health plans are increasingly accepting payments for patient visits at retail clinics which are located in areas within physical proximity to large swaths of the population.

Against this backdrop, retail health clinics are outfitting their facilities with clinical systems such as electronic health records (EHRs) to manage patient data, practice management systems to handle billing, human resource management and other business systems. They also deploy telehealth equipment to conduct doctor and patient sessions over long distances often using high-definition video conferencing equipment.

Channel partners entering this space will find a market in a state of flux. Consolidation is occurring as interest in the promise of what retail health clinics can provide continues to generate investment dollars. In December, CVS Health Corp. announced the completion of a $1.9 billion deal to acquire Target Corp.'s pharmacy and clinic business. Under the terms of the agreement, 79 Target clinic locations will be rebranded as MinuteClinics, and CVS Health will open 20 new clinics in Target stores within the next three years.

As for the technology landscape, MinuteClinics already use EHR technology from Epic Systems Corp. The EHR supports MinuteClinic's evidence-based care efforts and facilitates connectivity with hospital networks, physician practices and major health systems that are affiliated with MinuteClinic.

What retail health clinics are primarily looking for is more novel technology, system integration and advisory services.
Kaveh Safavisenior managing director of Accenture's health practice

Epic's EHR is also being rolled out at Walgreens Healthcare Clinics as part of a plan to support long-term growth for its clinic business. Epic's EHR will connect Walgreens' clinics with health organizations to share patient medication lists, assist with medication reconciliations and review patient data during a patient's visit. Walgreens currently manages more than 400 Healthcare Clinic locations in 22 states and Washington D.C.

A spokeswoman for Walgreens said a two-pronged growth strategy is being developed for its Healthcare Clinic business.

"The first is to build a strong, viable model for retail clinics within our stores and grow our business by expanding the range of services we offer and leveraging technology in new ways to improve the patient experience," she said. "We are making significant investments in our core business, which is our Walgreens-managed clinics, such as [an] EHR platform being implemented this year to accelerate this part of our growth plan."

The second component of its growth strategy is to explore partnerships with community health systems. According to the Walgreens spokeswoman, part of the company's growth plan entails entering into discussions with select health systems to explore a collaborative services model that fully integrates retail clinics into the health system care plan and care continuum. To advance this strategy, Walgreens recently announced two agreements, one with Providence Health and Services and the other with Advocate Health Care for those health systems to manage and operate retail clinics at Walgreen's stores.

Integration, consulting opportunities

Kaveh SafaviKaveh Safavi

As retail clinics explore different business models, Kaveh Safavi, senior managing director of Accenture's health practice, said while the IT potential of retail health clinics has not yet been fully realized, future projections are that these facilities will have to buy more technology and services to integrate their systems with their partners.

"They have to buy systems integration services, and they often have to buy management consulting services to help them figure out how to change their workflow," Safavi said. "What retail health clinics are primarily looking for is more novel technology, system integration and advisory services on how to change workflows in order to make these investments work."

With regard to adopting an outsourcing model for their business operations, such as off-premises cloud computing, Safavi said retail clinics haven't begun to think of outsourcing their business operations.

"The healthcare electronic medical record market space is not a marketplace that has transitioned into an outsourcing model at all. It's not really a meaningful conversation yet in retail because it's not a meaningful conversation in healthcare," Safavi said.

For IT companies looking for business opportunities in this market, Safavi noted they should remember that purchasing technology for a Walgreens- or CVS- operated retail health clinic is an enterprise conversation with sophisticated buyers who already have IT systems.

"You really need to do your homework and find an unmet need," Safavi said.

He said there are many cases where the real issue is who is going to organize the relationship and create the transaction platform or the communications platform between that retail clinic and several different stakeholders in the community who are all in different enterprises.

Safavi also noted that once an IT company has figured out the retail health clinic's business model and identified who is responsible for IT purchasing decisions, it needs to have specific skills in place to help with interoperability and other consultancy services.

"If I'm going to help a health system that has a proprietary electronic health record connect to a retail health clinic that has a different proprietary health record I need to have had experience in the technical aspect and semantics aspects, meaning I know what it's like to connect these two systems and have the information readable or available," Safavi said. "Then I'll have some theory as to how to make that happen quickly because both parties recognize that that is a need, but neither of them knows what the business model is that makes it worth doing."

Next Steps

Find out about Vertiscale's MSP offering for small to midsize medical practices

Learn how channel partners can assist healthcare customers with BI projects

Consider the factors healthcare execs evaluate when looking for a vendor

Gain insight into the channel's growing interest in healthcare data management

This was last published in March 2016

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Retail health clinics are an emerging segment within the health IT market. What market segments represent the biggest growth opportunity from your perspective?
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Since my field is media production – movies, television, informationals, educationals – we expect to see major changes in healthcare through imaging and off-site conferencing. As camera quality increases, with the introduction of VR, there is no longer a reason for the medical staff and the patient to share the same room. With improvements to robotic surgery (like the da Vinci), a patient can be prepped in California while the operating surgeon works in New York.

That aside, we expect that many of the advances will not be quite as dramatic. At this point we anticipate media that informs and educates, perhaps long before surgery is necessary. Eventually, of course, expert systems will eliminate the human doctor but that, fortunately, is still far away.
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