What's Next: Retail Clinics Define Role As Hub of Provider Network

Editor's Note: Below, our "What’s Next” predictions series continues with this view from Oliver Wyman Partner, Sam Glick. He shares his perspective on retail health and the evolution of retail clinics, highlighting traditional health systems' embrace of retail care as an extension of their impact, not as a competitor. Since publication of this piece, notable activity in the joint pharmacy/retail sector has been transforming the industry. Household names like Amazon, Walgreens, and Rite Aid are merely a few companies continuing to disrupt a rapidly evolving pharma industry. It’s nonetheless clear the pharma industry is ripe for disruption.

Over the past few years, there has been much excitement about the potential for retail healthcare. To date, however, retail health has largely been realized as urgent care clinics in pharmacy settings. These so-called doc-in-a-box clinics certainly extend the reach and convenience of low-acuity care, but most of them are still grounded in the old-fashioned sick-care, bricks-and-mortar world of medicine.

This year will usher in a new era of retail health. Retail clinics 2.0 will be different; they will be the hub of the provider network of the future. These clinics will still provide inexpensive urgent care at convenient hours and locations, but they’ll also provide insurance enrollment (like Walmart is doing); care coaching (a la Rite Aid); full primary care (as Walgreens is piloting); a community-health focus (like Target); and whole-health services (like CVS). The retail healthcare experience will be like the best of any other retail experience—that is, tailored, affordable, and easy.

In the coming year we will also see traditional health systems embrace retail care as an extension of their impact, not as a competitor. Continued growth in value-based payments mean health systems have incentives to find new, lower-cost ways to reach patients before they show up in the emergency room. And what system wouldn’t want to be able to deliver a primary care visit for $45, when their cost is two to four times that amount today?

Why is this the year that retail health will take root? Consumers are now comfortable with retail care (our research shows that more than a quarter of Americans have used a retail clinic and more than two-thirds are willing to do so); retailers are continuing to invest (CVS, for example, wants to nearly double its retail care footprint by the end of 2017); and providers have more incentive than ever to get costs down and improve the patient experience.

2016 is going to be an exciting year indeed.