I have been avidly following the metamorphosis of retail drug store chains such as CVS and Walgreens to important links in the U.S. healthcare delivery system. Of course, such stores have been important for decades for filling drug prescriptions. However, the deployment of walk-in clinics (Minute Clinics in the case of CVS) has taken this transition into new territory. An additional recent step by CVS has been the elimination of the sale of tobacco products (see: CVS Stores Stop Selling All Tobacco Products). Below is an excerpt from the article:
[A]ll 7,700 CVS locations nationwide will no longer sell tobacco products...as it seeks to reposition itself as a health care destination. The rebranding even comes with a new name: CVS Health. The decision to stop selling cigarettes is a strategic move as pharmacies across the country jockey for a piece of the growing health care industry. Rebranding itself as a company focused on health could prove lucrative for the drugstore as it seeks to appeal to medical partners that can help it bridge the gap between customers and their doctors....CVS already operates 900 walk-in medical clinics, or “minute clinics,” where customers can get relatively simple services like blood pressure tests and flu vaccines. By dedicating space for these services, CVS and other major retailers like Walmart are diving into the pool of competitive health care dollars available for helping manage customers’ illnesses.....As the medical industry braces for the flood of new patients with insurance through the Affordable Care Act, drugstores see an opportunity to provide basic care to consumers who may not want to wait to see a doctor....And major chains like Walmart, the country’s largest retailer, can offer such services for prices that may appeal to patients on the fringes of the health care system.....Drugstores want to use their clinics to help drive foot traffic to their stores, and to their pharmacies, where customers can fill prescriptions. CVS has entered partnerships with more than 40 health systems, including local hospitals, to help run its clinics. The company opened 32 clinics last quarter and is on track to open at least 150 more this year.....Revenues at the clinics are up 24 percent in the second quarter, compared with a year earlier, and the company plans to operate 1,500 clinics by 2017.....As CVS seeks new health partners, its decision to end cigarette sales may make it more appealing than its tobacco-selling rivals....When you stop selling cigarettes as a retailer, it sends a very big signal to the rest of the health care community that you are in the health care business.
I posted a precious note about the differences between walk-in clinics and urgent care clinics (see: Rapid Growth of Urgent Care Clinics; Cost Competition for Hospital ERs). The former are staffed by nurses, often nurse practitioners (NPs), and offer services such as vaccinations and school physicals. The latter are staffed by physicians and offer trauma care and treatment of minor, often with radiology services. Urgent care clinics siphon off patients from hospital emergency rooms. Walk-in clinics siphon off patients from office visits to primary care practitioners. As noted in the excerpt above, "CVS has entered partnerships with more than 40 health systems, including local hospitals, to help run its clinics." Local hospitals are not in direct competition with walk-in clinics but probably hope to benefit from referrals of the cases that the nurses staffing them can't manage.
Theranos is a rabidly growing reference lab that use micro quantities of blood accompanied by very low, posted prices for CLIA-certified lab testing. Posting of prices for direct-access-testing (DAT) is not unusual but the complexity of the Theranos test menu is quite unusual. Theranos is developing their so-called Theranos Wellness Centers in a limited number of Walgreens stores. Theranos has become the darling of the financial analysts. Here's a quote from a laudatory article from Fortune about the company and its founder (see: This CEO is out for blood):
...Theranos tests cost less. Its prices are often a half to a quarter of what independent labs charge, and a quarter to a 10th of what hospital labs bill, with still greater savings for expensive procedures. Such pricing represents a potential godsend for the uninsured, the insured with high deductibles, insurers, and taxpayers. The company’s prices are set to never exceed half the Medicare reimbursement rate for each procedure, a fact that, with widespread adoption, could save the nation billions. The company also posts its prices online, a seemingly obvious service to consumers, but one that is revolutionary in the notoriously opaque, arbitrary, and disingenuous world of contemporary health care pricing.
Look for CVS Minute Clinics to offer broader lab testing in connection with its Minute Clinics but I don't see how they can compete with the Walgreens/Theranos offerings in this area. In fact, if all of the reporting about Theranos proves to be true, Quest and LabCorp should be looking at what's happening in the consumer-oriented lab testing market with some alarm.