Retail Clinics: Expanding Access to Health Care

Heinz College of Health Care Policy and Management
Carnegie Mellon University
Pittsburgh, PA

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Health care costs today are rising at an annual rate of six to seven percent. This is a staggering figure considering that the United States spends almost a fifth of its Gross Domestic Product (GDP) on health care. In spite of these statistics, however, more than 47 million Americans lack health insurance. Given the current economic climate, this situation is likely to worsen, placing an even greater strain on both federally- and state-funded health programs such as COBRA and Medicare. According to the American Recovery & Reinvestment Act (2009), the United States will need to spend $150 billion in new funds on health care within the next two years just to maintain current obligations.1

Because health care services are mostly a fringe benefit of employment, people who lose their jobs face major challenges in obtaining necessary care. When faced with a crisis, their only option is the hospital emergency room. This is because an unfunded government mandate called EMTALA requires that hospitals provide emergency services to all—whether insured or not.2 This requirement to act as a “health care safety net” leads to an extensive amount of uncompensated care and sets up a domino effect. In the attempt to cover their costs, hospitals raise the rates for those who do have insurance, which raises the cost for all. In spite of this, however, many hospital emergency rooms are closing around the country due to a shortfall in revenues.

In response to these system-wide stresses, new health care delivery models have been developing across the country. One of the most promising is that of the retail clinic. Often located within suburban pharmacies, grocery stores and shopping malls, these private, for-profit entities are characterized by their accessibility and affordability. Because they are open in the evenings and on weekends, patients can receive prompt care without appointments. Because they are mainly staffed by nurse practitioners, they provide services at much lower cost than other health care providers such as emergency rooms, urgent care centers, and physician offices.

Despite their benefits, however, retail clinics pose some challenges for state policymakers and regulatory agencies who are working to improve access, cost, and quality within their health delivery systems. This paper describes the impact that retail clinics have had on the current health care system, as well as some of the challenges they currently face. It also examines how U.S. policymakers are using regulation and licensure to promote, structure, and/or limit retail clinic operations. It concludes by suggesting several ways in which the United States in general and Massachusetts in particular could incorporate retail clinics into the current health care system.


Reforming the U.S. health care system requires that policymakers address an array of issues, including how to control costs, increase efficiency, improve quality of care, and increase access. An important part of the solution could be the retail clinic, which uses evidence-based guidelines and physician oversight to provide walk-in services to people who need health care services. Since consumers are expected to pay for care at the time of service, it does not matter whether they are insured or not. In addition, since most of these clinics also use electronic medical records, it is easy to transfer patient information to family physicians and hospitals, which improves the integration and overall quality of care.

Since their inception into the health care environment in early 2000, retail clinics have expanded rapidly. Today approximately 1,200 clinics exist in 37 states, and approximately 3.4 million Americans have visited at least one. Mehrotra estimates that the number of clinics will grow to almost 6,000 in the next five years.3

Numerous studies have proven the efficacy of this model. Thygeson et al. find that retail clinics provide affordable care to the uninsured and to those who have coverage but can’t afford the co-payments. They also find that such clinics provide timely care that can prevent acute exacerbations of difficult, costly to treat existing conditions.4 Mehrotra argues that improving people’s access to retail clinics lowers the burden on emergency rooms.5 Smith suggests that the quality of care in retail clinics is good because they follow evidence-based guidelines for treatment protocols.6 Partin shows that people with limited financial resources find retail clinics a convenient, affordable resource.7 Thygeson et al. document that use of retail clinics increases over time.8

When compared to health care delivered through hospitals and doctors’ clinics, retail clinics offer four major advantages: 1) easier access, 2) better quality of patient care, 2) higher patient satisfaction, and 4) lower costs. Many studies conducted over the past 20 years show that advanced practice nurses and physician assistants provide quality similar to or better than physicians when delivering health services within their accepted scope. Hutchison and colleagues studied patient satisfaction and quality of care in three primary care settings (retail clinics, family physicians’ offices and emergency departments) and found that patients perceived retail clinics more positively than the other two. Furthermore, quality-ofcare scores were higher in retail clinics than in family practices.9 The Minnesota HealthScore (a Web site that provides information on the quality of health care) showed that quality of care for pharyngitis (sore throat) and colds is excellent in retail clinics compared to other provider groups.10

Retail clinics represent a market-driven approach to cost containment through innovation in primary care. According to Sage, their main commitment is to deliver low-priced services at point of service.11 Most retail clinic services are priced from $30 to $70, which is about half what patients would pay in a traditional physician’s office and a small fraction of standard emergency room charges. Thygeson et al. found that retail clinics cost, on average, $51 less than urgent care, $55 less than physician offices and $279 less than emergency rooms (Table 1). In addition, he found that pharmacy costs are between $4 and $5 less than in urgent care and office settings.12

Despite their many benefits, however, retail clinics are currently facing some serious challenges. In fact, current trends show that expansion of retail clinics has begun to decelerate. Some companies are facing financial pressures to offer their services on a seasonal basis rather than year-round, and some have even been forced to close. Private investors, due to profitability issues, are no longer as willing to invest in new clinics. Earlier estimates that retail clinics would turn a profit in three to five years are no longer guaranteed.

In their effort to grow and thrive, retail clinics face four major challenges. The first lies in the limited number of nurse practitioners who are both qualified and willing to work in a retail clinic setting. The second lies in the low volume of patients that such clinics see. The third lies in the need to align with doctors and hospitals. The fourth lies in the need to align with primary care physicians (PCPs). If retail clinics are to continue expanding, especially in underserved areas, these challenges must be addressed from a policy standpoint.


To resolve the four challenges identified above, we propose the following solutions.

Increase the number of nurse practitioners

To increase the number of nurse practitioners who specialize in family medicine and are willing to work in a retail clinic setting, we suggest that current nursing school loan forgiveness programs be expanded to include individuals who want to pursue a career in a retail clinic. Currently, the Nursing Education Loan Repayment program provides repayment of 60% of nursing school loans in exchange for two years of service at a critical shortage facility.13 It would be easy to expand this program to offer incentives for RNs who pursue a nurse practitioner degree and subsequently agree to work for a given period of time at a retail clinic.

Expand the services retail clinics can provide

We suggest that retail clinics be allowed to practice basic chronic disease management. According to Harlow, about 44% of the U.S. population has a chronic condition, and up to 75% of U.S. health care spending is on chronic care.14 In 2007 total spending for chronic disease was $2.2 trillion. Capturing just 2% of the chronic care market—such as monitoring visits for diabetics—would translate to over 8,500 fully-utilized retail clinics.

Encourage collaboration between doctors, hospitals, and primary care physicians

To increase the number of people who choose retail clinics for their basic health care needs, we suggest that hospitals, community care clinics, and retail clinics be encouraged to collaborate with each other. All of the parties have much to gain from working together. Hospitals and larger care organizations could use retail clinics as a point of entry into their health care network. With a predicted national shortage of primary care doctors, retail clinics could complement the primary care needs for many patients. By working together, they could create a brand or image (co-branding) that would give patients more confidence in the retail clinic as a viable alternative for their health needs.

Collaboration could be incentivized by giving tax cuts to hospitals that are willing to work with retail clinics in their area. Retail clinics could be incentivized by allowing them to receive Medicaid cost-based reimbursement if they collaborate with a local hospital or community care clinic.

In this effort, primary care physicians and retail clinics should not view each other as threats, but as complementary, mutually beneficial partners. Although many PCPs have voiced the concern that retail clinics will take away their easy-to-treat patients, we do not believe this would happen to any great extent. A recent study found that the patient population served by retail clinics and PCPs has limited overlap. It also found that ten clinical problems, such as sinusitis and immunizations, encompass more than 90 percent of retail clinic visits and that these same ten clinical problems make up only 13 percent of adult PCP visits.

An example of how retail clinics could support PCPs occurs in Massachusetts, where current policies encourage retail clinics to play an active role in emphasizing the importance of patient and PCP relationships. The policies require retail clinics to 1) make referrals to primary care practitioners for certain conditions, 2) maintain rosters of PCPs who are accepting new patients and encourage them to obtain a PCP, and 3) provide a toll-free number that will enable a caller to speak with a live practitioner during off-hours. All of these policies could result in a larger patient volume for PCPs.

Collaboration would also help hospitals, PCPs, and retail clinics alike.

Increase revenue for all

One of the major benefits of collaboration lies in the potential for increased revenue for all parties concerned. On the one hand, nurse practitioners in a retail clinic would refer patients with complicated health issues to their partner hospital for treatment. On the other hand, hospitals would refer nonurgent patients who come to their emergency departments to the retail clinic. In this way, the retail clinic could tap into a potentially rich source of referrals from the hospital emergency department, while the hospital could tap into a rich source of referrals for more complex health problems. This process would translate into more patients for both parties.

Lower costs throughout the health care system

Due to the lack of health insurance, many people use emergency rooms for routine health care. Since many of these services are never compensated, it forces hospitals to raise their rates across the board. In contrast, retail clinics are designed specifically to serve this population. If people with inadequate or no insurance were to use retail clinics as their first choice for basic health care, it would save enormous sums of money throughout the system. Some hospital networks have already recognized these potential benefits and started their own retail clinic chains. Examples include Aurora Health Care in Wisconsin and Alanticare in New Jersey.

Improve quality of care due to record sharing

Another benefit lies in the potential for improved quality of health care due to the sharing of electronic medical records (EMRs) between retail clinics and hospitals. With patient consent, both the retail clinic and the hospital would have mutual access to information on their patients’ medical history, prescriptions, and treatments. This two-way sharing of clinical information could not only improve quality of treatment, but also greatly speed up the referral process between the hospital and the retail clinic. One example of where this is already taking place is the Cleveland Clinic, whose MinuteClinic has become the largest provider of retail clinics in the country.

Lighten the workload for PCPs

Retail clinics could lighten the load for PCPs by routinely handling minor patient health issues. The benefits of such an arrangement would be many, including better care, improved care coordination, and better health outcomes for patients. It would also give PCPs more time to work with patients who have complicated health issues (which generally have higher reimbursement rates than minor issues do).

Help to reform the reimbursement system for PCPs

One positive aspect of analyzing the pros and cons of PCP and retail clinic cooperation is that it provides the opportunity to examine the current reimbursement system for PCPs more closely. A major factor in the growing shortage of primary physicians is that they are compensated at much lower rates than specialists are. This puts pressure on PCPs to see as many patients as possible each day and limits the time they can spend with individual patients. A major strength of this model lies in the ability of PCPs to coordinate care for their patients. Unfortunately, they do not currently receive financial reimbursement for such tasks; this leads to fragmentation of care and increases the possibility of making mistakes, especially in patients with multiple conditions. It also increases expenses overall.

Clearly, the PCP reimbursement system is due for an overhaul. One of the benefits of the growing numbers of retail clinics is that they could encourage PCPs to move away from a model that rewards episodic treatment to one that rewards chronic disease management and care coordination.


According to a 2006 report prepared by the California HealthCare Foundation, the average start-up cost for a retail clinic is $50,000.15 Actual costs range from $25,000 for a barebones operation to $145,000 for a well-equipped clinic. For example, Saint Alphonsus in Idaho spends $110,000 to build each clinic. It spends an additional $30,000 per location to purchase high-tech equipment such as self-registration computer kiosks and an electronic medical record system.

Compared to the potential benefits, the federal cost of retail clinics would be minimal. The loan forgiveness program would cost between $12,000 and $25,000 per nurse, depending on the length of time a nurse agrees to dedicate to the retail clinic. Each additional year would result in a greater percentage of the government reimbursement for their loan. This money could be allocated from the additional funding given to the Nursing Education Loan Repayment Program by the American Recovery and Reinvestment Act. Any costs for incentivizing collaboration between hospitals and retail clinics and for reimbursing them for basic care and chronic disease management would be offset by the savings inherent in such programs.


The intent of the 2006 Massachusetts healthcare reform law was to increase health insurance coverage by expanding the state’s Medicaid program, to provide government subsidies to make insurance affordable for low-income residents, and to create individual and employer contribution mandates. These initiatives have had strong public support and shown signs of early success in decreasing the numbers of uninsured. The uninsured rate has reportedly dropped to 2.6%, and public support has increased from 64% to nearly 75%.

Nardin found that despite such success there are many criticisms to this approach to reform. Some claim that the expanded coverage has not done enough and believe that comprehensive reform is necessary in order to make this a sustainable plan. These arguments point to the fact that the plan has failed to control healthcare costs, which has consequently prevented any improvements in access to care. The arguments are substantiated by the cost of the reform, which is projected to reach $1.3 billion for the 2009 fiscal year, an increase from $1.1 billion in 2008. Insurance premiums are projected to increase by 9.4% in 2009, far more than increases in wages and inflation.16

Increasing costs have also forced the state to divert money that would have originally gone to safety-net providers, such as public hospitals and community clinics, to sustain the costs of the reform. This not only hurts the ability of public hospitals and clinics to continue providing the same services, but it may force some to close.

Proponents of the reform argue that since the previously uninsured now have insurance they will no longer need access to safety net providers. However, evidence shows that funding for these services has fallen much faster than demand. One reason for this is that in the state’s old health care system, low-income residents were eligible for completely free care. Under the new plan, they are forced to pay co-payments and deductibles they cannot afford. Hence, increased levels of coverage have failed to increase access to care.

This leaves Massachusetts still struggling to find a way to ensure that all of its citizens have access to affordable health care. In the effort to devise a solution, retail clinics clearly have the potential to play a major role. Massachusetts took the first step—developing regulations that fit retail clinics into the health service delivery system—in early 2008 when it created regulations for the operation of retail clinics by establishing limited service clinics (LSCs). Table 3 lists the clinic regulations, and Table 4 shows a list of services that these clinics can provide.

We recommend that Massachusetts treat LSCs like federal quality health centers, similar to the afterhours clinics in New Jersey. The LSCs could work alongside community health centers as part of their cost structure and therefore receive Medicaid cost-based reimbursement encounter rates for federally qualified health centers. Retail clinics could be staffed with community health workers who, together with nurse practitioners and physician assistants, would enroll people in Medicaid, connect them to a primary care doctor, and make sure that they receive appropriate care. Medicaid could pay the LSCs a rate that reflects their overall lower cost structure.

On a national scale, we recommend that retail clinics become a common provider of basic healthcare services. People who lack adequate health insurance, or insurance at all, will find such clinics a convenient, affordable, and high-quality resource. To accomplish this, we need to do the following: 1) educate patients about retail clinics, 2) encourage state officials to enact laws that allow nurse practitioners and physician assistants to work in retail clinic settings, 3) increase nursing school numbers, 4) offer loan forgiveness programs for nurses and physician assistants who want to work in these clinics, 5) integrate retail clinics into the larger health care system, 6) expand the kinds of services that retail clinics can provide, including chronic care, and 7) form a bridge between retail clinics and Medicaid.

Richard Chang
Charles Davis
Steven Nguyen
Vinti Saini
Heinz College of Health Care Policy and Management
Carnegie Mellon University
Pittsburgh, PA
  1. American recovery & reinvestment act (2009). Retrieved April 12, 2009, from the World Wide Web: cgi?dbname=111_cong_bills&docid=f:h1enr.pdf
  2. The National Report Card on the State of Emergency Medicine by American college of emergency physicians (2009). Retrieved April 12, 2009, from the World Wide Web: ACEP-ReportCard-10-22-08.pdf.pdf
  3. Mehrotra, A., et al., (2008). Retail Clinics, Primary Care Physicians, and Emergency Departments: A Comparison of Patients’ Visits. Health Affairs 27: 1276.
  4. Thygeson, M., Van Vorst, K., Maciosek, M., & Solberg, L. (2008, September). Use And Costs Of Care In Retail Clinics Versus Traditional Care Sites. Health Affairs, 27(5), 1283-1292. Retrieved April 5, 2009, from Academic Search Premier Database
  5. Mehrotra, A., et al., (2008). Retail Clinics, Primary Care Physicians, and Emergency Departments: A Comparison of Patients’ Visits. Health Affairs 27: 1276.
  6. Smith, K. (2007). Quality of Care in the Retail Health Care Setting Using National Clinical Guidelines for Acute Pharyngitis.
  7. Partin, B. (2007, March). Give Your Input Into the Retail Clinic Debate. Nurse Practitioner, 32(3), 11-11. Retrieved April 5, 2009, from Academic Search Premier Database.
  8. Thygeson, M., Van Vorst, K., Maciosek, M., & Solberg, L. (2008, September). Use And Costs Of Care In Retail Clinics Versus Traditional Care Sites. Health Affairs, 27(5), 1283-1292. Retrieved April 5, 2009, from Academic Search Premier Database
  9. Hutchison, B., Ostbye, T., Barnsley, J., Stewart, M., Mathews, M., Campbell, M., et al. (2003, April 15). Patient satisfaction and quality of care in walk-in clinics, family practices and emergency departments: the Ontario Walk-In Clinic Study. CMAJ: Canadian Medical Association Journal, 168(8), 977. Retrieved April 6, 2009, from Academic Search Premier Database
  10. Minnesota Community Measurement (2009). Retrieved April 6, 2009, from the World Wide Web: http://www.mnhealthscores. org/?p=our_reports&sf=group&search_ phrase=&category=15&name_id=&compare=
  11. Sage, W. (2007, October). The Wal-Martization of Health Care. Journal of Legal Medicine, 28(4), 503- 519. Retrieved April 5, 2009, from Academic Search Premier Database
  12. Thygeson, M., Van Vorst, K., Maciosek, M., & Solberg, L. (2008, September). Use And Costs Of Care In Retail Clinics Versus Traditional Care Sites. Health Affairs, 27(5), 1283-1292. Retrieved April 5, 2009, from Academic Search Premier Database
  13. US Department of Health and Human Resources, Nursing Education Loan Repayment Program (2009). Retrieved April 12, 2009.
  14. Harlow, D. (2009). Operating retail based clinics in a heavily-regulated environment. The Harlow Group. Retrieved April 12, 2009, from the World Wide Web: david-harlow-speaks-at-retail-clinic-conference.html
  15. California HealthCare Foundation. Retail Clinics: Six State Approaches to Regulation and Licensing. Retrieved April 10, 2009, from the World Wide Web: RetailClinicsSixStateApproaches.pdf
  16. Nardin, R. (2009). Massachusetts’ Plan: A Failed Model for Health Care Reform. Boston: Harvard Medical School.


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