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Do Retail Clinics Actually Increase Healthcare Costs?

The clinics may appeal to someone wanting an mHealth option, but a RAND Corporation study questions whether they compel people to visit a doctor when they don't need to.

- A new study questions whether retail clinics are driving up healthcare costs – and perhaps even creating a nation of wimps.

The study, by the RAND Corporation, found that consumers with low-severity illnesses who had access to a retail clinic would visit the clinic rather than sitting home and coping with the discomfort. That led researchers to conclude that consumers are using the clinics solely due to the convenience, and are accessing healthcare services more often.

“These findings suggest retail clinics do not trim medical spending, but instead may drive it up modestly because they encourage people to use more medical services,” Dr. Ateev Mehrotra, an associate professor at Harvard Medical School and an adjunct researcher at the RAND Corporation, said in a press release issued this week. “Retail clinics do offer benefits such as easier access to medical care, but the widely expected cost savings may not be realized.”

Since their debut in 2006, retail clinics have sprung up in a number of locations, from community centers to pharmacies to retail chains like Target and Wal-Mart. More than 2,000 such clinics are now in operation, accounting for some 6 million patient visits each year.

The clinics are popular because they offer after-hours and weekend service at lower rates than a visit to the doctor’s officer or hospital and don’t require appointments.

That convenience, says RAND researchers, may be leading consumers to use them more than they should.

“While retail clinics do allow some users to lower their medical spending, the new use of medical services outweighed the savings from the substitution we observed among the large group of people we studied,” Scott Ashwood, the study’s lead author and an associate policy researcher at RAND, said in the release.

The study focused on 11 non-acute conditions – ailments like sinusitis or a urinary tract infection – that account for some 60 percent of retail clinic visits. It then compared the experiences of roughly 519,500 health plan enrollees who’d visited a clinic at least once with about 860,500 enrollees who did not use clinics.

Researchers discovered that only 42 percent of the retail clinic visits replaced visits to the doctor or hospital. While each visit represented an average savings of $21 over more expensive healthcare services, those who used a clinic rather than staying home created an average of $35 in extra healthcare spending – a 21 percent increase in average spending for low-acuity illnesses.  

Mehrotra, the senior author of the study, said it might come as a shock to payers who’ve created incentives – such as waiving copays – to encourage members to use retail clinics.

“Health plans may want to consider our findings as they decide whether and how to cover care at retail clinics,” he said. “If the goal is to lower costs, then encouraging use of retail clinics may not be a successful strategy.”

The study does create some additional questions that might offset the extra cost of retail clinics.

For example, a clinic visit might help someone recover more quickly from a minor illness, resulting in less sick time used and less money spent on over-the-counter medications. It might also catch another, underlying medical issue that requires more extensive healthcare services. And someone who stays home rather than visiting a clinic might eventually need to be hospitalized, requiring even more expensive and long-term care.

The study, supported by the Robert Wood Johnson Foundation, was co-authored by Martin Gaynor of Carnegie Mellon University, Claude M. Setodji of RAND, Dr. Rachel O. Reid of Brigham and Women’s Hospital and Ellerie Weber of the University  of Texas School of Public Health.

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