AHCA and Retail Clinics: Assessing the Impact

AHCA and Retail Clinics: Assessing the Impact

While American Healthcare Care Act (AHCA) is still in the middle of legislative process, with Senate action (that is expected to limit impact), and conference (which will be hard to predict) yet to come, estimates are that the bill removes anywhere from 15 to 20 million Americans from healthcare insurance rolls.   This might focus attention on the growth projections of retail clinics, as Kalorama Information notes that there was great anticipation and interest in retail clinics because of the passage of the Affordable Care Act (ACA), and that the legislation’s repeal might have an effect on the business of retail clinics.  Kalorama’s most recent report on walk-in clinics located within stores is Retail Clinics 2017. That report found that there was 2,200 retail clinics in the United States, and they will earn revenues of 1.4 billion this year.

Some of the preventative and insurance provision measures were expected to boost office visits, and the new features of proposed Congressional legislation like sick patient pools for states wouldn’t reach the low-level of care of clinics.  So one could make a case for reduced patient visits to stores.  Retail clinics function as a doctor’s office, though they are in a retail store and care is usually provided by a nurse, and they do rely on insurance payments.  On the other hand, retail clinic visitors have (according to our surveys over the years) trended slightly higher educated, slightly higher employed and slightly higher income.  They are seeking to avoid waiting times rather than seeking discounted services.   We’ll continue to watch the legislative process and adjusts forecasts for retail clinic patient volume and retail clinic store revenues as more information is available.   Right now, we would not anticipate a change to store growth forecasts.  

 Growth in clinics was not entirely about the ACA, though that did become a justification in some proposals.  It’s waiting rooms of doctor’s offices, and the high costs of ERs. And then it’s also the convenience factor. From the retail side, there’s indirect spending as well. The presence of a pool of customers in the retail store, and indirect revenue from store purchases, that make these clinics valuable independent of the expected increase in patients from the ACA. We imagine that the major drugstores, so far the largest supporters of the retail clinic concept will be watching what happens with AHCA, but we also imagine their plans of converting more stores to stores with walk-in clinics won’t change because of legislation.

So far, Kalorama holds to its estimate of 2850 or more retail clinics in the next five years.  The concept started before the ACA and will outlive it.