Large drugstore chains, as well as retailers and health systems, have entered the retail clinic market to provide health care to patients.
Courtesy of iStock\Thinkstock


Published 12/1/2014
Alexandra E. Page, MD

Retail Health Care: Update on Trends in Healthcare Delivery

Healthcare reform has spurred novel approaches to both care delivery and reimbursement. Much of the focus has been on the Accountable Care Act (ACA), but the commercial market for health care has also changed radically. The accelerating expense of providing healthcare benefits to employees has been a driving force for many employers to identify coverage options that give individual employees more “skin in the game.”

Higher deductibles and copayments are motivating employees to obtain the highest value for their healthcare dollars. Consumers are looking for off-hour services, convenient locations, or other benefits beyond cost. The result has been a transition to “retail health care,” moving from the traditional model of patients with healthcare benefits to empowered consumers purchasing health care in a way that works for them.

Understanding these pressures on orthopaedic patients can help practices incorporate novel options and prepare for increasingly cost-conscious patient-consumers.

Telehealth is viewed by some experts as the ultimate way to deliver true patient-centered care, addressing the issues of “right place” and “right price.” Although limitations certainly remain, telehealth has continued to grow. The American Telemedicine Association reports about 200 telemedicine networks currently operating in the United States, with 3,500 service sites.

IHS, an information and analytics firm, projected that the value of home health technologies—including telehealth—will double to $5.8 billion by the end of 2018. According to the American Medical Association, 78 percent of emergency department (ED), urgent care, and doctor visits can be avoided through the use of remote care technologies.

Part of this is enthusiasm fueled by the same legislation (the HITECH Act) that brought physicians “meaningful use.” In support of this legislation, the 2014 Medicare Physician Fee Schedule expanded coverage for telehealth beyond rural areas, and advocacy efforts to widen reimbursement are under way.

Telehealth in orthopaedics could range from assisting hospitals or clinics without orthopaedic access in triage of patients through remote viewing of radiographs or wounds to providing routine postoperative follow-up for patients.

Many telehealth companies market directly to patients or are included as a part of an employer-provided benefit package. Patients might pay a set fee to access a licensed primary care provider to provide diagnosis and treatment options for a minor problem. Ideally, if telehealth utilization replaces urgent care or ED visits rather than augmenting them, potential cost savings to the entire healthcare system could be realized.

However, the professional relationship and liability issues have not been fully clarified. One hurdle for telehealth involves patient care across state lines. A proposed bill (HR 3077) to facilitate providing care to Medicare beneficiaries in another state has languished in committee since its introduction in September 2013.

Retail clinics
The pressure to provide convenient access to care at reasonable prices has stimulated the explosion of retail health clinics. Peter Freska, healthcare practice leader at the LBL Group (a United Benefit Advisors Partner Firm), notes the evolution of retail clinics based on convenience.

“Working with large employers, we have seen the drive toward onsite clinics for years,” he said. “This has typically been limited to the largest employers, but now smaller employers and healthcare providers are talking about clustering together and offering onsite clinics in business parks so no one employer needs to carry the financial risk alone. People not only want to be treated now, but they also want to be treated where they are. Retail delivery could be the answer.”

Beyond this employer-based model, large drugstore chains, retailers, and health systems have all entered the retail clinic market. CVS Caremark and its MinuteClinic is the largest system, followed by Walgreens and Walmart. CVS has formed partnerships with large health systems including Cleveland Clinic, Advocate Health System in Chicago, and UCLA Health System. This alliance allows large healthcare providers to improve patient access and broaden their market.

Typically these clinics are staffed by a midlevel provider such as a nurse practitioner or physician assistant. Supervision can be an issue, but telehealth is emerging as a solution, enabling an off-site physician to provide back-up. For many common problems, diagnosis and treatment can be accomplished more quickly and at lower expense for the patient.

Many commercial insurers will reimburse retail clinic visits, but patients with high-deductible plans may find that the cost of the visit is less than their copayment requirement for a traditional office visit. A study of the 1.9 million patient visits to Walgreens clinics in 2013 found that 62 percent were for acute conditions, but no data were available on what proportion (if any) were musculoskeletal injuries. Many orthopaedic clinics have adopted this model, offering practice-based after-hours acute injury clinics staffed by midlevel providers as alternatives to EDs.

Concierge practices
The flip side of the retail healthcare experience is concierge medicine. This healthcare delivery option has emerged in many larger markets, predominantly with primary care practices that offer expanded access and service for a monthly fee. The applicability to the more episodic, unpredictable nature of orthopaedic illnesses or injuries may not be apparent, but Tom Blue, chief strategy officer of the American Academy of Private Physicians, suggests it is a possibility.

“In any situation, a physician can bring to the marketplace something value-added. It can be the difference between what insurance covers and what you may want for yourself or your family member. This can be a product or membership,” said Mr. Blue, who noted that, as a value-added service, this type of concierge practice would not require opting out of Medicare.

“For orthopaedics, another model could be availability to self-insured employers looking to balance costs by establishing transparent bundled prices for specific episodes of care,” he added. Mr. Blue suggests that orthopaedic surgeons “tap into their own creativity” for ways to enhance the patient experience and package those enhancements for people to purchase.

Media reports on the topic have noted a trend toward more “middle-class” concierge options and even inclusion in some employer-sponsored plans. Without the need for a traditional office visit to meet insurance requirements, a physician can be compensated for contact via telephone, email, video, or home visits. For elective procedures such as a total joint replacement, some patients may find this added service from their orthopaedic surgeon worth the additional cost.

Narrow networks
Narrow networks emerged as a hot topic early in 2014 when ACA Marketplace (formerly the “Exchange”) products were revealed. Insurance companies adopted a strategy of directing large patient volumes to providers willing to accept lower reimbursements. In some markets, this meant excluding key health systems such as a children’s hospital or academic center. Because insurance products sold on the federally subsidized Marketplace have similar plan benefits, copayments, and deductibles, provider networks became a way for insurers to either differentiate their products or control expenses.

However, the trend for narrow networks has spread beyond the federal Marketplace products to private plans. In September 2014, Forbes identified narrow networks as one of the five ways that healthcare costs were being shifted to consumers. Although similar economic advantages to narrowing networks exist for commercial insurance products, other reasons are also cited. For example, limiting networks to providers and hospitals able to share aggregate electronic health record data can help improve quality and reduce costs.

Clearly, the impact for an orthopaedic practice would be the participation decision, recognizing the potential trade-off of volume for reimbursement rate. Additionally, a narrow network could mean that the orthopaedist’s services might be covered while the hospital or anesthesiologist used might not be, leading to unexpected charges for the patient.

Alexandra E. Page, MD, chairs the AAOS Health Care Systems Committee. She can be reached at

Editor’s Note: This is the first in a two-part series updating recent trends in delivery and payment strategies in the retail healthcare market.

Bottom Line

  • Healthcare reform has sparked novel approaches to care delivery and reimbursement, including telehealth, retail clinics, concierge practices, and narrow networks.
  • Telehealth in orthopaedics could range from routine postoperative care for patients to remote viewing of a patient’s injuries and radiographs.
  • Retail clinics may employ midlevel providers, with physician back-up.
  • Self-insured employers may be interested in an orthopaedic concierge practice that offers expanded access and service for a monthly fee.
  • The decision to participate in a narrow network should recognize the potential trade-off of lower volume for higher reimbursement.

Additional Information:
Home health technologies look to reshape patient care, IHS Quarterly

[Doctor on Demand, ihealthbeat Oct 2014]