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Health Care Advisory Board
Profit from Convenient
Primary Care Retail Clinics, Urgent Care Centers, and Telemedicine
Presenter:
Jordan Stone
Health Care Advisory Board (HCAB)
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Road Map
5
Capitalizing on Tomorrow’s Demands
Driving Volumes with On-Demand Access
The New Health Care Consumer
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Patients Directing More of Their Own Care….
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Source: Kahn S, "Emergency & Other Outpatient Care Centers in the US," IBISWorld, October 2013; Lerman S, "Primary Care Doctors in the US,"
IBISWorld, September 2013; MarketData Enterprises, "Retail Health Clinics & Urgent Care Centers Poised For Strong Growth – Market Worth $10 billion,"
available at: www.prweb.com, accessed October 1, 2013; Son A, "Diagnostic & Medical Laboratories in the US," IBISWorld, August 2013; Son A, “Urgent
Care Centers in the US,” IBISWorld, February 2013; Health Care Advisory Board interviews and analysis.
What are consumers demanding from health care?
1) Retail: $0.78B, PCP: $128B, UCC: $14.5B, Freestanding
diagnostic imaging: $21B, HOPD: $57B, Non-urgent ER: $14B.
Least Consumer
Involvement Most Consumer
Involvement
Trauma
Care
Preventive
Care
Low-Acuity
Illness Care
Specialty
Care
Non-elective
Complex Care
Elective
Surgery
Moderate-Acuity
Illness Care
Imaging
Diagnostics
Physician input, guidance significantly
influences care and access decisions
Patients comfortable directing own
care based on personal judgment
Patient Involvement in Accessing Care
$235B Estimated market size
for consumer-directed services1
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…And Demanding More From the Care Delivered
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Source: Merlino J, "Why Customer Service Matters in the Healthcare Industry," Yahoo!
Finance, August 6, 2013; Health Care Advisory Board interviews and analysis.
• Immediate availability
• Broad range of hours open
• High quality service
• Geographic proximity to home,
work, errands
• Rapid completion of service
• Reputable brand
• Comprehensive visit length
• Delivery options tailored to specific need
• Guidance on which sites are
most affordable
• Provider interaction matches expectation
• Clear pricing to streamline payment
• Reasonable price compared to
similar options
• Positive clinical outcomes
“Customers in any other industry get to
vote with their wallets. The hospital
industry hasn't had that same type of
pressure before, but things are changing.”
James Merlino
Chief Experience Officer
Cleveland Clinic
” Patient Demands For Care
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• Comprehensive visit
length
• Provider interaction
matches expectation
• Delivery options
tailored to specific
need
Tailored Service
Three Most Pressing Consumer Demands
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Systems Underperforming on Price, Access, and Service
Source: Health Care Advisory Board interviews and analysis.
• Reasonable price
compared to similar
options
• Clear pricing to
streamline payment
• Guidance on which sites
are most affordable
• Immediate availability
• Broad range of
hours open
• Rapid completion
of service
• Geographic proximity to
home, work, errands
Major Categories of Consumer Preference
Affordability
On-Demand Access
Profit From Convenient
Primary Care
Today’s
Webconference
Telemedicine and
Concierge Care
Members click here
to access recording
Attracting the Price
Sensitive Consumer
Tuesday, June 17, 2014,
1:00PM ET - 2:00PM ET
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Anytime Service a Key Attraction
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Source: Health Care Advisory Board Medical Home Project; Mehrota A et al, "Visits To Retail Clinics Grew Fourfold
From 2007 To 2009, Although Their Share Of Overall Outpatient Visits Remains Low," Health Affairs, August 2012;
MarketData Enterprises, "Retail Health Clinics & Urgent Care Centers Poised For Strong Growth – Market Worth $10
billion," available at: www.prweb.com, accessed October 1, 2013; Health Care Advisory Board interviews and analysis.
On-Demand Access
64% 62%
53% 48%
34%
Patient Reasons for Visiting
Retail Clinics Over Other Sites of Care
38% Medical home clinics
open late on weekdays
Medical home clinics
open on Saturdays 29%
PCP Office Not Even
Close to On-Demand 1.48M
3.52M
5.97M
10.5M
2007 2008 2009 2012
Annual Visits 2007-2012
Retail Clinic Visits
More
Convenient
Hours
Convenient
Locations
No
Appointment
Needed
Lower
Cost
No Usual
Care Source
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Affordability
The Business Case for Meeting Consumer Demands
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Source: Health Care Advisory Board interviews and analysis.
Old
Perspective
Customized service
requires more physician
and staff investments
Convenient care sites are
questionable standalone
business ventures
Lower price equates
to less profit per case,
lower profit for
services as a whole
New
Perspective
Offering tailored service
opens up new revenue
streams and site capacity
for more volumes
Convenient access points
attract new patients and
generate profitable
downstream referrals
Strategic pricing leads
to higher patient
utilization, more market
share capture
On-Demand Access Tailored Service
Profiting from Catering to Consumer Preferences
Converting Patient Preference into Durable Advantage
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Road Map
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Capitalizing on Tomorrow’s Demands
Driving Volumes with On-Demand Access
The New Health Care Consumer
1. Generating Direct Revenue from Access Points
• Win consumer preferences through competitive site placement
• Drive visits by directing in-network patients to new site
2. Converting Initial Visit to Future Revenue
• Support on-demand care sites with accessible referral points
• Secure next step with hardwired referrals protocol
• Pursue strategic partnerships to drive value
Driving Volumes with
On-Demand Access
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On-Demand Offerings Not Measuring Up
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Current Solutions Less Suitable for Immediate Access
Source: Maat S, "Freestanding emergency department growth creates backlash," American Medical News, April 29, 2013;
California Health Care Foundation, “Living with Chronic Illness,” Health Care Advisory Board interviews and analysis.
Traditional Care Sites Overpowered, Inconvenient
Primary
Care Office
Low Acuity High Acuity Emergency
Department
National average
wait time at EDs
3 hours National average
wait time at
freestanding EDs
1.5 hours
• Appointment required,
may be unavailable
• Inconvenient hours
• Long wait times, service
frequently delayed
• On-demand service
• Long wait times for non-
emergency treatment
• Extremely expensive
Patients that do not have
access to same- or next-
day PCP appointments
43%
No appointment needed
Extended hours,
or open anytime
Definition of On-Demand Access
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An Expanding Network of Immediate Access Choices
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Markets Responding to Unmet Needs
Source: Mehrota A et al, "Visits To Retail Clinics Grew Fourfold From 2007 To 2009,
Although Their Share Of Overall Outpatient Visits Remains Low," Health Affairs,
August 2012; Health Care Advisory Board interviews and analysis.
Traditional
Access
Points
Consumer-
Oriented
Access Points Retail
Clinic
Urgent Care
Center
Virtual
Visit
44% Retail visits occur
when physician office
is likely to be closed
Primary
Care Office
Low Acuity High Acuity Emergency
Department
Consumer-Oriented Service Delivery Sites Filling the Gap
Driving Provider Questions:
• Should we partner to establish retail clinics?
• Should we build or expand our urgent care footprint?
• Is virtual care something that we should provide?
• When should we enter into partnerships to meet patient demands?
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Meeting Consumer Demands…But to What End?
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On-Demand Access Points Often Failing to Advance System Goals
Source: Health Care Advisory Board interviews and analysis. 1) Pseudonym.
Case in Brief: Tusk Health1
• Health system located in the Southeast
• Of insured patients using clinic, few lack PCP; few need
specialty or follow-up care
• After failed operations, retail clinic goal adjusted from ED
capacity relief to mission-based care delivery
• Retail clinic located too far (5+ miles) from ED,
patients unwilling to reroute to retail clinic
• Results show no ED volume reduction, no profit
• Retail clinic primarily serves uninsured patients
Goal: Establish retail clinics
to offload low-acuity services
from ED, drive new revenue
10+ Years health system has
operated retail clinic
$0 Profit from clinic
No Financial, Downstream Value
Captured from Convenient Care Clinic
On-Demand Access Strategy
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Downstream
Profit
Unpacking the Profitability of On-Demand Care
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Boosting Returns Depends on Volume, Conversion
Source: Health Care Advisory Board interviews and analysis.
Profitability Power Formula for On-Demand Access Points
Access
Point Visits Contribution
Profit per Visit
Access
Point Visits Downstream
Conversion Rate
Downstream Contribution
Profit per Conversion
Performance Baseline:
• Efficient operations
• Competitive but robust
reimbursement rates
Converting Initial Visit
to Future Revenue 3
Generating Direct
Revenue from
Access Points
2
Service-Specific
Profit
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Attracting Patients With a Convenient, Visible Location
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Source: Health Care Advisory Board interviews and analysis.
Win consumer preference through competitive site placement
1) Urgent Care Center.
Immediate Care Site
Placement Considerations
Positive Indicators
Growing affluent population
Large proportion of younger
consumers (18-54)
High marital/familial
concentration
Commercial-heavy
payer composition
Self-funded
employer presence
Retail adjacencies
High-traffic, busy intersections
Emergency department nearby
Plentiful Volumes
• Five-hospital system based in Louisville, KY
• Due to highly competitive urgent care and retail
market, challenging to attract incremental volumes
• For one of newest locations, focused on selecting
high-traffic site to attract volumes
Case In Brief: Norton Healthcare
Favorable Payer Mix
Reliable Consumer Traffic
Lease terms ensure new
construction cannot
obstruct view of UCC1
65,000 cars per day
drive by location
12,000
24,000 25,000
Average
location
(Open 5-28 yrs)
Location off
main road
(Open 3-4 yrs)
Largest
location
(Open 25 yrs)
Visits Per Year By Location
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Demonstrating Benefits of On-Demand Sites to PCPs
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Volume Data Allays Concerns, Encourages PCP-to-Urgent Care Referrals
Source: Health Care Advisory Board interviews and analysis. . 1) Urgent care centers.
Sharing Volumes Data Encourages
MDs to Refer to UCCs1
Before UCC After UCC
PCP Office
PCP Office
Urgent Care
Daily
Volumes
Capacity
Mutual Benefits from
PCP-Urgent Care Referral Channels
UCC offloading surplus
PCP appointments
UCC attracting new
patient volumes
PCP Offices
Remain At Capacity
Improving patient satisfaction
by lowering PCP appointment
delays, wait times
Preventing lost volumes due
to primary care inaccessibility
Right sizing daily volumes
across both sites of care
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Provide Capacity Feedback on a Monthly Basis
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Formalized Process Reinforces the Site’s Value Within the Network
Source: Health Care Advisory Board interviews and analysis. 1) Urgent care center.
Regional Service
Line Director
Primary Care
Physician
Collect and Track Urgent
Care Volumes Data
Case in Brief: Prevea Health
• 240-provider medical group headquartered in Green Bay, WI
• Regional service line directors share capacity and volumes data with physicians
to encourage referrals to the urgent care center when the offices are overcapacity
• Urgent care centers accrue new volumes from redirected patients and Prevea
physicians remain at capacity with daily volumes
Share Volumes Data
with Physicians Monthly
Prevea Health’s Data Sharing Process
Sample Monthly
Volume Report
Daily urgent care
center volumes
New urgent
care patients
Primary care referrals
from urgent care
1
2
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Rapidly Pulling Patients in with Virtual Offering
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Source: Health Care Advisory Board interviews and analysis.
1) Urgent care centers within 30 miles if physical care center needed.
2) Pseudonym.
15 weeks
Build-to-open time for
virtual care platform
Build-to-open time for
urgent care facility
• Multi-hospital system located in the East
• Entering new markets with virtual strategy to capture
consumer segments preferring site-less care delivery
• Patients can engage providers via webcam, send
secure photos, and submit biometric tests for clinicians
to review in real-time
Case in Brief: Underwood Health2
Tech-Savvy Patients Attracted to Virtual Care
Virtual Market Capture Strategy
Tailoring web banner campaign to
targeted consumer demographic
(tech-savvy, healthy, busy)
Marketing smart phone
accessibility to mobile users
Virtual co-pays lower than on-site
co-pays for ED, urgent care centers;
$45 for consumer paying OOP
2 Login to virtual
access portal
3 Conduct synchronous
virtual visit
1 See virtual care
advertisements
15 months
Patients in market
areas with no
physical site of care1
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Source: Health Care Advisory Board interviews and analysis.
Employer Contracts Drive New Patient Traffic
Case in Brief: UMC Physician Network Services
• 127-provider medical group associated with University Medical
Center Health System, based in Lubbock, TX
• Contracts directly with self-funded
employers to drive traffic to
UMC-PNS Express Care Clinics
• Employers offered a discounted
rate, well below primary care
• Employees pay $0, or
discounted co-pay to
encourage Express Care use
$75
$95
$125
Express Care Clinic
Charges per Visit
Per-
Patient
Charge
Primary
Care
Charge
Employer
Discounted
Charge
6,500+ Average annual
visits to each
Express Care; two
clinics operating at
a profit
Direct Contracts
Drive Patient Traffic
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Organizational Structure Informs Network Acceptance
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Oversight Contributes to Perception, Attitude, Function of Clinics
Source: Health Care Advisory Board interviews and analysis. 1) For owned or leased retail clinic models only.
Key Benefits of
Medical Group Oversight
Network Integration
• Retail staff can rotate through
MD offices to build trust
and tighten referral channels
between care sites
• Clinicians can establish
standard, acceptable retail
referral protocols
Clinical Coordination
• Medical group able to
oversee, modify1 on-demand
services to best support
network’s clinical needs
Primary Care
Practices
Retail
Clinics
Medical
Group
Business
Development
Retail
Clinics ASCs
Retail clinic perceived
as threat, competitor
to medical group—
without MD buy-in,
clinic less likely to hit
profitable volumes
Comparing Common Oversight Models
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Generating Sufficient Throughput Required
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Uneven Performance Common Across Sites of Care
Source: Ashwood JS, et al., “Trends in Retail Clinic Use Among the Commercially Insured,” The
American Journal of Managed Care, 2011,17: 443-448; Urgent Care Association of America, “2012
Urgent Care Benchmarking Survey Results”; Health Care Advisory Board interviews and analysis.
1) Assumptions listed in appendix chart.
2) Profit includes imaging, medications delivered on site.
3) Retail clinics open 358 days per year, urgent care centers
open 365 days per year.
-$2,000,000
-$1,500,000
-$1,000,000
-$500,000
$0
$500,000
$1,000,000
$1,500,000
0 10 20 30 40 50 60 70
Urgent Care Retail
Breakeven Volumes Per Day1
For retail clinics and urgent care centers2,3
Visits per day
15 Average visits per day
at a retail clinic
51 Average visits per day
at an urgent care center
Annual
Profit
Limited service menu
limits patient traffic
Assumptions available
in the Appendix
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Margins Strong for Urgent Care, Weak for Retail
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Standalone Profitability Varies Across Sites of Care
Source: Ashwood JS, et al., “Trends in Retail Clinic Use Among the Commercially Insured,” The American Journal of Managed Care, 2011,17: 443-448; Kaissi
and Charland, “Hospital-Owned Retail Clinics in the United States: Operations, Patients and Marketing,” Primary Health Care 2013; IBISWorld Industry
Reports; Urgent Care Association of America, “2012 Urgent Care Benchmarking Survey Results”, 2012; Health Care Advisory Board interviews and analysis.
1) Assumptions based on national averages, see appendix.
2) Hospital-owned clinics, not corporate partnerships or
retailer-owned clinics.
78% Health systems surveyed with
retail clinics failing to break even2
9.6% Average profit margin
for urgent care centers
$2,672,582
$2,284,426
$644,400
$420,995
$223,405
Urgent Care Center Profitability1 Retail Clinic Profitability1
$857,531
$388,156
($41,068)
Revenue Costs Best-in-
Class Profit
Typical
Profit
Revenue Costs Best-in-
Class Profit Typical
Profit
Profit based
on ambitious
volume of 30
visits/day
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Customer Acquisition, Conversion the End Goal
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New Customers, at Low-or-No Cost, is Retail’s Value
Retail Clinic Patient Acquisition Cost
Per Patient, Visits Held Constant at 16 per Day
$546
$273
$182
$136
$109
$409
$205
$136
$102 $82
$327
$164
$109 $82 $65
$0
$100
$200
$300
$400
$500
$600
5% 10% 15% 20% 25%
15% New
20% New
25% New
Conversion Rate
Cost to
Acquire
Proportion of Retail Clinic Patients
Who Are New to the System
1) New patients defined as those not interacting with the system in 24 months. Source: Health Care Advisory Board interviews and analysis.
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Converting Visits into Profitable Volumes
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Source: Health Care Advisory Board interviews and analysis.
Multiple
Site Options
Advanced
Access
Most employed PCPs
maintain same day
access slots for
on-demand care
Mercy has 100 PCP
providers at 35 locations,
multiple urgent care
centers in region
Components of Timely
Appointment Conversion at Mercy Medical Center
Support on-demand care sites
with accessible referral points
Staff
Alignment
Retail NPs staff MD
offices one day per
week to develop trust,
reinforce network
coherence
Referrals
Protocol Control
As clinic sole owner,
Mercy controls clinic
operations, prioritizes
in-network referrals for
follow up care
Secure next step with
hardwired referrals protocol
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Co-Located Site Converts to Ongoing Management
27
Co-locating Urgent Care Center, PCP Office for Convenience, Efficiency
Source: Health Care Advisory Board interviews and analysis.
Support on-demand care sites with accessible referral points
Co-located Services Offer
Patient, Practice Benefits
Case in Brief: Mercy Medical Center
• 643-bed hospital located in Des Moines, IA, part of Mercy Health Network
• Operates six urgent care centers co-located with primary care practices
• Mutual referrals increase new patient visits, decrease wait times, improve patient satisfaction
• New patients meet primary care
provider at urgent care service
• Patients are immediately referred into the
same primary care physician’s panel Urgent Care andPrimary Care
Primary CareOnly
1 Year
2-3 Years
Time Required for New Physician
to Build Panel by Practice Site
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Nearby Network Support Required to Convert Patients
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Retail Clinics Refer Patients to Closest PCP Office
Source: Health Care Advisory Board interviews and analysis.
Without primary care
presence, on-demand clinics
cannot convert patients to
ongoing relationship
!
Refe
rrals
Contr
ol
Affiliate-Partnerships, Medical
Directorships Offer No Referrals Control
• Affiliate health system does not
receive preferential referrals
• Clinic staff will choose most convenient
clinic for patient—making any nearby PCP
a viable choice for referral
• Ex. CVS Minute Clinic
PCPs in Area
Dr. Jones System A
Dr. Smith System B
Lease-Model, Owned Clinic Offers
Most Control Over Referrals
• Health system can preferentially refer
patients in-network through direct
scheduling or interconnected IT
• Clinic staff will choose most convenient
clinic for patient—making PCP clinic
proximity key to completing referral
• Ex. Walmart, local lease model
PCP Appt
Dr. Smith System B
Tues. 1:30pm
Affiliated retail clinics do
not prioritize affiliate
partner, sending patients
to any convenient PCP
!
Low
High
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Fragmented Process Puts High-Value Referrals at Risk
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Central Call Line Unable to Schedule Right Visit, Right Time
Source: Health Care Advisory Board interviews and analysis.
Secure next step with hardwired referrals protocol
1) All orthopedists are employed by the system.
Case in Brief: Norton Healthcare
• Five-hospital system based in Louisville, KY
• Operates 12 urgent care centers seeing 171,000 visits per year
• 20% patients referred to a PCP or specialist from urgent care; orthopedic
referrals are the top follow-up need for patients
Central call line
challenged with
scheduling urgent care
patient orthopedic
follow-up appointment
Challenging referral
chain steps
increase error,
decrease referrals
Challenged in Providing Correct and Timely Orthopedic Referrals
35 orthopedists1
have different
subspecialties
Wrong subspecialist
Six practices, very
geographically
distributed
Inconvenient location
Clinics have
variable scheduling
processes
Scheduling delay
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Dedicated Process Strengthens Referral Chain
30
Source: Health Care Advisory Board interviews and analysis.
1) Scheduler confirms plan eligibility, co-payment, pre-authorization and enters information into electronic medical record;
timeliness of appointment based on patient’s condition, urgency of care.
2) Appointments from 12 urgent care centers.
>245 Monthly orthopedic
scheduled appointments
from urgent care
produced through
dedicated phone line2
Protocol for High-Value Orthopedic Follow-Up Appointments
Keeping it Simple Keeps Patients in Network
“Instead of 12 urgent care centers searching for which
scheduler to contact, one dedicated assistant finds an
appointment at the right place, right time, with the right
doctor– it’s all about keeping it simple.”
Bill Ritchie
VP Outpatient Services, Norton Healthcare
” Appropriate physician
Proximate location
Timely appointment
Scheduler is familiar
with subspecialty care,
can access all 35
orthopedists’ calendars
Single scheduler maintains
centralized orthopedic
referral phone line
Patient receives follow-up
appointment with correct
subspecialist within 24 hours1
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Hardwire All Referrals to Increase Conversion Rates
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Centralized Scheduling the Gold Standard for Service Coordination
Source: Health Care Advisory Board interviews and analysis.
Case in Brief: Prevea Health
• 240-provider medical group headquartered in Green Bay, WI
• Attracting and referring significant percentage of new patients from its five urgent care
centers through centralized scheduling and the after-hours triage line
• Tracking new patient utilization across the year to calculate referral value
New patient receives unique
identifier; enables tracking
of downstream utilization, revenue
Quantifying the
Downstream Contribution New referrals after
implementing
centralized
scheduling and
after hours
triage line
30%
40%
2011 2012
Percentage of New UCC Patients
Converted to Prevea PCP or Specialist
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Patients Less Loyal to Specialists
32
Capturing the Specialty Episode from Competitors Without PCP Conversion
Source: Journal of Urgent Care Medicine, "National Urgent Care Chart
Survey," June 2010; Health Care Advisory Board interviews and analysis. 1) Pseudonym.
Offering Patients An Easy Choice
Employed
Specialists
Competitor
Specialists
Time to Appointment UCC
Receptionist
Case in Brief: Stamper Hospital1
• Multi-hospital system located in the Midwest
• Offers competitor patients in-network specialist appointment
at the point-of-service; patients remain with their PCP
46% 54%
Composition of Physician
Referrals from Urgent Care
Specialists
National Average by Specialization
Primary
Care
In-network appointment
available within 24-48
hours of UCC visit;
patient leaves with
appointment scheduled
Competitor appointment
delayed until weeks
after UCC visit; no
scheduling assistance
available
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Improving the Cross-Sell Opportunity
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Source: Health Care Advisory Board interviews and analysis. 1) Pseudonym.
Health
Plan Data
Centralized
Scheduling
Conducting Immediate
Virtual Care
Addressing
low-severity and
administrative
patient needs
Fulfilling Outstanding
Care Needs
Identifying and
addressing risk
factors, unmet
care needs
Enables Timely
Downstream Service
Accelerating
in-network referrals
via centralized
scheduling platform
Case in Brief: Jona Health1
• Multi-hospital system located in the East
• Using system-owned health plan data to inform real-time interventions during
virtual visits and to determine follow-up care steps
• Syncing centralized scheduling with virtual platform to enable immediate referrals
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Keys to Growth-Oriented Clinic Partnerships
34 Pursue strategic partnerships to drive value
Source: Health Care Advisory Board interviews and analysis.
Provider Considerations
Is the primary motivation to:
• Draw new patients into
the system through referrals?
• Relieve pressure on
existing resources?
• Extend the physical reach
of the primary care network?
• Advertise the health system?
Health System
Responsibilities
Partner
Responsibilities
Intellectual Capital
Care algorithms,
quality protocols
Financial
Start-up costs, profits,
operating risk
Division of Labor Across Partners
Patient Records
EMR, notification
of PCP
Clinic Staffing
NPs, clerical
staff
Clinical Oversight
MDs collaborate
with clinic NPs
Patient Traffic
Referring patients to site,
triaging low-acuity cases
Physical Site, Pharmacy
Space in retail location,
on-site dispensary
Marketing
Branding,
advertising
Customer Traffic
Maintaining high foot
traffic flows near site
Undecided Responsibilities
Collections
Patient co-pays,
insurance
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Attributes of a High-Value Partnership
35
Source: Health Care Advisory Board interviews and analysis.
Future Priorities
Care Coordination
Developing integrated
care management teams
Virtual Delivery
Providing asynchronous
visits, virtual support
Consumer Analytics
Integrating pharmacy,
consumer data
Today’s Priorities
Bidirectional Patient Flow
Utilizing clinic as integrated
delivery system component
Financial Investments, Returns
Sharing revenue, allocating
financial risk
In-Network Referrals
Enabling sites to capture
downstream referrals
Constructing a High-Performing Clinic Partnership
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Evaluating Corporate Retail Partners
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Source: Health Care Advisory Board interviews and analysis.
Reward
Risk
Low High
Low
High
Clinical Partnership
Walgreens-ACOs
Branded Affiliate
CVS-MinuteClinic
Full Control or
Operational Control
Walmart
Overview of Current Retail Partnership Models
Health system can triage
appropriate referrals in network,
directly accrues clinic revenue
Value defined from shared savings,
not clinic operations; retail clinic
revenue accrues to retailer
Co-branded partner does not receive all
referrals; clinic revenue accrues to retailer;
medical director receives small stipend
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Driving Volumes with On-Demand Access
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Generating Direct Revenue from Access Points
Converting Initial Visit to Future Revenue
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Win consumer preference through competitive site placement
Physical site placement is critical to successfully pull volumes into convenient care sites.
Move beyond a bricks-and-mortar approach, deploying virtual assets in tech-savvy markets
where remote care will be highly appealing.
Drive visits by directing in-network patients to new site
Ensure high volumes by referring patients from overcapacity clinics into convenient care
alternatives. Prove value by showing how the site complements and benefits PCP practices.
Support on-demand care sites with accessible referral points
Retail clinics used as system entry points require nearby primary care support to effectively
refer eligible patients into ongoing care. Retail clinics lacking primary care support will be
ineffective system entry points for new patients.
Secure next step with a hardwired referrals protocol
Patients are won on convenience and timeliness. Establish processes that ensure in-network
and competitor patients leave care sites with appointments and next steps intact.
Pursue strategic partnerships to drive value
Select partners offering models that explicitly advance growth goals–focusing on bidirectional
referrals for appropriate patients, new patient volumes, and revenue sharing.
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Road Map
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Capitalizing on Tomorrow’s Demands
Driving Volumes with On-Demand Access
The New Health Care Consumer
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Consumer Demands Constantly Evolving
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Source: Health Care Advisory Board interviews and analysis.
Converting Consumer Preference into Profitable Growth
Gro
wth
Preserving Share
Through
Affordability
Driving Volumes
with On-Demand
Access
Unlocking Value
Through Tailored
Service
Consumer
Demands I
II
III
Capitalizing on
Tomorrow’s Demands
IV
• Personalized
clinical experience
• Customized care
management interventions
• Elevated clinical
quality, outcomes
• Unified, longitudinal
health record
Requests and Expectations Becoming More Complex Over Time
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Walmart Testing Enhanced Primary Care Model to Replace Legacy Clinics
Source: Health Care Advisory Board interviews and analysis.
The New Primary Care Outlet for 130 Million People?
Low Price Guarantee in Primary Care
Cost of a clinic visit
for employees on
Walmart’s health plan
$4.00 Cost of a clinic visit
for customers and non-
covered associates
$40.00
Evolution of Model
Case in Brief: Walmart Care Clinic Pilot
• Walmart piloting new primary care clinic staffed
by two contracted NPs in Copperas Cove, TX
• Service offerings expand beyond traditional
Walmart retail clinic to include chronic disease
management, preventive and wellness services,
and specialist referrals
Chronic disease
management
Preventive and
wellness services
Specialist referrals
Basic acute care
Low-severity
illnesses
Minor injuries
Immunizations
Legacy Clinic
Expanded
Primary
Care Clinic
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Walgreens Entering the Care Coordination, Rapid Diagnostic Game
Source: Source: Anderson J, "Providers Want Partner, Not Dictator, in Potential Insurer ACO Relationships," ACO Business News, March
2013; Dolan P, "Walgreens clinics expand services to diagnosing chronic diseases," American Medical News, April 22, 2013; Walgreens
Press Room, "Walgreens Forms Accountable Care Organizations (ACO) to Deliver Seamless, Coordinated Care to Improve Patient Health,
Lower Costs and Close Critical Gaps in Care for Medicare Patients," January 10, 2013; Health Care Advisory Board interviews and analysis.
Confronting an Increasingly Sophisticated Competitor
Offering medication
consults for complex
drug regimens
Medication
Management
Having pharmacists
check patient vitals
Quality
Improvement
Serving low-acuity
care needs clinics
Healthcare
Clinic
Supporting care
coordination teams
Care
Coordination
Overview of Walgreens’ Care Delivery Strategy
Case in Brief: Walgreens
• Largest drugstore chain in the country based in
Deerfield, Illinois
• Operates 370 in-store Healthcare Clinics
staffed by NPs, PAs
• Establishing health system partnerships in
order to improve care coordination, medication
adherence, and quality metrics for patients
• Palo Alto-based technology company
• Developed a miniature medical device that
quickly detects hundreds of diseases with
a minute amount of blood
• Partnered with Walgreens in 2013; have
opened Theranos Wellness Centers in
Walgreens stores in Palo Alto and Phoenix
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Assets to Meet Our Evolving Needs
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Source: Health Care Advisory Board interviews and analysis.
Key Questions to
Guide Our Ambition
Who are the populations we intend to
serve today and in the future? What
are their most pressing demands,
preferences when it comes to
accessing care?
Do we have a mechanism for tracking
consumer preferences, needs over
time? Which populations will we serve
longitudinally?
Do we have a clear approach for
assessing the performance of our
assets, to ensure that assets are
driving value to the consumer and to
the system?
Do our staff incentives and business
approaches support the delivery of
care that exceeds consumer
expectations?
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Physical
Infrastructure
Clinical,
Consumer Analytics
Staff Leadership
Virtual
Infrastructure
Market
Intelligence
Assembling the Right Assets
2445 M Street NW I Washington DC 20037
P 202.266.5600 I F 202.266.5700 advisory.com
