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posted on 24 July 2017

Check Up Before You Check Out: Retail Clinics And Emergency Room Use

from the Chicago Fed

-- this post authored by Diane Alexander , Janet Currie , Molly Schnell

The U.S. health care market is often viewed as a market in which competition does not work well: it is increasingly concentrated (Gaynor and Townsend, 2011); prices are not transparent; and many studies highlight imperfections and asymmetries in the information available to providers, patients, and insurers.

These shortcomings are thought to entail large efficiency and welfare losses both from unnecessary procedures and delayed interventions, such as costly emergency room (ER) visits, that could have been avoided with proper preventive care. This state of affairs makes it especially interesting to consider an innovation that has the potential to increase competition in some health care markets: The development of the retail clinic.

Retail clinics first appeared in 2000 and have since grown rapidly, with over 2,000 clinics operating in 41 states and Washington D.C. in 2015 (National Conference of State Legislatures, http://www.ncsl.org/research/health/retail-health-clinics-state-legislation-and-laws.aspx). Retail clinics are generally located within retail stores, such as pharmacies or “big-box" outlets like Wal-Mart. They tend to be staffed by nurse practitioners or physician assistants and offer a limited range of services. They are typically open seven days a week, have extended hours in the evenings, and do not require appointments. Prices may be a quarter to a third less expensive than the price a doctor would charge for the same services (Mehrotra et al., 2009; Tu and Cohen, 2008, Thygeson et al., 2008) and are usually posted online.

Thus, retail clinics compete with doctors’ offices for basic primary care services by offering lower and more transparent prices, shorter waiting times, and convenience (Ahmed and Fincham, 2010; Wang et al., 2010). Lowering the monetary and time costs of care might result in higher consumption of primary care and subsequent improvements in health. Retail clinics may also divert some patients from ERs, particularly for relatively minor conditions that arise outside of normal office hours when doctors’ offices are typically closed, resulting in cost savings. On the other hand, retail clinics might sell unnecessary services or products (AMA, 2007), provide lower quality, or disrupt continuity of care (American Academy of Pediatrics, American Academy of Family Physicians), leading to higher costs and worse health outcomes.

[click on image below to continue reading]

Source

https://www.chicagofed.org/~/media/publications/working-papers/2017/wp2017-11-pdf.pdf

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