February 16th, 2011 5 Minute Read Report by Paul Howard

Easy Access, Quality Care: The Role for Retail Health Clinics in New York

Beginning in 2014, the Patient Protection and Affordable Care Act, signed into law in March 2010, is expected to significantly extend health-insurance coverage in New York by increasing Medicaid enrollment and offering federal subsidies for the purchase of private health insurance. However, there is no guarantee that the newly insured will be able to access the health-care system in a timely fashion as new demand for services outstrips physician supply.

After a similar insurance expansion in 2006, Massachusetts patients had to wait longer for physicians’ office visits, and hospitals noted a surge in emergency-room use. This suggests that New York policymakers should look for new ways to expand access to health-care services well in advance of full health-reform implementation.

In this study, we examine whether retail health clinics (also called “convenient care clinics”) have a role in alleviating pressure on overcrowded physicians’ offices and reducing inappropriate emergency-room use, thereby lowering overall health-care costs.

Published research and interviews we conducted suggest that retail clinics have the skills and organization to serve as convenient and cost-effective providers of basic health-care services, provided that certain troublesome and unnecessary regulatory barriers are lowered or removed. In particular, research suggests that:

  • Retail clinics offer readily accessible, high-quality care for a relatively limited set of basic health-care ailments ranging from minor skin infections to sore throats and earaches. For the services they offer, quality appears to be at least equal to—and, in some cases, superior to—that offered by other types of providers.
  • Total costs (to insurers and patients) of care at retail clinics appear to be significantly lower than those incurred by other types of providers such as physicians’ offices, urgent-care centers, and emergency rooms. Much of the lower cost can be attributed to the lower overhead associated with their retail location and widespread use of less expensive “mid-level” practitioners such as nurse-practitioners to provide care.
  • A significant percentage of emergency-room visits could be safely and effectively redirected to retail clinics, saving millions of dollars annually.
  • Patients are seeking care at retail clinics for appropriate conditions, and the availability of retail clinics does not seem to be increasing the utilization of such clinics for unnecessary care.
  • Patient satisfaction with the care that they obtain at retail clinics is very high.

Finally, retail clinics may be able to help reduce Medicaid patients’ utilization of emergency rooms for minor ailments, although this would require retail clinics as well as Medicaid officials to create reimbursement and enrollment procedures that encourage appropriate retail-clinic use. Previous reports have suggested that expanding retail-clinic utilization in New York could reduce health-care costs by $350 million between 2011 and 2020.

There are currently fewer than twenty physician-owned health centers operating in New York State in retail stores such as Duane Reade and CVS, and they appear to be expanding slowly. Retail-clinic availability in New York State is also much lower than in other states with retail-clinic access. As of December 2010, New York ranked among the four lowest states in retail-clinic incidence per 100,000 residents, with just 0.1 clinics per 100,000 population, or 75 percent below the median for all states with retail clinics.

Among more affluent urban and suburban areas as well, New York is “undersupplied” with retail clinics. Although New York’s Metropolitan Statistical Area (MSA) is the nation’s largest by population, it ranks at the bottom of the thirty largest MSAs in retail-clinic incidence, with just 0.1 retail clinics per 100,000 population, or more than 80 percent below the median.

Several regulatory barriers keep retail clinics from locating or expanding their operations in New York State:

  • Certificate of need: The state requires health-care providers to obtain certificate-of-need (CON) approval before opening or expanding health-care facilities, including what are currently called Article 28 diagnostic and treatment centers—a provision that affects retail-clinic operators. CON approval can increase the cost structure for potential retail-clinic operators to a prohibitive degree. The time and uncertainty involved in seeking regulatory approval can also deter health systems that are considering opening new clinics in retail stores in the state.
  • Prohibitions on the corporate practice of medicine (CPOM): New York State currently prohibits retail-clinic operators from employing even nurse-practitioners and other mid-level practitioners upon whom the cost savings associated with the model depend.
  • Collaborative-practice agreements (CPAs): The requirement that nurse-practitioners engage physicians to conduct quarterly chart reviews can make the state less attractive than states that offer nurse-practitioners complete practice autonomy. The cap on the number of nurse-practitioners who can be monitored by a single physician can also drive up costs for clinic operators, which must hire additional physicians to provide oversight.

Many states do not require any additional regulation or licensure beyond that required of the providers who treat patients there. New York’s regulations go well beyond this, either prohibiting or making it much more difficult for certain types of retail clinics to operate.

Ideally, legislators would repeal costly regulations that inhibit retail-clinic entry and expansion in New York. However, repeal appears unlikely. A second-best, but still effective, option would be to create a specialized licensure process for retail clinics that would streamline regulation of one or more retail-clinic models and allow corporations that operate retail clinics to employ providers directly, as dialysis treatment centers now do. Nurse-practitioners could also be allowed to practice outside of a collaborative-practice agreement, as nurse-midwives may do. Massachusetts enacted a similar set of reforms in 2008.

These reforms could focus on maintaining basic standards of consumer protection while leveling the playing field between physician-owned clinics and clinic operators that employ nurse-practitioners. An open-door policy toward retail clinics of all kinds would help ensure that federally mandated reforms not only expand insurance coverage but also improve patient access to cost-effective care.



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