If you enter a drugstore in any major American city, there’s a good chance you might see a retail health clinic. In the past decade or so, healthcare stakeholders have gone back and forth as to whether these clinics will have a significant impact on healthcare delivery in the U.S. But a new report reveals that retail clinics are solidifying their position as a major force in the U.S. healthcare system.

Retail clinic claims volumes have shot up by 200% in the past five years, according to the report, which was released Thursday by analytics company Definitive Healthcare. 

Claims growth for these clinics, which are usually located in stores like Walmart, CVS and Walgreens, have greatly outpaced growth in claims for urgent care centers, emergency departments and physician practices. Urgent care center claims grew by 70% in the past five years. Meanwhile, emergency room usage dropped by 1%, and primary care office claims declined by 13%.

As of this year, there are more than 1,800 active retail clinics across 44 states. Most of these are in major metropolitan areas, with just 2% of clinics located in rural areas. The report argued that this paucity stems from the same factors that have produced care deserts in rural America — mainly low population density and difficulty attracting workers.

The report also revealed that about half of all retail clinics are concentrated in the following seven highly populated states: California, Georgia, Illinois, Florida, Ohio, Tennessee and Texas.

Through their clinics, retailers have been reaching patients at a time when most traditional providers are too short on workers or cash to do the same. However, this doesn’t mean that retail clinics are setting out to replace health systems and doctor’s offices — patients will undoubtedly still rely on the traditional healthcare system for things like surgery or oncology care.

But for things like primary care appointments and vaccinations, retailers are competing for a piece of the care delivery pie. A Bain & Company analysis from last year predicted that retail disruptors could own as much as 30% of the $260 billion primary care market by 2030.

Patients are attracted to retail healthcare for two main reasons: easier access and lower costs. From a convenience standpoint, retail clinics are hard to compete with — they’re located within stores patients already frequent to buy their toothpaste and shampoo, and about a third of the country’s population already lives within a 10-minute driving distance from a clinic, according to the report. Patients can also usually schedule a clinic appointment on the same day or within a couple days, whereas the typical wait time to see a primary care provider was 26 days in 2022.

Retailers are also doing more to meet patients’ demands for low-cost care than traditional providers, according to the report. They offer self-pay options with transparent and fixed pricing, which many patients prefer instead of the surprise bills and unclear cost information that is common in urgent care centers, physician offices and emergency rooms.

Still, some critics of retail healthcare argue that these clinics can lead to greater care fragmentation and detract from a patient’s relationship with their primary care provider. But research shows that most retail clinic patients don’t have a primary care physician. In other words, these clinics can’t disrupt a patient-physician relationship if there was never one to begin with.

All of this begs the question: what can health systems do to respond?

One option is to partner with retail chains to help meet patients’ growing demand for consumer-centric care. For example, some systems are starting to do this with Target. The retail giant offers retail healthcare in its stores through CVS subsidiary MinuteClinic, and it has grown a large network of health system partners — including Kaiser Permanente, Cleveland Clinic, Dignity Health and UMass Memorial Health — to support consultations and referrals.

Hospitals should also be aware of opportunities to take over as owners of retail clinics, as some retail chains may want to divest. For example, Walgreens closed about 160 of its in-house clinics in 2019 to focus on health system partnerships and test new care models to treat more complex health issues. The company transferred ownership to several health systems, including Advocate Aurora Health (which has since merged with Atrium Health) and Piedmont Healthcare.

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