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The Secret To Reducing Health Costs May Be At The Shopping Mall

Americans spend a lot on health care. Last year, the average household’s tab was $5,000, according to the Bureau of Labor Statistics. That figure has gone up more than 13% since 2015 — and is about $600 more than the average person’s expenditures on groceries.

Fortunately, it’s possible for the average family to bring that $5,000 bill down — and that’s by turning with greater frequency to retail health clinics. These small health centers provide care for minor problems, like common colds and ear infections. And they’re proliferating throughout the country.

Americans typically have no idea what their trip to the doctor’s office costs until weeks or even months after their visit. More than half of Americans have received a surprise medical bill over the past year. Of those people, about six in 10 thought their insurance company would cover the cost.

Retail clinics allow patients to avoid such confusion altogether. Consumers pay their tabs up front, so there are no unexpected bills down the road.

That may sound like a poor deal for patients used to “free” care courtesy of their health insurer. But retail clinics can be much cheaper than other health care providers, after taking into account the copays and coinsurance that visits to conventional providers may require.

Low Costs For Storefront Care

For minor medical issues, patients who visit a retail clinic pay an average of just $37 out of pocket, according to a recent Journal of the American Medical Association study. The average visit to an urgent care center is nearly twice as expensive out of pocket, according to the JAMA report. And the average trip to the emergency room for a low-severity issue costs a patient more than $400 out of pocket.

Retail clinics are often more convenient than conventional medical facilities, too. In 15 major metropolitan areas, it takes an average of 29 days for a new patient to get an appointment with a family doctor. Two-thirds of patients at retail clinics are seen immediately or within less than 15 minutes. More than 80% are seen within a half-hour.

Moreover, retail clinics boast high satisfaction rates. More than nine in 10 patients rate their experience as good or better.

Unsurprisingly, these clinics have exploded in popularity. The number of retail clinics has quintupled over the past decade, according to a new report from Civis Analytics. From 2010 to 2016, total sales by retail clinics tripled.

Soaring Popularity

This growth will continue. By 2025, the retail clinic market is expected to reach $7.3 billion — more than five times its size just two years ago.

That’s great news for legacy health care providers, which are struggling to meet patient demand. By 2030, the Association of American Medical Colleges projects that the country will be short up to 50,000 primary care physicians.

Retail clinics can help alleviate that doctor shortage by handling minor cases that don’t merit a visit to the ER or the family doctor. Today, less than one in 10 emergency-room visits result in a hospital admission, according to the Centers for Disease Control. Thirty percent could likely be treated in a retail clinic, according to a Blue Cross Blue Shield report.

Retail Clinics Treat The Flu

The extra capacity that retail clinics can offer is especially important during cold and flu season. In the first half of 2018, eight in 10 primary care physicians saw an increase in appointments related to the flu. Almost half of these primary care doctors had to extend their hours to see these patients. Nearly one-third had to increase their staff in response.

Retail clinics can treat many of these patients for less money. If Americans visited retail clinics or urgent care centers for non-urgent medical issues instead of emergency rooms, our country would save $4.4 billion every year, according to a 2010 RAND study.

The tremendous growth of retail clinics proves that the invisible hand of the market is working to give Americans more of what they want — improved access to low-cost, high-quality care. That’s a template for reforming the rest of our health care system.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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