South-Westerns' Economic News Summaries
Can you stop at the corner—I Need a Burrito, a Big Gulp, and a Flu Shot
Topic Product Markets,
Key Words

health clinics, pharmacies, hospitals.

News Story

Now! In stores near you, clinics are beginning to pop up, offering walk-in health services at a fraction of the cost of visiting emergency rooms or your doctor's office. Approximately 100 such clinics around the country are already in business; parent companies hope to expand to over 2,000 mini-clinics in the next three years.

Wal-Marts, CVS stores, and other chains around the country are hosting these mini-clinics. Offering services like shots, checkups and other routine services, the clinics cater to patients who are under-insured or uninsured, as well as those unwilling to pay for expensive and time-consuming visits to the doctor's office. The mini-clinics offer the additional advantage of providing pharmacies right next door that can fill prescriptions while you shop.

Parent companies can run mini-clinics much more cheaply because the clinics keep costs low. The clinics are housed within existing stores, so overhead costs are minimal. Nurse practitioners with advanced training staff the clinics; these personnel make a fraction of what a doctor would charge. Currently, Rediclinics runs 11 mini-clinics throughout the country, with plans to open 90 stores this year, and 500 more within the next three years. Take Care Health Systems operates 16 clinics, with an eye toward 1400 more stores in three years. Finally, MinuteClinic operates 73 stores around the country.

These companies cater to an apparent consumer trend-a need for convenient and relatively cheap routine medical care--especially in the wake of eroding employer health benefits, and an increasing number of people without any insurance at all.

Questions
1.

Would operating a health clinic in a CVS pharmacy store constitute a conflict of interest between the parties? Why or why not?

2. The original intent of these clinics was to find a way to defray the costs of health care. Does the creation of these clinics accomplish that goal? Why or why not?
3. Will this have an impact on the fees charged by doctors in cities in which these clinics are located? Why or why not?
Source Freudenheim, Milt. "Attention Shoppers: Low Prices on Shots in Clinics" The New York TimesMay 14, 2006.
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