Walgreens' VillageMD recorded a $6 billion loss, an example of just how difficult it has become to generate profits from a health-care model that retailers over the past decade bet would be a big win.
Despite their early promise of convenience and accessibility, in-store clinics haven't been the golden egg-laying goose many retailers originally envisioned. That's why Walmart recently announced it would. CVS's MinuteClinic, the largest in-store clinic with over 1,100 locations, has announcedNot all patient experiences are negative. Karla Lemon of Conway, South Carolina, says she uses CVS's MinuteClinic for vaccines or sinus infections.
The retail clinics depend on volume selling."If you can't pump through a lot of patients, it doesn't work," Hoff said. Staffing was also a struggle."They ended up being more expensive to run than they thought, combined with a workforce shortage, they just didn't work." Staffing costs, meanwhile, slicing into already thin margins, meant that when Sanders worked at MinuteClinic, she did everything from checking people in, to billing and cleaning the clinic at the end of the day, and any support staff was undertrained, at best, she said."That was the model to ensure they could do it so they didn't have to add staff.
"Primary health care is a low margin business," said Arielle Trzcinski, a principal analyst covering health care at research firm. Forrester. "Compared to what they see in traditional retail, health care is a fundamentally different business," Trzcinski said, citing the challenges of navigating insurance companies and administrative burdens that health care brings.
"Walmart ultimately thought they were solving an important issue," Trzcinski said, but she added that Walmart never really put its full marketing muscle behind the effort or created relationships with other employers to make a pathway into the clinic."They set out to make health care more affordable and convenient for their customers. But to do that you need volume. ...
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