September 6, 2020
Not long ago, my non-emergency medical needs were exclusively met by visits to the primary care doctor or to a specialist. Given the time lost on a visit, growing co-pays and lead time needed to get an appointment, I really dreaded going to the doctor and put off some minor therapies, including flu vaccines. Recently, these have been available at mini clinics located at both pharmacy and some larger grocery retailers. There is one at a 2 minute walk from home. Therefore, my adderence to recommended therapies has grown. It also has helped that I can visit during weekends and with no appointment. The roll-out of these clinics has been well received by other patients as well (see figure).
Sources: UBS, McKinsey
Retail clinics bring two major benefits to patients:
- Lower cost: co-pays are lower (mostly free) than for visits to the primary care doctor;
- Convenience: most are open 7 days a week, located closer to work or home and with easier availability of preferred time slots;
These retail clinics have proven to be strong traffic generators for retailers. The current pandemic and associated future vaccination needs are likely to exacerbate this. This will open an attractive profit pool for these retailers while reducing the cost of health care for health insurers. In addition, this infrastructure is starting to be used by direct to patient entrepreneurs that may need an in-person intervention for installation if devices and / or titration of the therapy. Somar is following the space closely to find the best investment opportunities.