Healthcare: Putting docs in Duane Reade pays off

Healthcare: Putting docs in Duane Reade pays off

By Gale Scott for Crain’s New York

Putting its doctors to work next to the shampoo and toothpaste aisles in a chain of New York City drugstores is paying off for a big Manhattan hospital system. Continuum Health Partners’ two-year-old arrangement to place its physicians in walk-in medical clinics at Duane Reade pharmacies has done even better than the health system hoped.

In a trend that continues to grow nationally, New York City’s Duane Reade drugstores have set up medical clinics where people can seek care without an appointment. Nationally, most of these retail facilities have no hospital affiliation. In New York, however, Duane Reade has enlisted Continuum—the parent company for Beth Israel Medical Center and St. Luke’s-Roosevelt Hospital Center, both in Manhattan—as its affiliate. The hospital system has worked out an arrangement to see that patients are offered follow-up at its own facilities.

“We are absolutely seeing a flow of new patients” to the health system’s hospitals, said Adam Henick, Continuum’s senior vice president for ambulatory care. That has included patients with everything from head colds to near heart attacks, he said, though the majority of care has been for minor ailments.

The affiliation model has also silenced some critics of the retail clinic concept, who have voiced concerns that people who use them will avoid finding a family doctor. That could mean that underlying health problems could go undiagnosed and without follow-up.

No money changes hands between Continuum and the business entities involved with the clinics. Those companies are Duane Reade Walk-In Medical Group and Consumer Health Services, a Washington firm.

But under an agreement with the drug chain and the care companies, all physicians providing care at the clinics go through Continuum’s medical credentialing process to get admitting privileges to a Continuum facility.

That arrangement gives Continuum “downstream revenue” when patients use the system’s hospitals and its doctors for follow-up medical needs, including primary care.

The venture has been so successful that Duane Reade and Continuum plan to expand it. Continuum originally placed its doctors in four Duane Reade clinics in Manhattan. It later decided two were not working out, and closed those two and opened two new ones. Working with the drug chain, the hospital systems plans to add another 20 locations over the next year or so, starting with adding three in the next six months.

Among those new locations will be a Duane Reade medical office in Harlem, to be located in a drugstore at 135th St. and St. Nicholas Ave. “It will be our first in a lower-income area,” Mr. Henick said. “We are working with Medicaid managed care companies to come up with reasonable payments.” Insurers should be interested, he said, “because this will drive people who don’t need to be in the ER out of the ER.” Emergency room visits are generally far more expensive for health plans than clinic visits.

The drug store benefits by increasing its retail sales, which usually includes filling the prescriptions that walk-in patients generate.

Mr. Henick says he believes that the clinic arrangement fills a gap in New York City, by offering convenient after-hours primary care.

Though it is not unusual in many cities for healthy people not to have a family doctor, other major cities tend to be chock-a-block with doctor-staffed walk-in clinics.

“I strongly believe that having our clinics staffed with physicians—not physician assistants or nurse practitioners like they use in other drugstores—is a big reason for our success,” he said.


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