Private equity gets into retail clinics
So-called retail clinics are still a blip on healthcare delivery's radar, but private equity funds are jumping into them in a big way, Reuters reported.
Private equity senses a win investing in this burgeoning sector, boosted by the fact that 30 million Americans will be gaining coverage as a result of the Affordable Care Act, according to the wire service.
"We thought it would be mostly people who would otherwise go to the emergency room. But it's equal parts E.R. and primary care physician-type appointments," Aaron Money, an executive with the San Francisco-based private equity firm FFL Partners, told Reuters. The company started up the retail clinic chain WellStreet in Georgia.
Altogether, the industry has about 1,400 retail clinics nationwide, and the numbers are growing quickly, according to the National Journal. The clinics offer a significant cost advantage over seeking treatment at regular physician offices and even hospital emergency rooms.
They are "about 30 to 40 percent cheaper on a per-visit basis than care at a doctor's office, and 80 percent lower, on average, than the care at an emergency department visit," Ateev Mehrotra, policy analyst at the RAND Corporation, told the National Journal.
Mehrotra noted that's primarily because care administered by nurse practitioners at the clinic is less expensive than the same care provided by a physician.
Patients who make a habit of using retail clinics may get equal-quality care for less cost, but they also risk continuity of care, according to a RAND Corporation study published last fall in the Journal of General Internal Medicine.