Patients may visit the ER less often for conditions that do not require that level of care if a retail clinic operates close to their homes, a study by researchers from the Federal Reserve Bank of Chicago and Princeton University suggests.
In a working paper for the nonpartisan National Bureau of Economic Research, Diane Alexander, economist at the Federal Reserve Bank of Chicago, and fellow researchers examine the potential of retail clinics in New Jersey to induce local residents to utilize their services instead of visiting ERs, which typically charge more for primary care treatments.
“The idea was that retail clinics would have the biggest effect on people who live closest to them,” Alexander says.
Designing the Study
While claims data were not available to show exactly which services patients used when visiting retail clinics, the research team was able to examine when and where retail clinics opened and closed, as well as health outcomes data from New Jersey hospital discharge records.
“Every time someone goes to the hospital or ER, a record is generated that goes to the state government,” says Janet Currie, Henry Putnam Professor of Economics and Public Affairs at the Woodrow Wilson School of Public and International Affairs, Chair of the Department of Economics and Director of the Center for Health and Wellbeing at Princeton University. “The government uses that data to regulate hospitals. We used the data for our study.”
The study compared ER visits among residents who live within two miles of an operating retail clinic — the inner treatment circle — with visits by those who live two to five miles away — the control group circle.
“We wanted to construct a control group with similar [demographic] characteristics to those who lived right by retail clinics,” Alexander says. “We found that when retail clinics opened, those who lived in the inner treatment circle were less likely to go to the ER for conditions that could also be treated at retail clinics.”
To determine which conditions to examine, the researchers visited retail clinics and their websites, which often market the conditions they treat and services they offer. These conditions included urinary tract infections, ear infections, pink eye, strep throat, strains, sprains and more.
“Other conditions we looked at — such as flu and complications from diabetes — are higher in severity, but we think they are preventable with adequate primary care,” Alexander says. “Retail clinics [highlight] their flu shots and diabetes care, which we thought were two things that would be affected simply because retail clinics target them.”
“There has been a lot of interest in the public policy arena on how to reduce unnecessary ER usage because it’s seen as representative of waste in the healthcare system.”
— Diane Alexander, economist at the Federal Reserve Bank of Chicago
Cost and Access
The study found that residents who live close to an operating retail clinic were 12.3 percent less likely to go to the ER for the flu and 4.1 percent less likely to go for complications of diabetes. For other minor conditions, residents were between 4.7 and 11.4 percent less likely to visit the ER. The study also found that the presence of retail clinics had no effect on ER visits for more serious conditions, such as fractures or poisonings.
Based on these results, the researchers estimate that potential cost savings from reduced ER visits in New Jersey could surpass $70 million annually, with most of the savings stemming from flu and diabetes services.
While that is significant, some research has suggested access to retail clinics may increase utilization of healthcare services overall. A 2016 study in Health Affairs found that 58 percent of retail clinic visits represent new use of healthcare services by patients and contribute to an increase in healthcare spending annually.
Moreover, other research has raised questions about retail clinics’ relationship to ER usage.
Ateev Mehrotra, MD, Associate Professor at Harvard Medical School, helped conduct a 2016 study, “Association Between the Opening of Retail Clinics and Low-Acuity Emergency Department Visits,” which was published in the Annals of Emergency Medicine. It examined 2,053 emergency departments across 23 states using the Healthcare Cost and Utilization Project State Emergency Department Databases.
“Our study didn’t track the exact same conditions, but they were similar, and we didn’t find much of a difference in terms of ER visits,” Dr. Mehrotra says. “However, I don’t discourage patients from going to retail clinics because the biggest impact on their healthcare spending comes from hospital visits.”
Industry observers say reducing inappropriate ER use and dealing with other issues regarding healthcare utilization will require a multipronged effort.
“We can address ER overutilization and still not lower total medical expenditures or improve overall health,” says Mark J. Werner, MD, National Director of Clinical Consulting for The Chartis Group, a healthcare-related advisory and analytics services firm. “I think retail clinics are part of the solution, but they are not the entirety of the solution.”
With the price of ER visits increasing 31 percent between 2012 and 2016, according to the “2016 Health Care Cost and Utilization Report” published by the Health Care Cost Institute, the focus on retail clinics and other potential avenues for cost savings is likely to intensify.
“It seems like a relatively recent innovation in healthcare delivery, [retail clinics], has been able to achieve something that’s been difficult to do through policy,” Alexander says.