UPDATE:CVS Shuts 90 MinuteClinics For The Season,Citing Demand
March 09 2009 - 5:12PM
Dow Jones News
CVS Caremark Corp. (CVS) has placed about 16% of its retail
MinuteClinic locations on a seasonal schedule, closing their doors
for the time being, while keeping other drugstore clinics open in
those markets, a company spokeswoman said Monday.
MinuteClinic, the largest operator of retail clinics in the
U.S., is making the move "to align with consumer demand," said CVS
Caremark spokeswoman Carolyn Castel. The company now has about 460
clinics in operation, excluding those now closed for the season,
she said.
The move has implications for the retail clinic industry, which
enters a slow season in the spring, and may be a sign of increased
pressure wrought by the economic recession.
Some 90 MinuteClinics started operating on a seasonal schedule
earlier this month, while the company extended weekend hours in
certain other clinics, said Castel. The company will reopen the
stores for the next flu season or other seasonal needs, she said.
MinuteClinic has not exited any market.
"This is the first time they've ever done such a thing," said
industry consultant Tom Charland, chief executive of Merchant
Medicine LLC, who noted in a report on his web site earlier Monday
that MinuteClinic had removed 89 clinics from the list on its site
since last week while adding two new ones. Nine states are most
affected, notably California and Florida, according to
Charland.
This will mark the first time MinuteClinic has placed clinics on
a seasonal basis, "if indeed that turns out to be true" and the
company reopens those clinics later, he said in an interview. Until
now, MinuteClinics operated seven days a week, all year, he
said.
"For those in the industry, the nagging problem is what to do
with the extra capacity we have in the off season, and unless that
problem gets solved this industry will continue to have a major
structural weakness," Charland said. He had noted on his blog
earlier this month that growth in the retail clinic industry has
almost come to a halt this year.
Charland sees a larger economic dimension to MinuteClinic's
move.
"I would imagine that this isn't just about we're going into the
off-season. That cash preservation is something that we're seeing
cross-industry," he said. CVS' Castel couldn't immediately be
reached later to comment on whether cash preservation played a part
in the move.
Castel noted that MinuteClinic continues to open new clinics in
Massachusetts.
"MinuteClinic will be continuing to serve all of the communities
in which we operate while maintaining convenient access to care,"
said Castel. Nearly all the seasonal clinic locations are within 10
miles of another MinuteClinic location and more than half are
within five miles, so access has been affected only minimally, she
said.
Walgreen Co. (WAG) said Monday it has no plans to place its Take
Care Clinics on a seasonal schedule. The drug store chain and CVS
competitor operates more than 700 retail and work site health
centers, nearly 340 of which are retail.
"We feel more convinced than ever that retail clinics are a
critical part of the solution for health care in the United
States," Take Care Health Systems Chief Executive Peter Miller said
in an interview.
"People are sick all year 'round," with a need for accessible,
high-quality, affordable health care, he said. "If you close
clinics people are going to think of you as a seasonal business. We
are not a cough and cold business."
The "mature" Take Care Clinics are now two-and-a-half years old,
and the company expects a majority of those sites to break even
within two to three years of opening, Miller said, adding that some
of the stores are profitable now. Take Care is focused on
introducing services that are nonseasonal or not on the same
seasonal pattern as cough and cold products, including a new
vaccination offering and health evaluations, and plans to start
infusion injections, hypertension screening and stabilization and
wound care, and to expand skin care in the future.
-By Dinah Wisenberg Brin, Dow Jones Newswires
215-656-8285; dinah.brin@dowjones.com