CVS Continues To Expand Its MinuteClinic Footprint
CVS Caremark (NYSE:CVS) opened its 35th MinuteClinic in Pennsylvania but its first in York County, earlier this week. The CVS MinuteClinic joins in a range of walk-in clinics that are offered in York County, including WellSpan’s ReadyCare, MedExpress Urgent Care and Patient First. Most other walk-in clinics in York County are staffed by physicians, office staff and nurses, but Minuteclinic only has a single nurse practitioner which it believes will keep costs down while still meeting the need of convenience. [1]
MinuteClinics are small walk-in retail health clinics within the CVS Caremark pharmacy stores which utilize nationally recognized protocols to diagnose and treat minor health conditions, perform health screenings, monitor chronic conditions and dispense vaccinations at much lower prices than a hospital. It is usually staffed with advanced degree nurses known as nurse practitioners who treat routine maladies. At present, there are over 800 MinuteClinic locations inside CVS/pharmacy stores in 28 states and the District of Columbia. CVS, which accounts for more than one in every five prescriptions filled in the U.S., considers MinuteCinic to be an important factor responsible for its retail and enterprise growth. [2]
Shortage Of Primary Care Physicians to Benefit CVS
The U.S. is currently facing an acute shortage of primary care physicians. With 30 million additional Americans expected to be included under healthcare coverage (as a result of the Affordable Care Act), the demand is expected to outweigh the supply by about 45,000 doctors by the end of this decade. [2] Expanding the MinuteClinic footprint can help CVS take advantage of this huge demand-supply gap. CVS registered a 11.4% year-over-year increase in revenue from MinuteClinics in Q1 2014. It plans to open a total of 150 new MinuteClinics by the end of the year and operate 1,500 clinics by 2017.
MinuteClinic Is The Largest & Fastest Growing Retail Clinic Operator In The U.S.
As per a recent report by Merchant Medicine, CVS has a considerable lead with more than double the number of retail clinics compared to its closest competitor Walgreen. While CVS has over 800 MinuteClinics in 28 states, Walgreen operates just 388 clinics in 19 states. Additionally, the report claims that CVS continues to open clinics at a much faster pace than its competitors. Wal-Mart, Target and Kroger are some other company that run similar retail clinics. Operating 119 retail clinics, Kroger is ranked number three followed by Wal-Mart (92) and Target (70). [3]
CVS has provided medical care to over 20 million patients since the inception of MinuteClinic. It has approximately 2,200 nurse practitioners, providing high-quality, affordable, walk-in healthcare services, seven days a week, without any prior appointment. CVS also has clinical affiliations with more than 30 major health systems around the country.
Our price estimate of $70 for CVS Caremark is at a discount of approximately 10% to the current market price.
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Notes:- CVS Pharmacy opens first MinuteClinic in York County, insurancenewsnet.com, July 7, 2014 [↩]
- CVS Caremark’s CEO Presents at UBS Global Healthcare Conference (Transcript), Seeking Alpha, May 20, 2014 [↩] [↩]
- CVS Doubles Up Walgreen In Retail Clinics As Obamacare Patients Seek Care, Forbes, June 5, 2014 [↩]