Medical Marts Retail Clinic's Shutting it's Doors

Another large privately backed clinic operator closed its doors last week, this time Medical Marts. This group distinguished itself by having MDs as the providers in retail clinics in Utah Shopko stores and Illinois Meijer stores rather than Nurse Practitioners, or Medical Assistants.. Signs on the clinics say they are "temporarily" closed.

All phones are busy.

Medical Marts joins a growing list of privately based operators to close their doors, including CheckUps (Wal-Mart stores) and Corner Care Clinic (Medicine Shoppe). The web sites of both operators are still up and still show that all locations are open for business.

One can only imagine what’s going through the minds of retailers across the country who are looking to bring in their own clinic operators. All of these closings have taken place with national retailers, showing that even the most sophisticated are being surprised by the lack of staying power of some clinic operators.

All of which leads to what experts believe are the top three stumbling blocks:

Does the retail clinic business plan build in enough operating capital for at least two years of operating losses?

Does the cash flow plan anticipate major swings in seasonality?

Are average per-patient revenue assumptions based on actual fee schedules negotiated ahead of time with insurance payers or are they mere guesses?

Unfortunately, this probably isn't the end of some shakeout in the retail clinic industry.

2008 will likely see a few more doors closing before things settle into more stability among major retail clinic operators.

The bottom line for all these clinics is they need 25-30 patients per day to reach the break even point. It can take a couple of years or more to build some practices to that point. If the pockets aren't deep enough the clinic is likely to fail.