Target is testing a new model for its in-store health clinics in a partnership with Kaiser Permanente, a prominent health care provider.
The Minneapolis-based retailer will offer a wider array of medical services including primary and pediatric care, women’s wellness exams and management of chronic conditions such as diabetes and high blood pressure in four new Target Clinics opening in Southern California that are part of the collaboration.
“We’re really excited about this model,” said Steve Lafferty, Target’s senior director of clinics and health care partnerships. “We are pretty confident the model is going to work based on what Kaiser Permanente brings to the table.”
He added that Target will see how these clinics do before deciding how the partnership might be expanded to more locations.
Target currently has in-store clinics in 80 of its 1,800 U.S. stores. They offer more basic services such as physicals and vaccinations and treat common illnesses such as strep throat and pink eye. Those clinics are staffed by Target employees. But under the new arrangement in these four clinics, Kaiser will take over the responsibility of hiring the nurse practitioners and other staff members.
“The fact that Kaiser … will be staffing these clinics is a major departure for Target,” said Tom Charland, CEO of Shoreview-based Merchant Medicine, a retail clinic research and consulting firm. “Up until now, they felt their guests should be treated by Target employees.”
He said this partnership could help shield Target from some of the initial exposure of opening a new retail clinic, which often takes about two years to break even.
At the same time, Kaiser is a huge player in California so it will likely draw new customers into Target stores, Charland said. Many, he added, may very well go shopping while they’re waiting at the clinic.
“Generally, retailers [open clinics] first and foremost to bring new people into the store and to gain new prescription customers,” he said. “That’s the primary reason.”
John Holcomb, Target’s vice president of health care operations, said Target sat down with Kaiser to figure out how to improve the health care model and to find ways to remove some of the friction points in the current system. He noted that these four clinics will be convenient, open seven days a week and at night, and will be able to connect patients with physicians and specialists via telemedicine.
Target, Holcomb added, is in the midst of a “thoughtful expansion” of its health clinics, opening about 10 to 15 a year. Earlier this year, it expanded into Texas with eight new clinics. In total, it will open about 14 new clinics this year.
Its clinics, though, are still modest in scale compared to Walgreens and CVS, which have hundreds of in-store clinics.