The rise of doctor's clinics in supermarkets

Can Walmart and Loblaw deliver the same level of service as a private practice?

In recent years there’s been an uptick in the number of medical clinics in grocery stores across Canada.

Since it was founded in 2006, Jack Nathan has grown to include 59 family health and walk-in clinics located in Walmarts in six different provinces.

Primacy, a similar operation that entered a partnership with Loblaw in 2003, owns more than 140 clinics in Real Canadian Superstores, Zehrs, No Frills and Loblaws in every province.

Both Jack Nathan and Primacy rent their space to physicians and offer a number of perks—turnkey setup and ancillary providers like physiotherapists, chiropractors and dietitians. Monthly fees at both also include a team that handles any maintenance issues in the facility.

At Primacy, there’s a loyalty program that earns physicians discounts on technology and equipment, as well as marketing packages that include clinic signage and web design services.

At Jack Nathan, there is the not insignificant advantage of being associated with one of the most widely recognized brands in the Western world.

Physicians at these clinics aren’t employees, though. As Scott Murray, the vice-president of health at Calian, Primacy’s parent company, pointed out: “Other than being located in a Loblaw banner store, the practice is no different than working in another group setting.” These corporations are, in a sense, extra-supportive landlords.

But there is also an undeniable emphasis here on customer (patient) service. The biggest advantage for patients is convenience. The so-called one-stop shop. They already had to go out to buy their groceries, but at these clinics they can do it while they’re waiting to see their doctor. Jack Nathan even provides a beeper that goes off five minutes before a patient’s appointment, like the one some restaurants give you to let you know your table is ready.

The benefits of these arrangements for retailers are obvious. Will Falk, the national leader of the health-care services group at PricewaterhouseCoopers, said the average person who visits a grocery-store pharmacy spends between $30 and $40 above and beyond the cost of their prescription.

“Just imagine how much they’re going to spend if they’re in to see a family doctor for their kid,” he said.


Many doctors believe privately run group practice will deliver a level of service that a clinic in a Walmart or a Loblaws never will. That’s the way Dr. Andris Lielmanis felt when he closed his Brampton, Ont., family practice in November 2015. In March 2012, Dr. Lielmanis’s colleague died suddenly of an MI, leaving the now 72-year-old practitioner in a 2,300-square-foot office with a roster of 5,000 patients.

“No FP, young or old, was willing to join the practice with the goal of taking it over,” he wrote to the Medical Post in an email.

Just as the burden was becoming unbearable, the College of Physicians and Surgeon of Ontario “suggested” he switch to an electronic medical record-a tool that Dr. Lielmanis, a self-proclaimed computerphobe, finds “excellent for slowing everything down.”

So, being unwilling to abandon his patients but also unable to keep up, Dr. Lielmanis joined Appletree, a network of 36 clinics originally based out of the Ottawa area.

Apart from the fact that Appletree clinics are not located in grocery or superstores, they’re also far more involved in a physician’s practice than either Jack Nathan or Primacy. Appletree’s modus operandi is that the doctor is there to practise medicine and the Appletree-trained staff are there to do everything else. They work for you, with the added advantage of you not having to hire, train or-generally speaking-worry about them.

Dr. Lielmanis now has a personal assistant to help him run his EMR (every Appletree FP has one, he said) and is surrounded by young doctors who will slowly take on his patients as he edges closer to retirement.

But it’s not the same as it used to be. “In the old-style medical practices our expenses may well have been high but our patients were treated like hand-fed canaries,” he wrote. Now at Appletree “the cozy atmosphere of the office where everyone knew each other and chatted with my staff is gone. The new atmosphere is far more clinical.”

Despite this, Dr. Lielmanis spoke favourably of Appletree. He pays 30% of his gross billings to the company, but only out of what he actually receives. If he goes on vacation, he doesn’t pay. If his pay gets clawed back, his overhead reflects that. The environment allows for a greater degree of freedom than one with a fixed overhead, he said.

But he also clearly missed the old-style practice. The way he described his transition to Appletree seemed uncomfortably similar to that of the small businessman forced to close shop and go work for the giant chain that just rolled through town.

The cost of administration I visited Dr. Thom Tyson, the physician who founded Appletree 24 years ago, at one of the company’s Toronto offices (headquarters is in Ottawa). In addition to his MD, Dr. Tyson’s background is in economics, a field he deftly described as the study of how to produce more with less. He had put together a PowerPoint presentation containing a detailed and, frankly, convincing sales pitch for doctors on the company. Yet, as he pointed out a few minutes into our meeting, physicians are generally less impressed.

That’s because they already have staff, so when you suggest that an administrative staff should handle all the administration, doctors aren’t typically blown away. “My secretary already handles all of that,” they’ll say.

But do they really? At this point, Dr. Tyson pulled up a cocktail-napkin equation to demonstrate the physicians’ error in thinking. He said that in Ontario, the average doctor earns about $41 per patient seen. Most doctors estimate they’re able to see about six patients an hour and work 40 hours a week (most say they work more, but Dr. Tyson insisted on low-balling it). Even assuming those doctors take a full month off work, this equation puts their gross billings at over $470,000 annually-more than $100,000 higher than the average Ontario doctor’s gross billings. In some cases, he said, physicians are billing less than half of what they could be.

“The problem isn’t that their office isn’t well run—it’s that they’re running it,” Dr. Tyson said.

He contends that physicians are blind to tiny administrative failures they so often insist their secretary takes care of. Take a routine vaccine. Doctors might spend a couple of minutes digging through the fridge because they haven’t trained their clinic staff to properly read the labels, or watching the patient take off their jacket because there’s no protocol to ensure they’re ready when the doctor walks through the door.

While eliminating these hiccups has undoubtedly contributed to the “clinical” atmosphere Dr. Lielmanis described, the impact of not doing so can greatly affect the physician’s bottom line. Dr. Tyson

mentioned one doctor who, for about 20 years, enjoyed a full-time job in a penal institution while he ran a clinic part-time, billing about $100,000 a year. He had pegged his overhead at about 25% but when he sat down to crunch the numbers with Appletree’s medical director, he found that the overhead was about $110,000. “For 20 years, he’d been working in his office for free,” Dr. Tyson said.

Appletree’s administrative adjustments not only boost the earning power of primary care physicians, they also affect their capacity to deliver care. Dr. Tyson said the average family physician at Appletree can comfortably handle a patient load of about 2,300, which is nearly twice as many as other family physicians take on. Ten per cent of community physicians in Ottawa—about 225 doctors-belong to an Appletree clinic but together they delivered about 20% of primary care in the city last year.

His point was clear: the public system, strained as it may be, has the resources to meet demand. Those resources just need to be allocated differently.


Regardless of how doctors feel about working at Jack Nathan or Primacy or Appletree, the fact that these new models exist as a choice is important. Some physicians may love certain aspects of running their own practice and may be capable of doing it well. They may be able to marshall a support staff that would allow a doctor to efficiently handle a roster of 2,300 patients. But they are also rare and the system is already demanding more of them.

Still, there’s an area in which the retail model isn’t taking full advantage of available technology to improve upon the health-care system’s notorious lack of connectivity. Even in many of the larger groups (Jack Nathan and Primacy included), the clinics are not connected electronically to each other.

But at Appletree, Dr. Tyson said a patient can walk into any location and any physician can immediately access their information from any Appletree location. What’s more, Appletree’s EMR, patient portal and virtual kiosk are used by nearly four times as many clinics as those under the Appletree umbrella.

Which raises what is perhaps the most maligned model of care: the walk-in clinic. While neither Appletree, nor Jack Nathan, nor Primacy are strictly walk-in models, there is no denying that walk-ins comprise a healthy segment of their business. But that doesn’t seem to bother the people running these companies. In fact, the corporate ethos dictates they do everything they can to help those doctors keep their doors open to walk-ins without getting overwhelmed. Anything else is just bad business.

“(Primacy clinics) cannot be all things to all patients,” Scott Murray from Calian acknowledged. “The trick is to have the right patient seen at the right location at the right time.” The problem is that right now, many patients can’t get seen anywhere at the right time. Continuity of care has often been used to justify weeks-long waits to see your own, personal family physician, but soon, as these clinics and networks grow, that’ll no longer be a good enough excuse.

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