1. Convenience Care: Youre sick. Were quick. ¹ Presented by Stephen C. Waldhoff, FACHE ¹MinuteCare, Michael Howe, CEO

2. Acknowledgements Albert Lea Medical Center – Mayo Health System Albert Lea Medical Center – Mayo Health System –Karen Conn, Administrative Assistant –Ginny Larson, Clinic Administrator –Steve Underdahl, Hospital Administrator Michael Howe, CEO – MinuteClinic Michael Howe, CEO – MinuteClinic Charles Liedtke, Ph.D., University of MN Charles Liedtke, Ph.D., University of MN John Vollum, The Wellspring Group John Vollum, The Wellspring Group

3. Background Information Changing healthcare market conditions Changing healthcare market conditions –Niche medicine movement –Consumer driven retail model Retail medicine appeal Retail medicine appeal –Convenience –Cost –Appointment access

4. Objectives Introduce and become familiar with the concept of retail medicine Introduce and become familiar with the concept of retail medicine Understand the driving market forces behind convenience clinics Understand the driving market forces behind convenience clinics Gain an appreciation for the impact this care model will create for traditional medicine Gain an appreciation for the impact this care model will create for traditional medicine Suggest some potential take-home business plan strategies Suggest some potential take-home business plan strategies Assess how one rural healthcare system is responding to retail medicine initiatives Assess how one rural healthcare system is responding to retail medicine initiatives

5. Overview 1. Concept Description 2. Implications 3. Potential Strategies 4. Albert Lea Medical Center (ALMC) Express Care Model 5. Questions

6. Convenience Care Concept Description

7. Definition A walk-in neighborhood medical clinic in retail locations where certified nurse practitioners diagnose and treat select common family illnesses using defined medical protocols. (PR Newswire US, 02-02-05)

10. Origin Consumer driven concept Consumer driven concept -- Convenience -- Accessible -- Convenience -- Accessible -- Quick -- Little or no out-of-pocket cost -- Quick -- Little or no out-of-pocket cost -- Low Cost -- Consumer empowerment -- Low Cost -- Consumer empowerment -- Simple -- Simple Founded in 2000 Founded in 2000 Minneapolis Based Minneapolis Based

11. Origin (cont.) MinuteClinic – early pioneer/founder MinuteClinic – early pioneer/founder –One physician and two investors –Partnered with Target Opened a kiosk in Towson, Maryland Opened a kiosk in Towson, Maryland –19 Minnesota locations –Contracted directly with Best Buy and Guidant Corporation with on-site medical kiosk services –84 locations in 10 states –300 clinics in 22 states by year end

12. Origin (cont.) CVS Corporation CVS Corporation –Acquiring MinuteClinic for $170 Million –6,100 retail and specialty pharmacy stores –Currently 66 CVS stores with a MinuteClinic –450-500 locations or more by 2007

13. Retail Locations Partnerships are emerging nationwide Partnerships are emerging nationwide Well-known retailers: Well-known retailers: -- Wal-Mart-- Hy-Vee -- Target-- Albertsons -- Kroger-- Cub Foods -- CVS-- Osco Drug -- Rite Aid-- Save-On Pharmacy

14. Convenience Clinic Brands Express Care Express Care MinuteClinic MinuteClinic MinuteCare MinuteCare FastCare FastCare Little Clinics Little Clinics Quick Clinic Quick Clinic MedSpot MedSpot Ready Clinic Ready Clinic Wellness Express Clinic Wellness Express Clinic Take Care Take Care Redi Clinic Redi Clinic

16. Attributes - Clinical Employ a Nurse Practitioner Employ a Nurse Practitioner Treat non-emergent conditions Treat non-emergent conditions Conduct physicals Conduct physicals Offer routine tests Offer routine tests Utilize algorithm based clinical pathways Utilize algorithm based clinical pathways Physician supervised Physician supervised Referrals offered Referrals offered

17. Attributes - Operational No appointment necessary No appointment necessary Open 7 days a week with extended evening hours Open 7 days a week with extended evening hours Sophisticated computer software utilized Sophisticated computer software utilized Easy consumer access Easy consumer access Personal and attentive staff nature Personal and attentive staff nature Available medical menus with posted pricing Available medical menus with posted pricing Offer beepers Offer beepers Kiosks measure 10 ft. x 12 ft. Kiosks measure 10 ft. x 12 ft.

18. Attributes - Administrative Convenient locations Convenient locations Low overhead Low overhead Limited square footage (110 - 440 sq. ft.) Limited square footage (110 - 440 sq. ft.) Priced well below traditional healthcare options Priced well below traditional healthcare options Covered by most insurance plans Covered by most insurance plans Promise patients an average waiting time of 15 minutes Promise patients an average waiting time of 15 minutes

19. Clinical Safeguards Utilize Masters prepared Nurse Practitioners Utilize Masters prepared Nurse Practitioners Follow evidence based clinical protocols with treatment algorithms Follow evidence based clinical protocols with treatment algorithms Supervised by a physician (M.D.) Medical Director Supervised by a physician (M.D.) Medical Director Available physician consultation Available physician consultation Offer referrals to primary and secondary care providers Offer referrals to primary and secondary care providers

20. Clinical Safeguards (cont.) Avoid treating children younger than 18 months or people with chronic diseases Avoid treating children younger than 18 months or people with chronic diseases Maintain complete patient records Maintain complete patient records Fax records to the patients primary care provider to ensure treatment continuity Fax records to the patients primary care provider to ensure treatment continuity Patients returning with the same medical complaint are flagged by the computer system Patients returning with the same medical complaint are flagged by the computer system Protocols prevent Nurse Practitioners from prescribing antibiotics without a positive test result Protocols prevent Nurse Practitioners from prescribing antibiotics without a positive test result

21. Urban vs. Rural Sensitivities Urban communities are attractive markets Urban communities are attractive markets Rural locations have appeal Rural locations have appeal –Regional shopping venues –Close proximity to larger communities –Physician under served areas –Little or no competition

22. Market Appeal and Consumer Reactions

23. The Three Ps of Marketing Applied to Convenience Care Clinics P roduct P roduct P rice P rice P osition P osition

24. P roduct Consumer acceptance/empowerment Consumer acceptance/empowerment –Options/choices –Convenience –Appeal to working mothers –Quality care –Timely: Youre sick. Were Quick. –Affordable

26. P rice ¹ Typical primary care visit cost $109 Typical primary care visit cost $109 Emergency Room visit costs $328 Emergency Room visit costs $328 Urgent Care visit costs $125 Urgent Care visit costs $125 Convenience Care fees: Convenience Care fees: –FastCare$38 –QuickClinic$39 –MinuteClinic$44 –MedSpot$40 ¹ MN Council of Health Plans

27. P osition Typical locations: Typical locations: –Shopping Centers –Grocery Stores –Retail Centers Target Market Target Market –Cash customers Only 5% of MinuteClinic patients are 60 years + Only 5% of MinuteClinic patients are 60 years + –Ages 18 months – 64 years –Process insurance claims Some companies are reducing or waiving deductibles Some companies are reducing or waiving deductibles –U.S. Bank in Minneapolis –Individuals with HSAs Consumerism Consumerism –Career singles, students, and families

28. Wall Street Journal by Harris Interactive Survey Wall Street Journal by Harris Interactive Survey 1 2,245 adults surveyed 2,245 adults surveyed Convenience (92% satisfied) Convenience (92% satisfied) Quality of Care (89% satisfied) Quality of Care (89% satisfied) Staff Qualifications (88% satisfied) Staff Qualifications (88% satisfied) Cost (80% satisfied) Cost (80% satisfied) 1 October 2005

29. Consumer Reaction Patients think its a great alternative to an emergency room. Rhonda Duke Patients think its a great alternative to an emergency room. Rhonda Duke I thought they were very friendly and helpful. More convenient than having to wait elsewhere. I thought they were very friendly and helpful. More convenient than having to wait elsewhere. Kristy Parrish Kristy Parrish I think its a good idea. Its convenient, and sometimes you just dont need to see a physician. Walter Fosser I think its a good idea. Its convenient, and sometimes you just dont need to see a physician. Walter Fosser What I like about this is, its hitting people where they live, work, and shop. The advantage of it is that its the right kind of care at the right time. What I like about this is, its hitting people where they live, work, and shop. The advantage of it is that its the right kind of care at the right time. Mike Walker Mike Walker

30. Implications for Traditional Medicine

31. Potential Healthcare Industry Consequences Fragmentation - a possible/likely outcome Fragmentation - a possible/likely outcome Lost market share Lost market share Patient panel erosion Patient panel erosion Financial loss Financial loss –Heavy private pay concentration –Loss of overhead coverage Primary care provider threat Primary care provider threat

33. Market Potential for Retail Health Providers The MinuteClinic concept represents an almost indescribable potential for growth. Michael Howe, CEO MinuteClinic

34. Potential Healthcare Industry Strategies

35. Questions to Consider What is our business? What is our business? How can we best meet the needs of patients? How can we best meet the needs of patients? Should we position ourselves to compete? Should we position ourselves to compete? What should we consider doing? What should we consider doing? Are there any viable options? Are there any viable options?

36. Healthcare Industry Options 1. Co-Exist –Do nothing approach –Accept consequences 2. Collaborate –Respond by working with others –Stratify existing fees based upon patient acuity levels –Become more customer friendly

37. Healthcare Industry Options (cont.) 3. Partner/Acquire Assets –Establish an equity position with other providers –Buy an established business 4. Compete –Open a de novo business –Establish kiosks in high density consumer traffic areas –Become more visible by creating a consumer driven model that is responsive to the changing market place

38. ALMC Case Example

39. Guiding Principles Care provided in a retail setting Care provided in a retail setting Care provided for limited diagnoses Care provided for limited diagnoses Care provided by nurse practitioners Care provided by nurse practitioners Minimal offered ancillary support Minimal offered ancillary support Care provided within a limited timeframe Care provided within a limited timeframe Care is focused on immediate need (rather than preventative health) Care is focused on immediate need (rather than preventative health) Posted charges and point-of-care payment Posted charges and point-of-care payment Paperless environment Paperless environment Serve as an innovative incubator Serve as an innovative incubator

40. Why Now? Significant retail medicine growth in metro areas and spreading in out-state areas (Winona & Mankato) Significant retail medicine growth in metro areas and spreading in out-state areas (Winona & Mankato) Minnesota now allows N.P.s to practice independently Minnesota now allows N.P.s to practice independently Albert Lea retail corridor appears to be an ideal setting for a Convenience Care model Albert Lea retail corridor appears to be an ideal setting for a Convenience Care model Anticipate Albert Lea Wal-Mart will follow the direction of retailers Anticipate Albert Lea Wal-Mart will follow the direction of retailers One-Third of local survey respondents indicated they would use this new service One-Third of local survey respondents indicated they would use this new service

41. Potential ALMC Convenience Care Model Patients referred to ALMC primary care for: Patients referred to ALMC primary care for: –Acute care diagnosis –Follow up care –Extensive lab, radiology 120 – 140 sq. ft. kiosk located within an existing retail location 120 – 140 sq. ft. kiosk located within an existing retail location

42. Potential Diagnoses Limited Limited Posted along with charges Posted along with charges

43. Potential Diagnoses (cont.) Common Illnesses Common Illnesses –Pink eye –Ear infections –Sinus infections –Strep Throat –Allergies (over 6 years) –Bladder infections (females age 12-65 ) –Bronchitis (age 10-65) Additional Treatments Additional Treatments –Flu (ages 10-65) –Laryngitis –Mono –Pregnancy Testing –Swimmers Ear –Minor lacerations

44. Potential Diagnoses (cont.) Skin Infections Skin Infections –Athletes foot –Cold Sores –Deer Tick Bites (over age 12) –Minor skin infections, burns, rashes, poison ivy, ringworm, wart removal, swimmers itch Vaccines Vaccines –Diphtheria, Tetanus, Pertussis –Flu –Hepatitis –Polio –MMR –Meningitis –Td

45. Goals Meet operating expenses Meet operating expenses Generate Generate –Referrals to ALMC –Positive patient satisfaction scores –Positive patient outcomes –Effective patient utilization

46. Goals (cont.) ALMC Innovation Center ALMC Innovation Center –Automated drug distribution dispensing system –Physician referral resource –Medical education and information kiosk

47. Exit Strategy The expected goals will be reviewed quarterly by the Clinical Practice Committee for the first year and other appropriate review bodies annually The expected goals will be reviewed quarterly by the Clinical Practice Committee for the first year and other appropriate review bodies annually If the goals are not met on a consistent basis, an exit strategy will be implemented If the goals are not met on a consistent basis, an exit strategy will be implemented One year space lease One year space lease

49. Questions?