Check Up Before You Check Out: Retail Clinics and Emergency Room Use

The retail clinic is an innovation that has the potential to improve competition in health care markets. Given concern about inefficient use of the emergency room (ER) increasing health care costs, we use all ER visits in New Jersey from 2006-2014 to examine the impact of retail clinics on ER usage. We find that people residing close to an open clinic are 4.1-12.3 percent less likely to use an ER for preventable conditions and for minor acute conditions. Our estimates suggest annual cost savings of over $70 million from reduced ER usage if retail clinics were readily available across New Jersey.

In order to identify the effects of retail clinics on ER usage, we use a difference-in-difference framework. In particular, we compare ER visits among residents living 0 to 2 miles from any site where a clinic ever operated (“near”), to those among residents who live 2 to 5 miles from such a site (“far”), when the clinic is operating and when it is not. Our identifying assumptions are therefore that those who live closest to a clinic are most likely to use it, and that ER visits would have shown similar trends in both distance bands in the absence of the opening and/or closing of a retail clinic. We exclude patients who live further than 5 miles away from sites where a retail clinic ever operated over our sample period because patients in unserved areas are quite different than those in areas where retail clinics locate. To absorb any time-invariant differences across neighborhoods, all of our specifications include a fixed effect for each retail clinic location.

We consider three classes of conditions: (1) conditions that frequently result in ER visits but which could have been prevented by adequate primary care; (2) relatively minor conditions which could nevertheless lead to an ER visit in the absence of an open or convenient doctor’s office or retail clinic; and (3) a control group of conditions that are normally only treated in the ER and cannot be prevented by improved primary care. The first category of conditions—severe yet preventable conditions—includes ER visits for influenza and complications of diabetes. These conditions are common reasons for ER visits and both flu shots and routine diabetes care are explicit foci of retail clinics. The second category—relatively minor conditions—includes sprains and strains, urinary tract infections, conjunctivitis, upper respiratory tract infections, ear infections, and sore throat. Finally, placebo conditions that cannot be treated in a retail clinic include fractures, poisonings, and childbirth.

We find that residents who live close to an open clinic are 12.3 percent less likely to go to the ER for influenza and 4.1 percent less likely to use the ER for complications of diabetes. They are also between 4.7 and 11.4 percent less likely to go to the ER for relatively common, minor conditions. As predicted, retail clinics do not have any statistically significant effect on ER visits for fractures, poisonings, or childbirths.