Matthew Holt has some good info/links on the CVS acquisition of MinuteClinic. Are retail clinics the "disruptive innovation" Southwestern Airlines model for healthcare? Offer limited services, cut all the stuff folks don't really want, and do it cheaply. The entire business model (like most) rises and falls on market demand (check out the great white paper from Mary Kaye Scott of the CHF). It comes down to this:

Can we get 2 or 3 people to utilize the service per hour? If yes, cha-ching.

Local newspapers are reporting that the deal went for $170MM - that's about $2MM per site. Keep in mind that this is for a unprofitable $20MM business. Some MBA exec in CVS Corporate is obviously seeing some compelling positive economics to make such a big investment. They are adding 200 more sites this year, and then few hundred more per year after that.

Also, $77MM in VC funding just went into Take Care Health Systems, the biggest competitor of MinuteClinic. They plan to open 200 locations in the next year and 1,400 more by the end of 2008.

So, in 3 years time, just with these two biggest players, we can expect to see 2,000-2,500 of these - 1 for every two or three hospitals. And we're just getting started, right? If Walgreen's and CVS both jump abroad, that's another ~10,000 potential sites to be considered. Add also grocery stores, malls, or any other retail setting (banks? new tagline: live long and prosper?).

Related, we've probably all heard that a group of investors almost bought out HCA. It would have been one of the biggest leveraged buyout deals in US history. If it weren't for the $11B in debt, the deal would have been sealed. Regardless, this just goes to show - despite all the negative trends we always talk about, lots of folks are putting their money where their mouth is. Within our messed-up, red-taped, media-bashed healthcare industry, non-healthcare people truly believe that there are lots of opportunities to add value and make a real buck.

one more thing: speaking of non-healthcare types, the CEOs of both MinuteClinic and Take Care are retail service experts. MinuteClinic's Howe was Arby's CEO; Take Care's Rosenbluth (yes that Rosenbluth) built & sold off travel management giant Rosenbluth International. They are experts in location selection and service excellence.

What do they see that we healthcare drones don't? (or is it vice versa)