John August

Director of Healthcare and Partner Programs, Scheinman Institute

John August, program director of healthcare labor relations at Cornell University’s School of Industrial and Labor Relations, said he expects the healthcare consolidation trend to continue.

August says: 

“The trend for ‘mini-clinics’ started around 2010, when health coverage was expanding due to the Affordable Care Act and Medicaid expansion. In hindsight these box-store clinics probably expanded too quickly.

“By the time the pandemic hit, the business model started taking on water as people began staying home and not using the services at increasingly difficult-to-staff facilities.

“Reimbursement rates have been flat and will continue to be, but my view is that this is less about reimbursements and more about profitability. Increased costs for staffing and retention of employees are driving consolidation in all sectors of healthcare. This dynamic is what recently drove Walgreens and Rite-Aid to close a number of their retail pharmacies.”