Sept. 7 (Bloomberg) -- Lillian Grabel had one day of blood pressure medication left and didn't want a long wait in a doctor's office for a new prescription. So she turned to the drop-in clinic at a Duane Reade drugstore in New York.

``It's wonderful,'' says Grabel, 66, after a stop at the RediClinic on the second floor. ``It was worth every penny not to sit in any doctor's office.''

To capture walk-in patients who will buy drugs and other merchandise, Wal-Mart Stores Inc., Duane Reade Holdings Inc., CVS Corp. and Walgreen Co. are opening clinics mostly run by nurse practitioners and physician assistants who treat everyday ailments and write prescriptions. Executives say at least 5,000 U.S. outlets will open in the next few years, even as doctor groups express concern over the quality of patient care.

``This is a first step by CVS and some of the others to say we are going to fill the void of where the general practitioner used to be,'' says Dan Genter, president of Los Angeles-based RNC Genter Capital Management, which manages more than $2 billion including CVS shares. ``It's a big void, and there's a real need for it.''

CVS, the second-biggest U.S. drugstore chain, agreed to buy MinuteClinic Inc. for an undisclosed amount in July to enter the market for walk-in health-care services. MinuteClinic, based in Minneapolis, was founded in May 2000.

Former America Online Inc. Chairman Steve Case, who has a minority stake in RediClinic, has also entered the market.

$20 Million in Sales

MinuteClinic, with sales of $20 million last year, has 86 drop-in offices in 10 states, 68 of which are already in CVS stores. CVS Chief Executive Officer Tom Ryan said at an analyst meeting in May that he could see the health-care company opening 1,500 offices in the U.S.

Walgreen has 10 of its Health Corner Clinics open in stores in the Kansas City market and nine in the St. Louis area, spokesman Michael Polzin says. The chain says it plans to have about 60 by the end of the year.

Shares of Woonsocket, Rhode Island-based CVS have climbed 33 percent this year. Deerfield, Illinois-based Walgreen has risen 14 percent. Both are outperforming the 39-member Standard & Poor's 500 Consumer Staples Index, which is up 8.5 percent.

The switch by patients to walk-in clinics has raised questions in the medical community.

``I think it's a bad idea,'' says Leon Hodes, 41, a Long Island, New York, general practitioner with offices in East Rockaway and Oceanside. ``I don't think you have good follow- up.''

`Coordination of Care'

A June report by the American Medical Association in Chicago said clinic customers may not follow up with a primary- care physician when their conditions warrant it.

``Many physicians remain concerned about the impact store- based health clinics may have on their practices, the physician- patient relationship and the coordination of care,'' the AMA said.

On June 13, the association adopted principles for in-store clinics, calling for each to have a well-defined and limited scope of service, referral systems involving local doctors and electronic recordkeeping.

Clinic operators say they provide these services.

``This is not going to be a medical home,'' says Michael Howe, chief executive officer of MinuteClinic and the former CEO of the Arby's Inc. restaurant chain. ``In many ways it can serve as a triage system into the health-care system.''

The typical MinuteClinic visit costs $45 to $50 and lasts 15 minutes. Many health insurers will pay for the consultation, except for a small ``co-pay'' fee paid by the consumer. The different clinic operators serve both the insured and the uninsured.

Aetna Agreement

Aetna Inc. agreed Sept. 1 to cover patients who get medical care at one of RediClinic's locations. The third-largest U.S. health insurer previously signed a similar agreement with MinuteClinic. About 40 percent of in-store clinics accept at least one type of insurance, according to a July report from the California HealthCare Foundation.

About 20 percent of local physicians support such clinics, 70 percent ``don't love'' the concept though they recognize its importance, and 5 percent to 10 percent are threatened by them, Miller estimates.

RediClinic, a unit of Houston-based InterFit Health, has 12 clinics and plans to open 300 in the next three years, spokesman Brad Burns says. Case's Revolution Health Group has an option to buy a majority stake in InterFit Health and is providing the capital for RediClinic to expand, Burns says.

Drawing Customers

The drugstore chains like walk-in clinics because they bring additional customers into stores who will probably fill their prescriptions there as well as shop for general merchandise, which is more profitable than medicines. Some clinics even give patients pagers so they can shop while they wait.

``If we end up with tag-along business because people are in the stores for other reasons, that will be helpful,'' CVS Chief Financial Officer David Rickard says. ``But this is primarily a matter of putting an additional health credential in the CVS store to service customers better.''

Wal-Mart is trying out six different companies as it adds 50 medical offices this year amid a race by clinic operators to secure deals with big retailers.

`Market for 5,000'

Jacksonville, Florida-based Solantic, which offers treatment by doctors instead of nurse practitioners, opened its first office in a Wal-Mart in July. On Aug. 24, Wal-Mart signed Houston-based Intrepid Holdings Inc. to build and operate Healthy Access clinics in stores in several markets, starting in Texas.

``There is probably a market for 5,000 of these in the U.S.,'' says Richard Scott, who heads Solantic, which has opened 13 clinics in Florida and plans 12 more in the next year. ``That would make it a $10 billion market. I think there will be a lot of players.''

Scott resigned as CEO of Columbia/HCA Healthcare Corp. in 1997 amid government investigations into the hospital chain's practices. He wasn't charged with any wrongdoing. Columbia/HCA pleaded guilty to 14 criminal counts in 2000 and settled allegations that it paid doctors kickbacks and filed false Medicare reports.

``Every day you see more and more people jumping into the space,'' says Peter Miller, chief executive of Conshohocken, Pennsylvania-based Take Care Health Systems LLC, with 23 clinics, some of which are inside Walgreen outlets. ``As they go out and do the consumer research we've done and the other stakeholder research, they realize this really is a strong idea.''

Fast Growth

Take Care, which operates clinics in St. Louis, Kansas City and Portland, Oregon, expects to have 200 clinics by the middle of next year and 1,000 in the next few years, says Miller. He forecast as many as 10,000 locations for the industry eventually.

``This is something that could fundamentally change the way health care is delivered,'' says Amee Chande, vice president of health strategy and communications for Bentonville, Arkansas- based Wal-Mart. ``It may not be the entire answer, but the opportunity to make some impact is really exciting.''

To contact the reporter on this story: Josh Fineman in New York at jfineman@bloomberg.net.

Last Updated: September 7, 2006 16:23 EDT