The next time you stop at the dollar store, imagine getting a blood test on the way out.
That’s already possible for some shoppers in Clarksville, Tenn., where Dollar General is experimenting with mobile clinics at some of its stores. From the parking lot, the mobile clinic can provide non-emergency care for wounds and illnesses, as well as vaccinations, blood tests, and routine checkups.
The clinic is part of a partnership between Dollar General and DocGo, a mobile healthcare provider. At present, it consists of a single medical vehicle that rotates between three Clarksville-area Dollar General stores, staffed by a Licensed Practical Nurse from DocGo.
The mobile clinic pilot represents a small step in Dollar General’s efforts to leverage its 19,000 stores to become a healthcare destination. But while the company has expanded its selection of health products, the goal of providing services remains distant. Analysts are optimistic, but there are many roadblocks ahead for the mobile clinic model.
Although still in “early innings,” the mobile clinic model could benefit from Dollar General’s rural footprint, according to Ryan MacDonald, an analyst at Needham and Company. Three out of four Americans live within five miles of a Dollar General, the company says, and 80% of its stores are in communities of 20,000 people or less.
“If it has a potential to close care gaps or care deserts, then that could be very interesting,” MacDonald said.
Dollar General began exploring healthcare in 2021, when it appointed its first chief medical officer and rolled out a larger selection of over-the-counter remedies. In a conference call, Chief Executive Officer Todd Vasos suggested that the company could eventually offer health services like telemedicine or eye care.
“It could be a really big deal,” Vasos said, not only for Dollar General, but also for “consumers in rural America who now have to drive 30, 40 minutes for an eye exam.”
The pandemic provided one opportunity to expand into services. Soon after Vasos’ announcement, Dollar General revealed its first healthcare partnership: a collaboration with the Michigan Department of Health and medical staffing company SnapNurse (now SnapCare) to provide vaccinations at Dollar General stores.
Ultimately, more than 5,300 doses of Covid vaccines were administered at Dollar General stores in seven states, according to researchers at the UCLA Anderson School of Management.
The pilot in Clarksville was the next step. The town of around 120,000 has a shortage of primary care providers, according to Julie Olson, an administrator at the Good Samaritan Ministry, which provides free medical and dental care to those in need.
“I don’t know why there’s a shortage of doctors here,” said Olson, who has to drive to nearby Nashville for her own treatments. “Most of these people can’t get to Nashville, because a lot of them don’t have a car.”
Mobile clinics are cheaper to run than fixed-site clinics, and they can serve multiple communities at the same time. About 70% of Dollar General stores are “attractive prospects,” DocGo said in a presentation slide to investors in June. Sarah James, a healthcare analyst at Cantor Fitzgerald, wrote that the pilot “could represent a $900 million revenue opportunity” if it were expanded.
But there were bigger issues facing both companies. At Dollar General, supply-chain problems and falling demand contributed to four consecutive quarters of missed earnings targets. A Bloomberg exposé alleged abysmal working conditions, and several store locations were fined for labor abuses and unsafe conditions. Jeff Owen, who replaced Vasos, was shuffled out after less than a year.
Things were no better for DocGo, which faced a scandal over its treatment of asylum seekers in New York. State and city authorities launched separate investigations into the company, and Anthony Capone, its CEO, resigned amid allegations of an embellished resume.
In an email, Dollar General said that it was “pleased” with its collaboration with DocGo and would continue to evaluate the pilot. DocGo did not respond to requests for comment.
Dollar General’s stock price fell 50% this year to $125.45. DocGo’s stock price fell 22% to $5.75. In the same timeframe, the S&P 500 rose 19%.
Via Tradingview
Dollar General’s revenues for the current fiscal year are forecast to reach $38 billion for the twelve months ending in February 2024, an increase of just under 2% over the same period last year. Net income is projected to fall by nearly a third to $1.6 billion.
The internal turmoil has overshadowed Dollar General’s other initiatives. “Because of the business slowing and some of the issues that happen in the stores, there hasn’t been any conversation around healthcare,” said Brian Yarbrough, a retail equity analyst at Edward Jones.
“It’s very complicated, there’s a lot of nuances with insurance and just how everything works,” Yarbrough added.
Other retailers have tried to crack healthcare, with mixed results. Walmart recently expanded the scope of its pharmacy program, while CVS and Walgreens have announced store closures. Amazon recently announced another stab at healthcare after backing off from earlier efforts in 2021 and 2022, while Rite Aid filed for Chapter 11 bankruptcy.
That doesn’t mean Dollar General is out of the game, but the mobile clinics will probably need additional support to continue. According to documents obtained by KFF Health News, the pilot is currently supported by a grant that will run out in June 2024.
Then there’s the problem of getting people to trust healthcare delivered in a parking lot. Citing DocGo sources, KFF Health News reported in October that the clinic had treated “about 1,000 patients,” both at Dollar General and other sites. That figure is “probably on the low end” of DocGo’s expectations, MacDonald said, although it is not clear if the trend is increasing.
Gaining trust is a major hurdle for new mobile providers, according to Mollie Williams, the executive director of Mobile Health Map, which tracks around 3,000 traveling clinics across the United States.
“It takes time for people to trust that you’re a reputable source of healthcare,” Williams said. “I advise mobile clinics to commit to two years, preferably three, before deciding that this isn’t going to work for them.”
That may make it difficult to gauge the success of the partnership. In other words, before Dollar General can become a healthcare destination, it will need patience—and patients.
In the meantime, some locals are optimistic. “Here in Clarksville, we have a Dollar General every half mile,” said Olson, the administrator at Good Samaritan. “If they start putting in these clinics, that would be fabulous.”