Former MinuteClinic principals open walk-in clinic in Minneapolis, plan 3 more this year

Several principals behind MinuteClinic, a pioneer of the walk-in medical clinic model that was sold to giant CVS in 2006 for $170 million, are back with a similar startup.

The Good Clinic, under former MinuteClinic CEO Michael Howe, 68, quietly launched in February with a flagship site in a residential-commercial complex called NordHaus in bustling lower Northeast.

Good Clinic also plans sites in Eden Prairie, St. Louis Park and St. Paul by December, as well as 50 clinics in in several states over the next three years.

Good Clinic is a subsidiary of publicly held Mitesco, an over-the-counter stock with bigger-market aspirations which recently hired investment banker E.F. Hutton to raise a yet-to-be specified sum to finance the growth of Good Clinic and other ventures.

Mitesco said it will spend about $900,000 to build out and market the Nordhaus clinic, with a 7.5-year lease, and that it will need $50 million for the next 50.

Like MinuteClinic, Good Clinic is built around nurse practitioners as primary heath care providers. It has agreements or negotiations with major insurers, including Medicare.

Howe said the difference with the typical clinic-in-a-store model is that Good Clinic will provide a "medical home," instead of more one-off visits to treat strep throat or an earache or panic attack.

"We want the accountability of health care to be [in the hands of the patients]," Howe said last week. "But they need the coaches, education and empathy. And study after study about the value of primary care shows that for every dollar you invest you save $13 in downstream health care costs."

Good Clinic will locate in dense-population urban areas, with a spa-like feel and wellness plans for every patient. The focus will be convenience, value and satisfaction.

Amid a primary-care doctor shortage, care increasingly is being delivered by physician assistants and nurses, often outside traditional doctor offices.

There's lots of competition. CVS acquired Target's pharmacy business in 2015 for $1.9 billion and added MinuteClinics in many stores. Walmart, Walgreens and others are in the walk-in primary-care business.

Mitesco CEO Larry Diamond, 58, a Wall Street veteran who once worked for UnitedHealth Group, said Good Clinic is focused on the 70% of Americans who consume 25% of the rising U.S. health care spending, as opposed to the 5% who use about 50%.

Part of the Good Clinic secret sauce is an "activation tool" that helps determine if patients can self-manage and how providers can best work with them.

"We never knew 50% of the population is not good at self-management," Howe said. "Our clinicians are now armed with the information. A diabetic has 10 things to do every day. Some people struggle with that. We parse it down to the vital few that they have to do."

Howe stayed with MinuteClinic, since relocated to CVS headquarters, for about three years after the 2006 acquisition.

His team designed Good Clinic around sustainable personal and virtual relationships.

Mitesco, based in Minnetonka, raised $15 million in preferred stock proceeds in spring 2020, following discussions between Howe and Diamond that led to acquisition of Good Clinic. Earlier, Diamond and other investors acquired a near-dormant public company and changed its name and purpose to be a holding company for health startups.

Diamond said the advantage of initially capitalizing Good Clinic through a public company, compared with the more traditional route of venture capital and private equity, will allow retail investors to get in on the ground floor. That's where big gains often accrue.

Rob Goldman, a former Piper Jaffray analyst who now runs Goldman Small Cap Research of Baltimore, was paid $4,000 by Mitesco to produce an introductory analysis in February.

Mitesco (ticker MITI) shares have slid since winter from 40 cents to about 20 cents; it now has a market value of $38 million. Goldman, in a late-June update, projects 2022 revenue of $18 million, and forecasts a price of $2 per share within a year.

"MITI offers unusual upside potential," Goldman wrote in the update.

Good Clinic senior management includes several MinuteClinic veterans: Dr. Jim Woodburn, president and chief operating officer, was a former medical director of Blue Cross Blue Shield of Minnesota; Dr. Rebecca Hafner-Fogarty, chief medical officer and primary-care physician, held a senior role at Zipnosis; and Kevin Lee Smith, the chief nurse practitioner, was a founder of MinuteClinic and also is a veteran of Zipnosis.