Sense of Urgency

Urgent care centers are catching on, but the question remains: Are they a low-cost alternative to the ER, or a high-cost alternative to the doctor’s office?

Situated somewhere among physicians’ offices, retail clinics, and emergency rooms – in terms of the severity of illnesses treated as well as cost to the patient – urgent care centers are becoming part of the medical neighborhood. Even if, as one Repertoire reader recently reported, some newly opened centers are still quiet, hospital systems, private equity firms, insurers, doctors and private companies are betting that walk-in traffic will grow in the months ahead.

“Urgent care bridges the gap between the hospital emergency room and the traditional doctor’s office,” says Ian Slinkman, director of marketing and public relations for Patient First, a privately held owner and operator of urgent care clinics, headquartered in Glen Allen, Va. Founded in 1981, the company opened its 54th in Chantilly, Va., in July.

“Many of the conditions routinely treated at hospital emergency rooms can be treated at Patient First for a fraction of the cost and much more quickly,” he says. “If necessary, we will refer patients requiring additional care to specialists or to hospital emergency rooms, as appropriate.

“On the other side of things, we are open extended evening, weekend, and holiday hours – times when a traditional doctor’s office is typically closed …. If a patient wishes us to do so, we will forward a copy of the visit record to his or her primary care physician. We are each important components of the healthcare landscape, working together to provide the best possible care to patients.”

‘Urgent care’ defined
Urgent care centers provide walk-in, extended-hour access to adults and children for non-acute illness and injury care, according to the Urgent Care Association of America. They may also provide other healthcare services, such as sports and school physicals, travel medicine, and occupational medicine. Ideally, patients should visit an urgent care center when their condition is beyond the scope or availability of a primary care provider, but not severe enough to warrant a trip to the emergency room, according to the association. They are typically staffed with physicians, but may also have physician assistants, nurses, nurse practitioners, medical assistants and radiology technicians.

Some of the most common conditions treated are fevers, upper respiratory infections, sprains and strains, lacerations, contusions, and back pain, reports the association. But most centers also treat fractures, can provide IV fluids, and have X-ray and lab capabilities.

“We also see conditions like allergic reactions; cough; ear or sinus pain; eye swelling, irritation, redness or pain; frequent and painful urination; mild to moderate asthma attacks; nausea; vomiting; diarrhea; rashes; and sore throats,” says Slinkman, speaking of Patient First. The company’s centers also treat fractures, provide IV fluids, have on-site labs and X-ray, provide EKGs and dispense prescription drugs as part of a patient’s treatment.

As of 2013, of the 9,000 centers in the United States, roughly 31 percent were corporate-owned; 35 percent were physician-owned; 25 percent were hospital-owned; and 6 percent were either owned by non-physician individuals or part of a franchise, according to the Urgent Care Association of America

“There is increased interest in urgent care today,” says Tom Charland, CEO, Merchant Medicine, Shoreview, Minn., a strategic planning consulting service focusing on non-acute-care. “But there has been consistent interest and growth since we started covering it in 2007.” The growth has been steadier than that of retail clinics, which has tended to advance in fits and starts, he adds.

Historically, urgent care centers often were independently owned, stand-alone facilities, according to the Center for Studying Health System Change. But that has changed.

Three of the big players today are private equity firms, payers/insurers, and hospital systems, each with its own set of reasons for participating in the market, says Charland.

Private equity
Private equity firms have always had an interest in urgent care, but that interest has heated up in the last couple of years, Charland says. There are a few reasons for this, most notably the changing healthcare scene. “More people are insured, fewer family physicians are taking on new patients, and health systems are at risk now, so it’s no longer in their interest to have people go to their emergency rooms. Now, people are being encouraged to seek healthcare elsewhere by the hospital systems themselves.”

Private equity firms see this as a platform for growth. “They see a market in which, unlike retail clinics, there has been very little consolidation,” says Charland. Whereas five companies dominate the retail clinic market, the top 20 urgent care companies still comprise only a quarter or less of the market. That spells roll-up opportunities for private equity firms, he says.

Insurers
Payers are also interested in the urgent care market for many reasons, says Charland. “First and foremost, going forward, the commercial insurance market is not going to be as profitable as it has been in the past, and insurers are looking for other lines of business,” he says. Secondly, for those clients for whom they assume full risk, insurers would much rather see patients go to an urgent care center than a more expensive hospital emergency department. Some payers, such as UnitedHealth Group, with its Optum division, have begun opening urgent care centers of their own. Others have invested in urgent care companies, including WellPoint, which invested in Physicians Immediate Care.

When Blue Cross and Blue Shield of North Carolina announced in September 2012 that it was making an investment in Clayton, N.C.-based FastMed Urgent Care, it noted that ER use had consistently increased over the previous decade, significantly increasing the overall cost of care. Statistics cited included:

• More than 20 percent of ER visits are for non-emergencies.
• A 5-percent shift from ER use to urgent care centers could reduce medical spending by $8 million annually.
• The average cost of an urgent care clinic is 90 percent lower than an average ER visit.

Hospital systems
Hospital systems have a growing interest in urgent care as they slowly move away from fee-for-service to population health management, says Charland. “They are approaching large groups – either employers or government groups – and agreeing to keep a given population healthy on a per-member-per-month basis.” Seeing someone in the ER for an ear infection isn’t as attractive as was in the fee-for-service world.

Hospitals are interested in urgent care centers for a second, closely related reason, he says. “In taking on risk, you want as many healthy people in the funnel as you can. What better way to widen the funnel than to have a network of branded urgent care centers in the community?” Episodic illnesses – the kind that tend to draw patients to urgent care centers – occur all the time, and they affect healthy individuals as much as chronically ill ones. “If the center does a good job with people coming in, and it’s convenient, the hospital has a great way to get people into the funnel.”

Physician’s perspective
Physician-owned urgent care centers can bring more to patients than others, says Matt Bruckel, M.D., owner, president and CEO of Total Access Urgent Care, which operates five urgent care centers in the St. Louis, Mo., area, and, at press time, was preparing to open a sixth.

“We are more aggressive and more advanced and sophisticated than your typical urgent care center,” says Bruckel, a board-certified ER doctor who founded the company in 2008. “The traditional urgent care provides a few more services than a doctor’s office, but typically, a lot less than the ER. We push toward the services the ER provides. We recognize we’re not an ER, but, unless you have to be admitted to the hospital or you need to have surgery today, we can provide the healthcare you need.”

Teams at Total Access Urgent Care centers provide multiple medications directly onsite, start IVs for both fluids and medications, perform EKGs, run more than 30 lab tests onsite, suture lacerations, reduce dislocations, splint fractures, drain abscesses and more, the company says. Its Web Check-In service allows patients to enter demographic and insurance information from his or her home, office, or cell phone prior to arriving at the urgent care center.

Being small, independent and physician-owned offers many advantages to Total Access and its patients, says Bruckel. “The most effective eye for improvement of a process is that of the person who does it on a daily basis,” he says. “When you separate the operator from the owner, organizations often find the board room making decisions without a helpful understanding of operational realities. Furthermore, working clinically keeps leadership directly connected to the employees’ needs, challenges and motivations.”

Unlike many hospital-owned urgent care centers, Total Access Urgent Care doesn’t charge a large “facility fee,” that is, a fee for simply visiting the center, on top of which is added the doctor’s fee and other costs, says Bruckel. Nor is the center motivated to immediately send patients to the ER, as is often the case with hospital-owned urgent-care centers.

“We provide most of the services of the ER at the cost of a doctor’s office, whereas hospital-owned centers provide the services of a doctor’s office at the cost of the ER,” he says.

Being physician-owned also means taking a longer-term view of the patient’s health than most urgent care centers, Bruckel adds. For example, whereas other centers might refer a particular patient to the hospital, “we may elect to treat them aggressively in urgent care, then bring them back the next day for evaluation. We monitor these patients much more closely than traditional urgent care centers, which tend to be one-offs.”

Future
Patient First has been growing steadily since 1981 and expects to continue that gradual expansion, says Slinkman. “As a segment of the healthcare landscape, I think urgent care has become more recognized in recent years as a good option as a convenient, cost-effective alternative to overcrowded emergency rooms for non-life-threatening conditions,” he says. “I suspect that this general increased awareness of the value of urgent care is spurring some of the segment’s recent growth.”

Rather than view other emerging venues of care – particularly, retail clinics and freestanding ERs – as competitors, Patient First is trying to adopt a collaborative approach. “We make it a point to work closely with the existing healthcare delivery sites, including emergency rooms, primary care physicians, specialists, and retail clinics,” says Slinkman. “We keep an open line of communication with primary care providers, hospitals and specialists as part of the same healthcare delivery landscape.

“There are some other facilities that do things similar to what we offer, but you will typically find distinctions. A major distinction is that we offer urgent care as well as primary care to patients without a regular physician. We provide physician-directed medical care on a walk-in basis, while working closely and in a collaborative fashion with the area’s medical community.”

Bruckel believes urgent care centers will continue to fill a valuable niche for the foreseeable future. “The hard truth is, primary care physicians are busy. They’re busy all the time, every day.” As much as they would like to see every patient immediately who calls with a sore arm, they can’t. “So doctors have traditionally told people, ‘Go to the ER.’ That has always been the backup, the safety net. But with ER costs ranging from four to six times as much as a visit to the doctor or urgent care center, patients can’t afford to take that advice.” Cost isn’t the only issue, he says. Convenience and efficiency are important too. Add up those factors, and a great urgent care center is often the best option.

One question remains: Are urgent care centers diverting patients away from expensive – and perhaps unnecessary – ER visits, or are they driving patients away from less expensive visits to their primary care physician?

The question must be answered from two perspectives: health policy and consumer experience, says Charland.

From a health policy perspective, the jury is still out, he says. The incentives associated with healthcare reform, and all the market maneuvers to steer people to the right place for their condition, are still being worked out. For consumers, urgent care centers can be a convenient and affordable alternative to the ER, if the centers hold the line on price. “The consumer with a high-deductible health plan will start figuring all this out,” says Charland, referring to such things as urgent care facility fees. “It doesn’t matter if the center is in-network or not, if it’s coming out of your pocket, you will go where the service is good and the price is right.”

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HEAD: Urgent care highlights

The urgent care market has been active for some time. Here are just a few highlights from the past four years.

• May 2014: Tenet Healthcare Corp. launched a national brand of urgent care centers called MedPost Urgent Care. At press time, the hospital system had 23 such centers in Arizona, California, Florida, Georgia, Mississippi, Missouri, Tennessee and Texas; and planned to double the number of centers by the end of 2014.
• November 2013: After identifying markets nationwide with high emergency room utilization and shortages of primary care physicians, UnitedHealth Group announced plans to open Optum Clinic Urgent Care facilities. The first locations were to open in December 2013, starting with one in Overland Park, Kan., and followed by centers in the Tanglewood and Copperfield communities in Houston,
• March 2013: American Family Care agreed to terms to acquire Doctors Express, said to be the largest franchisor of urgent care clinics in the United States. At the time, American Family Care had 37 clinics in Alabama, Georgia and Tennessee; while Doctors Express had 63 centers in 25 states. In July 2014, American Family Care reported that it operated 126 clinics.
• September 2012: Blue Cross Blue Shield of North Carolina made an investment in FastMed Urgent Care to expand its network of physician-owned urgent care clinics across the state. In July 2014, FastMed listed 41 urgent care locations in North Carolina and 35 in Arizona on its website.
• July 2012: California-based IDN Dignity Health announced plans to acquire U.S. HealthWorks, said to be the largest independent operator of occupational health and urgent care centers in the United States. Dignity Health said the acquisition would transform the parent company from local Mercy hospitals into a national health care system with 172 centers in 16 states. Dignity added that it planned to expand U.S. HealthWorks operations nationally – and boost surgical and imaging services via partnerships with United Surgical Partners International and SimonMed Imaging. As of July 2014, U.S. HealthWorks operated 218 locations in 19 states. Of those, 37 were work sites, that is, clinics located inside major employers (hence, not available for urgent care). Urgent care services were available at the remaining 181 locations.
• July 2012: LLR Partners, a middle market private equity firm with more than $1.4 billion under management, and WellPoint announced a growth capital investment in Physicians Immediate Care LLC, which provided management services to 20 independently owned medical clinics in Illinois, Nebraska, and Oklahoma operated under the trade name “Physicians Immediate Care.” These clinics offered urgent care, occupational medicine, physical therapy and employer services such as physicals and drug screening. As of July 2014, Physicians Immediate Care operated 31 urgent care centers in three states – Illinois, Indiana and Nebraska.
• November 2010: Humana Inc. announced it signed a definitive agreement to purchase Addison, Texas-based Concentra Inc., for approximately $790 million in cash. At the time, Concentra delivered occupational medicine, urgent care, physical therapy and wellness services to workers and the general public from more than 300 medical centers in 42 states.
• September 2010: Sequoia Capital acquired a stake in MedExpress Urgent Care, which operated 47 clinics in four states. As of July 2014, MedExpress listed 135 clinics on its website.

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HEAD: Urgent care stats

• Approximately 9,000 centers in the United States provide urgent care services.
• An average 357 weekly patient visits per center.
• 85 percent of urgent care centers are open seven days a week.
• 70 percent of centers open at 8 a.m. or earlier; 95 percent close after 7 p.m.

Source: “Urgent Care Industry Information Kit 2013,” Urgent Care Association of America, https://c.ymcdn.com/sites/ucaoa.site-ym.com/resource/resmgr/Files/UrgentCareMediaKit_2013.pdf

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HEAD: Urgent care center: Time in operation

• 61 percent of urgent care centers have been in operation five or more years.
• 15 percent for three to five years.
• 16 percent for one to two years.
• 8 percent less than one year.

Source: “Urgent Care Industry Information Kit 2013,” Urgent Care Association of America, https://c.ymcdn.com/sites/ucaoa.site-ym.com/resource/resmgr/Files/UrgentCareMediaKit_2013.pdf

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HEAD: Urgent care ownership

• Corporation: 30.5 percent
• Physician/group of physicians: 35.4 percent
• Non-physician individual: 4.4 percent
• Hospital: 25.2 percent
• Franchise: 2.2 percent

Source: “Urgent Care Industry Information Kit 2013,” Urgent Care Association of America, https://c.ymcdn.com/sites/ucaoa.site-ym.com/resource/resmgr/Files/UrgentCareMediaKit_2013.pdf