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Competing With Urgent Care

Screen Shot 2015-01-02 at 8.08.19 AMAbout seven years ago, the California Healthcare Roundtable and HealthAffairs sat down to prepare a white paper on the emerging “phenomenon” of urgent care centers, and what it might mean for primary care. At the time the group couldn’t agree that urgent care was a “disruptive” innovation, but it seemed clear to all participants that it represented a threat to primary care: The rise of UC, the group noted, would lead to 1) less preventive care and 2) concentrate acuity in primary care clinics. They wrote: “[Urgent care] means fewer patients per day, a higher intensity environment for providers, and potentially lower reimbursement.”

In particular, the group couldn’t understand if patients were choosing to leave primary care because they didn’t value having a PCP, or if they were settling for the inherent limitations of UC because cost and convenience outweighed its disadvantages.

 Seventy-five percent  [of UC customers] are women ages 28 to 42 and their children. Some hypothesize that this consumer group thinks of its health care relationships differently than do people of the baby boomer generation and older. The younger cohort often has no “medical home,” while baby boomers and older people tend to view the primary care physician as the center of their medical care. Discussants concurred that what the data do not reveal, however, is whether the medical “homelessness” of this younger group and its high relative use of retail clinics reflect how these consumers want to receive their care or is instead merely their experience (or is a function of the fact that they have fewer chronic conditions and thus need less care and care coordination).

Since the roundtable in 2007, there has been a flood of urgent care centers with ongoing rapid growth. The American Academy of Urgent Care estimates that there are around 9300 UCs nationally. Across the country, clinics are sprouting like flowers, sometimes fueled by private equity investors, but often by hospitals and health systems who are reflexively installing UCs in repurposed strip malls, sometimes without a clear strategy other than “keeping market share” in an otherwise low margin business.

The reasons for growth, according to the American Academy of Urgent Care? Primarily extended hours (as compared to primary care) and better wait times and lower prices than the ED.

As the private-equity fueled urgent care bubble expands, here’s my prediction on how this all plays out: Don’t bet the farm on UCs being the final answer to the consumer’s search for value. For all of UC’s utility, it’s also possible that urgent care may just get out- maneuvered by the next generation of primary care.

First, I don’t believe that that UCs are a disruptive innovation that has negated the value of primary care. They’re an incremental improvement in care delivery that arose in response to two separate areas of consumer dissatisfaction in medicine: 1) overburdened emergency departments who’ve been unable to batch patients by acuity leading to long process and wait times; and 2) inflexible primary care practices with no incentive to be consumer oriented.

As a primary care alternative (and, I don’t want to address the UC value proposition for emergency department patients here– though it’s quite high and a different story) UC offers many consumers a Fuastian bargain: In exchange for transparent and affordable costs, extended hours with reasonable cycle times– plus ready access to assurance (what the California whitepaper calls “emotional care”)– consumers give up integration, coordination of care, preventive medicine and a loss of relationships with providers who know them.

UCs’ competitive advantages are easily overcome by a primary care system that develops a little operational rigor.  Extended hours, transparent pricing and process flow analysis are business 101, and particularly as ambulatory practices consolidate and large physician groups grow, they basics will be easy to implement in primary care. What we’ll see (if my thinking is right)  is primary care 2.0: consumer-focused, well managed and with a move toward higher acuity in-clinic diagnostics and treatment. Delivered by people you know, in a system you know…

UCs have sent a warning shot to primary care practices, but they didn’t, and can’t replace them.   The next step in this chess game is the re-emergence of a renewed and consumer-focused primary care, just in time to respond to a graying America’s need for integrated care. We’re seeing examples of this consumer focus on the extremes of the primary care organizational spectrum—small subscription groups (such as Atlas MD in Kansas) who refuse to take insurance but offer care on demand, and at large physician groups who have the resources to add extended hours and in-house diagnostic services. Walmart, which promises to be among the largest providers of primary care in the next few years is also liable to step into the fold.  Interesting times ahead.

Marc-David Munk is the Chief Medical Officer of a risk-bearing healthcare system in Massachusetts.  His personal blog, Considering American Healthcare, is at www.mdmunk.com

 

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11 replies »

  1. The reason patients choose urgent care over PCP is SOLELY due to convenience of hours.

    It’s certainly NOT cost. Urgent cares cost insurance plans double what a PCP charges for the same visit becuase UCs charge extra fees for “after hours care delivery.” It’s certainly not a cheaper copay to see UC either, copays for UC are routinely higher than for PCP, because insurance companies prefer patients to see cheaper PCPs vs more costly UCs.

    UCs tend to drive up costs in other ways too, they are notorious for having on-site x-rays and giving x-rays to every single person who walks in the door with a cough. PCP offices generally dont have on-site x-rays

    UCs would go out of business overnight if PCPs would stay open longer hours.

    The primary care economy rests in the hands of PCPs. It always has and always will.

  2. “UC offers many consumers a Faustian bargain: In exchange for transparent and affordable costs, extended hours with reasonable cycle times– plus ready access to assurance (what the California whitepaper calls “emotional care”)– consumers give up integration, coordination of care, preventive medicine and a loss of relationships with providers who know them.”

    This was exactly my experience. While I was still working, I got most of my healthcare from my NYC based cardiologist / PCP. He did our corporate physicals and 80% of his practice was primary care. If I had a problem on the weekend or in the evening that needed attention, I would go to the local urgent care clinic. Sometimes I saw a doc and sometimes I saw an NP. None of them ever got to know me.

    After I retired, I found a local PCP practice that I’m satisfied with. Timely appointments are available most of the time, they use electronic records and they know what drugs I take. The experts keep telling us that 75% of healthcare costs relate to the management and treatment of chronic disease including virtually all of my own medical claims. Relationships with a good PCP practice which, hopefully, includes a strong referral network when needed, will always play an extremely important role in assuring the delivery of good healthcare in my opinion.

    The UC’s and retail clinics have a place in handling the simple cases on a timely basis for a reasonable price but they will never amount to much in the scheme of total healthcare costs. Moreover, since the retail clinics are labor intensive, it means they’re hard to scale which means they will never be large profit contributors for the drug chains and the big discount retailers like Wal-Mart. The UC clinics can offer more services like x-rays and maybe blood draws so the potential for profit is somewhat higher there but I don’t think they will ever be big businesses either which a good thing is probably.

  3. I think that’s right Gena. Much primary care hasn’t kept up with rapidly changing consumer service expectations.

  4. I’d argue that this is one of the real challenges of fee for service payment, and one of the advantages of moving to risk. It’s not reasonable to expect the acuity to up but the volume to stay the same!

  5. Very good points Dr. Palmer. As we enter an era of consumer directed/ high deductible healthcare, I think that the challenge will be coming up with a way to coordinate these services and results. For example, how will the Synthroid prescriber have access to the results of the TSH lab? Not sure that this has to sit in primary care– but needs to be somewhere otherwise we risk duplication and omission of services.

  6. I don’t believe the UCs, doc-in-a-box, or retail clinics are going anywhere anytime soon. They’ve found an important market niche and will just continue to expand. The market will break out so that PCPs will have the boomer and elderly population and those with chronic illnesses that require ongoing management, while the UCs and retail clinics will have the Gen X/Y and Millenial population. Those in the latter group value convenience, quick access, reasonable prices (especially with high deductible/high co-pay insurance plans), for the most part don’t have chronic conditions that need managing, and Google and apps are their friends when it comes to preventive maintenance. They have a low tolerance for the sometimes byzantine approach to getting a PCP. Case in point: Several years ago, I decided I should get a baseline physical and find a “medical home” since I’m pushing 50 and hadn’t been to a doctor for about 10 years. So I called up a PCP on my insurance company’s list. They “might” be able to give me an appointment after I sent in my last 10 years worth of medical records (non-existent since I hadn’t seen a doc in that time), filled out an extensive H&P, and waited a month for the doctor to decide if she wanted to take me on as a patient or not. As a potential “patient” and consumer, who’s got time for that nonsense? I can walk into a UC or retail clinic, get a physical done same day for a reasonable, transparent price without all the rigmarole and be done. There’s value in a medical home, but if PCPs want this business, they’re going to have to recognize the needs of this particular market or they won’t get it.

  7. i am a busy internist of 20 years, my group and I thought it would be a good idea to open an urgent care affiliated our hospital. So when i used to see 26 patients a day and half of them were coughs colds uti etc, i know see 26 chronic follow ups and train wrecks with unna boots etc. while this is a better use of my education it is killing me and burnout has been put into hyperdrive.

  8. There are so many things in health care that are so utterly simple that its nice to see these different approaches.

    Eg parents have to get a sports physical for their kid who is going out for football. Not much…well maybe look for long QT.
    Or, someone has been taking thyroid for years and wants a TSH or T4.
    Or needs a liver function test for statins, or a PPD for employment.
    Or a tetanus toxoid shot.

    A long list.
    I dont think these folks need a lot of fuss or coordination. Just do what they want in a few minutes and let them go on their way.

  9. “Seventy-five percent [of UC customers] are women ages 28 to 42 and their children.”

    That’s it, that’s all your data to do “hypothesizing”?

    If UC reduces costs by diverting patients from ER, that’s good, but if it raises costs by diverting care from PCP, that’s bad.

    As usual nobody cares, it’s just about market share.

  10. I like the way the Urgent Care sign in your picture is conveniently placed between the liquor store and BBQ place. If I can see the doctor, get me some good hooch and some ribs at the same time, that’s perfect.

    Realistically, I think there are going to be all kinds of different practices to satisfy many different needs of patients, but I would like to see traditional primary care prevail in the long run.

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