Ambulatory Care: Learning the Art of "Retail Medicine"
Urgent care centers are becoming the health care access point for the 80% of the population that simply needs minor, episodic, unscheduled care.
Managed care organizations that don’t want lump-and-bump bee-sting victims grouped with MI patients and consumers who want an alternative to long waits in the ED or doctor’s office are driving a major shift in the health care delivery system, says a leading expert on urgent and ambulatory care.
The nation’s current health system is really an "injury, illness, and disease" system that focuses on the 20% of the population with major injuries or chronic illness and essentially ignores the 80% of the population that, for the most part, is healthy, says William Wenmark, President and CEO of NOW Care Medical Centers, Inc. and President of the National Association of Ambulatory Care.
The rising number of storefront, 13-hour-day, seven-day-a-week urgent care centers serve as testament to the fact that demand is growing for an alternative.
"Ambulatory care, urgent care, is just a huge, huge growth industry," says Wenmark. "Our population is extraordinarily healthy, yet we are being demonized and politicized about 20% of the population with the problem. We’re all being told we have to pay for that, but nobody’s dealing with the 80% of the public that is only going to need episodic care. That’s what we are dealing with, that huge marketplace with only 20% of the cost in it."
Fourteen years ago, Wenmark founded NOW Care on the concept that people needed access to primary care after customary office hours, without an appointment, and with little or no follow-up or medical records management.
"I became interested in that kind of facility, which would basically be developed on a retail basis," he says. "We are open 13 hours a day, every day, without an appointment. We will take care of anything and everything that is episodic in nature. We are not going to take care of cancer. We are not going to take care of diabetes. We are not going to deliver babies. We are not going to do hospital admissions. We are not doing anything in that realm."
What they are doing is focusing on the complaints that the majority of Americans have from time-to-time: minor lacerations, earaches, fractures, sore throats, bumps and bruises. They also do pre-placement exams for employers, Wenmark says.
And, they do it faster and cheaper than the ED and many doctor’s offices.
"If we went head-to-head with an FFS type, we match up similar to a doctor’s officethat’s what we are," he says. "The difference would be the number of hours of service and the efficiency that you get, which enhances the perceived value."
Audits performed by NOW Care of actual case charts show a dramatic difference in ED charges and ambulatory care center charges for the same diagnoses.
As an example, Wenmark cites a recent review his group performed for Blue Cross Blue Shield.
"We showed them the numbers," he states. "We put up the ICD9 codes and started looking at actual cases they had paid for in emergency rooms that did not belong there."
A repair of a 2.5 cm laceration in an urgent care center operated by NOW Care cost $175 all things included and took 45 minutes, Wenmark says. At a Buffalo hospital, in a case reimbursed by Blue Cross, a similar procedure was 3.5 hours in the ED and cost $389 for the visit.
"Multiply those things and you start to see enormous costs saved in the system, and it’s convenient at the same time," he says.
Controlling the costs of unscheduled urgent care
Urgent care centers must scrutinize every penny if they are to make the facilities profitable. Urgent care is not a high-profit area, and this is especially difficult to manage when you have no idea what kinds of complaints will be walking through the door next, acknowledges Wenmark.
The key to minimizing loss is to, first, be very efficient in constructing and operating each facility.
"I find that many hospitals don’t do well in this arena because they have a chronic history of overbuilding the system," he says. "You look at an average build out of a hospital-operated unit and you are looking in the neighborhood ofgeographically these are going to vary across the countrybut you are looking at between $100-$225 per square foot. We build our centers out at $45 per square foot."
NOW Care focuses more on efficiency and less on aesthetics, emphasizes Wenmark.
"We aren’t doing plastic surgery, we don’t need those great big chairs and mahogany desks," he says. "When people come to ususually it’s the momthey say, I’m on my way.’ She’s heading off to work and she’s got the kids and one of the kids has a 104ºF temperature and she’s got to go to the grocery store, she’s got to go to school or to volunteer. She doesn’t care about all that stuff."
The real operational key is in having a staff that knows triage and can get people and out of the office quickly, he adds.
"We have no knowledge whatsoever what is going to show up. A sore throat could walk in followed by five lacerations and four fractures, and that does happen," he says. "Your people have to be partners with you in understanding that your job is to move people."
And this is one area where it won’t pay to cut corners, Wenmark states. The most critical employee is the receptionist, he adds. The only person who sees the customers twice, and also talks to them on the telephone.
"We don’t pay minimum wage for our receptionists," he says. "We pay $10, $12, $15 per hour for people because they are extremely valuable to our operation."
Eighty percent of the costs of operating a unit are going to be HR costs, employing the physicians, nurses, and medical support staff necessary to operate.
This means the delivery system must be top notch.
"You are going to have to be extremely efficient in your utilization of resources. You have to watch your margins and you have to watch your medical supplies," he notes.
NOW Care conducts 10-month audits of all of their ICD9 codes and track each one on their computers.
"We show at an ICD9 10-month scan exactly where all of the diagnoses come from in every category," Wenmark says. "So, then we can use that to template over how you manage your medical supplies, how we do distribution of services, then we lay that over the clinic and time studies. Then we lay that over our HR plan. The margins here are so slight, that if you don’t do it right, you are going to fail."
Interfacing with primary care and emergency medicine
Instead of competing with primary care or the ED, ambulatory care centers mainly aim to serve as an alternative access point into the system for the majority of the population, says Charles Pexa, MD, FACEP, Medical Director of NOW Care and a board-certified, practicing emergency physician.
"Family practitioners originally thought we were competition," says Pexa. "We don’t want our patients to go to you, because you are going to steal them and we’re never going to see them again.’ But, they found that isn’t true."
In areas where they’ve opened centers, they have basically lightened the load of "add on" complaints for the primary care physicians, he says.
When the PCPs have a fully booked day and someone has a minor complaint, the physician can refer to the urgent care center and be assured that the patient will be referred back into the system.
"We are not set up to do (primary care)," says Pexa. "If someone comes in and is diagnosed as a new diabetic or a new heart patient or rheumatoid arthritis or something that is going to require lifelong care, then those people, if they don’t already have a doctor, we find one for them and refer them on."
The centers are a boon to the medical attention level in the community because they often result in getting people into the system earlier than they might ordinarily be if they waited to seek care, says Wenmark.
"We are able to identify, early in their morbidity, medical problems that would otherwise go undetected over time until the morbidity was significant enough to cause some kind of difficulty for the individual, and then they would seek care in the traditional, 8-5, Monday through Friday system, which many find highly unsatisfactory in terms of consumer demand," he says.
By intercepting the problem early, the patient gets into the system at a lower level of acuity, which results in lower costs to the system as a whole.
The centers also catch people with serious illness who, because of the inconvenience of waiting in the ED or physician’s office, come to the urgent care center.
"The typical one is the guy with chest pain who thinks it’s nothing or hopes it’s nothing," says Pexa. "His wife or someone is on him to get it checked, so he comes to the urgent care center because he knows it’s nothing, but he’s wrong. These people are sent to the emergency room."
If there is a possibility of a serious problem, the staff at NOW Care’s centers have a very low threshold for referring someone to the ED, emphasizes Pexa.
"Our doctors need to be aware that they don’t need to be heroes and, if something doesn’t seem right, to send it on to the next level because that is what those people are trained for," he says.
ED urgent care centers
Because a large volume of ED visits are comprised of urgent care, and some people presenting with urgent complaints may, indeed, need to be seen in an emergency department, many argue that the most logical place for an urgent care center is in a hospital, not standing alone.
But, hospital-based urgent care centers are not always the solutions that they seem to be, say both Wenmark and Pexa.
"A lot of hospitals have opened urgent care centers in the (emergency) departments or near their departments with varying success," says Pexa. "I think the reason for that is that they have encumbered their urgent cares with the same bureaucracy and training structure that they had in their emergency department."
Though the departments may separate urgent care into another unit, or offer a "fast track," which allows urgent care patients to bypass standard ED triage and offers a discounted rate for certain procedures, they still cannot recoup enough of the costs to pay for the facilities, argues Wenmark.
"You don’t build an emergency room for $175 per square foot, you certainly don’t build it out at $45 a square foot. You are talking in the neighborhood of $300-$400 per square foot minimum," he says. "Run the numbers. How many sore throats are you going to have to see to break that sucker even?"
Many managers are confusing the increased volume with increased profit, which they may not be seeing, he explains. "Figure out the cost per hour to run that unit and tell me that you are ever, ever going to be able to break even at $45 a patient."
Board-certified emergency physicians are trained to provide several levels of service higher than primary care practitioners. They are paid on average between $225,000-$270,000 plus benefits, according to Pexa.
It is not an efficient use of resources putting them to work treating coughs and colds, he argues.
EDs are required to be able to provide a higher level of service, expensive equipment, personnel, and space, and urgent care just won’t pay for it, continues Wenmark.
Unless the department can strictly control costs and resource utilization and see enough patients to justify the higher cost of the facility, they may actually end up losing on the deal, says Wenmark.
"They [the EDs] may be busier," he says. "But, that doesn’t mean it is something good."
If hospitals or ED groups want to be in the urgent care business, Wenmark recommends contracting with someone like himself to set up the urgent care component independent of the hospital structure.
"I would ask them, Are you talking about opening an ambulatory/urgent care center because you are good at it and think you can make money doing it?," he asks. "Or are you doing it to protect market share? If so, I would suggest you either let us tell you how to do it, or do a 50/50 joint venture because we are committed to referral to your ED anyway."
Pexa and Wenmark are convinced that urgent care centers will become even more proliferative as managed care continues to push the restructuring of the health care delivery system, and physician practices and the ED should begin developing cooperative relationships with these facilities.
As the public becomes more aware of urgent care centers and how to access the system, family practitioners and emergency physicians who don’t have those good relationships are going to find themselves out of the loop, predicts Pexa.
"I think particularly as the hospital and emergency room doctors figure out that developing a good relationship can only help their practice, I think they will end up ahead of the game.
You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
- Award-winning Medical Content
- Latest Advances & Development in Medicine
- Unbiased Content