Symposium issue for Sept 2015

Survival and the Middle Picture

2016 ConvUrgentCare Symposium Issue

Managing a large enterprise in a predictable environment is tough enough.  But when it turns unpredictable, it becomes a complex web of cash flow management, hard decisions about your employees and leadership, and risky new strategic paths.  As many of you have heard me say, I lived through this in the mainframe computer business.

I have also said the business of taking care of people is no longer a predictable enterprise, and in many ways the hospital business model reminds me a lot of the mainframe business model.  Big computing fell victim to small computing.  High acuity is falling victim to low acuity.  Or better said, the lower the acuity level, it seems, the lower the predictability.  It is now all about questioning your assumptions.  Constantly.   

I am the host of our annual ConvUrgentCare Strategy Symposium and each year we try to bring together speakers that, when taken together, tell a story that helps you manage to an uncertain future.  The 2016 ConvUrgentCare Strategy Symposium is about looking at what we call “The Middle Picture.”  You have heard the big-picture talks from healthcare futurists.  About half of their predictions will come true, you just don’t know which half.  And there are conferences that go into the nitty gritty details on everything from facilities management to ICD-10.

But the middle picture is all about executing on future trends that we know are going to happen and building new teams and partnerships that are 100 percent committed to winning at their particular part of the challenge.

Here are three of those trends we know are going to happen:

1.       The forces of economics will push virtually all commercial and individual health insurance plans to some form of high-deductible coverage.  Within five years you will have to assume that every non-Medicare/Medicaid healthcare consumer who is healthy enough to walk through your doors for a low acuity service will be paying for all, if not most, of the cost of that care.

2.       Consumer technology, meaning devices that consumers can afford to own, will play a far more significant role in their interactions with healthcare providers.

3.       Hospitals will be in a battle for survival as they face non-traditional competitors moving into the provider space.

In the on-demand medicine space, we have come to the conclusion that many initiatives by hospital systems and even the most sophisticated of urgent care operators, are not the most important initiatives for building long-term competitive advantage.  We hope that this year’s conference will help bring some clarity around that middle picture, and the elements required to win.

Economic Forces

What has existed in virtually every other industry is now happening in healthcare: consumers are paying for most of their low-acuity healthcare services out of their own pocket.  The result is a more powerful and demanding healthcare consumer, and a healthcare services industry that looks a lot like most other retail service establishments.  Teams will have to be consumer focused.  Training on interacting with consumers will move from tactical programs like “The Language of Caring” to larger, more sophisticated training departments who strive for high levels of performance and service level guarantees.

As we look at training, patient care and marketing, what if our assumptions about motivation, education and engagement are all wrong?  And how might those faulty assumptions apply to how we build teams, lead patients to healthier lives or motivate new customers to come to our clinics?  Leading us in that discussion will be Kyra Bobinet, MD, CEO of engagedIn. 

“The surprising thing is that most people know what they should do, but they can’t explain why they don’t do it,” says Dr. Bobinet.   Dr. Bobinet is one of those inspiring bright lights in healthcare who is helping leaders across the country raise the bar on interacting with patients, customers and team members.  She will discuss her work with “fast brain” and “slow brain,” and how the gap between the two are linked to why behavior change doesn’t happen.  She will talk about myths around willpower, motivation and engagement.  And she will give us actionable insight into how emotions can carry the day when trying to change behavior.

Also speaking at the conference is Gary Loudamy, operating partner, Greenridge Investment Partners.  Mr. Loudamy is a former Johnson & Johnson executive who has applied his experience with a consumer products company to walk-in medicine.  His work is so successful that a private equity firm investing in urgent care centers hired him.  His work has involved the connection between leadership and strategic planning, and what he calls the causal hierarchy.

“Outcomes have causes,” he says.  “If you set up a process that causes positive outcomes you will see what “good” really looks like.  In a highly competitive consumer services environment, this is critical.”

Creating an environment where you have a high degree of consistency in the customer experience is an area where healthcare provider organizations are only getting started.  With so many hospital systems tied to customer satisfaction systems like Press Ganey, there are slow reaction times to unhappy customers.  The result is often negative social media commentary and poor on-line reviews

Another area where economics will force us to change is with consumer marketing.  To begin with, most retail business have no choice but to spend a fairly high percentage of revenue on advertising and marketing.  Ray Owens, CEO and founder of DX Marketing, has made a living as a marketing expert in the chain restaurant industry.  But four years ago his company realized there was tremendous overlap with on-demand medicine and began focusing on that segment as well.

“For a long time the marketing sophistication in chain restaurants has pushed the edge of what’s possible,” he says.  “When you compare that industry to healthcare, there’s a pretty big gap.  That’s what makes it so satisfying.  We’re able to bring a whole new level of customer targeting and payback that healthcare is just not accustomed to.”

Owens will go into some detail on the new levels of consumer analytics and targeting that are possible.  As walk-in medicine looks more and more like other retail establishments, the timing couldn’t be better.


Closely related to consumer marketing in healthcare is the subject of telemedicine, or as many would prefer to say, “telehealth.”  One of our keynote speakers at this year’s conference is Jay Sanders, M.D.  In fact, Sanders snickers at the telehealth/telemedicine terminology debate.

 “It’s not telehealth; it’s not telemedicine,” he says.  “It’s just medicine.”

Dr. Sanders is CEO of The Global Telemedicine Group, adjunct professor of medicine at Johns Hopkins School of Medicine and a founding board member and president emeritus of the American Telemedicine Association.   He is known to many as the "Father of Telemedicine.”  Dr. Sanders will look the past, present and future of seeing patients outside of the traditional exam room using technology.  And the future is very different from what most people looking at the field realize.

“From a medical standpoint, we’re just taking the exam room to the patient,” he says.  “And despite some of the resistance out there, in many cases it is better medicine.”

He points to measures such as blood pressure or peak flow.  The environment can have a tremendous impact on those measures, he says.

He will also point to some of the latest research and development, including consumer devices in the home and mobile devices.  Site and sound devices, such as digital otoscopes and stethoscopes, are what we think about today.  But Sanders says we will begin to see the ability to capture touch digitally, which will move no doubt increase the scope of healthcare services that can be offered over a network.  And bandwidth will continue to increase.

New Competition

Sanders says new players are entering this space, and that, too, is going to change the entire healthcare industry structure.   Optum, the healthcare services arm of UnitedHealth Care, is the one that hits closest to home.  Optum is viewed as one of the most aggressive players in the telehealth space.  But that has not stopped them from acquiring and developing brick and mortar in the form of large multispecialty groups like Southwest Medical Associates and urgent care platforms like MedExpress.

Another is the partnership between IBM and Apple, ironically, made public the week after the Optum-MedExpress announcement.  That partnership aims to tie IBMs famous Watson supercomputing and artificial intelligence capability with Apple’s consumer reach through mobile devices.  IBM has created a “Watson-in-Medicine” business unit with 2,000 people.   Apple has two develolper tools kits, HealthKit and ResearchKit, which allow the collection of personal health data.  The idea is to create a kind of cloud-based middle layer between consumer devices, clinic-based electronic medical record systems and a high-powered computational system that can help with research and diagnosis.  No doubt other IT giants like Cerner and Epic won’t be sitting on the sidelines.

CVS is another company we can’t ignore.  Clearly they are no longer a retailer playing on the periphery of healthcare.  Since dropping tobacco products from its shelves and renaming itself CVS Health, the company has been embarking on a plan that will give them enormous reach to consumers through its own stores and Target stores, to employers through its pharmacy benefits management (PBM) company, Caremark, and through a rapidly evolving telehealth strategy that weaves in hospital affiliations across the country.

What is most potentially disruptive about these new competitors isn’t just their potential to deliver patient care.  The real disruptive power will come from data: data about consumers, data about outcomes, and data about cost.  Back-end systems are beginning to show up as more and more influential in the practice of medicine from the most high-acuity intensive care unit at a hospital to the most basic screening at an employer worksite. 

Other Speakers and Topics

The 2016 ConvUrgentCare Strategy Symposium will cover a number of other topics as well:

Gordon Maner, managing partner at Allen Mooney Barnes Investment Banking is one of the most active investment banking professionals in the urgent care space, will review the major deals in 2015, provide some perspective on current valuations, and offer some predictions on what to expect in 2016 and beyond.

Jon Henderson, office managing partner in Dallas and chair of the Corporate and Transactional Practice at Polsinelli PC, will cover how joint ventures are being structured between independent urgent care operators and hospital systems, and what he believes are the best approaches for both parties on the most often negotiated issues.  Interest in joint ventures between health systems and independent urgent care operators spiked in 2015, so we expect this session to be very useful to our attendees.

Robert Rohatsch, MD, FACEP, co-founder and former chairman and CEO at Physician One Urgent Care, will present lessons and observations for hospital systems from a former ED physician turned independent urgent care operator. It is a view from the independent operator side that all health systems should pay close attention to.  Dr. Rohatsch built Physician One from a single center in 2010 to the nine centers that operate today across Connecticut.

Bernie Kuhn, a principal at Merchant Medicine, will present “A Playbook for Health Systems in the Walk-In Space.”  The good news for hospitals is they have a trusted brand and a great opportunity for their urgent care business to be both a positive financial contributor and a catalyst for change in their organization. The challenge is hospitals will have a hard time competing if they run their urgent care business like a hospital. Kuhn will outline the unique challenges hospitals face in the walk-in business and, using case studies, he will show how to overcome these obstacles.

And finally, I will be giving a talk called “Bubbles Mean Troubles,” where I look at certain submarkets of on-demand medicine, and point out the sectors that are most vulnerable to a “pop” in their growth cycle.

Registration and Location

The 2016 ConvUrgentCare Strategy Symposium will take place at the Marriott McDowell Mountain Resort in Scottsdale, AZ, January 25-27, 2016.  The early registration fee is $799 until October 15, and $999 after that date.  The conference is an invitation-only event for hospital system and large medical group executives.  If you have not received an invitation and would like one, please contact us at or call Yvette Harvieux at (651) 483-0450 x702.

Health Plan Landscape for the Walk-in Operators

March 2016 - Health Plan Landscape for the Walk-in Operators
By Bernie Kuhn

The health plan industry survived the ACA implementation and the first few years of the new plan structures.  The rate of change isn’t slowing however.  Millions of newly covered lives (25% of which auto-renewed in January) on-boarded into the US health system.  Demographic trends and regulatory forces continue to change their business mix from group commercial to individual products.  But the effect of consumerism seems to be the big question.  High deductible plans haven’t driven price shopping so much as they’ve curtailed spending.  Plans have been making investments in consumer technology and engagement which will affect the walk-in business.

As this month’s newsletter is being prepared, the annual health insurance statutory reporting cycle is wrapping up and full year 2015 results hit in April.  Look for major announcements as plans merge for scale and to grow their Medicare Advantage volume (Aetna/Humana).  We expect to see several smaller Blue plans merge into larger plans.  Blue plans may compete amongst themselves (via Anthem/Cigna), and Aetna and UnitedHealth (via Optum) will continue to build their infrastructure as a service arm of health systems.  There may in fact be better money from running operations for health systems than in covering risk and chasing employers – the business case is pretty straightforward if/when a single or dual payer model occurs.  


Based on 2015 projections, some 18M out of 54M total eligible Medicare recipients are on Medicare Advantage plans.  Medicaid in its various forms now covers 72M+ lives – up 15M since ACA implementation – and those plans are also evolving rapidly.   Most walk-in operators may only care about the Employer and Non-Group columns – leaving half the population to seek walk-in resources elsewhere.  Having a clear strategy to skim high margin customers or serve the masses, and building accordingly, should line up with your overall playbook and payer strategy.

Health insurance and health plans used to be about deploying capital as a risk transfer business, plus expertise in contracting, actuarial, underwriting, and processing claims.  Capital is now cheap and the other functions are all about scale unless a plan is integrated with the provider.  Consumers are bringing expectations from other sectors to healthcare.  The opportunity lies in helping make better health decisions and upgrading the experience of the ______ (insert… Member? Customer? Patient? Yes?).

Walk-in operators should be paying close attention – these payers are going to get a lot smarter about steering business to your door – or away from it.


Most health systems are already familiar with Truven analytics – many use them for service line planning and patient analytics.  Large operators would benefit from these advanced tools where they have sufficient scale.  IBM acquired Truven for $2.6B last month.  IBM reports it now has health-related data on approximately 300M lives.  The goal is to run patient data through Watson’s artificial intelligence software, so that it works as a specialized digital assistant to physicians and health administrators to improve care and cut cost.  This points to a holy grail of health insurance underwriting among others.

Last summer CVS and IBM partnered to use Watson to predict the health of the pharmacy giant’s customers through predictive analytics.  From the J.P. Morgan conference in January 2016, “More than 50% of the U.S. population is within 10 miles of a MinuteClinic”. ,   CVS already handles pharmacy benefits management for about a third of the US and is one of the largest “health insurance” plans due to its Part D prescription drug plan (see this month’s Enrollment data).

So, if IBM, through its Truven claims treasure trove, and CVS can identify and predict health issues, and a plan can factor that into modeling, the next step would be to route the patient for the lowest cost, most effective point of care for the service and measure outcomes.  One could figure out a way to get around the local health system if needed, or in reverse bypass the traditional health plans in favor of a payer/provider design.  With this type of information, one could begin to predict performance for a self-insured employer’s plan, or health system service line, going out years.  

If these giants figure out how to integrate consumer behavior and profiling – searching for health on their phone, lifestyle / pre-disposed interests, social media patterns, characteristics like income, education, demographics etc. – it gets even more interesting. It would of course work with consumer-based purchase patterns like walk-in care.

Take a look at Accolade (  It picked up a $39M funding round from investors including McKesson Ventures and a subsidiary of Independence Health Group .  (Independence is the parent of Independence Blue Cross in PA, and rumored to be seeking a merger with another Blue.)  They claim “Across our customer base, Accolade is responsible for [driving utilization of]: 60% of usage for telehealth programs, 80% of referrals to second opinion services, and 10x the usage for price transparency tools” among their plan clients.  Quoted on their site, “…We’re building a world-class product development organization to design the next generation of cloud-optimized healthcare products and services. … to set the new standard for how technology and personalized service combine to reinvent the healthcare experience.”

Fidelity, one of the largest and most sophisticated investment firms on the planet (e.g. 401k plans, investments) has recently announced they are entering the health benefits private exchange business .  “…the same Fidelity employers have relied on for decades to help safeguard their employees’ financial futures. Fidelity Health Marketplace was created to expand our commitment to helping employees achieve the lives they want by helping them protect their most important asset, their health.”  

Fidelity also led a $400M funding round for Oscar (a health insurer startup), making a bet on consumer-driven health plans : “Oscar is …pairing up with integrated provider networks such as Tenet Health in Texas and Providence in California” (also both walk-in operators, e.g. Carespot/Medpost urgent care and Walgreens/Providence retail clinics, respectively).

Note that these groups understand sophisticated analytics, consumer / customer experience, have their own benefit plans, and are putting their money to work building smarter health plan products and services.


Healthcare providers continue to make inroads in the plan space.  For the last decade, J.D. Power and Associates has published a Member Health Plan study .  Interestingly (perhaps obvious) the integrated plans consistently score some 100-200 points (on a 1000 point index) higher – there is no separate brand or image to the consumer, and no question of “who” their healthcare comes from.  For dominant health systems, why they are not in the health plan business probably speaks to an opportunity – just as with walk-in operations, these brands will intrinsically index higher and have a competitive edge.

Intermountain Healthcare (with 30 urgent care centers), as an integrated payer/provider, has introduced a product with a set annual health plan rate increase for employer clients (4% !) through its 22 hospitals and 1,400+ doctors.  By locking in employers over a multi-year program, and by vertical integration controlling its own costs, it can win recurring, high margin business on the provider side and command a competitive edge on its plan.  With health care benefits as one of the biggest expense items on any employer’s income statement and having had a decade of wild increases, every CFO and benefits buyer in the US will be demanding something similar should Intermountain prove successful.

Sutter Health (with 26 urgent care centers) launched its HMO products for individual, small, and large-group plans in January 2014, now serving 37K people in northern California.  While it has 25 hospitals in its network it has openly stated it is only writing coverage where it has “adequate network of primary care and specialty providers” to cover members.  This novel concept – as the organization grows and builds its geographic coverage – it will write business for those areas.   If we were taking bets, we might wager their an urgent care platform is a strategic asset to establish a presence, build the medical group with the referral volumes, and extend into attractive markets with its high margin integrated payer/provider products.

Payer/provider integration has other benefits.  Assume that providers spend 5-10% of every dollar of net revenue on payer contracting and revenue cycle; further assume that payers spend 3-5% of their premiums or equivalent revenue on the same.  In the case of being vertically integrated, the cost savings from not having the complexity in the middle is huge – skip the third-party gateway, reduced denial/audit overhead, no drawn out contract negotiations, rate adjustments actually follow the cost drivers, etc.  Data sharing is simpler and less contentious.  Not only does the integration drive savings, it is also is clearly linked to satisfaction (see J.D. Power references).

Kaiser Permanente is the giant in the space and originated the HMO model.  UPMC, Geisinger, Spectrum, Henry Ford, and other large system-based plans with walk-in access points are also large health insurers with the opportunity to compete head-on with traditional commercial carriers.  These integrated plans should see similar branding and vertical integration efficiencies.


Value-based care and bundling continues to be an endless topic.  We’ve had several clients inquire on the rules now being put in place by large payers for their systems with respect to bundled payments.  The going rates for health system operators are superior to private operators, and the value-based payment structure may sweeten that further.  It is clear the plans haven’t figured out a coherent set of requirements for the urgent care business at large (and likely don’t understand it well enough amongst them to agree). Several paraphrased excerpts from a February 2016 Healthcare Financial Management Association (HFMA) report:

CMS.  Health and Human Services Secretary Sylvia Burwell targeted 30 percent of fee-for-service (FFS) Medicare payments to quality or value through alternative payment models (ACOs, bundled payments) by the end of 2016 and 50 percent of payments by the end of 2018.  …  It showed positive quality results – lower hospital readmissions and higher patient experience.  But only one of seven regions over four years generated savings for Medicare.

Anthem.  Chief medical officer at Anthem: “We’ve all committed to meet or exceed the secretary’s goals of 30 and 50 percent… For those of you living day-to-day on the provider side … that’s where we’re going as health plans.” … The cost performance of the model ranged from no improvement to 8 percent savings when compared with enrollees not in the programs, with an overall average savings of 3.3 percent.”

UnitedHealth.  Chief medical officer at UNH:  “...Value-based payment models help reduce hospital admissions and improve “overall cost trends”… Secondary savings have been derived from finding sites of care with lower unit costs…  Value-based payment is a starting point, and it is absolutely essential… But we contend that is insufficient by itself to really move the needle on value.”  UNH found PCMHs in FFS-based performance contracts provide about 3 to 5 percent savings and value-based payment has provided 1 to 6 percent savings. The company has been able to get savings to increase “to the double digits” by adding those two approaches to so-called virtual integration, which includes data analytics and best practices.   UNH is moving away from bundled payment programs, with some exceptions.”  “We’re not fans of bundles for a variety of reasons,” including a pattern of churning utilization among supply-sensitive bundles and concerns about attribution.

Aetna.  CEO of Aetna Accountable Care Solutions: “committed to move 75 percent of their contracts into value-based arrangements by 2020.  The insurer has found the most success when it was able to establish “full-thickness relationships” as the preferred partner of health systems… financial cost of reduced average length of stay and readmissions, with Aetna finding additional patients for the provider to make up for the lost revenue. In co-branded insurance plans launched with providers, Aetna utilized technology to identify leakage rates and to start managing patient referrals to increase their stability.”

Our take-aways?  CMS lives in the complexity trap of believing more sophistication is the answer.  Capturing a few percent in savings doesn’t make sense compared to vertically integrated delivery and flat-out lower cost delivery.  Anthem has publicly staked itself with Vivity and needs to make that work (3.3% savings?).  Aetna is selling solutions to health system CFOs which drive revenue and may emerge as the white-label operator of health system plan products.  UnitedHealth is the smartest and most pragmatic, and they aren’t seeing the value – they admit it’s a lot of work to get single-digit savings.  Most relevant comment in our view: “finding sites of care with lower unit costs”.


Each of the segments – commercial lines, Medicare Advantage, Managed Medicaid – are incorporating experience-centered features.  The plans with commercial lives that they hope to convert to Medicare Advantage are suddenly dealing with an end consumer-buyer instead of a benefits manager.  (Note: this is where Humana for example, with its chain of Medicare clinics in Florida, dominates.)  The health plans have figured out that customer satisfaction and ease of use matters – and may be a critical factor for renewals in coming years.  Consumer-driven influence will begin to shift the balance of power from health plans unless they control the consumer as the member’s healthcare champion and budgetary coach.

In J.D. Power’s annual rankings for health plans (both commercial and Medicare Advantage lines) , the health plan business as an industry by itself is one of the firm’s lowest ranking on an overall satisfaction scale (compared to overall satisfaction level with financial services, travel, consumer goods/autos, etc.).  Some key take-aways from their national survey of 30K+ members include large gains on scoring when a plan emphasizes communications and digital integration.  With a nod to the inherent value of competition, those members tended to have higher satisfaction in states with a more competitive market (<50% Blue dominated).  High deductible plans across the board had the weakest consumer scores.

UnitedHealth is testing new approaches to integrated delivery.  An example is Harken Health, its new subsidiary that will be taking on the exchanges (ironically after it made a stink about ACA losses from the exchanges).  From the Chicago Tribune last October , “In 2014, UnitedHealth put together a small group of employees, led by Tom Vanderheyden, vice president of business development and innovation, to come up with something new. Acknowledging the frustration of consumers over the complexity of insurance, Vanderheyden said the group looked outside the industry at companies known for good customer service. For example, he looked to the simplicity of the menu at the Chipotle restaurant in rethinking how an insurance company should design a plan.”  This plan is anchored to their clinics as part of the product .

We expect 2016-2017 will see dramatic shifts in consumer perception of managed care across market segments.  Every plan appears to be trying to upgrade its consumer-facing touch points.  These shifts will occur as a result of consumer expectations from other services industries now being expected of healthcare.  For examples, we took a look at how the payers are connecting through to the walk-in space.

A quick review of Google Play (apps for your Android phone) had some amusing screen shots of how the biggest plans deploy technology; Anthem somehow decided to cram the details from a card onto a screen?  But kudos for Urgent Care on the Main Menu.


Kaiser’s app shows how much more integrated they are as a payer/provider; in their app one can go from plan benefits to appointments to records to finding care.


A few views of UnitedHealth’s app (including a map to urgent care centers affiliated into BCBS of South Carolina!).  Under a new program, data collected from plan members using fitness wearables will be sent to UnitedHealthcare Motion app.  Members can earn up to $1,460 in reimbursement account credits based on their usage – basically feeding the plan further information on the health and activity on members.


It doesn’t take a great leap of imagination to see how this could shape the walk-in market.  Each operator needs to build a brand and be front/center with the buyer.  The only competitive advantage for private operators may be superior service.  Luckily the buyers can and do change health plans, and the walk-in businesses will be there to serve them.  Look for these digital tools and remote data collection to be bigger features in coming years as the plans learn consumer tech and how to capture the actuarial value on these sources.

Advance Planning for 2017-2018

•    Develop an active strategy for working with and integrating into payers in your market
•    Figure out how your operation fits into the tools and products being sold by payers
•    Those evergreen payer contracts signed years ago are due for a refresh – and you need market intelligence and analytics to make a compelling case for rate and volume
•    Coordinate with local systems and large self-insured employer plans on their quality initiatives to learn what they are doing and how you may be able to serve
•    Get your customer experience story together and have a third-party vet your strengths and weaknesses

*Year to date enrollment data for 2015 from SNL Financial are included in the appendix; Contact us if interested in further information.  Data presented are not completed for FY2015.

Bernie Kuhn is a principal at Merchant Medicine LLC.  Please contact


May 2016 newsletter - initial content

May 2016 article by Rob Rohatsch

Making the Strategic Provider Staffing Decision

Throughout my career as an emergency medicine physician and as an entrepreneur in urgent care medicine, I have had the pleasure of working with many nurse practitioners (NPs) and physician assistants (PAs) in various staffing models.  In the emergency department (ED) during residency, they were typically assigned to a section of the department where lower acuity cases were triaged.  In my program, they were almost exclusively NPs.  They functioned fairly independently from the physicians but had full access when they had questions.  Their scope of practice in the ED was controlled by the triage nurse with protocols established based on the chief complaint of the patient.  There are some studies that suggest nearly 15% of all patients seen in an ED are seen by either a PA or NP.  After residency, as an attending physician in emergency medicine, I worked with primarily PAs under two different staffing models. In one large urban ED, I worked with PAs assigned to a ‘fast-track’ area of the ED and had patients triaged to them in a similar manner to my residency experience.  In a smaller ED I worked in, I worked along side a PA and we saw patients in an alternating fashion with no triaging based on acuity.  My experience as an ED physician indelibly etched in my mind their value in an acute care setting.

The US health care system is the most costly in the world, accounting for an estimated 20% of the gross domestic product by 2020.  In an attempt to mitigate this alarming statistic, the Institute for Healthcare Improvement (IHI) developed the Triple Aim framework in 2007.


    Improving the patient experience

    Improving the health of populations

    Reducing the per capita cost of health care


So how can we as operators of walk in healthcare services work towards the IHI goals?  Can something as simple as a staffing model change yield improvements in all three areas?  How do the policies of payers, government agencies, and other competing interests confound the ability to make a strategic decision on provider staffing models?  A review of the literature on the subject provides some interesting results.  There is a paucity of data regarding the use of NPs and PAs in the urgent care setting.  However there are many studies that examine their role in both primary care and the emergency departments.  NPs and PAs have been used in emergency departments for many years.  Recently the use of these providers has plateaued representing as high as 40% of the workforce in some EDs.


As the on-demand sector increasingly shifts into payer and health system models, this staffing decision becomes strategic because their platform is based on core, often unvetted assumptions on provider staffing.  Payer, system, and/or state-level regulatory requirements for an on-site physician at all times can derail profitability targets.  Decisions pertaining to how an operator should staff a center in the on-demand sector directly impacts, and is directly impacted by, these goals.  If a physician, PA, or an NP can each meet the goals of routine visits, how should a center be staffed?


With the Affordable Care Act in full swing, PAs and NPs are assuming a pivotal place in the future of healthcare.  Dino Soriano is the CEO and founder of ClinicalMatchMe, a preceptor NP/PA matching company that pays providers to work with NP students doing their clinical rotation requirements.  He states it this way, “ I place NPs and PAs all over the country for the sole purpose of helping them finish their training.  The real benefit, however, is that the business model really serves as an on-the-job interview.  I get feedback all the time from physicians that tell me they found real value in working with NPs and PAs.  Many of these rotations end up in a job offer.” For the purposes of this article, we will be using the commonly accepted term of NPP (non-physician provider) to refer to PAs and NPs.  Where studies only looked at one or the other, I will reference the individual specialty.


Improving the patient experience

There have been multiple studies looking at patient satisfaction, which clearly is improved using NPPs.  However, the triple aim does not address patient satisfaction in a vacuum.  It is about the patient experience, which includes the six dimensions of the Institute of Medicine’s concept of the patient experience; safe, effective, patient-centered, timely, efficient, and equitable.  Many scholarly articles exist that indicate NPPs provide equivalent, and in many cases, superior patient satisfaction that touches on all six dimensions of the patient experience.  In several large health systems we have worked with as well as private operators, it is often that one or two NPPs consistently obtain the highest patient satisfaction scores and even earn the highest net promoter score which we know leads directly to profits and growth within an organization.  According to Dr. Eric Powell, Medical Director for AppleCare Immediate Care in Georgia, “ Years ago, people wanted to see doctors.  Now that has all changed.  Patients have accepted that NPs and PAs provide great care and that has been beneficial to our model.  The patient perception of their care is equivalent to when being provided by a physician.”



Improving the health of a population

A recent article in BMJ concluded that NPs in primary care roles have equivalent or better clinical outcomes than physicians in ambulatory care settings.  Additionally, the Institute of Medicine has recommended eliminating the restrictions on NPs that impact their ability to provide care.  None of this is new.  In 1986 the Office of Technology Assessment concluded that  “within their area of competence, NPs, PAs and CNMs (certified nurse midwives) provide care whose quality is equivalent to that of care provided by physicians.” Anecdotal evidence is abundant in the urgent care field with many healthcare institutions and larger private operators, many backed by private equity dollars, moving to a mixed model of physicians and NPPs. Dr. Jeannie Kenkare, chief medical officer for PhysicianOne Urgent Care in Connecticut and New York stated, “Some of our best providers in terms of quality of care are PAs and NPs.  We still have a legal and ethical obligation to supervise them, and we do, but our chart review results are clear; our PAs and NPs provide outstanding care to our patient population.”  Some institutions have adopted procedures that allow substantial oversight until the NPP has exhibited a proficiency in the skill sets necessary to work alone in an urgent care setting.  Dr. Nandini Koka, Medical Director for Inova Health System Urgent Care in northern Virgina describes her onboarding program this way, “In bringing on an experienced NP, we provide a robust 2 week training program.  Then we have the NP work along side a specific physician trainer for several months before allowing them to work at a site alone.  We focus on hiring experienced NPs and have found that the quality of the care we provide is great.”  Having well run, efficient urgent care centers contributes to the health of a population.  Dr. Kenkare pointed out, “This is about access.  If we build in efficiencies through creative staffing models, that only helps our company grow and allows us to provide even more access to our population base.”


Reducing per capita health care costs

There are plenty of data to suggest that overall costs of healthcare go down with NPPs in comparison to physicians.  This might seem intuitive given the pay differential between the two professions.  But there is more to it.  Other factors trend favorable to NPPs in the economics such as supply utilization, readmission data, etc.  Much of this data is from the emergency medicine world.  Again, there is a paucity of data within urgent care medicine, but much can be extrapolated from the emergency medicine literature.  In one study describing the economic impact of NPPs in an emergency department, the following data points were discussed.  The average cost of an emergency medicine NPP in 2014 was $114,000 per year, or about 25-35% of a board certified emergency physician.  In this particular institution, the NPP saw 1.6 patients per hour or about 80% of the productivity of a physician. When adjusting the cost of a NPP for this variance in productivity there is a 50% decrease in the cost of care using only these two factors.  There is no doubt that the utilization of NPPs yields a reduction in overall health costs. Physicians need not worry, their salaries across all specialties goes up in practices that utilize NPPs.  The data in this are clear.  In general terms, if you utilize NPPs in your practice, you will take home more money.


How do PAs and NPs differ? 

The training and ability of both disciplines are similar.  The largest difference lies in a cultural gap and often, practice expectations, which can directly impact how your operation performs.  On a state by state basis, NPs are being granted more and more autonomy to practice in a solo environment, so their job satisfaction in an ED or a busy urgent care center that is double staffed, may not rise to their expectations due to a culture geared toward solo practice.  However, as a solo practitioner in a single provider staffed urgent care center a NP may find career satisfaction.  PAs on the other hand, seem to be comfortable with career goals that take them along parallel paths with physicians, often being used to leverage a physician’s workload.  “We don’t really see much of a difference in PAs and NPs.” Dr. Powell said, “we view them both as an extension of the physician.” Some health systems have made a strategic decision to use either just PAs or just NPs due to constraining legislative and payer policies. “We use exclusively NPs in our centers.  We came to that decision not because we felt there was a disparity in ability, but because regulatory requirements forced our hand.” said Nandini.  The bottom line here is that when you control for experience, PAs and NPs can both handle the clinical complexities seen in the on-demand setting on an equal basis.  Dr. Kenkare, who employs both PAs and NPs mentioned, “Experience trumps everything.  If I have a PA in front of me with 8 years experience and a new grad NP, there is no contest.”




Nurse Practitioner

Physician Assistant

Number practicing in the U.S.

110,200 as of 2012, according to the Bureau of Labor Statistics (BLS).


86,700 as of 2012, according to the BLS.



The mean annual wage, as of May 2013, was $95,070, or $45.71 per hour for NPs, according to the BLS.


Annual mean wages for PAs, as of 2013, were $94,350, or $45.36 per hour, the BLS reports.


Expected job growth

34 percent from 2012 to 2022, much faster than average for all occupations, according to the BLS.

38 percent from 2012 to 2022, much faster than average.

Anticipated number of new positions available by 2022




Meeting Requirements

Degree requirements

Currently, NPs need a minimum of a master’s degree from an accredited school to become licensed within a state. Even though the American Association of Colleges of Nursing (AACN) has recommended that the new NP standard be the Doctor of Nursing Practice (DNP) by 2015, states still just require a master’s or graduate degree.


PA’s need a minimum of a master’s degree from an accredited medical school or center of medicine to seek licensure.

Degrees available

A NP can seek a master’s or DNP from a nursing school, although the DNP is suggested by the AACN. In the U.S., there are 92 DNP programs available for nurse practitioners.


170 physician assistant programs, most of which were master’s degrees, were available in 2012, according to the BLS.


Program details

NPs typically choose a specialty area and need to complete 500 didactic hours and between 500 to 700 clinical hours.

PAs are trained as generalists and typically need to complete about 1,000 didactic hours and more than 2,000 clinical hours.

School accreditation

NP programs typically will be accredited through the Commission on Collegiate Nursing Education (CCNE) or the Accreditation Commission for Education in Nursing, Inc. (ACEN). Click here to search for CCNE accredited schools.


PA programs are accredited through the Accreditation Review Commission on Education for the Physician Assistant, Inc.



Certification and Licensing


NPs can seek national certification in their specialty area through the American Nurses Credentialing Center (ANCC) or the American Academy of Nurse Practitioners.


PAs need to pass the Physician Assistant National Certifying Examination (PANCE) available through the National Commission on Certification of Physician Assistants (NCCPA).



A RN license, a master’s or graduate degree and national certification are generally needed to seek state licensure.

A master’s degree from an accredited school and national certification are generally needed to seek state licensure.

Licensing Agency

NPs seek licensure through a state board of nursing or board of medical examiners.

PA seeks licensure through a state medical board, board of medical examiners or similar.

Details about the Job

Practice Framework

NPs generally work with physician oversight. However, currently 250 practices in the U.S. are operated solely by NPs, and legislation is being pushed to expand the number of states that allow NPs to work autonomously from 16 to 30, according to The Washington Post.


PA cannot work independently of physicians.

Average number of prescriptions written per week

46.58 in 2013, according to a survey done by Advance Healthcare Network


49.76 in 2013

Average number of patients seen per week

56.28 in 2013, per the Advance study

61.11 in 2013

Average number of years in practice

8.9 years, per Advance Healthcare Network

11.97 in 2013





According to Clinical Advisor, the average salary in 2015 among all NPs is $99,471. The average salary among all PAs is $105,013. There are multiple surveys out there that look at national trends, however NPP salaries are driven from more geographic pressures such as payer policies on reimbursement, supervisory requirements, disparity in the number of training programs in the area, etc.  Typically, NPPs will demand a slightly higher salary than their counterparts in a primary care setting due to weekend, evening, and holiday requirements.  NPPs make slightly more in an ED than in an urgent care setting. Many urgent care operators have a bonus structure in place and use it for both physicians and NPPs. “We ask a lot from our NPPs.  We ask them to work by themselves and function as independent as possible,” Kenkare said “so why not bonus them in the same manner as we do physicians?”



Obviously, the question of supervision is very state and payer specific.  In a double coverage situation with an NPP as the second provider along side a physician, it would be quite easy to meet even the most restrictive state supervisory requirement.  Things get more complicated once a supervising physician is not in the same office at the same time.  In this second scenario, assuming state law around supervision is being met, a mechanism to allow real-time communication between the supervising physician and the NPPs must be established.  Real-time Skype or “FaceTime”-like technologies allow for communication between the physician and the NPP.  Regardless of state law, physician supervision should depend on several things: An NPP’s training, education and experience, the nature of the practice setting, the percent of complex cases seen, and the supervisory skill of the physician.  According to Dr. Kenkare, “Our goal is to provide clinical coverage with 75% NPPs and 25% physicians so that one physician is supervising three NPPs.  This exceeds the state supervision requirement ofa 1:6 ratio.”


The two scenarios

Likely, the first time an operator will face the decision whether to use a NPP or not will occur once a certain volume of patients is being seen in a single site.  Most private operators would be comfortable with single provider coverage until around 3.5-4 patients per hour.  A good way to track this in your own system would be to track door-to-door time and overall patient satisfaction.  When the clinic gets busy and one or both of these numbers starts to trend off the benchmark, then it is time to start thinking about additional coverage.  Thought needs to be given to the fact that once that second provider is in place costs will rise in the form of the additional provider as well as the ancillary staff required to support him/her.  In all likelihood, four-wall earnings will drop for period of time until an additional 5-6 patients per day are realized thereby mitigating the cost increase.  The gain from the decision to add an extra provider is also realized in less tangible ways such as maintaining good door-to-door times, increased patient satisfaction due to more ‘face time’ with the patient, etc. 


Let’s look at a different scenario.  An operator of a multisite platform wants to better control costs without losing any clinical quality or diminishing the patient experience.  Let’s assume a ten center operation has single coverage in all sites and none are at the threshold for a second provider.  One model to consider would be to hire NPPs to establish a well-defined ratio of NPPs to physicians.  For example, based on state laws and the skill set and experience of the NPPs being considered, it is determined that a 1:4 physician to NPP ratio is appropriate.  At this point a plan to replace 80% of physician coverage with NPP coverage needs to be developed.  This can be accomplished through physician attrition or more aggressive human resource tactics.  Obviously the background and skill set of the NPPs must be considered and robust training must be accomplished prior to the roll-out.  Also, the method and real-time practice of physician supervision must be considered in detail.


Billing and Reimbursement

Medicare reimbursement for services rendered by NPPs is determined by federal Medicare policy.  However, Medicare defers to state law when determining scope of practice.  There are two ways a practice can bill under Medicare: as “incident to” services under the supervising physician’s name and National Provider Identification (NPI), or directly under the NPP’s NPI.  Medicare has strict rules regarding “incident to” billing that is billed at 100% of the physician fee schedule. Normal direct billing under the NPP’s NPI reimburses at 85%.  Requirements to bill “incident to” are beyond the scope of this article.  Private payers typically either enroll the NPP and have the practice bill under their own NPI and the group tax ID, or they do not enroll them and have the practice bill under the supervising physician’s name and NPI.  It is paramount to check with each payer to see how reimbursement for NPP services might change the practice revenues.  Most groups that have looked at this have determined that due to the decreased cost associated with NPPs, the economics still make sense.


Recent payer requirements – A change in the tide?

Might all this be changing?  Recently, several payers have been changing oversight requirements that may be designed more to increase payer profits than to increase patient safety.  Aetna and various BCBS plans have been requiring physician presence on-site during open hours for many recent contracts.  This is inconsistent nationally, where Aetna clients (health systems operating health plans with an Aetna back office) and BCBS-affiliated centers are not held to this same standard.  Given the move to flat rate structures, premised on an NPP model to provide lower cost structures, but then requiring high cost unnecessary staffing seems counterintuitive.  The payers are out of alignment with their own goals, which publicly they would agree to under triple aim.



As the urgent care and on-demand sector continues to expand and mature, there has been mounting pressures to add additional providers.  This can be done by adding another physician.  But using a NPP may be a better option.  By using a NPP as the second provider in a busy urgent care setting, you can increase the clinic’s accessibility, productivity, and revenue while contributing to excellent quality and the patient experience. We know from a review of the literature and interviews with national thought leaders in urgent care clinical staffing models that costs, quality of care, and the patient experience is, at worst, preserved, and at best, improved by using a NPP.  Additionally, many large regionally dominating operators have adopted the model of a NPP run clinic with proper physician oversight resulting in a marked change to the bottom line with additional benefits of having a better patient experience and equal or better clinical outcomes. Strategically, the decisions around how to staff providers at slower clinics, whether to have an on-site physician at all times, and how to scale coverage with volume are intrinsic and critical to your success.