How to View the Payer Markets

How to View the Payer Markets

Spring is an important time for the urgent care industry.  The main convention of the Urgent Care Association of America (UCAOA) will take place, along with the election of board members and new committee appointments.  Insurers publish rate filings and prior-year financials, and often many contracts are coming up for renewal.  And with all of this come fresh ideas on how the industry can work together to plot a brighter future.  It is a future with significant challenges and it is critical that the urgent care industry come together to help drive a national payer strategy.

July 2016: Population Health Drives Convergence – Mid-Year Review

Ten years ago when retail clinics were popping up like weeds, all you heard about was the land grab between MinuteClinic, Take Care and all the other competitors seeking out the best retail locations for their clinics.

“Today it’s a land grab for patients,” says Michael Pisani, managing director of the Healthcare Group at investment firm Houlihan Lokey. “Once you have the most lives, the game becomes a lot clearer.”

The game Pisani refers to is population health management. And he should know. He has more than a decade of healthcare and investment banking experience, much of it with the largest urgent care transactions. Houlihan Lokey is perhaps best known for handling recent transactions involving FastMed, one of the largest pure-play urgent care operators, and the sale of CareNow to HCA. Pisani has had a front-row seat to the underlying motivation behind the continued interest in urgent care medicine. He will also be one of our featured speakers at the next ConvUrgentCare Strategy Symposium in January.

Indeed, population health management seems to be at the root of virtually all of the activity we saw in the first half of 2016 among retail clinics, urgent care, telehealth, direct primary care and work site clinics.

But what nobody is really talking about is that this move away from transactional-based, fee-for-service medicine to value-based care isn’t moving as quickly as many people thought it would. Health systems that invested aggressively in risk-based healthcare delivery found themselves sitting on a lot less cash than the bond-rating agencies thought they should. And many health system executives quietly speak about at least another five years before value-based care becomes more strategic than fee-for-service medicine.


June 2016: Retail Clinics Revisited – Health Systems Are Showing a Renewed Interest

Unlike the urgent care market, the retail clinic market has seen inconsistent growth since its beginning in 2000. From 2005 to 2007 the market expanded rapidly. From 2008 to 2011 there were a host of closures, not only by venture-funded upstarts, but by some of the major retailers. More recently, some operators have grown consistently, such as MinuteClinic, The Little Clinic and RediClinic. But others seem to be in a holding pattern, such as Walmart, or are moving in a different direction, such as Walgreens. And one operator, Target Clinic, has gotten out of the business altogether.

More revealing is that our data on closures shows that more than 50 percent of retail clinics operated by health systems, most in Walmart or regional grocery chains, have closed.

Yet in the last year there has been renewed interest in operating retail clinics by health systems. This article will first explore the challenges associated with this particular type of walk-in platform and then address the factors that are causing this renewed interest by health systems.

Retail Clinic Challenges

Anyone with retail clinic experience will tell you that, despite seeming so simple, it is not an easy business. Granted, much of the patient traffic is for simple illnesses like sore throats, pink eye, sinus infections, bladder infections and ear aches. And these are low-acuity visits that can be handled with predictable workflow and fairly consistent clinical guidelines.


May 2016: Provider Staffing Decisions – The Strategic Fit of NPPs in the Walk-In World

By Robert Rohatsch, MD

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.


April 2016: Tough Talk Around Walk-in Medicine – The Top-10 Focal Points for Hospital-Based Urgent Care Operators

As a management consulting firm for hospital systems and large medical groups, we’ve seen a lot of behavior that we know won’t cut it in the walk-in world over the next decade. And as “outside experts” we are often asked to deliver some tough talk around the harsh reality of how our clients compare to the rest of the market. Those are difficult meetings, particularly with primary care physicians whose practices have been turned upside down and who have virtually no time to think strategically about the future. When it comes to walk-in medicine, hospitals and their employed medical groups are having a hard time.  

It’s not that system leadership and middle management are oblivious to how strategic walkin medicine is or that competition is moving into their service area. Quite the contrary; they are scrambling to get their act together. But there are usually two fundamental issues: First, while the employed medical groups of health systems, particularly the primary care providers, are seeking to promote access, they also remain stuck in what we call the “my patient-my approach” mindset. Second, this “my patient” mindset tends to result in each physician office going its own way in how it addresses access. And if there is a leadership vacuum, the result is that patients view your walk-in offering as confusing and chaotic.

This article is about executing on a business model that is as much a hospitality business as it is a health care business. That means getting the details right not just on the clinical side of the house, but on the facility, the finances, the team, and the marketing. Here’s our take on the "Top 10" most important focal points for competing in the world of walk-in medicine.


March 2016: Health Insurance Landscape for the Walk-in Operator

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.  


February 2016: Growth Amid Shifting Players – 2016 Forecast Issue

Let’s imagine it’s the year 2020 instead of 2016.  Patients no longer have to wait in waiting rooms (if they don’t want to). Urgent care centers in large medical office buildings are a thing of the past. People pay $80 a month for unlimited primary care access.  The differences between retail clinics and urgent care centers have blurred. The independent urgent care operators not gobbled up already are those who jointly own their centers with health systems. And patients know ahead of time what services will cost instead of finding out 30 days later when the explanation of benefits comes in the mail.

It’s only four years away, but in 2016 we will see early evidence of that 2020 scenario. This year we expect the number of joint ventures to double or triple over 2015.  We’ll see more large urgent care players gobbled up by health systems or insurance companies. Direct primary care will start to show up as a legitimate option during employer health plan open enrollment season. We anticipate new architectural schemes for walk-in brick and mortar, pushing new limits for visibility, accessibility, and consumer friendliness.

Growth will continue in 2016, on both the urgent care and retail clinic fronts. Until now, most growth was focused on the top-50 metro areas.  Going forward anticipate more growth in markets ranked from 51-200. In other words, smaller metro areas will become hot. This growth will be at the expense of smaller hospital system medical groups who can’t move fast enough and are sitting on sweet payer agreements.

And mobile technologies will begin to play a big role in helping patients navigate care with little or no wait times. Telehealth will continue to expand, but as with last year, not as fast as many had expected, especially in the realm of lowacuity episodic illnesses.


January 2016: Still Going Strong – 2015 Year in Review

Eventually, you would expect that the urgent care market might slow down.  I happened in the retail clinic space and is starting to occur in the telemedicine space -- more on that later.  But in 2015 there was no evidence of an urgent care pullback anytime soon.  Clinic growth continued as it did in 2014.  And perhaps most telling were the acquisitions, both large and small, which also continued.

“A huge underlying factor in many of these recent urgent care transactions is health systems, which are emerging as a top bidder, whereas three years ago they were the lowest bidder,” said Gordon Maner, managing partner at Allen Mooney Barnes and a speaker at this year’s ConvUrgentCare Strategy Symposium.  “It clearly shows their interest in population health and coordination of care has skyrocketed,” he continued.  “There’s something about the post-Supreme Court decision time frame around Obama Care and the recent CMS readmissions policy where you can sense there is a big spike in health system interest and participation in the walk-in sector.”

But retail clinic growth also continued, as did the energy around worksite and near-site clinics.  As we approach the New Year and our next symposium, several themes are becoming clear:

• Traditional methods ofprimary    care medicine are under    threat and walk-in operators are a part    of that threat.
• Payers are continuing    to enter the walk-in space, but    with a parallel    track of continuing to acquire primary care practices.
• Large    health systems appear to be gunning for    a bigger piece of the urgent care action on a national basis.
• Local health systems are now routinely looking at joint ventures with independent urgent care operators.
• Retail clinics and telemedicine are struggling to find their identity amid all of this activity.


December 2015: Is It Time for Telehealth?

It seems like anytime you have a conversation about telehealth, the explosive growth is just a quarter away. Many of us forget that the same thing happened with “the World Wide Web” and “e-banking.” For those investors and operators suffering through the early stages of growth, progress seemed to take forever. And for the World Wide Web in particular, the boom hit a major interruption in March 2000, with many companies falling by the wayside.

But for the average consumer, before we realized it, the World Wide Web and e-banking were so prevalent that we’ve stopped using those terms.  

According to Jay Sanders, M.D., often referred to as the father of telemedicine and one of our keynote speakers at our next symposium, the same is going to happen to telemedicine.  “Before we know it,” he says, “it will just be medicine.”

Sanders is quick to point out that the real father of telemedicine, and the person who coined the phrase, is Ken Bird, M.D., from Massachusetts General Hospital.  In 1967, Dr. Bird connected two television cameras: one at a Logan Airport clinic in East Boston and the other at Mass General Hospital in the center of Boston.  He decided it would sound strange to call it “television medicine,” so he shortened the term to “telemedicine.”

That’s a fun story.  And it’s true.  But the point isn’t so much about the origin of the term telemedicine, but how long this industry has been around.  “I’ve been involved now for four decades,” says Sanders. “It’s taken a lot longer to take off than I thought it would.”


November 2015: Retail Clinic Partnerships

Largely under the radar, we’ve seen some changes in the retail clinic world.  CVS Health is taking over Target Pharmacies, and with that, Target Clinic will become MinuteClinic.  

Walgreens now has two models: its traditional model where the company runs its own clinics, and a new model where it is now leasing clinic space to hospital systems and medical groups.  Add to that the recent announcement that Walgreens is attempting to acquire Rite Aid. Rite Aid has its own retail clinic chain, RediClinic, which has been opening new clinics at a rapid pace.  

The Clinic at Walmart was leasing space to health systems, but that has given way to a new concept: The Walmart Care Clinic. Operations of that clinic was outsourced to worksite clinic vendor QuadMed.  But Walmart has said goodbye to QuadMed in favor of running those clinic themselves.

Are you confused yet?  What complicates this further is that there is renewed interest in retail clinic partnerships on the part of health systems and large medical groups.  But the track record for success by hospital systems and medical groups is not very good when it comes to running clinics inside retail stores.

In this article, we will provide a description of what partnership options the major retailers are offering. We will also address the track record of health systems operating retail clinics and why those partnerships have such a high rate of failure. And we’ll look at why there is still risk, and why things may be different this time around for some health systems.


October 2015: What it Takes to Get Paid

With the shift fully underway in the walk-in space to consumerism, high deductibles, improving patient experience, and a focus on the bottom line, you would think clinic operators would be well ahead of the game when it comes to collecting the patient portion of what’s owed. But the unfortunate reality is that most operators are living in an antiquated world. Chris Seib, chief technology officer and co-founder of InstaMed, a Philadelphia-based health care payments network says, “Health care has a lot to learn from Apple Pay, Amazon, and Uber, which have innovated around the consumer experience.”

Getting paid by health plans is an entirely different discussion and we’ll leave that for a future update. With the fourth-quarter busy season approaching, we’ll focus this article on getting paid by the patient and/or employers your organization serves. There are some innovative approaches headed your way, and you should be looking at these closely for 2016, either as pilot projects or full-blown implementations.


September 2015: Survival and the Middle Picture – 2016 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 mainframecomputer 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.


August 2015: Consumer Analytics for On-Demand Medicine

The on-demand medicine business is fundamentally about serving a consumer of healthcare services when and where it works for them. To the extent a given operator embraces a retail platform – “retail” oriented real estate, “retail” oriented marketing, and “retail” consumer expectations (e.g. shopping, dining, etc.) they should outperform the operator who does not embrace this retail platform.

But as walk-in medicine operators add consumer analytics expertise and vendors serving operators roll out consumer analytics platforms, giving healthcare consumers what they want, where they want it and when they want it is becoming more sophisticated. These platforms will improve marketing effectiveness, help refine existing services and develop new services, improving overall financial performance.

Since the consumer is the bulk of the walk-in operator’s customer base, in this article we focus on the more specific role of “consumer analytics” and not “customer analytics,” which includes employers and affiliates. “The average company has more data coming in than it knows what to do with,” says Tim McGuire, director at management consulting firm McKinsey. “We went through a 10- or 15-year period when most retailers collected information and did very little with it. Now we’re at a stage where they are starting to figure out that I have this treasure trove and if I use it I can make better decisions about how to run the business.”

The idea is to combine actual consumer data across multiple internal and external sources. Typically consumer analytics departments are staffed with individuals thatcan combine business know-how with financial, statistical, and IT skills to make key decisions, usually at the executive level. Larger, more mature organizationstypically devote extensive resources to this domain, as it has potential to deliver outsized impacts on performance.

The grocery industry is a great example. The average grocery store has thousands of products covering dozens of categories. That industry used to make decisions on howto allocate shelf space based on averages.  But that may have ended up eliminating a product that was important to your best customer, even though it didn’t sell much.

“We can draw the right customers into the store and expand the basket they shop in,” says McGuire at McKinsey.  “We can look at products they are buying today and usethose as the basis for recommending other products to them, whether that is an online situation or through coupons or direct mail targeting programs.”

In the grocery industry, McGuire says getting the cherry pickers out of the store who are just there for sale items and instead investing in more dollars in thecustomers who are going to be more profitable might mean 200 basis points of profitability.


June 2015: The Physician Shortage – Burnout May be the Least of Your Worries

The year is 2025. The last patient-centered medical home in the country closed last week. This is final result of a major policy initiative that ignored the fact that physicians didn’t go to school to spend 50 percent of their time coding, charting, and training, and the other 50 percent caring for a panel of 2,500 patients.

It appears that not only have thousands of medical groups been negatively affected, but the health systems who acquired or employed them over the past few years have suffered as well. In fact, the number of hospitals in the United States over the last 10 years has shrunk from more than 5,000 to just under 2,500.  More than a decade ago these health systems decided primary care was the place to be, so they acquired these practices one after another, the same way they did in the 1990s. During the first go around the strategy failed because patients wanted nothing to do with managed care. This time it failed because doctors wanted nothing to do with accountable care.

Oh, there were predictions of a primary care shortage. But those predictions never included a complete disruption in who employed the doctors.

It began with a few private urgent care centers who realized family practice doctors were probably sick of too many administrative tasks and might like a change of pace. They promoted higher salaries, some suturing and casting to break up their day, and a whole lot less of the stuff they didn’t sign up for when they chose medical school.

Then some new primary care models entered the scene, most notably concierge medicine. Then concierge medicine morphed into direct primary care (DPC), where for $60 a month a person could have access to a doctor the same way they have access to a health club. Alongside DPC is a high-deductible catastrophic plan at $300 a month. Employers jumped at what became known as “DPC and a Wrap,” a new kind of health benefit plan that took insurers out of the equation, along with all of their policies, procedures and administrative costs. The most active employers opting for this new option were those with group sizes of 50-250, self-insured and wanting desperately to gain control of their healthcare destiny.

Under the DPC model, the family doctors have panel sizes of between 800 and 1,000 patients. They have more time with their patients, which resultsin far fewer referrals to specialists and subspecialists.  Give a patient enough time and they will tell you what’s wrong with them. Best of all, these family docs can see their patients in person, via a high-definition web cam or even a simple email.  And there’s no need to file a claim form because it’s covered by one simple monthly fee.

But it isn’t health systems or large traditional medical groups that these doctors are working for. It’s private-equity-backed corporations, who began as startups seeking to disrupt inefficiency, inflexibility and poor quality. Ten years ago more than half of primary care doctors were employed by these health systems. Now it’s less than 10 percent.

It took a while, but now medical schools are finding more and more of their graduates are wanting to go into primary care again. Predictions of a shortage of 100,000 doctors is a distant memory.  And not only are healthcare costs no longer rising as fast, they are actually going down, the result of fewer unnecessary referrals, a tighter rein on prescription drug spending and a lot more competition for complex cases.


May 2015: Optum Branches Out – Acquisition of MedExpress Raises Many Questions

The news came suddenly on April 8. And it wasn’t so much that MedExpress was going to be acquired, news that had been anticipated for a couple of years.  It was the name of the buyer, Optum, that took many in the walk-in medicine industry by surprise. Among the most typical reactions:

“Health insurance companies are taking over urgent care.”

“They’re going to rig the system to try to push out the smaller players.”

Many people have heard of Optum.  But fewer people know much about what the company does.  

Optum is one of two main divisions of UnitedHealth Group (NYSE: UNH), the most well-known of which is UnitedHealthcare, the health insurance arm of the company, and by far the largest in terms of revenue and employees.  

Optum is characterized by UnitedHealth Group as its services business, which is an outgrowth of the many business processes the company has developed or acquired to make itself more efficient over the years.  A good comparison is, which is now one of the largest providers of cloud storage services in the country.  Amazon needed to develop cloud services to become the largest online store in the world. But cloud services has become a very large side business at Amazon, one that has brought down the cost of development for scores of startup companies.

“Optum is Steve Hemsley’s vision of creating a platform that on an integrated basis can help manage medical cost trends better,” says Ana Gupte, managing director and senior research analyst covering healthcare services for Leerink Partners. “He wants to use it not just for the UnitedHealthcare (insurance) book of business, but to make it broadly available to third-party health plans, employers, hospital systems, or anyone who is taking on health risk.” Gupte says that the business not only offers unique services, but that it diversifies the company’s revenues and profits. “It’s a hedge against various uncertainties and moves to valuebased care,” she says. “And it’s also unregulated to a large degree, which gives them flexibility on profitability and margins.” What gets confusing about Optum is how broad ranging its different services are, and the diversity of their customer base. In this article, we’ll try to break down and explain these services along with the different types of clients that use them.  We’ll also put their financial performance in perspective with the insurance business.  And we’ll cover in more detail what this all means to the urgent care sector.


April 2015: Hospitals Play Catchup in the New World of Consumerism

How do you compete with the independent urgent care or retail clinic operator who opened just down the street from your hospital?

• Find an end cap or free-standing building
• Call your architect and design the space
• Hire a general contractor and get it built
• Hire some providers and a support team
• Send out the marketing materials and hold a grand opening

What could be simpler, right? But you would be hard-pressed to find any hospital executive saying it was that simple.  As John Hamburger said at our recent ConvUrgentCare Symposium, “Simple is hard.”

There are literally hundreds of issues hospitals face when looking at walk-in medicine for the first time.  They include legal issues like forming new legal entities and deciding whether those should be for-profit or notfor-profit.  Does that new business unit fall under the same HR and compliance requirements as the hospital and are pay rates and work schedules handled the same way?  What is the provider model: physicians, mid-levels or both?  Should it be located in a medical office building or in a retail area?  Are we capable of competing with the operational and marketing sophistication of the big retailers or private equity-backed urgent care operators?  How much walk-in care can a market handle and how do we know the market isn’t saturated already?

Adding to the stress is that most hospitals have board members who see walk-in medicine as strategic, but each member’s views are either highly divergent from one another or ill informed.  If you are like most hospital executives, you have too much on your plate already.

Hospitals are aggressively competing with one another, encroaching on service areas and looking at pulling high-dollar procedures into their in- and outpatient facilities via the walk-in clinic funnel. Winners and losers will be defined by the service areas they strategically dominate. Many health systems have reported their best earnings in years (if ever) and the market just closed out a strong winter season. Waiting until financial pressure makes these strategic moves a do-or-die situation may, in fact, be too late for many systems given the 12 to 24 month lag on top line revenue performance.

So if you are the decision maker at a health system charged with areas such as ambulatory service line growth, overall system strategy, innovation, and/ or consumer experience, what are some things you can do to shore up your competitive barriers while moving forward with a solid on-demand medicine strategy?


March 2015: Reference Pricing in the Walk-in Market – Walk-In Operators Need to Prepare

I grew up in an auto dealer family, and I remember the closely protected little gold NADA books that held car price data by year, model type, mileage, and other factors to derive a market price.  New cars had varying optional equipment such that the public would be challenged to decipher what they were paying for.  The public didn’t have access to relevant information, dealers owned their geographies, and there tended to be limited price shopping.  Fast forward 20 years.  Car buying services and online quotes for new and used vehicles are a click away.  Every buyer is armed with pricing, and if they are not, their credit source certainly is.  Dealers now compete on service and a quality experience, and scale through operational efficiencies.  Marketing and customer loyalty are absolutely critical.

The auto industry is instructive for what is likely to come in healthcare.  And walk-in clinic operators should pay attention.

Recently in healthcare there has been an increasing volume of discussion around “reference pricing”, “cost benchmarking”, “price transparency”, and other related terms and phrases surrounding what to charge whom for what services.  Depending on the perspective of the source, they are talking about different things in different contexts or for different end goals.  Cost to a patient (and/or employer) is revenue to a provider, and that expense is a medical claim loss expense for a payer.

A “reference price” is a subjective figure which a customer expects to pay, usually derived from a recently paid amount, a perceived price of a competitor, or some related influencer. In theory, reference pricing fuels competition, which in turn should drive down healthcare expenses for healthcare buyers.  A CalPERS / Anthem study on reference pricing has suggested that by sharing price information openly and educating patients, healthcare costs should decrease or at least stabilize.  There is some evidence this is occurring where (1) large price disparities in a local market area exist, (2) those services may be scheduled in advance, and (3) there are significant savings to be achieved (with corresponding net decrease of profits to providers).

Astute walk-in operators already know what is being charged locally for the same office visit level across the competition.  Prices sometimes vary widely, and “you get what you pay for” doesn’t always apply.  Walk-in operators will naturally develop an informal price strategy in the normal course of business, but often not in a structured and deliberate manner.  As pricing becomes more visible element you should be ready to respond to calls for transparency and have a price strategy to compete.  


February 2015: Solid Growth to Continue in 2015 – 2015 Forecast Issue

For most participants, this is a great industry to be part of right now.  But it’s not as simple as it used to be.  There are some emerging complexities to this industry that are going to make things a little trickier going forward.

Some of the major urgent care players are for sale and the outcomes will certainly influence valuations. Partnerships abound in both the retail clinic and urgent care sectors.  For some, however, the benefits of those partnerships will come into question during 2015. Telehealth and queue management systems are ready for prime time, but how they are deployed can potentially disrupt a smooth operation. The payer landscape is changing, with high-deductible health plans becoming widespread, insurance companies entering the market as direct competitors and hospital billing going by the wayside.  And don’t hold your breath, but it looks like consumers are starting to view retail clinics and urgent care clinics in very different ways, creating both opportunities and risks for marketing departments.

All of these factors will influence the performance of virtually every walk-in operator in 2015, making strategic planning more of a challenge this year.


January 2015: Another Strong Year for Walk-in Medicine – 2014 Year in Review

When Merchant Medicine held its strategy symposium last January, momentum had been building in both the retail clinic and urgent care space.  MinuteClinic had just added another 150 sites.  The top five pure-play urgent care operators had added 102 new sites, mostly through organic growth.  Consumerism in healthcare was becoming the hottest thing since the dotcom era in the late 1990s.  And increasing brand sophistication was one of the key topics of conversation.

In 2014 most of that momentum continued.  Some parts of the urgent care sector slowed down to absorb its rapid expansion in 2013.  But those same top five pure-play urgent care operators added another 93 clinics, although a larger percentage in 2014 was through acquisitions.  Consumerism remained hot and brand sophistication manifested itself in a number of ways during the year, from higher multiples paid for urgent care operations to national brand consistency to interconnections between private operators and local health systems.

Next month we will release our annual Forecast Issue in which we offer up a new set of predictions.  But what happened in 2014 provides plenty of instruction on what will likely become a common trend:  walk-in medicine – or now commonly referred to as “on-demand” medicine – is evolving into a network of national and regional brands amid increasing connectivity.  Overlay the rapid emergence in 2014 of telehealth and queue management systems, and what you have is a fast-moving industry that is well funded and highly disruptive to the traditional healthcare establishment.


December 2014: Compete or Collaborate – Retail Clinic Reality Sets in For Urgent Care and Medical Groups

In 2006 when MinuteClinic, Take Care Health (now Walgreens Healthcare Clinic), The Little Clinic and RediClinic were in major expansion mode, there was a great deal of concern among both the urgent care and primary care communities.

One illustration of that concern occurred in October 2006 when SSM Healthcare in St. Louis announced it had ended its clinical affiliation agreement with Take Care Health, an affiliation that had been formed just three months earlier. There was no formal explanation of the rapid termination of that relationship, but a spokesperson said it was the result of extensive “dialogue” with its pediatricians.

Much of that fear subsided when the retail clinic industry went through a downturn from 2008 through 2011.  Since then, retail clinics appear to have reemerged as a legitimate player in the walk-in medicine space. In fact, in some markets it is almost a competition among health systems to land the best retail clinic affiliation agreement because of the potential of primary care referrals.  Urgent care clinic operators are also reaching out to local retail clinic practitioners seeking referrals of patients who present out of scope.

But to succeed alongside retail clinics, urgent care operators and health system medical groups must face a number of facts:
• Retail clinics now have broad geographic reach
• They benefit significantly from steerage by health plans and self-insured employers
• And they have reached a very high acceptance rate by consumers, both in terms of their trust of nurse practitioners and physician assistants, and an understanding of the limited-scope model.