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.

February 2017: Dialing Back Growth? 2017 Forecast Issue

Five years ago a senior partner at a large private equity (PE) firm told me, "The urgent care market is a good market, but not a great market."

This made an impression on me for two reasons. First, this firm was then and still is actively invested in the urgent care market, although compared to its other holdings urgent care is a tiny fraction. Second, I used to work for a company owned by this firm and know firsthand that their predictions and observations tended to be on target.

His statement comes to mind again as we look to provide guidance on what might happen to the on-demand market in 2017. Are PE investors starting to view urgent care as a good market, not a great market? That is a fundamental question in this 2017 forecast issue. In this article, we will also rely on statements from some of our presenters a few weeks ago at our annual symposium in Scottsdale, as well as how clinic growth ended up in 2016
compared 2015.

The bottom line can be summed up as follows: The urgent care market will continue to grow in 2017, probably at a similar pace as in 2016, but that growth will not come as much from the PE-backed players. Instead, it will come from new entrants, like health insurance companies, and hospital systems. Retail clinic growth, which has been led by CVS Health's MinuteClinic subsidiary, continues to be a mixed bag and is entering another period of uncertainty. We expect net retail clinic growth to be flat or slightly positive in 2017. Telehealth will grow, but not as strongly in the acute episodic space as many investors had hoped.

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January 2017: Less Robust but Still Growing 2016 Year in Review

2016 can best be summarized as a year of continued strength and growth with on-demand medicine. While at year end most of the healthcare industry was a little on edge with the prospect of the repeal and replacement of the Affordable Care Act, the on-demand sector was focused more on other drivers such as convenience, door-to-door times, locations and throughput.

In fact, this is our ninth consecutive Year in Review article covering what we believe were some
of the most significant developments in the on-demand space. Over that time there have been some bumps in the road for retail clinics, but the overall on-demand space has continued to grow and prosper consistently year over year despite economic downturns...

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December 2016: 2017 ConvUrgentCare Strategy Symposium

All of a sudden, low-acuity has become strategic for health systems and large medical groups. It is a mass market that, if managed with a retail and hospitality mindset, can become a “funnel” for bringing new patients into the system, increasing or protecting market share, boosting overall patient satisfaction and acting as a change agent for the entire organization. Since 2008, this conference has gathered healthcare strategy and business development leaders whose focus is on the increasing “retailization” of low-acuity medical care.

Although there is a tremendous amount of attention on primary care today, this sector has never seen more competitive pressure. Retail clinics are beginning to practice chronic disease management; urgent care clinics are starting to act as medical homes; employers are opening worksite clinics with full primary care and specialty care services; 2017 may be a breakout year for telemedicine; and network development partnerships abound. At the same time, consumers are demanding convenience, price transparency and customer service. This is convergence. This is convenience. This is ConvUrgentCare.

Intended Audience
People who attend this event view walk-in medicine and employer solutions as a space that touches the greatest number of individuals in any given service area. As such, it is the most effective mechanism for pulling people into their system, both in the short term for acute episodic illnesses and injuries, and for longitudinal primary care. In other words, it represents a mass market of consumers who are vital to the survival of hospitals in a world moving to population health management. Also, we invite executives from large independent urgent care operators, payers, investors and researchers to attend to further build a dynamic experience and sense of community. By keeping the size of the meeting small, this highly interactive conference gets high marks for the amount of cross-learning that takes place.

What is ConvUrgentCare?
The term ConvUrgentCare (pronounced convergent care) captures the converging spaces of primary care, urgent care, retail clinics, employer worksite, near-site and occupational health clinics, as well as telehealth. Our call to health systems when approaching strategic planning – and in planning our agenda -- is to look at all of these spaces holistically, rather than as individual service lines and ask how they can work together to solidify your competitive advantage and reach the greatest number of 2017 ConvUrgentCare Strategy Symposium individuals. The walk-in/on-demand healthcare platform is a network in itself, and that network can serve as the foundation for driving transformation across payers and providers.

Why Attend?
The purpose of the gathering is to harness the best ideas for a long-term strategy that increases patient access and convenience, lowers costs and improves quality. It is the only conference with an integrated view of retail clinics, urgent care, worksite clinics, virtual medicine and primary care. The symposium is highly interactive, using a combination of case studies and discussion panels. To promote interactivity and networking, the number of attendees is limited and there is one concurrent session...

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November 2016: The Changing Face of Primary Care Medicine

In June 1952 my father opened North Scituate Pharmacy in the northwest part of Rhode Island. Next door was the primary care office of Robert F. Spencer, M.D., whose character resembled the beloved and kindly Marcus Welby, M.D. There was even a pass-through window between the drug store and doctor’s office so patients could get their prescriptions filled before leaving. It was a simpler way of doing things.

The independent pharmacy and the family doctor are rapidly becoming history. Large retail chains now rule the drug store market; large, hospital-employed medical groups now rule the primary care market. The large retail drug chains seem to be thriving. But when it comes to large primary care practices, both senior leadership and providers wonder where it’s all going. Burnout, demanding consumers, fewer medical school graduates, administrative burdens, complex productivity goals and new competitors are all adding up to make primary care’s long-term survival somewhat of a question mark.

Are things really that bad for traditional primary care medicine? Should we really believe those observers who say things are only going to get worse?...

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October 2016: ConvUrgentCare Technology Refresher – The Importance of Vision When Building an Urgent Care "Operating System"


By Bernie Kuhn and Crissy Carcamo

After several years of helping health systems develop and manage their urgent care platforms, we’ve come across some unique challenges. Many of these challenges are connected to the deployment and use of technology. But if we were to identify one common source of technology-related problems, it would be that management failed to connect its vision of the urgent care patient experience with the underlying technology architecture.

This high-level vision is critical and we call it the urgent care “operating system.” It is broader than the out-of-the-box practice management or electronic medical record systems that most IT vendors bring to the table because these systems are not tuned to do everything you will need over the next decade. It means spending more time and money at the front end, thinking through a model that creates that “Wow” experience for your on-demand patients. Though much of it involves technology, this kind of thinking impacts everything, from the size of the brick and mortar right down to the little things like how to design a counter for registration or the number of seats in the lobby. Thus, if you simply let technology drive your vision, you likely will end up with a center that reflects patient care 10 years ago. This month’s article is dedicated to the initial vision of your urgent care operating system, as well as the tactical technology and process design components that P&L owners must pay attention to.

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September 2016: Primary Care On Demand – Is Physician Leadership Ready for Urgent Care 2.0?

This month HIMSS kicks off its Pop Health Forum 2016 event in Chicago. The lead media partner for the event is Healthcare IT News, which puts out a lot of pre-conference content. But in reading the articles about the strategies and tactics health systems should be employing for a successful population health program, very little is said about on-demand services. In fact, one article lists five steps to a successful population health framework and there isn’t a single mention of walk-in care. You’d think the journalists at Healthcare IT News (mostly millennials) would understand how difficult it is to get their generation in for an appointment.

At Merchant Medicine, all of this fits a pattern we have observed over the last two years. Despite the fact that primary care physicians feel under threat from retail and urgent care clinic operators, the traditional medical community appears to be blind to a unique opportunity. Under the right circumstances, we believe health systems and their employed medical groups can enter the walk-in space with what we would call “Urgent Care 2.0,” which is a primary care-urgent care hybrid of sorts. The model that we’ll describe is unique to health systems because their employed medical groups own the primary care relationships, at least in the payers’ minds. They are invested in and have the wherewithal to pull off population health management. And as a result, they can take advantage of the alternative payment models (APMs), many of which are not offered to, or bear far too much risk for, the independent retail and urgent care operators...

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August 2016: The HMO Strikes Back

The CEO of a large managed care corporation was sitting in his office late one night, gloating over his latest acquisitions. Suddenly, with a puff of smoke and the smell of brimstone, Satan appeared before him.

Satan smiled at the CEO and said, "I have a proposition for you. You can win every health care contract you bid on, for the rest of your life. Your colleagues will stand in awe of you, physicians will fear you, and you will make embarrassing sums of money. All I want in exchange is your soul, and the souls of all your friends and the souls of all the shareholders in your company."

The CEO thought about this for a moment, then asked, "So, what’s the catch?"

That joke from the 1990s circulated just before managed care took a nose dive. But here’s a more recent joke.

A hospital CEO and his chief strategy officer were having a conversation about all the physician group acquisitions they had completed and the strategy executive asked the CEO, “What’s different about population health today compared to when we acquired all those practices for our managed care strategy in the 1990s?” The CEO thought for a moment and said, “What’s different is that today we measure things.” The strategy executive thought for a moment and asked, “What do we measure today that we didn’t measure in the 1990s?” Getting flustered, the CEO replied, “We measure how long we have before we retire.”

Clearly, whatever you want to call it, HMOs are making a comeback in the form of population health management. Physician group acquisitions have increased in parallel and many of those acquisitions are not generating the kind of downstream benefits many health systems were expecting. So is there really anything different this time around?...

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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...

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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:

...

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