With patients bearing more of the financial burden for their health care, investors are betting that for-profit urgent care centers can attract patients by offering care at competitive prices. One example is Convenient MD in Windham, which is funded by $5 million in private investment.
Because urgent care centers treat injuries and illnesses that need immediate attention but are not life threatening, investors say patients will lead with their wallets. Of the 30 or so urgent care centers in NH, most are associated with a hospital or physician’s group. Nationally, there are about 9,000 urgent care centers (about twice the number of hospitals nationwide) and 60 percent are owned by physicians or other private parties, according to the Urgent Care Association of America. It reports that 85 percent of urgent care centers are expecting more patients and 40 percent are planning to expand to meet demand.
Urgent Care Goes Private
Convenient MD, which opened its Windham location in December, has plans to roll out facilities in Concord and Exeter. And more are planned for the future. Concentra, a privately funded Texas-based chain with three occupational health offices in NH, started offering urgent care from those locations earlier this year.
Urgent care is greatly affected by location, which is why Convenient MD launched near Interstate 93 where thousands of cars pass by every day. While hospitals are known entities, Convenient MD CEO Gareth Dickens says, “It’s entirely up to the patient to see us.” Once they do, Dickens says, they are designed to provide fast, efficient and effective service. All records are electronic, wait times are generally a few minutes, visits last no more than 45 minutes, prescriptions are available for a flat $15 fee and Convenient MD will send records to a patient’s primary care physician upon request.
Right now, Medicaid and Medicare account for 15 percent of patients, self-pay is 5 percent and the remainder have private insurance. Since opening, Convenient MD has averaged about 400 patients weekly, with common issues being suturing, broken bones, colds, flus, and bug bites. The facility can do X-rays and uses radiology contractors working remotely to keep costs down. It is also piloting the use of a portable ultrasound machine. There are 40 employees, with five to 10 working at any one time, including a physician that is emergency room and board certified. The center has provided free flu shots and free cholesterol testing, and offers $20 sports physicals as a way to bring patients through the door.
For self-paying patients, no bill exceeds $250, while many who are insured pay as little as a $10 to $50 copay, Dickens says. He says the self-pay rate is less than the self-pay rate at hospital-affiliated urgent care centers. A report by the Center for Public Integrity found that facility fees charged by hospitals for outpatient services, which are separate from doctor’s fees, are increasing health care costs. Self-paying patients at Convenient MD are expected to pay at the time of their visit, but, “It’s not like if we can’t get payment at the time we’re turning patients away. We treat them,” Dickens says. Open 9 to 9, seven days a week, Dickens says patients often come when they can’t get an immediate appointment with their doctor.
Since these facilities have less negotiating clout with insurers, Dickens says, his business receives lower reimbursement than hospitals, making private investment even more critical. On average, he says clinics lose money for 18 months to two years, then as business grows, that equation changes, helping to fund the next one.
Most urgent care centers are affiliated with a doctor’s practice or a hospital. Within months of Convenient MD opening its Salem facility, Parkland Medical Center, based in Derry, opened one in Salem. There is no data comparing hospital-related urgent care with stand alone centers, but the competition is bound to heat up as both open more locations. St. Joseph Hospital in Nashua, one of the latest NH hospitals to enter the urgent care market, is opening a center in Milford. Another new private urgent care center, ExpressMED, opened last year at the Executive Health and Sports Center in Manchester.
While Dickens says his operation is competitive on quality and price, Steve Ahnen, president of NH Hospital Association, says hospital-affiliated urgent care centers offer a continuum of care. Ahnen says that is critical for overall population health at a time when more services are accessed on an outpatient basis. “How do we ensure the care patients are getting is care that is tied to longer-term goals and making them feel well over time? There is no question the competition will continue and I think hospitals will find a way to compete in that space,” he says. “Part of the challenge is moving from a payment system of fee-for-service to a system based on volume and outcomes. We’re moving in that direction and we’re moving as quickly as possible.” Ahnen says hospitals operate urgent care centers on a different cost structure than hospital facilities and will refine that model over time.
Concentra, with locations in Concord, Manchester and Nashua, is looking to increase market share. It added urgent care to its occupational health services to meet what it saw as a growing need. While 95 percent of its 250 weekly clients receive occupational health services, NH Center Medical Director Craig Packard expects urgent care to grow to 50 percent of its business. “I’m not even sure we need to compete yet. There is great need for urgent care as the burden before was on primary care and the emergency room. As Obama Care comes in, there will be more need,” Packard says. Still, he believes Concentra has an edge, offering patients an affordable, quality experience that includes waiting times that don’t exceed 20 minutes, TVs in all rooms and affordable fixed prices. “The idea is meeting the patient’s need as quickly as possible,” Packard says.
While Concentra does not accept Medicaid, it does take Medicare, and no visits generally costs more than $280 for those paying out of pocket. Like Convenient MD, Concentra generally requires payment for self-payers at time of service, but “they have a heart” and will treat someone in need, Packard says. Concentra is also partnering with Blue Cross Blue Shield so the insurer will list them on insurance statements to remind people of urgent care options.
It is yet to be determined whether there are enough colds, flus, broken bones and last minute sports physicals to keep these new centers financially viable as they compete with hospital- and physician- affiliated ones, but with the trend toward outpatient care, for-profit urgent care will be a closely watched segment of the industry.
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