In the age of same-day delivery and on-demand entertainment, it is no wonder that the healthcare industry is moving toward a more immediate and convenient provision of primary care. The most ubiquitous example of this is the urgent care center. Traditional primary care practices tend to have hours similar to those of their nine-to-five patients. Accordingly, patients are often required to take time from work to see the doctor for a non-emergent issue. Plus, appointments are scheduled weeks (if not months) out, so more pressing medical concerns leave patients with few options. Urgent care facilities, on the other hand, have flexible hours (including weekends and holidays) and regularly allow walk-ins. While the personal relationship between a physician and her patient may be largely absent in an urgent care clinic, patients are clearly willing to abandon that relationship in exchange for convenience. What is more, the co-pay with most insurances is the same at an urgent care clinic as it is at your neighborhood primary care practice.
Speaking of the neighborhood, urgent care clinics seem to be nearly as common and conveniently located as Dunkin’ franchises—popping up in strip malls and shopping centers across the country. According to Merchant Medicine, the U.S. already houses approximately 12,000 urgent care facilities and that number continues to rise. CVS Health is looking to tie up with Aetna in order for the pharmacy giant to utilize its retail spaces to better provide medical care. CVS already operates more than a thousand MinuteClinics, but the proposed $69 billion merger aims to give both CVS and Aetna more direct access to the other’s customers. While benefits will undoubtedly accrue to CVS’s pharmacy business as a result of the prescriptions written by the doctors working at the merged company’s clinics, the immediate financial benefits only tell half the story. The data held by the combined company would help manage the type of care patients receive and where they go to get it. The competition in this space has made such coordination critical to growth. Aetna’s competitor, UnitedHealth Group, employs more than 30,000 physicians and runs MedExpress, one of the largest urgent care companies in the U.S. One can presume that CVS’s plans with Aetna are a direct response to UnitedHealth’s strong position in the urgent care market.
More recently than CVS’s merger announcement was Walmart’s announcement that it is in talks with Humana. Though details are scarce, Walmart already provides pharmacy services at its retail stores and operates just fewer than twenty care clinics in Georgia, South Carolina, and Texas. Early speculation surrounding Walmart’s talks with Humana is that the two could partner to expand Walmart’s care clinic model. It is worth mentioning that among Humana’s offerings are private Medicare plans, which Walmart may find beneficial to the continued success of its in-store pharmacies.
A discussion of headline-grabbing healthcare mergers and partnerships cannot exclude the closely-watched corporate partnership among Amazon, Berkshire Hathaway, and JP Morgan, which aims to fight administrative costs, high prices, and improper usage in healthcare. The venture, headed by surgeon, Harvard professor, and public health researcher Atul Gawande, will operate separately from the three partnering corporations. While its target customers are the employees of the three partnering corporations, the venture will offers its solutions to other companies. Though it is unclear at this stage precisely what solutions the venture will present, one may presume that there will be some effect on primary care. This presumption is particularly safe in light of Apple’s recent move to open its own clinics in order treat its employees. Though it is a single, geographically-isolated example, the (potentially former) primary care physicians of those Apple employees certainly understand the impact such corporate involvement in primary care can have.
Despite the trend toward convenient retail clinics, critics are concerned that patients are treated like anonymous customers, rushed through the facility to collect the fee, and given unnecessary prescriptions (including antibiotics) in order to quiet patient concerns. Harvard Medical School associate professor Dr. Ateev Mehrotra researches such clinics, however, and his findings cut against these arguments. In fact, his research suggests that patients at urgent care facilities receive an equal or better quality of care versus a doctor’s office or an emergency room. Further, the prescriptions of antibiotics are the same in such clinics as in doctor’s offices.
Regardless of potential downsides, true or otherwise, there can be no doubt that retail clinics have hurt traditional primary care offices. According to insurance data analyzed by the Health Care Cost Institute, office visits to primary care doctors declined 18% from 2012 to 2016. And this hit comes to a practice area already facing other challenges. According to information from the Medical Group Management Association, salaries for primary care physicians represent a less attractive proposition than those for specialties such as dermatology. Worse, the hours that a primary care physician faces in order to compete—even unsuccessfully—against the onslaught of urgent care centers, renders the effective hourly wage for primary care doctors lower yet compared to peers practicing in specialties.
How, then, should a primary care physician take all of this information? The New York Times profiled physician Carl Olden in Yakima, Washington. Dr. Olden and his partners watched their patient rolls shrink as the waiting rooms of urgent care clinics filled up. In response, he and his partners began opening and operating competing “convenient care” clinics—including one across the street from their practice location. Offering the best of both worlds, Dr. Olden’s clinics have the patient records and relationship necessary to avoid, for example, bad drug reactions, but are still able to offer the convenient hours of their urgent care competitors. Obviously, not all of the clinic patients are the practice’s primary care patients, so Dr. Olden moves those patients into his practice and thereby leverages the draw of the clinics to grow his patient numbers.
Initiating such a project requires substantial work, considerable funding, and experienced legal assistance—on top of the time and wherewithal to keep the underlying practice afloat. But opening retail clinics is by no means the only way that a practice can compete to provide its patients with the convenience and prompt attention that they have come to expect. Short of competing head-to-head as Dr. Olden has, traditional practices have a number of potential options: (1) bring on additional partners and physician employees to offer broader hours; (2) subject to applicable regulations, offer ancillary services not available at clinics; (3) merge or otherwise establish referral relationships with practices in nearby geographic areas to both expand marketing reach and, in the case of a merger, recognize the benefits of sharing a back office; (4) utilize the ever-expanding authority of nurse practitioners and/or physician assistants to supplement physicians, offer cheaper care without breaking the practice’s bank, and make it feasible to offer more walk-in hours, same-day appointments, and on-call services; and (5) coordinate with a medical Management Services Organization to help keep costs in check.
Depending on how competitive the landscape, physicians may also opt to hang up their ownership hat to become an employee. If more successful practices are not hiring, hospitals may be. Better yet, it could be worth heeding the old expression, ‘if you can’t beat ‘em, join ‘em.’ As the number of urgent care centers in the U.S. grows, the number of physicians they need to employ will do likewise.
When traditional primary care practices were the only game in town, the patient lacked the power to demand the convenience and service that retail clinics are beginning to offer. Now that there is competition in the market, it is critical for primary care physicians to respond to the demands of their patients lest those patients take both their sore throat and their business to the urgent care center.
Andrew Stein is an associate at Lamb McErlane PC. He concentrates his practice in health law and business law. He represents individuals and businesses with a primary focus on licensed medical professionals, medical practices, and other health care entities. firstname.lastname@example.org. 610-701-4433.