Over the last two decades, the healthcare market has seen rapid change due in large part to consumer demand for more choices, more control, and more perks. And urgent care is no exception. The entire industry was born, cut its teeth, and grew (at breakneck speed) based on this “retailization of healthcare.”
According to Phyllis Dobberstein, DocuTAP’s Compliance and Privacy Officer, “Urgent care is growing because it responds to what today’s consumers want. This industry paves the way for unprecedented advances in healthcare that improve the patient experience and provide increased access to healthcare through innovation.”
And with that growth and innovation, the on-demand healthcare market has attracted savvy entrepreneurs and private equity companies that recognize the earning potential of healthcare providers with a smart business model poised for growth.
As we make our way into 2019, we will continue to see more mergers and acquisition in the urgent care space, more emphasis on giving patients what they expect, market expansion and crossover—and not surprisingly, more innovation.
These are some of the trends we’re watching in 2019.
1. Rising Costs and Diminishing Reimbursement
The cost of operations keeps going up and providers are feeling a tighter squeeze by payers for reimbursement. Negotiating payer contracts can ease a little of the pain, but unfortunately, even the best negotiators don’t have a lot of leverage with payers. To stay profitable, it’s critical to optimize urgent care operational costs, starting with labor.
To be successful, urgent cares will have to identify the speedbumps in their processes and workflows, assess staff productivity (especially at the front desk), and explore and expand service lines to stay ahead financially.
Access to (and use of) good clinic performance data will be increasingly critical for optimization, and will be the only way leaders can make accurate adjustments to improve operational efficiencies—including managing the revenue cycle. In this tight market, clinics can’t afford to risk partial reimbursement. A focus on collecting payments from patients and payers is vital to success.
More clinics, especially those in growth stages, will look to their technology providers to make sense of the data collected through their EMR/PM with improved reporting and interfaces that provide real-time data they can trust.
To deal with increased complexities in reimbursement and compliance, on-demand care operators will more frequently consider partnering with outside billing services and compliance experts to ensure they are not only optimizing their revenue cycle, but also staying compliant with dynamic regulations.
2. Consumer Expectations
As healthcare organizations continue to improve the patient experience, consumers have become more selective about how, when, and where they receive healthcare. Not only do they expect to receive quality care, but they also want convenience and improved digital interaction for routine activities. Consumers accustomed to digital conveniences offered by retailers and other service organizations want the same experience when it comes to healthcare—pushing the entire industry to get better at engaging with patients at every level.
According to research findings by NTT DATA Services, nearly two-thirds of consumers expect their healthcare digital experience to be more like online retail i.e. Apple and Amazon. According to the study, “Even among the simplest digital healthcare task, the majority of healthcare consumers feel improvement is needed in the following areas:
- Searching for a doctor/specialist (81%)
- Accessing my family’s health records (80%)
- Changing/making an appointment (79%)
- Accessing test results (76%)
- Paying my bill (75%)
- Filling a prescription (74%)
And higher expectations don’t stop at digital interaction. Today’s patient expects convenience, up-front estimates, a wireless connection while in-clinic, and access to telehealth services.
Urgent care has led the charge and has been a big part of moving healthcare in this direction, but don’t get too comfortable. Primary care providers, health systems, and other healthcare organizations are beginning to respond to the growing needs of consumers, adapting their practices with online appointments and better digital interaction to attract and retain patients—in essence, offering on-demand care in competition with traditional urgent care providers. Traditional medical practices may be slow to adopt this new way of doing business because it requires new thinking that gives patients more control over their time and care, and without the right people and technology, it can be hard to implement.
How this will affect the future is yet to be determined, but urgent cares should keep their eyes open and adapt to stay relevant and competitive.
3. Alternatives to Current Employer Sponsored Insurance Programs
More than half of non-elderly insured Americans (nearly 180 million people) get their coverage through their employers. According to the Society for Human Resource Management (SHRM) the estimated cost to employers is expected to approach $15,000 per employee in 2019, of which roughly 70 percent is paid by employers—and this cost continues to rise.
This added financial pressure is sending corporate leaders in search of alternatives that cost less while improving access and convenience. Some of the top trends suggested by the National Business Group on Health, 2019 Large Employers’ Health Care Strategy and Plan Design Survey include:
- Adding more virtual care solutions
- Focusing on high cost claims
- Expanding Centers of Excellence (COE) to include additional conditions
- Using targeted specialty pharmacy management for high-cost drugs
- Adding consumer engagement platforms
- Implementing high-performance networks (HPNs), or accountable care organizations (ACOs) in select markets
This shift will push more urgent care providers to negotiate contracts directly with local and regional businesses to provide employee healthcare and partner with them in wellness programs to improve the health (and productivity) of the workforce—and reduce overall costs.
One trend we expect to see gain momentum is direct contracting. Through direct contracting, self-insured employers partner with a healthcare system to reimburse providers for services rendered, negotiating terms directly with providers—namely ACOs and HPNs—and bypassing traditional insurance companies.
Workforce Wellness Programs
Watch for more companies to implement wellness programs that include not just physical health, but multiple areas of their employees’ lives like life coaching, on-site nutritional guidance, meditation breaks, and even sleep pods. Tuning in to the relationship between well-being and employee performance does more than keep employees well and happy, it can reduce absenteeism. Offering chronic disease management programs has shown the highest ROI for employers.
While direct-to-consumer telehealth visits continue to increase, albeit slowly, it will become more common for patients visiting urgent care clinics in person, to see the doctor virtually. This will help to counter rising labor costs and increases patient convenience (and satisfaction) when a doctor is not readily available.
Using telehealth with patients onsite also reduces patients’ reluctance to use this technology from their homes, indirectly contributing to the future growth of direct-to-consumer video visits.
In the OccMed arena, we may see more employers installing video technology in the workplace that allows employees to see a doctor virtually from the office or factory. The equipment to make virtual visits possible has a low cost burden for clinics (especially if the employer pays for it) while improving access for employees and reducing time lost.
4. Significant Transition from Emergency Departments to Urgent Care Clinics
With the growth in urgent care accessibility and expansion, more patients are embracing urgent care not only as an alternative to waiting to get an appointment with their primary care provider, but as a much lower-cost (and time-saving) option to visiting an emergency department. While this is a catalyst for growth, a number of large commercial payers in some states are taking a second look at their policies about what qualifies as a justified visit to the ER. Some have rejected ER claims for non-emergent visits and shifted the responsibility back to patients, initiating legal wrangling. For now, patients are fighting this battle, and winning.
The ensuing controversy and pushback from patients and patients’ rights advocates is ongoing, but if patients are held accountable for choosing the most appropriate medical help in time of crisis, we could see more regulations rise around this topic.
Improved patient education and improved awareness about alternatives to the ER may help drive more patients to on-demand healthcare providers. It will also benefit ERs, who waste too much time and money on non-emergent conditions, driving up healthcare costs. With lawmakers, payers, doctors, and patients worried about the rising cost of healthcare, this shift to urgent care can be good for everyone. Not only will it save time and money for patients, but the overall healthcare system can use resources more appropriately.
5. Mergers and Acquisitions
Mergers and acquisitions will continue to change the face of healthcare through the year. And not just to increase profitability, but to manage care more efficiently and effectively, eliminating duplication of services and leveraging economies of scale. And all of this should have benefits for patients.
The 2018 merger between Cigna and Express Scripts was positioned in a statement by Cigna CEO David Cordani as a milestone to transform healthcare for everyone. “Together, we are establishing a blueprint for personalized, whole-person healthcare, further enhancing our ability to put the customer at the center of all we do by creating a flexible, open and connected model that improves affordability, choice and predictability,” he said.
A $70 billion merger approved in December between CVS Health and Aetna seeks to redefine access to high-quality care at a lower cost, according to the December 2018 announcement by CVS.
CVS Health President and Chief Executive Officer Larry J. Merlo said, "This combination brings together the expertise of two great companies to remake the consumer health care experience. With the analytics of Aetna and CVS Health's human touch, we will create a health care platform built around individuals. We look forward to working with the talented people at Aetna to position the combined company as America's front door to quality health care, integrating more closely the work of doctors, pharmacists, other health care professionals and health benefits companies to create a platform that is easier to use and less expensive for consumers."
And on the pharmacy front, Amazon’s merger with PillPack puts the online giant right in the middle of the healthcare industry and demonstrates the growing focus on the patient and the very real retailization of the industry.
Watch for mergers and acquisitions from all different angles—payers buying clinics, health systems partnering with clinics to expand networks, involvement of venture capital, pharmaceuticals, and insurance companies.
According to a Premier Inc. survey released in July of 2018, C-suite healthcare leaders cited better integration of care across the continuum as the top driver of mergers and acquisitions in the healthcare industry today, which explains the vertical nature of most of these transactions.
With patients demanding more convenience, better value, and an alternative to primary and emergency care, health systems, hospitals, and large service providers see the opportunity to give patients options throughout their entire healthcare journey, no matter what type of care they need. As networks expand and merge to offer end-to-end care, patients can use a single system for everything from routine check-ups and preventative care to emergent and surgical care.
In addition to meeting the changing needs of patients and providing a competitive edge, these megamergers will allow networks to manage capital and financial pressures, respond to consolidation among insurers, and succeed with new payment models.
Will these mergers improve healthcare for patients, provide more cost-effective solutions, and streamline a confusing and often frustrating healthcare market? If we listen to market experts, it’s a good place to start.
In the urgent care space specifically, we’ll see more clinic growth by the largest operators, further expansion into rural settings, and some leaning into telemedicine on a small scale. Hospital ownership of urgent care clinics will stay on the rise, and retail clinic growth will continue to be flat. Although, some retail clinics may change their strategy altogether and transform into something closer to true urgent care.
6. Labor Shortages, Physician Turnover, and Clinical Staff Retention
More doctors, please. The labor shortage and high physician turnover will be a big challenge for urgent care clinics in 2019. High turnover, learning curves, and the need to fill vacancies on a regular basis can lower patient satisfaction scores due to longer wait times and inefficiencies that can only improve with time.
In an effort to fill vacancies, on-demand healthcare clinics may need to change hiring strategies just to get providers in exam rooms, or alternatively, hire more physician assistants and nurse practitioners to fill labor gaps. This may make patients less confident about going to urgent care instead of a primary care physician.
With smaller operators getting squeezed out of the market, it will be more important than ever for urgent cares to keep top-tier staff on their schedule and keep their eyes on their immediate labor market. Provider staffing shortages in all roles will also be a factor in driving the rise of telemedicine as a solution.
7. Blurring Lines Between Urgent Care and Primary Care
Over the last five years, primary care office visits have been steadily declining as the growth in urgent care has risen. With more options available for care (i.e. competition for healthcare dollars) patients are looking for convenience, better value, and time-saving options. In every sector of the healthcare industry, everyone is fighting for the primary care patient.
Younger, and often healthier patients, aren’t looking for long-term relationships with care providers or the benefits that go along with a primary care doctor that understand their lifelong medical journey. They want to feel better fast and pay less. While these preferences don’t always hold true, this is the trend we’re seeing now, causing primary care providers to reassess their business model to offer more opportunities for on-demand care.
In the next few years we’ll see more primary care providers shift into on-demand care mode, and more urgent care clinics offering services once reserved for family doctors.
In fact, what we’re seeing is a trend across every sector of healthcare to follow the lead of the urgent care industry and providing care that is more focused on what the patient wants than what clinics have traditionally provided.
8. Digital Influence and Marketing
Increasingly, we’ll see the use of technology among healthcare consumers and providers.
On the consumer side, patients will expect more digital interaction with their healthcare providers to confirm appointments, check tests, and look at health records. More people will turn to health apps to assess their own medical conditions, improve overall wellness, and participate in health and fitness communities. As they become more savvy consumers, they will use resources that provide accurate and trustworthy information, are easy to use, and are proven safe and secure. And finally, they will continue to communicate about their healthcare experiences through digital networks, promoting or expressing dissatisfaction with providers.
With so much digital interaction, urgent care clinics must become better at defining their brand, responding to patients, and improving their satisfaction. Providers and clinic staff will have to wear more hats than ever as they become better digital corporate citizens, making relevant information available in digital formats, and establishing marketing practices to build their brand and foster online relationships.
We’ll see more—especially larger—urgent care organizations turn to tech and marketing providers to help them manage digital aspects of their practice and promote their brand.
Urgent Care Leads the Way in 2019.
Since urgent care entered the healthcare arena, the market has changed in ways never expected—and this dynamism isn’t going to stop. Technology has changed healthcare forever and will continue to affect the way we care for patients. And as was true in the past, urgent care plays a big role as a change agent. The influence of the urgent care industry has and will continue to push healthcare toward a service model that acts and looks a lot more like the corporate world, answering yes to the demands of healthcare consumers as their needs change.