Urgent need for extra revenue? Some try urgent care

Practice Management. By Mike Norbut, amednews staff. April 28, 2003.

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It's always been billed as a low-cost alternative to the emergency department, but these days, some doctors are viewing urgent care as the answer to eroding bottom lines.

Physician practices are finding plenty of reasons to consider urgent care as a way to enhance revenue, from creating more opportunities to land new patients to finding another way to make money on fixed overhead costs, health care consultants said.

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"Primary care and specialty physicians are always looking for any revenue stream they can get their hands on," said Bill DeMarco, president and CEO of DeMarco & Associates, a consulting firm in Rockford, Ill. "A convenience center with extended hours may be the first step, and then maybe they can move up to an urgent care clinic."

The major differences between the two are the types of appointments offered and the patients seen. While an urgent care center operates as a walk-in clinic and sees new patients, an office with extended hours generally requires scheduled appointments and sees only current patients.

The latter can serve as a goodwill offering to established patients. The former, though, can be a gateway to an expanded practice, both clinically and financially, physicians said.

"The more you can get out of your work space with the same fixed costs, the better," said Matt Mesnik, MD, an emergency physician and urgent care medical director at Aspen Medical Group, a 175-physician, multispecialty group in Minnesota's Twin Cities region. "You're adding employee costs, but you still have to pay to heat the building, if you're there or not."

Plentiful benefits

There can be a cost-saving benefit for the practice as well, especially for groups with capitated managed care contracts. Rather than paying for a patient's emergency room trip, the group can encourage him or her to see its own urgent care facility.

Urgent care also provides a way to accept overflow patients, physicians said. For example, at Aspen, when primary care physicians' schedules are filled, urgent care is offered as an option, Dr. Mesnik said.

Aspen offers urgent care at three of its nine locations every day. The clinics saw about 45,000 patients last year, nearly one-third of whom were new patients, Dr. Mesnik said.

"You can be profitable with more than two patients per provider per hour," he said.

The ability to operate urgent care is not strictly reserved for large groups, however. While it becomes more taxing on manpower, groups with only four or five physicians have been able to offer full-time urgent care services, said Bob Bohlmann, an Arlington, Texas-based principal with the Medical Group Management Assn.'s Health Care Consulting Group.

"I've worked with more than 50 groups of all sizes, and I've only seen one fail at doing it," Bohlmann said. "It's because they wouldn't commit to it, and they had no staying power. It takes awhile to build it up. You have to market it."

High Desert Primary Care Medical Group, a nine-physician practice with offices in Victorville and Hesperia, Calif., sees about 15,000 patients annually through its urgent care services, said Ziad El-Hajjaoui, MD, an internist and the group's medical director. The urgent care portion of the clinic is staffed by a physician and two physician assistants, though Dr. El-Hajjaoui said the group is looking for a second full-time urgent care physician.

The night and weekend hours are not very difficult to fill either, Dr. El-Hajjaoui said, because physicians frequently are looking for overtime opportunities. Doctors get an hourly wage for their urgent care work, he said.

"You just have to have the volume to justify the expenses of urgent care."

Problems with urgent care

Groups that accept new walk-in patients also should be prepared to refer them to a physician within the practice to build on that first contact. If the practice is already full, urgent care might not be an ideal solution, physicians said.

For example, Madrona Medical Group in Bellingham, Wash., offers extended hours only for its established patients. Because the demand in the community is so great, the practice can't see any new patients. The 53-physician multispecialty group is looking to hire about 20 more physicians in the next two years, said Erick Laine, MD, an internist and CEO of the group.

"We don't have the resources to offer the continuity of care," he said. "Once we're replete with manpower, then it might make sense to migrate to urgent care."

Don't expect to make a fortune on urgent care either, physicians said. Since the service is often a hit-and-miss proposition in terms of patients, it is dangerous to plan for the service to generate a substantial profit, they said. If you have a true walk-in clinic, you may end up seeing patients who don't have insurance or can't afford the full cash payment as well.

A practice with urgent care services needs to be aware of its operation hours and what the patient's insurance situation is, and should take cash payments up front, Bohlmann said.

"I've seen some groups make mistakes," he said. "They say they'll be open to midnight, but if you're open until midnight, those are probably not the patients you want coming in."

Practice Management is written by members of our Business staff.