Health Insurers Betting on Urgent Care Centers

Margaret Dick Tocknell, for HealthLeaders Media

As insurers seek ways to control the price point at the entry level of the healthcare system,  health plans such as Blue Cross Blue Shield of North Carolina and Highmark Blue Cross Blue Shield in Pittsburgh are turning to developing urgent care center networks.

This month, for example, the NC Blues announced that it is investing an undisclosed amount in FastMed Urgent Care, a North Carolina-based company with 29 locations throughout the state. Last year, Highmark Inc. bought into the MedExpress Urgent Care chain. And Highmark rival UPMC offers eight “full-service, walk-in” clinics for patients seeking immediate care.

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As cost pressure has risen, the typical ways of reducing demand?increased copayments and high deductible health plans have not reduced the demand for medical services. Investing in UCCs puts health plans closer to the point of care where they can more directly influence treatments and healthcare costs, explains David Windley, a Nashville-based research analyst with Jeffries & Company. Profit, in other words, is not the primary goal.

Increased demand for primary care services also plays a role in insurer interests in UCCs. Health insurers and hospitals are competing for ownership positions in physician groups. But for insurers, an investment in a UCC, which can provide basic medical services at lower costs, is “less intensive” than investing in a primary care practice, says Windley.

It can also provide insurers with leverage when negotiating reimbursement rates with hospitals for emergency department services, Windley adds.

Insurers are also investing in UCCs in preparation for the advent of health insurance exchanges in 2014, says Brett Hickman, a partner with PwC’s health industries advisory practice. With millions of people joining the ranks of the insured pent-up demand for medical care is expected to strain the primary care sector.

Payers are looking at the rich benefit packages that will be offered through the exchanges and seeing an opportunity for UCCs to provide an alternative not only for expensive emergency department visits but also for physician office visits.

Urgent care centers typically employ doctors, nurses, and physician assistants. They treat common injuries and illnesses such as sprains, cuts and bites, and colds and ear infections. Many also can provide immunizations, blood and urine tests, EKGs, occupational health services, and even on-site pharmacy services.

UCCs are usually equipped with the latest healthcare technology including electronic medical records, electronic prescriptions and digital X-rays. They are typically open night and weekends,  when physician offices are usually closed.

Although UCCs often tout drop-in wait times of less than one hour, many centers are now offering online reservations.

Business is booming. The 9,000 UCCs in the U.S. receive an average 342 patient visits each week, or 3 million visits annually, according to the Chicago-based Urgent Care Association of America.

UCC costs are significantly less than an emergency department visit but can be comparable to a typical physician office visit. The NC Blues estimates that the average cost of an ED visit is $1,500 and about 20% of ED visits could be effectively treated at an urgent care center where the average cost per visit is $142. The insurer estimates that a 5% shift from ED use to urgent care centers could reduce medical spending by $8 million annually.

With its ownership position, BCBSNC can entice its members to use the FastMed facilities by offering lower copayments and lower in-network charges.


Although BCBSNC declined to give specifics about its financial investment in FastMed, Darcie Dearth, a BCBSNC spokesperson, said the investment will allow FastMed to expand its network of physician-owned clinics across the state over the next two years.

Underserved areas will be a priority, Dearth explains. In some areas of North Carolina, a visit to the ED is the only option for immediate care. Expanding into those areas will enable the NC Blues plan to divert non-emergency care from expensive EDs.

Hickman says the investment in urgent care centers provides insurers with the opportunity to proactively influence cost and quality. “It’s really a means to an end. It’s a way to get the right treatment to the right people at the right time.”

Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.

This entry was posted in Centers for Medicare & Medicaid Services (CMS), EHR Adoption, Electronic Health Records, Latino health trend, LISTA Global EHR, meaningful use, mHealth, Office of the National Coordinator for Health IT (ONC), Patient Care, Primary care physicians and tagged , , , , , , , . Bookmark the permalink.

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