By Thom Herrmann, CEO Intuitive Health
We live in a fee-for-service world, where businesses and service providers are compensated for supplying goods and services. The healthcare field is no exception. Healthcare practitioners and hospital systems are primarily paid for services rendered. The more you provide, the more you get paid—regardless of the outcome. Recent innovations and the prioritization of quality of outcome in patient care is changing the healthcare business landscape. The dual care emergency and urgent care model supports this shift to value based reimbursement while providing a fresh, consumer-centric approach to ambulatory care services that benefits the consumer, the payor and the healthcare provider.
From the consumers standpoint, accessing healthcare can seem complicated, bureaucratic, and inappropriately expensive, which drives the need for innovation. For example, if a patient has an operation, the patient or the insurance company receives a bill for the surgery. If, however, there has been a medical error in a hospital operating room, the patient may need to return for a second procedure or an inpatient stay. In the current fee-for-service model, the providers would be paid again. In some situations, the fee-for-service model essentially incentives poor outcomes.
Conversely, value-based care ensures that the consumer or payor pays for an outcome instead of the inputs. Provider groups have been among the first to shift to this model, where reimbursement received is based on performance in terms of treatment and preventative care that avoids adverse patient outcomes and reduces the total cost of care. The healthier the patient population becomes, the more the provider group is rewarded for that outcome financially. In a value-based care model, incentives are flipped. The focus is on the quality of the care.
ER and Urgent Care: The Introduction of a Dual-Care Model
In the hospital setting, emergency room services have traditionally been over-utilized by healthcare consumers. An estimated 39 to 44 percent of ER visits could be treated in an urgent care setting, resulting in millions of dollars in unnecessary healthcare spending. A 2016 study published in the American Journal of Emergency Medicine found that the unnecessary expense related to these visits was over $90 billion a year.
None of us can predict when we might need emergency services, nor is it easy for non-medical personnel to know what type of treatment they need. A patient who has been in a car wreck may require an entire care team to save their life – the kind of treatment necessary is obvious. However, what about the person who has head pain? It could be a stroke, but it might just be a severe headache requiring basic treatment. Studies show patients typically default to the highest level of care when they are unsure where to go. As a result, they usually go to ERs. In our current system, if these patients went to the ER, they would be charged at an ER rate, which is often ten times what an urgent care would cost, whether a stroke or a minor headache. Why not bill the second patient at a lower cost if it turns out that the head pain is not a true emergency? This is the question that is shifting our thinking and refining our approach to patient care. When we bill the second patient at an urgent care rate, we reduce inappropriate ER utilization and reduce the cost to the system.
To simplify how patients access immediate care and reduce inappropriate ER utilization, Intuitive Health partners with leading health systems nationwide to pioneer a model that supports the transition to value-based care which benefits both patients and providers without sacrificing the quality of care. This dual care model combines access to emergency room and urgent care services in a single onsite facility that bills patients according to the level of resources required to diagnose and treat their condition. This model eliminates the undue burden on consumers and simultaneously elevates operational efficiency.
Hospitals exist to provide life-saving care, so reduced billing without a corresponding shift in service delivery might put the hospital in a difficult financial position. The dual care model equips hospitals to render all services in a single location, utilizing the same staff while reducing costs throughout the healthcare system.
Benefits of the Dual Care Model
More than 70% of all patient visits in Intuitive Health dual-care facilities are billed as urgent care, resulting in significant savings to consumers who avoid high, out-of-pocket deductibles. Instead, the average consumer pays a copay in the range of $50 to $75 vs. the deductible and coinsurance associated with an ER visit which could be in the thousands. The new model clearly benefits the healthcare consumer and saves insurance companies and self-insured companies from covering hefty ER bills. Furthermore, because consumers prefer the Intuitive Health model, it offers a new front door to health systems looking to extend their market reach.
Many patients are confused about whether their condition warrants a visit to the ER or urgent care. If they chose the ER and could have been treated at an urgent care center, it could cost them thousands of dollars. If they chose the urgent care center and it was a real medical emergency, they put their health at risk. In addition, insurance companies are beginning to deny coverage to consumers who visit the ER for what was deemed a non-emergent issue. The frightening reality is that many consumers must now choose between a potentially sizable financial hit or putting their health—or that of their children—at risk.
As a former hospital CEO and multi-site health system executive, I faced such a decision when my son had a fever hovering around 103 degrees. I thought it was a virus that would run its course, but I didn’t want to risk it. I also didn’t want to spend hours at the ER and incur a bill of around $2,000. So, I went first to the urgent care center, where my son was evaluated after a 90-minute wait. After running several tests, the provider informed me that my son was likely fine, but there were a couple of blood tests that should be run to be safe. Unfortunately, the urgent care center did not have the blood tests in question, and it was recommended that I take my son to the local emergency department. So, I ended up at the ER, and after three hours with an uncomfortable child, we found out that my son was going to be fine. Unfortunately, this entire experience resulted in three bills, one from the urgent care visit, one from the hospital emergency department and one from the emergency room physician and it cost me nearly $1,100 out of pocket and my insurance company another $900.
The dual care model provides a simple solution to this common problem. Providing ER and urgent care services in the same location means consumers are no longer placed in the tenuous position to self-diagnose. Instead, they have access to life-saving care if needed but are also assured they will not be financially penalized if it is not.
Finding the Right Balance: Value and Excellence in Patient Care
There are several steps we can take to serve today’s healthcare consumers more effectively:
- Ensure that off-campus environments bill healthcare consumers appropriately. For patients who do not require a visit to the ER, the provision of affordable services that meet their needs through billing matched to service level is critical.
- Health Systems should consider offering off-campus combined emergency and urgent care facilities as part of their ambulatory care strategy. When hospital systems focus on billing that mirrors actual services rendered, both consumers and the system benefit. Each system that we’ve partnered with has received rave reviews from the community and increased market share.
- Educate healthcare consumers. Hospital systems, provider networks, medical facilities and insurance providers all play a role in helping educate consumers on the range of available options to them. We need to better inform patients of the types of care available and the corresponding costs.
Thom Herrmann is CEO of Intuitive Health. About Intuitive Health. Founded in 2008, Intuitive Health partners with leading health systems nationwide to build, operate and launch retail healthcare facilities that provide urgent care and emergency room services under one roof. Intuitive Health’s patient-centered retail-care model is built on a proven business model focused on concierge-level customer service and transparency. Each facility has lab equipment, a radiology suite with X-ray, ultrasound and multi-slice CT scanners onsite. All locations are conveniently open 24 hours a day, seven days a week. An ER-trained physician is available at all times. Patients are only billed for the care they need, thus eliminating inappropriate emergency room utilization. This proven model establishes a cost-effective, more personal and time-efficient way to deliver high-quality medical service at an appropriate cost, garnering long-term patient loyalty. In addition, the Intuitive Health model increases market share for partnered healthcare systems by expanding their footprint with conveniently located centers.
Intuitive Health has locations in operation or implementation in 10 states with 13 health system partners. Please visit iheruc.com for additional information.
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