Entrepreneurs and medicine: the urgent care clinic phenomenon
In the six months or so that I've been paying attention to the business of medicine, I've noticed the undercurrents of change. Those who have been watching the field longer than me are probably tempted to call me a silly newbie. (And they might be right!) There are a number of economic and demographic indicators that make me feel this way, as well as a general dissatisfaction on the part of the public with medical care as it exists now.
I don't know whether there's a doctor shortage or not. As with anything, I suspect it depends on a number of different factors: specialty, location, demographics, etc. I do know that I would never be an MD. The barriers to entry are too high. The amount of debt taken on by aspiring doctors is nothing short of impressive, and the demands on a person after they've graduated and are out practicing are extraordinary. Doctors are blamed for everything: picking the wrong medications, not checking formularies, rushing patients, missing diagnoses, not calling in prior authorizations, being unavailable to patients and other providers alike — the list goes on and on. As someone who believes that just about all doctors do the best they possibly can within the bounds of human limitation, one must then examine the conditions in which they work.
Gone are the days where being a doctor was a sure road to wealth. While it's true that docs make pretty good money, there are professions out there in which they could make a lot more — even within the healthcare field where the MD is traditionally seen as the top of the totem pole. Retail pharmacy, for instance, pays more on average on an hourly basis than does being a general practitioner. In the United States, a GP makes about $120,000 a year, but they also work something like 60 hours a week on average. Plus being on-call. If a pharmacist works 60 hours a week, they'll be pulling in around $160K — their first year out of school, with an average raise of between 4-8% per year. And there's no "on-call" and work stays at work.
Reimbursements are declining in recent years. Some doctors aren't accepting Medicare patients anymore. Frankly, I can't blame them. Medicare reimbursement rates are so low that seeing them can actually cost money. The same principle holds true in retail pharmacy as well — filling Medicaid scripts can actually be a money-losing proposition, and usually it's tax breaks that (barely) make the difference between filling at a loss and breaking even.
Doctors suffer an economies of scale problem. Just like independent pharmacies, privately-owned practices are going the way of the Dodo in favor of group-run clinics. But this doesn't solve the problem of reimbursement. Nor does it change the problem that doctors get paid for reactive medicine rather than proactive medicine. When something goes wrong, a patient sees a doctor, and the doctor, in essence, fixes them up. They don't get reimbursed when they prevent problems down the road, even though proactive medicine saves money.
The system is broken, but then again just about every system is flawed in some way. Most of the people I know that actually want to go to medical school have no idea of what awaits them when they get out. I think medicine is a noble profession, and I wish them well, but I wonder if they really know what they're getting into. Most of them are hopelessly idealistic. And hey, that's cool, but it's not for me.
But things are changing. Slowly. And the change is being fueled by entrepreneurs who see a problem and think they can fix it.
Medicine as it currently exists lacks a "middle class," for lack of a better analogy. What I mean by this is that you can pay an exorbitant sum of money — up to $10,000 a year — for "concierge medicine". Or you can be seen by a doctor for 15 minutes, if you're lucky, because you're just one of fifty people s/he's going to see that day. And you're fairly likely to have to wait a half an hour in the waiting room. Trust me, doctors don't like it any more than you do.
So where's the middle ground?
Well, it doesn't exist for most, yet. But it will, soon. Doctors are turning into entrepreneurs, borne probably as much out of their own frustration as because it's a huge business opportunity. Some are finally creating this middle ground.
His b-school classmates might call it vertical integration: The clinic has under one roof an X-ray unit, a lab for blood and urine tests, a minor surgery suite, vascular imaging ultrasound, an electrocardiogram area, physical and massage therapy and a 20-person staff to run it all.
"This was a really unique opportunity where everything can be under one roof," said Meyer, Mason's partner in the clinic and in the Fawcett emergency medicine practice.
I live in the northeast United States — arguably one of the the medical capitals of the world — and I'm starting to see these types of practices spring up, either through hospital affiliations (which combine the benefits of economic scale with the lower cost of treating patients at satellite facilities) or through groups of doctors that partner up and essentially pool their resources and do a lot of their own things like lab testing and X-rays, in-house. The former is how my own physician operates, and his practice is remarkably efficient.
He ran through a checklist of what the clinic staff did: started an IV, ran fluids, did an EKG, measured blood oxygen, took an X-ray and performed a carotid Doppler scan to look for a blockage in blood flow to the brain, and did a blood test called a CBC, for complete blood count.
"And we get all of that done at a fraction of the cost of an ER, and we get it done more than twice as quickly."
The clinic seems to practice what he preaches. At mid-morning, almost all the waiting room's 20 seats are full. But 40 minutes later, the room is mostly empty.
It might sound like a production line — and it is — but it's certainly better than sitting in the ER for 3 hours waiting to see a doctor.
So at the one end, you've got your emergency rooms, and on the other, you've got your concierge medicine. In the middle, you've got urgent care clinics that see patients that fall in the middle of the spectrum. I suspect we'll be seeing more of these clinics as ERs become increasingly overcrowded, and start turning away non-urgent cases.
By no means are these sorts of clinics a magical silver bullet, but they are a start towards fixing a real problem.
[tags]Medicine, pharmacy, entrepreneurship, business[/tags]
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[...] In the article I referenced in my last post, the last couple of paragraphs stood out to me, because it highlights something that I've noticed lately: a lack of common sense and a treatment of symptoms rather than the cause. Especially for what are mostly simple problems like headaches, dizziness, and that sort of thing. [...]
Pingback by Medicine and common sense :: OnThePharm — August 22, 2006 @ 10:28 am
You are exactly right! Urgent care centers truly are a wave of the future with several more opening every week in the USA. They truly do fill the niche, treating mostly middle-class patients with middle-of-the-road problems (i.e., problems that can't wait a week but are not true emergencies). They new wave is driven by ED overcrowding (often with non-emergency cases), the difficulties that primary care doctors have in fitting more patients into their busy schedules and public demand for convenient access to urgent care. The Urgent Care Association of America has two conferences each year (spring annual convention and fall conference) with full-day (plus) seminars on how to start an urgent care center. The annual attendance at the seminars is currently around 200 with many physicians aspiring to enter the dynamic field of urgent care. UCAOA is also sponsoring a fellowship, with three physicians entering postgraduate training in 2006 at the University Hospitals in Cleveland. The organization, also, will begin publication of the Journal of Urgent Care Medicine in October of 2006. The next Annual Conference of the Urgent Care Association of America will be held in Daytona, FL on May 9-12, 2007.
Comment by David Stern, MD — September 15, 2006 @ 8:30 pm