The High Cost Of Convenience
If you read this column regularly, you know I loathe going to the doctor or hospital. Unless I’m convinced my life is on the line, I’ll wait until my symptoms go away, or I’ll try some alternative treatment to feel better. The only other way I go to the doctor or hospital is if by not going I’m putting someone else’s health at risk.
It was for the latter reason that I went to my local urgent care center recently. I was worried that my bad cold and sore throat might be pneumonia and/or strep, and I didn’t want either to infect anyone else.
I could have driven 30 miles to see my internist, which would have cost about $250 for an office visit and validated parking. But a five-minute drive, free parking and what I thought would be a cheap office-visit fee made urgent care a logical choice.
The drive was less than five minutes, the parking was free and the visit was immediate and lasted less than an hour. But the charges were off the medical charts. The urgent care center, which is operated by my local hospital system, charged $768.75 for the experience: $442.25 for the clinic visit and $326.50 for the flu and strep lab tests. My insurer “adjusted” the bill for $327.49, which means it reduced the bill because the clinic was in-network. My insurer paid the clinic $416.26, leaving me with a $25 balance. I paid a $10 co-pay and later sent the clinic a $15 check after all the billing paperwork settled.
I didn’t have pneumonia or strep, but I got a headache thinking about who really paid my bill. I was fine—out just $25. But who picked up the $327.49 adjustment for my convenience? Who cut a check for $416.26 because I didn’t want to drive downtown and pay for parking? My employer did, of course, through higher premiums for my health care benefits.
It also explains why urgent care centers are everywhere: It’s a high-margin business. The low-intensity care doesn’t cost operators much to provide; prices are high because they can be. They’re cheaper than the emergency room, and people who are sick or hurt will pay extra for the convenience, while insurers will cover the cost of in-network care and pass it along through higher premiums.
Urgent care centers have their own trade group, the Urgent Care Association of America, which estimates their numbers at nearly 7,000 across the country (bit.ly/1cCyJ03). Urgent-care centers are not retail clinics, which are even lower-intensity providers in settings like big-box department stores and national pharmacy chains. Retail clinics are represented by the Convenient Care Association, which estimates their numbers at nearly 2,000 across the country (bit.ly/1VvdjEz).
According to Urgent Care Locations, which finds the walk-in clinics closest to you, there are 121 urgent-care centers and retail clinics within 20 miles of downtown Minneapolis (bit.ly/1UlCX1b). HealthPartners alone operates 23 urgent care centers, according to data from market research firm Merchant Medicine as reported in Becker’s Hospital Review. Angie’s List also offers ratings on 100 urgent care centers and retail clinics in Minneapolis (bit.ly/1L38nPQ).
If I were an employer, here’s what I would do:
- First, educate your employees on the difference between urgent care and retail clinics, what services each provides and when it’s most appropriate to use either as an alternative to a physician office visit or trip to the emergency room (see chart below).
- Second, collect and post the list prices for a basic visit to the urgent care centers and retail clinics in your area or those most used by your employees. Knowing that information before they need to go will help them choose the right walk-in clinic at the right price for the right care they need.
- And third, offer a retail clinic benefit in your health plan and incentivize workers to use retail clinics when appropriate. Some 57 percent of companies offer a retail clinic benefit, but only 8 percent give employees a financial incentive to use them, according to the latest data from the Kaiser Family Foundation/Health Research & Education Trust employer health benefits survey.
Convenience doesn’t have to be this expensive.
Somewhere between “What, me worry?” and “Let’s wait and see”—that seems to be where employers’ heads are at after mega-mergers that promise to reshape the national health insurance market. First it was Centene-Health Net on July 2 (bit.ly/1T86pUq). On July 3 it was Aetna-Humana (aet.na/1RY4AfM). On July 24 it was Anthem-Cigna (bit.ly/1VGiiTU). A survey of 100 companies by insurance broker Aon (after Aetna-Humana but before Anthem-Cigna) found employers with mixed emotions on the pending acquisitions (prn.to/1L1rSbl). Some 46 percent said insurer consolidation will reduce health plan options for them and employees; 33 percent indicated it would not affect them much either way; and 21 percent said they expect the consolidation to create cost efficiencies that could lead to lower premiums. The question I would ask myself as a company CEO is “When was the last time a merger or acquisition involving one of my suppliers enhanced my product, improved my service or lowered my cost?”
This past December, I urged employers to offer medication therapy management as a covered benefit (bit.ly/1FzgvpB). It’s not complicated. Workers who take meds as prescribed tend not to get sicker and avoid the doctor or hospital. A new study in the American Journal of Managed Care provides convincing evidence and suggests how employers can take advantage of that knowledge (bit.ly/1LIB9YB). The study found that diabetic patients enrolled in health plans with low medication adherence rates went to the emergency room at a rate of 13.2 visits per 1,000 patients. Diabetic patients enrolled in plans with high medication adherence rates went far less frequently—8.3 visits per 1,000 patients. The same pattern was found in patients with congestive heart failure, coronary heart disease and high blood pressure: The more plan enrollees took their medication as directed, the fewer medical complications and hospitalizations the enrollees had. That means fewer expensive claims for health care services and lower costs for employers. The researchers suggested that employers use medication adherence as a measure of health plan performance—that is, whether the plans are doing everything they can to get enrollees to take their medicine properly, and as an important way to comparison-shop for their next health plan.
Where To Go For What
Common illnesses or injuries treated by urgent care clinics and retail health clinics
When to go to urgent care:
Broken toes or fingers
Cuts requiring stitches
Foreign objects in the eye, ear or nose
Minor animal bites
Sore throats, earaches and other minor ailments
Sprains and strains
When to go to a retail health clinic:
Rashes and hives
Urinary tract infections
David Burda (@davidrburda, email@example.com) is editorial director, health care strategies, for MSP-C, where he serves as the chief health care content strategist and health care subject matter expert.