Is McHealthcare Our Future Model?

Forbes magazine, which has become a great source for healthcare articles, has a story about urgent care clinics in the July 21, 2014 issue called “McHealthcare”.  It’s an interesting read saying that fast food is the model on which to reinvent the doctor’s office.  

Let me layout a few key points:

  • There is a lot of waste in the healthcare system with people mis-using the Emergency Room.  (A report by NEHI estimated this waste at $38B a year.)
  • Urgent care clinics and clinics in general (e.g., MinuteClinic) have become more easily accessible points of care for many people.
  • Consumers want easier access and lower out-of-pocket costs.
  • Telemedicine is growing with the recent support from the AMA likely to boost it significantly in the next few years.  

The article gives some facts about the industry and talks about two structures being used in the urgent care growth – franchising and private equity consolidation.

Some of the facts from the article include:

  • 10,000 urgent care clinics in the US
  • 160M visits annually
  • $16B industry
  • $1.5M / year in avg sales per location
  • $300,000 / year in avg profits per location

I also really liked the example they used of American Family Care simply following Walmart and Target to figure out locations.  As we know, location is king.

The questions of course are:

  • Will this industry grow at the forecasted pace?  (12,000 by 2019)
  • How will traditional physicians respond?
  • Will the costs be less than the ER?  (They are today per the chart from Forbes below)
  • Will the costs be less than PCPs?  Will they be less than other clinics?  How will costs compare to telemedicine?
  • Will the outcomes be better?  
  • Will they treat only acute or one-time visits?  How will they manage chronic conditions and repeat patients?  [One chain sees 20% of patients for chronic care and 75% are repeat customers.]
  • Will their be an IT infrastructure to link all their data together to create a coordinated care strategy?

Urgent care vs ER prices

Some of the companies they list in this space include:

If you think about The Triple Aim, clinics should be one of the first to really appeal to the consumer experience.  Cost should be able to follow.  It’s the third leg of the stool (clinical outcomes) that I think is still TBD.

Clinics as a proxy to fast food may work if you think about franchising, but I’m not sure about customer service.  (And the term “McHealthcare” can’t help but make me think about the movie Super Size Me.)  We don’t want the disconnected, unengaged worker treating us.  We want more of a Nordstroms model where they know us and engage us.  Can that happen in a clinic setting?  Perhaps.  

The idea of no appointments (see wait times), longer hours, weekend hours, technology savvy, comfortable wait rooms, free WiFi, and one-stop healthcare is appealing.  This is just one of the macro trends which will help lead the transformation and change within healthcare.

Advertisements

No comments yet... Be the first to leave a reply!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: