Cutting Costs: Medical Homes, Urgent Care Centers, or Both?

The New York Times recently published adjacent stories about two very different ways to cut health care spending. On one hand, health insurers and other payers are increasingly moving toward accountable care organizations (ACOs) and patient-centered medical homes (PCMH) to replace the former fee-for-service method of payment. Medicare and some Medicaid agencies are making similar choices. What these arrangements have in common is care coordination—capitated payments to the physician, practice, or organization, additional compensation for coordinating the care of patients with complex or chronic medical conditions, and incentive payments based upon cost savings and health outcomes.

Medical Homes and Value-Based Purchasing

The Blue Cross Blue Shield Association (BCBSA)  announced on July 9, 2014 that its member organizations participated in 350 locally-developed programs in 49 states, involving ACOs, PCMHs, value-based purchasing, and pay-for-performance arrangements. BCBSA reported that these programs saved it $500 million in 2012, while the member associations reported reductions in emergency room visits, especially “primary care-sensitive” visits, hospital admissions, and use of radiological imaging. At the same time, management of patients’ diabetes improved, and the use of preventive services, such as breast cancer screenings and pneumonia vaccinations, increased.

The story also profiled a physician who used the incentive payments he received for care coordination to provide preventive services. He even used them to offer Weight Watchers meetings at his office at a reduced cost.

Urgent Care Centers

In the same issue, the Times reported that investors are increasingly attracted to urgent care centers.  These facilities are walk-in clinics that cater to people with medical problems that are relatively simple and can be addressed quickly. They may offer evening and weekend hours.  People often use them instead of the emergency room to get treatment for minor injuries. Both the wait and the cost are significantly lower than a visit to the emergency room. Other patients may be attracted to UCCs because they can see a doctor when they want to rather than within typical business hours.

Urgent care centers (UCCs) may meet the needs of patients for whom an emergency department is not an appropriate care setting.

So can overworked, underfunded emergency departments refer their Medicaid patients with nonemergency conditions to UCCs? Not necessarily.

Unlike hospitals with emergency departments, UCCs  have no obligations under the Emergency Medical Treatment and Active Labor Act (EMTALA). They may refuse service to Medicaid beneficiaries, the uninsured, or anyone else who cannot pay the entire bill before they receive treatment.

Apparently, private equity firms see high profit potential from clinics that serve a high volume of patients with simple problem. The ability to cherry-pick patients gives these businesses an edge over the competition. Venture capital firms have invested $2.3 billion in UCCs since 2008.  Insurance companies and health systems also are investing in UCCs.

UCCs are inexpensive and convenient, but they’re not for everyone. According to the American Academy of Urgent Care Medicine (AAUCM), the UCC is not meant to replace the office of a primary care physician. They’re not looking to build long-term relationships with patients.The AAUCM encourages patients to use their members’ facilities when their primary physician is not available, and it emphasizes the UCC’s commitment to send records on to the primary care physician when the urgent problem has been addressed.

If a primary care physician’s office is a medical home,  perhaps the UCC could be considered the medical motel.