Urgentcare issue 2 by Urgent Care Magazine

July/August 2015

M&A

should you sell?

Telehealth The Future is Now

social media roadmap for engagement Game Changing

Site Selection Strategies

Covering the Business of Delivering Care • Latest News • Management • Compliance • Patients • Technology • Revenue

Everything you need to run a successful Urgent Care Center.

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In This Issue... 04 PAST DUE Outsourcing debt collection increases your bottom line

10 HOUSE CALLS The frontier of telemedicine in urgent care

22 CORNER THE MARKET Take the guesswork out of site selection with patient analytics

26 RIDING THE M & A WAVE How to know when to sell

30 EMBRACING FLAT RATES The benefits of predictable revenue and streamlined billing.

THE BUSINESS OF GOING SOCIAL A solid social media strategy boosts your visibility

EDITOR’S NOTE We’re pleased to welcome you to the second issue of Urgent Care Magazine. As summer winds down and business picks up, it’s the perfect time to review your business and marketing strategies. To that end, “The Business of Going Social” is the centerpiece of this issue, delivering insight and analysis into social media strategies that can improve your bottom line. Whether you’re just launching your social media channels or have a team of social media experts in place, you’ll gather actionable information that will help you engage with patients and potential patients. If you’re looking to get out of the urgent care game, “Riding the M&A Wave” tells you how to position your clinics to get the best price. If you’re looking to open new clinics, “Corner the Market” reveals the role that patient analytics can play when selecting the right site. And if you’re interested in expanding your services, “House Calls” delves into the world of telemedicine. I hope that you enjoy this issue, and that you’ll let me know what you’d like to see in future issues. I want to know about the challenges you face and the victories you achieve. Drop me a note at editor@urgentcaremagazine.com. I look forward to hearing from you. Sally E. Smith, Editor

Publisher Howard Borgen Editor-in-Chief Sally E. Smith Advertising Director Chris Sanford Ad Sales Wayne Laszlo Copy Editor Beth Taylor

Contributors Susan Cooper Tammy Mallow Stephan Westlake Art Director Stephanie Bergmann Circulation Director Michael Evan UC Media, LLC Robert Rosen, CEO

Urgent Care Magazine, Vol. 1, No. 2, July/August 2015. Published by UC Media, LLC. 734 Walt Whitman Road, Suite 307, Melville, NY 11747. Copyright (c) 2015 by UC Media, LLC. All rights reserved. Nothing may be reprinted in whole or in part without written permission of the publisher. Editorial queries and information should be sent to editor@urgentcaremagazine. com. Products advertised are not endorsed by Urgent Care Magazine and views expressed are not necessarily those of Urgent Care Magazine. All correspondence to Urgent Care Magazine will be treated as unconditionally assigned for publication and copyright purposes and as subject to Urgent Care Magazine’s right to comment editorially. Subscriptions to Urgent Care Magazine are complementary to qualified subscribers. Subscribe at www.UrgentCareMagazine.com. POSTMASTER: Send change of address to Urgent Care Magazine, 734 Walt Whitman Road, Suite 307, Melville, NY 11747. Periodicals postage paid at Melville, NY and at additional mailing offices. Printed in the USA.

REVENUE

Past Due

BY SUSAN COOPER

OUTSOURCING DEBT COLLECTION INCREASES YOUR BOTTOM LINE

or Ridgeview Medical Center, using a third-party debt collection agency to recover overdue patient accounts isn’t a luxury. It’s a necessity. “Aged accounts is a numbers game,” says Tony Rinkenberger, Ridgeview’s director of revenue cycle services. Rinkenberger says that collecting balances requires many calls, which in turn requires technology that facilitates high-volume contacts with patients. “This technology is not core to a healthcare provider,” he says, “so it’s best to outsource to those that have the technology and do it well.” Outsourcing may be the destination, but the debt collection journey – and the patient revenue cycle itself – can be rife with pitfalls. “Urgent care has revenue cycle nuances that require more focus,” says Tom Gavinski, debt collection industry association ACA International board member and ARS National Services vice president, healthcare revenue cycle. Among those nuances is the necessity of being on top of the self-pay portion of a patient’s charges. “Identify the self-pay for the patient, and get it before they leave,” advises Gavinski. “After they leave, they’ll just as likely forget – or want to forget – about the medical bill.” Rinkenberger notes that, as the popularity of high-deductible plans has risen, there is a portion of the population that can only afford to pay insurance

“Identify the self-pay for the patient, and get it before they leave. After they leave, they’ll just as likely forget – or want to forget – about the medical bill.” 4

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REVENUE

“Patient relations can get touchy with delinquent accounts. A good agency will have a well-trained staff talking to those patients.” premiums. “They struggle to fund the HSA that will cover the high deductible,” he says. “These are the balances that end up in collections if not collected at the time of service.” Gavinski says that, once a patient walks through the door, it’s important to identify her insurance so you can collect her co-pay and determine if she’s met her deductible. Even though they’re imperfect, “insurance verification systems and payment estimator systems are crucial,” Gavinski says. “Do your due diligence and mitigate some of the risk upfront.” Because once the patient walks back out the door, he says, “the odds of getting money decrease.”

Timing Two factors help determine when to turn your accounts receivable over to a collection agency: the resources you have to conduct internal collections and the break-even point for your accounts. The first decision is whether or not to outsource internal collection work. Rinkenberger says that Ridgeview Medical Center works accounts in house for the first 30 days, and then sends them to an “early out” vendor. These vendors act as first-party collectors, and use the center’s name during the collection process. According to Gavinski, many urgent care centers “send the account to an outsourcer after 30 days, let them work it for 60 to 90 days, and then move the account from an outsourcer to a bad debt agency.” The second decision is when to send past due accounts to a third-party collection agency. If an urgent care is not outsourcing first-party collections, Gavinski says, the norm is to work the

If an urgent care is not outsourcing first-party collections, the norm is to work the account in house between 90 and 150 days. 6

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account in house between 90 and 150 days, though some will turn the account over at 60 days. “My recommendation is to turn it over between 90 and 120 days,” he says.

Choosing Partners Choosing debt collection agency vendors involves both financial risk and reputational risk – while working to mitigate both. Gavinski says that many urgent care centers choose to use one agency for outsourced first-party collections and another for third-party collections. “The concern on the part of urgent care centers is that an agency in both roles won’t initially work the account that hard, and they’ll wait until it rolls over to bad debt and charge a higher fee,” he says. “It depends on the level of trust.” According to Gavinski, both first- and third-party collections are typically performed on a contingency fee basis. Rates for “early out” collections range from 5 to 12 percent, he says, while thirdparty collectors charge between 15 and 30 percent. “It depends on the age and type of debt,” he says. “A debt that’s 250 days old is harder to collect than debt that’s 120 days old.” If you’re in the market for a first- or third-party debt collection agency, price should be one factor, but not the only factor. “Everyone looks at price first,” Gavinski says. “But the best price might not yield the best results.” Gavinski suggests sending a request for proposal to at least three collection agencies. “It doesn’t have to be elaborate,” he says. “It can be a one-page questionnaire.” In an age where a tweet from a dissatisfied patient can go viral and where community goodwill is crucial for an urgent care center’s survival, the reputational risk associated with selecting a debt collection agency can’t be overstated. “Patient relations can get touchy with delinquent accounts,” says Gavinski. For that reason, he suggests asking potential vendors about their patient complaint resolution process. “A good agency will have a well-trained staff talking to those patients,” he says. It’s also important to talk to references. “Ask about an agency’s strengths, weaknesses, and issues,” says Gavinski. “Look for quality issues, compliance issues, and patient relation issues.”

Rinkenberger says that Minnesota-based Ridgeview Medical Center’s early-out vendor is a sister company to their third-party vendor, and that its selection criteria were twofold: that the company was local or had a local presence and that it had a good reputation. Noting that the Minnesota Attorney General has laid out specific requirements for third-party collections, Rinkenberger says, “We need a service that is familiar with these requirements for compliance purposes.”

The Compliance Landscape A debt collection agency plays a critical role in an urgent care center’s revenue cycle, but the $13 billion debt collection industry is also highly regulated and highly scrutinized. In 2014, the federal Consumer Financial Protection Bureau (CFPB) fielded more than 88,300 debt collection complaints, more than for any other type of financial service.

{ AAAHC

The primary federal law in play is the Fair Debt Collection Practices Act. According to consumer attorney Sergei Lemberg, “The FDCPA regulates third-party debt collectors by prohibiting certain collection tactics and granting consumers the right to sue collection agencies for violating the law.” Lemberg notes that the Telephone Consumer Protection Act is another federal law that third-party debt collectors sometimes violate. “When a debt collector uses an automated dialer to robocall a consumer’s cell phone without their consent, the consumer can sue and recover between $500 and $1,500 for each call,” he says. The original creditor, in this case the urgent care center, is typically not named as a defendant in these types of lawsuits. Nevertheless, Lemberg says, “When a patient sues the collection agency, there’s necessarily ill will toward the urgent care center.” According to a report issued jointly by the Healthcare Financial Management Association and ACA International, other laws

ACCREDITATION }

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Improving health care quality through accreditation

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REVENUE

applicable to healthcare collections include the Federal Trade Commission Act, HIPAA, the Fair Credit Reporting Act, the Gramm-Leach-Bliley Act, and a variety of state laws that address everything from licensing to unfair collection practices. It’s against this backdrop that Lemberg advises urgent care centers to screen debt collection agencies for robust compliance initiatives. “It doesn’t mean that you shouldn’t collect,” he says. “It does mean that you have to take care to select agencies that are more likely to follow the rules.” While the regulatory landscape might appear daunting, it’s one that many collection agencies – and urgent care centers – successfully navigate. According to Ridgeview Medical Center’s Rinkenberger, “Our vendor strives to be a ‘no complaint’ program. They have done a good job of this.”

The Medical Account Resolution Process

Billing and Patient Financial Communications Best Practices have been observed.

Post-Service Account Resolution: Part 1 Medical Account Resolution Efforts Continued From Pre-Service/Time of Service

Patient 's Account Is Screened for:1.a.i

Patient Granted 100% Financial Assistance or Pays19 PROCESS STOPS

Post-Service Account Resolution: Part 2 Resolution Process for At-Risk Accounts

Pat ien

Account Goes to Collection Agency4, 4a, 9, 10, 12, 15

Not Pa oes y1 tD

Possible Options for Provider Account Resolution Efforts1, 3, 11,18 (includes "Early Out")3, 4, 4a, 5, 6, 7, 8, 10, 12 Account Deemed Bad Debt Risk1, 3, 6, 11, 15

Balance Remains on Account

Payment Plan Development

Collection Agency Efforts Depend on Provider Board-Approved Policy9, 10, 18 Options May Include:

R Presumptive Score Review R Reasonable Efforts to Determine Eligibility for Financial Assistance Programs Undertaken

R Installment Plans1.a.i R Third Party Loans from Reputable Lenders R Calls/Letters

Program Eligibility, Bankruptcy

R Deceased

R Data Integrity, Propensity to Pay R Asset Verification

Patient Granted 100% Financial Assistance or Pays12,19 PROCESS STOPS

R Insurance Verification/COBRA Eligibility R Eligibility for Public Programs R Bankruptcy Screen R Data Scoring for Financial Assistance/

Patient Granted 100% Financial Assistance or Pays12,19 PROCESS STOPS

Full in

Pat ien

Continued Efforts to Resolve Account1, 2, 3, 9, 10,18 Optional Extraordinary Collection Activity9a: es Not Pay 1 Do

R Report to Credit Bureau6,7,13,14 R Legal Actions as Necessary: R Wage Garnishment R Liens

If Reported:

Remove Credit Bureau Report7, 14

Patient Granted 100% Financial Assistance or Pays12,19 PROCESS STOPS

Optional Next Steps R Second Placement

Balance Remains on Account

with Collections1, 3, 4, 4a, 6, 7, 9, 13, 14, 18

R Debt May Be Sold

by Provider1, 3, 4, 6, 7, 9, 13, 14, 17,18

R Stop All Collection Activities

As recommended by the HFMA Medical Debt Task Force, the following suggestions are intended to provide best practices to support fair account resolution policies and procedures. This process does not require duplication of efforts at the front end of the revenue cycle where HFMA Best Practices for Patient Financial Communications have been adopted and consistently applied.

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(see Provider Account Resolution Efforts)

Balance Remains on Account

Closed and Returned to Provider3

Small Balance Resolution Options: R Resolve the Account Internally

R Send to Early Out Business Affiliates12 R Administrative Write-Off of Account

R Screening or Scrubbing: R Insurance20, Financial Assistance

The report, which can be downloaded from http://www.hfma.org/Content. aspx?id=21225, includes this infographic of the medical account resolution process.

Not Pa oes y1 tD

Full in

A Clean Bill Is Sent to Patient

for Patient's Portion of Financial Responsibility for Services Rendered1, 2, 15, 16,18,19

Full in

In January 2014, the Healthcare Financial Management Association and ACA International published “Best Practices for Resolution of Medical Accounts: A Report from the Medical Debt Collection Task Force.”

Patient Granted 100% Financial Assistance PROCESS STOPS

R Primary/Secondary Payer for Billing R Accurate Payment Made/Posted from Payers R Discounts for Necessary Care Provided to Eligible Uninsured R Eligibility for Public Programs and Exchange Based Coverage R Bankruptcy R Financial Assistance Programs Summarized in Plain Language and Applied According to Provider's Board Approved Policy18

Pat ien

Best Practices

Goal: We believe that most patients want to resolve their medical accounts in a responsible manner. However, one of the challenges facing them is the highly variable processes used to resolve accounts, which contributes to confusion. Therefore, our goal is to identify a common set of account resolution best practices that align with HFMA's Patient Friendly Billing Principles and emerging federal requirements to simplify the process for patients.These best practices should be consistent for widespread industry adoption, leading to improvement in the overall collection process, patient experience, and financial performance, ensuring a fair collection process for patients and providers. A key component of this is educating patients about the availability of financial assistance programs and the account resolution process, which begins prior to patient registration as prescribed by HFMA’s Patient Financial Communications (PFC) Best Practices. This workflow begins with the initial statement and assumes all Patient Friendly

Nuts and Bolts Once an urgent care center has entered into an agreement with a third-party debt collection agency, the next steps are fairly standard. According to Gavinski, after consensus is reached about what data will be shared, delinquent patient accounts are typically transferred electronically. “It doesn’t have to be complicated,” he says. “It can be a spreadsheet.” The collection agency will acknowledge receipt of the accounts and send information back to the urgent care center for reconciliation. “It’s important to follow up so that inaccurate information doesn’t go to the patient,” Gavinski says. The debt collection agency will typically begin collections with a written notification sent to the patient through the mail. “There are so many legal requirements on the national and state levels that it’s the safest and most compliant to mail the first notice to the patient,” Gavinski says. The patient then has 30 days to, in writing, dispute the debt. Once that waiting period is over, the agency “will start calling and trying to contact the patient through cell phones, landlines, and work numbers if they’re provided,” says Gavinski. The debt collection agency will also send out subsequent notices through the mail. “This will go on for weeks to months, depending on whether they get ahold of the patient or arrive at some payment arrangement,” he says. If the debt collection agency can’t reach the patient, or if they are unable to get payment, Gavinski says that the agency can take any of a number of courses of action in agreement with the urgent care center. “They can potentially sue them, but they’re not going to do that unless the balance is big enough,” he says. They can also put the debt on the patient’s credit report – or threaten to do so. “You’re doing it as leverage to get them to pay,” he says. If the debt does get reported, Gavinski says, “Now they want to pay to get it resolved and get it off their record.” Gavinski notes that there are risks associated with reporting medical debt to credit bureaus. “Medical debt reporting is getting scrutiny from the federal government,” he says.

In a report issued in December 2014, the CFPB expressed concern that 43 million Americans have overdue medical debt on their credit reports, the result of third-party collectors reporting delinquent debt to credit bureaus. The CFPB noted that the median unpaid medical debt was $207 and the average $579. The agency reported that these relatively small amounts have a relatively large impact on a consumer’s credit score. As a result, the CFPB announced measures to hold credit bureaus and debt collection agencies accountable to ensure that the information reported to credit bureaus is accurate. Credit bureaus are required to investigate and take action when creditors and debt collectors have a disproportionate number of disputes. In addition, credit bureaus are required to list the volume of information provided by various industries, and to report those in each industry with the largest number of consumer disputes.

Adding to the Bottom Line An urgent care center that takes care of business by diligently and accurately collecting co-pays, deductibles, and self-pays at the time of service is undoubtedly a step ahead in the revenue cycle. But when past due accounts accrue, tapping into a debt collection agency’s core competency and technology is sure to be a boon to an urgent care center’s bottom line. ■

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TECHNOLOGY

House Calls

BY STEPHAN WESTLAKE

THE FRONTIER OF TELEMEDICINE IN URGENT CARE

a relative newcomer to the healthcare industry, telemedicine was initially met with skepticism by patients and medical professionals alike, and the urgent care sector was no exception. Today, however, telemedicine has become an industry buzzword, and telehealth experts and urgent care gurus agree that the technology provides opportunities for urgent care centers to improve quality of care, expand their services, and use their resources more effectively. Some urgent care operators aren’t waiting to be solicited by telehealth technology providers and are instead taking the initiative to introduce technology at their centers, says Glenn Hammack, president and chief executive officer of NuPhysicia, a company that installs telehealth systems at medical facilities worldwide. “Our experience is that the big organizations actually come and seek us out,” he says.

Load Balancing Multisite urgent care centers that install telehealth systems find that the technology delivers what Hammack terms “load balancing.” For instance, rural or remote sites may not have sufficient numbers of patients to warrant full staffing at each facility. An alternative is to fully staff one of the centers and use telemedicine to treat patients at the other locations, he says. The greater the number of locations, the more useful telemedicine becomes to the urgent care operator. “We have been really drawn into the urgent care area mostly because of our experience in helping them handle large numbers of sites,” Hammack says. Multiple centers may not have the same type of work flow; one clinic might be overloaded with patients while the other one is experiencing downtime. Hammack says that the doctors at the slow clinic can then use telemedicine to treat patients at the crowded facility. “That way, they are making better use of resources that they already have,” Hammack says. Telemedicine systems come with two-way audiovisual communication and other applications that allow the doctor to “not just be a talking head but also do numerous examinations remotely,” he says

Expanded Geographic Coverage Telemedicine is delivered in a variety of ways. The more established and accepted application is site-tosite telemedicine, which connects to patients while they are at a clinic rather than at home. Another, known as direct-to-consumer telemedicine, uses mobile apps and software exclusively to connect to patients on the go. This type of telemedicine is garnering a lot of press and investor interest, but is also attracting the attention of state medical boards and is criticized as not establishing sufficient doctor-patient relationships, Hammack says. Dr. John Shufeldt, founder and CEO of MeMD, an urgent care telemedicine company, sees significant opportunity for urgent care centers that embrace remote telemedicine. With the average drive time to the nearest urgent care center around 12 minutes, he says that most

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FOR MORE INFO In December 2014, the American Telemedicine Association published “Practice Guidelines for Live, On Demand Primary and Urgent Care.” Included are practice guidelines, technical guidelines, and administrative guidelines. The paper can be downloaded from http://www. americantelemed.org/docs/default-source/ standards/primary-urgent-care-guidelines.pdf

– if not all – patients are in close vicinity of the center. “But with telemedicine, urgent care centers can see patients from all over the state,” he says. Moreover, doctors can also see patients out of state - but only if the doctor is licensed in the state where the patient is located, Shufeldt says. Urgent care centers can see local patients when walk-in numbers are high, and then use telemedicine during slower times to see patients who are located further away, he says.

Specialist Care Telehealth experts say another benefit of telemedicine is that urgent care clinics can deliver specialist care without physically having a specialist at the center. Hammack says many urgent care operators have either referral relationships (in the case of doctor-staffed centers) or medical oversight relationships (in the case of nurse-practitioner centers) that they use as their specialist resources. The communication between a specialist in one location and an urgent care center at another location is often best accomplished with a telemedicine process management application, Hammack says. An automated process management software provides this service much more efficiently and smoothly, using text messaging and emails, he says. “Telemedicine is a benefit in terms of specialty care to providers who are generalists,” says Dr. Anne Burdick, associate dean of telehealth and clinical outreach, and professor of dermatology at the University of Miami Miller School of Medicine. An added benefit is that it cuts down on the patient’s travel time and cost, thus improving the patient experience, she says. A specialist’s availability at an urgent care center through telemedicine also means that there can be better collaboration between the specialist and the doctors at the center who already know the patient, which translates into a continuity of care, Burdick says.

“With telemedicine, urgent care centers can see patients from all over the state.” 12

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“Telemedicine in the future of healthcare.” Reimbursement Hammack points out that an important consideration for urgent care centers that are considering adding a telemedicine service is whether it is a covered benefit for patients. This is dependent on the payor and the location of the clinic, and has to be evaluated on a case-by-case basis from the outset so that unpleasant surprises don’t pop up after the service is launched, he says.

Getting Up & Running According to MeMD’s Shufeldt, a turnkey telemedicine solution can be implemented in less than 30 days. MeMD credentials each urgent care provider individually, and once approved, conducts technical training. “Once training is complete, we turn ‘on’ the urgent care’s private patient portal and they are able to treat patients online, within their designated on-call hours,” Shufeldt says. According to Shufeldt, MeMD’s WebEx-based model for urgent care centers has a one-time $250 setup fee and a recurring monthly fee of $100 for unlimited provider licenses. Essentially, the urgent care center needs only a device (smartphone, tablet, laptop, or desktop) with an Internet connection and a webcam. According to Hammack, urgent care centers setting up site-tosite technology have two main options: using laptops and software alone, or using professional grade videoconferencing equipment. The former is $10,000 or less, including exam tools, while the

second option may cost $20,000 or more, although it offers a high-quality system, he says. According to Burdick, despite its benefits, using telemedicine requires addressing challenges that have to do with return on investment, technical components, and bandwidth capability, as well as licensing, malpractice, and legal issues that arise under the Health Insurance Portability and Accountability Act (HIPAA). Hammack says that broadband Internet service is usually sufficient for telemedicine, and that special circuits are often not required. In fact, in some remote areas where there is limited satellite connectivity, telemedicine systems use Internet connectivity that is merely the speed of two old-fashioned dialup modems, he says. The connection, however, must be correctly configured to comply with security requirements under HIPAA and the Health Information Technology for Economic and Clinical Health (HITECH) Act, he says. With the web-based MeMD, however, “the HIPAA-compliant secure site runs on any device with an Internet connection, so it is quite straightforward from there,” says Shufeldt.

The Future is Now The trails have been blazed and telemedicine is poised to take off. Burdick says, “We are able to do this more and more, and I think patients will come to demand it.” Shufeldt’s take is more to the point: “As far as making a decision, it’s more of a ‘when are we going to implement?’ instead of a ‘why implement?’ because telemedicine is the future of healthcare.” ■

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The Business of Going Social A SOLID SOCIAL MEDIA STRATEGY BOOSTS YOUR VISIBILITY BY SALLY E. SMITH Photo: Quka / Shutterstock.om

hecked your Facebook wall in the last hour? Is your Twitter feed chirping? If so, you’re not alone. The numbers are staggering – but not surprising. According to the Pew Research Center, 71 percent of Internet users are on Facebook. Twenty-three percent are on Twitter. Drill down to discover that more than half use two or more social media channels. Yet Facebook is central to the social media experience. Pew found that 70 percent of folks on Facebook use the site daily and 45 percent engage with Facebook several times each day. More online women than men use Facebook (77% vs. 66%) and more young people 18-29 than seniors 65+ use the service (87% vs. 56%), but beyond that, it appears as though Facebook is the great equalizer. There are only four percentage points separating the most and least educated users (74% vs. 70%), a five-point spread between users at the highest and lowest income levels (72% vs. 77%), and two points’ difference between those living in urban and rural areas (71% vs. 69%). Latinos have the highest usage (73%) and Blacks the lowest (67%), with whites resting near the middle (71%). What does this mean for urgent care centers? Greg Matthews (@chimoose), creator of MDigitalLife and managing director of healthcare marketing and communications consultancy W2O Group, sees social media as a proactive marketing tool. “Because urgent care is strictly a fee-for-service business, getting the patient in the door for the right thing at the right time is critical,” he says. Leveraging social media channels like Facebook, Twitter, and Foursquare enables urgent care centers to connect with people in the communities that surround the centers’ locations, he says.

The Roadmap Jake Miller (@JakeNews), Marshfield Clinic Health System media relations/social media lead, advises that urgent care centers just branching out into social media start small – and start with a plan. “What’s realistic?” he asks. “What are your expectations?” He cautions, “Don’t start a Facebook page without knowing how you’re going to respond” to feedback. Matthews says that, before even thinking about content creation, its crucial to prime the pump. “Make sure you have an audience with whom you can connect – and that it’s the right audience,” he says. Twitter is the social media channel where it’s easiest to find connections based on a common interest. “I would find and follow the Twitter accounts that are likely to be followed by people in my community and only people in my community,” Matthews says. For example, potential patients include people who follow the Twitter

accounts of local hospitals, school districts, and news stations. “The best way to gain followers is to initiate the relationship,” he says. In other words, if you follow your potential patients, they’ll likely follow you. Next, Matthews advises finding and liking local organizations’ Facebook pages, and then asking them to like your urgent care center’s Facebook page. Point out that you’re both serving the community and that you can help each other out. “Unless they’re in a competitive situation, it’s not a difficult thing to do,” he says. Lee Aase (@LeeAase), director of the Mayo Clinic Center for Social Media, says that Facebook pages are the electronic equivalent of the yellow pages. “A Facebook page is a social media home base,” he says. “It’s a place for people to find out your hours of operation and location.” After getting your Twitter and Facebook ducks in a row, take ownership of your locations on Foursquare. “Once you claim your locations, Foursquare will let you see the data that’s behind it,” Matthews says. Finally, it’s time to think about content. “Be present in the channels you’ve created,” advises Matthews. He says that one tweet a day “has an enormous impact on your followers,” and suggests posting to Facebook three to five times per week. He acknowledges that the thought of that much content development can be intimidating. “With a little strategic forethought, though, it’s not as hard as it sounds,” Matthews says. With a monthly content calendar, he says, it’s easy to plan out one or two months worth of posts. “In October, a third of the posts can be about flu shots. Another third can be about healthy back-to-school habits. Another third can be in support of Breast Cancer Awareness Month,” Matthews says. One thing a content calendar never includes is a sales pitch. “Nothing will say, ‘Hey, come to my urgent care center,’” says Matthews. But, he advises, one in four messages should be about the urgent care center. “Highlight one of your providers. A service you offer. Something that differentiates the center and makes it appealing,” he says. Marshfield Clinic’s Miller echoes the no-sales-pitch message, saying, “You have to share content that people want.” But that doesn’t mean you have to write it all yourself. “If you don’t have resources to create your own posts, take time to find relevant content and share or retweet it,” he says. Sharing and retweeting is also a way to serve the community. “Congratulate the local middle school for winning the band competition. Be on hand to support the opening of the new library

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TECHNOLOGY

down the street,” Matthews says. And encourage others who care about the community to do the same. “This is a way to help potential patients know that you care about the same things they do,” he says. “It’s a way to stay very present with your audience.” Still sounds too resource-intensive? Matthews says that a standalone urgent care center could have an active social media presence by devoting 60 to 90 minutes per month developing a content calendar, and 15 minutes per day scheduling posts and monitoring feedback. Mayo Clinic’s Aase says the resources needed to effectively nurture and maintain a social media presence depends upon the organization’s goals. “Some might hire a contractor to help produce content and oversee management,” he says. “Others may have a desk attendant or receptionist who can do some of the monitoring.”

Helpers There are a variety of both free and subscription-based tools that help organizations schedule and monitor posts (see Page 17). Miller says his team uses Hootsuite as a tool for both scheduling posts and for engagement. “Tools help our team be able to prove our worth and constantly measure and adjust,” he says. “It’s like traditional media monitoring, but with social listening tied in.” Miller says that tools can prevent urgent care centers new to social media from getting overwhelmed. “You don’t want to get in over your head,” he says. “You can schedule posts using tools. You can get alerts for when folks

have a question for you online.” He says that alerts deliver peace of mind, so that you don’t have to worry that a posted comment will be neglected. Matthews reiterates the importance of scheduling and listening tools. He also suggests adopting a reader tool to get RSS feeds from local newspapers, local health bloggers, and other local healthcare publishers. “You want to avoid having a need, and then having to go out and do a bunch of research,” he says. “With a reader tool, you can make sure that the content you want is reaching you in real time.”

Beyond Basic If your urgent care center has already mastered the basics, it may be time to step up your game. Mayo Clinic’s Aase says, “Getting a Facebook page is like adopting a puppy. You need to take care of it and feed it. Starting a blog is like getting a pony.” While some organizations can have staff write blog posts during slow times, others may want to use a contractor who can write regular, quality content. You may also be ready to shoot and host videos on YouTube. According to MDigitalLife’s Matthews, short interviews with doctors, nurses, and administrative staff familiarizes potential patients with your clinic and personnel. “It makes the first visit seem like the third visit in terms of how much they trust you, because they feel that they already know you a bit,” he says. Aase encourages urgent care centers to make educational YouTube videos about common conditions and post

“In October, a third of the posts can be about flu shots. Another third can be about healthy back-to-school habits. Another third can be in support of Breast Cancer Awareness Month.”

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SOCIAL MEDIA TOOLBOX The right tools can make social media engagement relatively seamless. This selection of free and subscription-based tools represents the range of available helpers.

Social Media Dashboards

Social media dashboards help with scheduling, tracking, productivity, and analytics.

Hootsuite (hootsuite.com) enables you to manage social networks, schedule posts, monitor conversations, and track analytics. Subscriptions start at $9.99 per month, and can be scaled to accommodate large social media teams with varying permission levels.

Photography

Apps

Photography is critical to creating engaging social media posts.

There are several apps that can help with various tasks associated with social media engagement.

Shutterstock (shutterstock.com) is a stock photography website that enables you to search images using various keywords and parameters. Pricing ranges from “image packs” (e.g., two images for $29) to monthly subscriptions (e.g., 350 images per month for $169).

feedly (feedly.com) is a news aggregator app that enables you to keep tabs on topics related to urgent care or to your community, so that you can respond more easily and promptly on your social media channels.

iStock (istockphoto.com) is a stock photography website that offers monthly subscription packages (e.g., 250 images for $199) or pay-per-download pricing (e.g., 6 credits for $60, but each photo costs more than one credit).

Sprout Social (sproutsocial.com) allows you to draft, schedule and publish posts, manage social media profiles, and monitor your brand. Subscriptions start at $59 per user per month.

Rignite (rignite.com) is robust software that enables you to schedule and monitor posts, but also to run campaigns and contests. Subscriptions start at $28 per user per month.

Sendible (sendible.com) provides the ability to monitor and engage via social media, measure your impact with in-depth analytics, and generate prospective leads based on specific interests and needs. Subscriptions start at $59 per month for two users.

if and do (ifttt.com) are two apps that

are free to use with proper attribution and adherence to varying licensing agreements (e.g., Creative Commons).

allow you to create “recipes” in order to add a bit of automation to your social media management. For example, you could create a recipe that says “if someone follows #MyUrgentCare on Twitter, then follow their Twitter account” or “If someone retweets my tweet, then favorite the retweet.”

Compfight (compfight.com) searches

everypost (everypost.me) allows you

Wikimedia Commons (commons. wikimedia.org) offers images that

images and can find royalty-free images from flickr and other sources. These free images can be used non-commercially in accordance with the images’ licensing agreements (e.g. Creative Commons).

to curate content from social media and the Web, schedule posts, and customize content when you cross-post to different platforms.

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TECHNOLOGY

“Getting a Facebook page is like adopting a puppy. You need to take care of it and feed it. Starting a blog is like getting a pony.”

links on your Facebook page. “They could actually help make office visits go more quickly,” he says. “When you’re rooming a patient, you could show the video.” That can build rapport and deliver information. Doctors and nurses can help move your social media efforts forward by writing a few Facebook posts or tweets. “The more healthcare professionals get personally involved in the process, the more it tends to resonate with patients,” says Matthews. But he warns against ghostwriting posts on behalf of your medical team. “If it’s disingenuous, it defeats the purpose,” says Matthews. “It’s pretty easy for Dr. Jones to say, in his own words, here is why flu shots are important and this is what your experience will be like at our urgent care clinic, and then post it with his picture.” Similarly, for organizations with multiple locations, Matthews says that each should have its own social media channels. “Because of the importance of personalization, there’s a tremendous benefit for each clinic to establish its own voice and personality, and to feature the people who deliver care in those spaces,” he says. That’s not to say there isn’t a role for the home office. According to Matthews, corporate leadership can build health-related content and schedules, recommend which Twitter accounts to follow and Facebook pages to like, and provide a list of businesses around the clinic’s location. “That takes the burden off of the local shop,” he says.

Monitoring You have your accounts set up. You have the right audience. Your content calendar in place. You start posting to your social media channels. Now you need to listen. Marshfield Clinic’s Miller says that urgent care carries a greater emotional charge with patients than other healthcare settings. “Good or bad, they’re sharing it,” he says. Aase agrees, saying many organizations have trepidation about embracing social media because of concerns about negative comments. “If you’re not there, you’re just not seeing what’s already being said,” he says.

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Often, patient feedback happens in real time, and an urgent care center with a social media presence needs a response plan. According to Miller, that includes noticing if someone in the waiting room has posted about the center on social media. If the post is negative, Miller says the manager could walk out and talk to the person. If positive, she could say, “Hey, thanks for the kind words.” Aase finds that, more often than not, folks are fair. “People are typically more positive on social networks than they are in general because they’re using their real names,” he says. “They don’t want their friends to know they’re being unreasonable.” He says that, on Facebook, this accountability leads to more responsible commenting. Miller says that monitoring can also pave the way for more business. Noting that Marshfield Clinic has urgent care centers in two vacation destinations popular with Chicagoans, he says, “You can’t provide advice or diagnoses online, but it’s nice to quickly point them to the nearest center, or connect them with the nurse line. Being accessible can go a long way.”

Privacy Concerns

Some urgent care administrators get queasy at the idea of engaging with patients in public forums like Facebook and Twitter. Miller notes that Marshfield Clinic has a protocol for engaging with patients via social media. “Patient privacy is a priority,” he says. “It’s also a big challenge.” Mayo Clinic’s Aase asserts that urgent care centers have fewer issues around privacy than those in other healthcare settings because the patient’s issues are more transient. “You’re not publishing information about patients. You’re publishing educational information. If patients choose to comment, then it’s on them,” he says. “It’s not a violation for the provider to have a place where a patient made a comment.” Similarly, Aase brushes aside concerns that having a social media presence may be perceived as practicing medicine on the Internet. “You’re not practicing medicine,” he says. “You’re offering education.”

The Business Case Miller says that, in its infancy, a digital content strategy may not produce an immediate, measurable return on investment. “It’s a long game,” he says. “Don’t expect overnight success.” Miller says that reputation building, community engagement, and audience building serve to form a solid foundation upon which to garner ROI. Promotion can be part of the ROI equation. MDigitalLife’s Matthews emphasizes the need to adhere to a broad strategy of building a local audience, then doing outreach to engage that audience. As an example, he says, you can see who’s checking in within five blocks of your urgent care center via Foursquare. “Say, ‘I saw you went to Whole Foods down the block. We’re offering a discount to anybody who’s eating healthy at Whole Foods.’” Advertising can pay for itself as well. Miller says, “Last year we ran an urgent care paid campaign. On our social ads alone, we had 6.6 million impressions and 10,000 clickthroughs. The cost-per-click was lower than we expected. We saw a lift in visits to urgent care tied to the whole campaign.” Mayo Clinic’s Aase says that targeted Facebook advertising is invaluable. For example, if you’re posting information about the BY importance fluSMITH shots or back-toSALLYofE. school physicals, “spend 10, 20, or 30 dollars doing a geographically and demographically targeted Facebook post. It’s a way to stay in front of people.” Aase disagrees with those who would argue that employing a strategy like

Photo: Christo and Melissa Phillips

THE GOLD STANDARD When it comes to healthcare and social media, Mayo Clinic represents the gold standard. Under the direction of Lee Aase, the Mayo Clinic Center for Social Media works to empower healthcare consumers to advocate for their health and to help the healthcare community use online channels to share information with each other and with the public. A cornerstone of Mayo Clinic’s leadership is the Social Media Health Network (SMHN) (http://network.socialmedia.mayoclinic.org/), which is comprised of more than 100 organizations that work toward advancing the use of social media in healthcare. Membership in SMHN is available to urgent care centers, hospitals, patient advocacy organizations, and medical practices. Aase says that both individuals and organizations are welcome to join. According to Aase, SMHN welcomes those who are just dipping their toes into the waters of social media, as well as those who are active in social media channels. “It’s a community of people who think it’s important to apply these tools in healthcare, and those who can help navigate and share best practices,” he says. In addition to online resources, SMHN offers a social media residency that teaches residents about professionalism, risk management, and compliance; using social media to further organizational goals; measuring benefits and return on investment; and adopting best practices in using social platforms. SMHN offers online continuing education courses and webinars, and presents its capstone conference, Social Media Week, annually in June. The Center for Social Media’s book, Bringing the Social Media #Revolution to Health Care (ISBN 978-1893005877, 2012) is available on Amazon, or as a free ebook to members.

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TECHNOLOGY

educational YouTube videos promotes self-care over clinic visits. “The very nature of urgent care is that you have a pressing problem and are looking for help,” he says. “Enabling people to have your center top-of-mind isn’t going to cannibalize your practice.” As an example, Aase says that someone with an eye infection may watch the video, but won’t be able to obtain eye ointment unless she sees a clinician. Similarly, an out-of-towner could learn of the clinic through watching the educational video. “Creating educational resources could definitely help a local practice,” he says.

The Bottom Line According to Matthews, the more an urgent care center’s leadership is committed to using social media as a communication channel, rather than a means of advertising, the more successful social media efforts will be. “Communication implies that it’s not unidirectional,” he says. “It’s about listening to my community and sharing things I have reason to believe that they’ll care about.” “When you’re authentic, timely, and genuine, the benefits are huge for everyone,” concludes Marshfield Clinic’s Miller. ■

SOCIAL MEDIA CASE STUDY: MARSHFIELD CLINIC HEALTH SYSTEM With more than 50 locations (including 9 urgent care centers housed in clinics), more than 750 physicians, and more than 7,000 allied providers and staff, Wisconsin’s Marshfield Clinic Health System has the resources to develop a robust social media presence. And while Marshfield Clinic has been active in social media for several years, it’s only been slightly more than a year since it formed a social media team and connected the dots between the organization’s mission and its social media strategy. But it hasn’t wasted any time getting up to speed. With close to 11,000 Facebook “likes” and more than 2,800 tweets (@mfldclinic), social media is a tool that enables Marshfield Clinic to fulfill one of its objectives. “Part of our mission is to provide quality health information beyond the physician’s office,” says Jake Miller, Marshfield Clinic media relations/social media lead. To that end, Miller’s team deploys a content and engagement strategy to deliver relevant information that increases consumer awareness of Marshfield Clinic while burnishing its reputation. While Miller is the only Marshfield Clinic team member with “social media” in his title, there are about a dozen people on his team – writers, graphic designers, editors, SEO analytics experts, technology experts, videographers, and photographers – all of whom also have duties unrelated to social media strategy. Miller says that his team posts to Twitter multiple times per day, though “Facebook is where we spend the most time.” The organization’s Shine365 blog, which features daily posts, launched in October 2014 as a replacement to a quarterly 400,000-piece print mailing. “The blog is more relevant, and allows us to be part of the conversation,” says Miller. It may seem counterintuitive, but Miller says, “You won’t find advertisements and you won’t find marketing” on Shine365, on the organization’s Facebook wall, or in its tweets. “You’ll find stuff that you can use in your everyday life,” he says.

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Marshfield Clinic has developed standing features that act as community engagement pieces. “’Motivational Monday’ is one of our most popular features on Facebook,” Miller says. Whether posting photos with inspirational quotes, promoting blog content, or reposting information from credible sources like the New York Times or American Health Association, the purpose is to “help people lead richer, fuller lives,” says Miller. When it comes to social media, Miller’s team has learned that timing is critical. “We don’t want to inundate people,” he says. “Any trendline change, and we’ll back off.” At the same time, Miller’s team piggybacks on trends when possible. For example, a February measles post took off on Facebook. “We managed to have it hit when there were two suspected cases in counties we serve,” he says. “We got great feedback.” The measles post was shared 50 times and received more than 200 “likes.” When a post has legs, the team can choose to promote it or boost its visibility. When it comes to Facebook, Miller says that “likes” are a trailing metric. “We are constantly looking at how we’re doing compared to others,” he says. “We don’t look at ‘likes,’ but rather we look at engagement rates.” But content is only one facet of Marshfield Clinic’s social media strategy. Equally important is customer service. “We keep a close eye on what type of feedback we’re getting,” says Miller. The team not only looks at negative and positive reviews, but

also tracks and responds to feedback in real time. That necessitates a close relationship with Marshfield Clinic’s patient experience team. “We share things with them in real time,” says Miller. “We work with them to get an answer or feedback to someone.” While acknowledging that it’s impossible to keep everyone happy, patients respond when they know that a real person is listening to their concerns on social media. “That can change someone quickly from being a detractor to an advocate,” says Miller. “People have taken down negative reviews, though we never ask them to do that. That one star review goes from a rant to nothing, or they turn it into a five-star.” Miller relates an interaction his team had with a patient who posted a selfie taken

in a Marshfield Clinic waiting room with the message, “This is the face of someone defeated by the waiting game.” A member of Miller’s team responded, “Do you want someone to reach out to you?” The patient replied, “No, it must be a grind.” The Marshfield rep replied, “No, it’s our mission, not a grind.” The patient shared the exchange, and people who saw the exchange reposted it. Miller acknowledges the challenge of social media engagement for standalone urgent care centers. But, he cautions, “If someone has a good experience or a bad experience, they’re having the conversation online whether or not you’re part of it. Being part of it is a must-do.” ■

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TECHNOLOGY

Corner the Market

TAKE THE GUESSWORK OUT OF SITE SELECTION WITH PATIENT ANALYTICS BY SUSAN COOPER

“The best urgent care companies are applying retail principles to help them efficiently and effectively acquire new patients, and to improve frequency with existing patients.”

atients have never been more aware of – or more savvy about – healthcare costs. They’ve grappled with insurance exchanges. They’ve paid a greater share of premiums for employer-provided insurance. They’ve been hit in the pocketbook with higher deductibles and copays. They’re as likely to research out-of-pocket costs for a clinic visit as they are to find the best sale for Nikes. Welcome to the patient-as-consumer. Bill Stinneford, senior vice president at analytics technology innovator Buxton, is convinced that the “retail-ization of healthcare” is here to stay, and that urgent care aligns with the retail philosophy more than any other healthcare service line. “The best urgent care companies are applying retail principles to help them efficiently and effectively acquire new patients, and to improve frequency with existing patients,” he says.

Know Your Customer The retail principle in play is “know your customer.” An understanding of the patients you attract – and those you would like to attract – can inform and impact your real estate site selection. Although it sounds straightforward, getting a true picture of the market is more complex than reviewing a neighborhood’s average income and family size. Stinneford says two neighboring households can be identical demographically – in terms of age, UrgentCareMagazine.com

August 2015

TECHNOLOGY

income, and ethnicity – but be radically different. “One could be a big outdoors person, while the other sits on the couch watching ‘Duck Dynasty,’” he says. “Just looking at the demographics, you can’t tell the difference.” Buxton’s patient analytics tool, SCOUT, combines an urgent care center’s patient data with what could be termed “Big Brother” data – the digital fingerprints left by consumers at countless points of contact in day-to-day life. Then it analyzes the data and maps in onto a data visualization platform. The result is granular, actionable information. Stinneford says that, once he knows the common attributes of an urgent care center’s patients and sees what he terms “the patterns and the chaos,” he can know a specific household’s likelihood of becoming a patient. “I can give you names and addresses. Email addresses. What they’re watching on TV. What radio stations they’re listening to,” says Stinneford. That information forms the foundation upon which to build new urgent care center locations. “You can determine your top potential locations, compare them to an inventory of potential locations, and negotiate the best deals,” Stinneford says. Pam Ladu, Cooper University Healthcare’s assistant vice president of ambulatory planning and logistics, says that her organization “relies heavily on SCOUT as a starting point” in site selection. Ladu says that, initially, Cooper University Healthcare provided Buxton with two years of patient data. Buxton then overlays data from more than 250 databases. “It tells us the type of people who are most likely to come to Cooper,” she says. “It also tells us where there is need in the market based on supply and demand.” With the explosion of new players in the urgent care space, Ladu says that a patient analytics tool “leads us in the right direction” by pinpointing the competition. “We can wrap our heads around who is going where, and look at the market in a new way,” she says. To Ladu, competition isn’t necessarily bad. “Sometimes, we want to be in a certain market and don’t care who the competitors

are,” she says. In those cases, she uses patient analytics to determine if the market is growing and has the demand for urgent care services. “If our model is different and our niche is different, we can succeed even in a crowded marketplace,” she says. Ladu says that the patient analytics tool provides her team with a geographic area where an urgent care center might succeed, but that’s just the first step. From there, “We validate with our finance team, our data analytics team, and our real estate team,” she says. “We’ll look a little bit to the north, a little bit to the west, to see if there’s still the same level of opportunity.” To ensure the best site selection decision possible, Ladu overlays Cooper’s own market intelligence. “We know things the system will never know,” she says.

“You can even find all of the potential locations in a given operating area that meet certain criteria but that won’t cannibalize your existing locations.”

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Location, Location, Location

Impetus for Change

A number of factors determine the best spot for your next urgent care center, but – as in retail – location is key. “Urgent care is an infrequent transaction,” says Stinneford. Still, you want “impression frequency.” He describes an ideal location as a good intersection two minutes away from a concentration of your best patients. If you’re a prospective patient, he says, “You probably drive by it to and from work twice a day. If it’s next to a grocery store, you’re driving there once or twice a week to run errands. You go by when you take your kids to soccer practice.” Buxton’s patient analytics software can map existing locations, overlay existing patients, and then overlay “lookalike patients” – those who share commonalities with existing patients, but who aren’t yet in the urgent care center’s system. It generates revenue forecasting models that consider the impact of co-tenants, area draw, traffic, and potential internal and external competition. “You can even find all of the potential locations in a given operating area that meet certain criteria but that won’t cannibalize your existing locations,” Stinneford says.

Stinneford says that data-driven decisions are better business decisions, particularly in urgent care’s current mergers and acquisitions environment. “If you have five good locations and the sixth is a dog, when you go to sell, the private equity firm will ask what you use for site selection,” he says. “When you don’t have an answer, you lower your value.” On the other hand, if you can map out your next 50 locations, it increases the value of the company. “The potential buyer knows you’re looking to grow, and that there’s inventory available,” he says. Cooper University Healthcare didn’t always use patient analytics in their site selection process. “The impetus for change for Cooper was that we were most often reacting to real estate opportunities,” says Ladu. “It was like putting a round peg in a square hold. We needed to change our thinking.” Today, Cooper University Healthcare incorporates patient analytics into location decisions. “It ensures that you really are making the best site selection decision possible,” she says. ■

WE HELP MORE THAN 350,000 PEOPLE EACH MONTH FIND URGENT CARE When people need urgent care, they search for it online and they find UrgentCareLocations.com. UrgentCareLocations.com Now we are making it easier than ever for you to take control of your location information, ensuring 100% accuracy and enticing more patients to walk-in your doors. The best part is...

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Proceed with the on-screen instructions to claim your location. If you have more than one location, you can claim them all at the same time.

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August 2015

REVENUE

Riding the M&A Wave HOW TO KNOW WHEN TO SELL BY SALLY E. SMITH

he urgent care horizon is rapidly changing. Once a veritable archipelago of individually owned clinics, seismic shifts in the marketplace – think Obamacare – have created an volcanic environment for urgent care mergers and acquisitions. Some have ridden the cash flow down the mountain, while others have cratered out. Tony Barber, CEO of Urgent Care Advisors, says that while the movement toward consolidation is here to stay, not every urgent care owner will be able to ride out the wave. “A market that’s moving toward population health management and broader risk acceptance isn’t looking good for independent operators,” he says. “Or at least it’s making them nervous.” Barber, who helps urgent care centers assess the likelihood of being an acquisition prospect and helps private equity firms evaluate prospective investments, calls the market “scattered.” “I’m seeing one small group acquiring another small group, or larger groups acquiring small groups,” he says. An investment that seemed like a slice of paradise two or three years ago may look less inviting today. “There was a time when people were on your doorstep, wanting you to sell,” Barber says. “The inclination was to say no, that the business would be worth more later.”

August 2015

In the last year or so, though, fewer buyers have come around. “If you have an exit strategy and people stop knocking at your door, you start getting anxious,” he says. Barber says that the issue is that owners think their urgent care centers are worth a bundle, but they’re simply not big enough for the majority of investors. “If you only have a half or three-quarters of a million EBITA, you won’t even get looked at,” he says. Keith Borglum, president and CEO of Professional Management and Marketing, concurs. “The big chains are on an acquisitions tear,” he says. “The bigger the size in terms of number of doctors or facilities, the more attractive it is for acquisition. When you get down to the really small ones – one to two doctors – I find that the interest drops off a lot.” Urban urgent care centers are feeling particularly stressed. “Most of the rollups occur in the urban market,” Barber says. “It’s very competitive and owners are getting a little scared.” And the competition isn’t just coming from other urgent care clinics. “There’s invisible competition affecting urgent care center volumes” says Barber. He cites three examples: worksite clinics, population health management, and telemedicine. “These are significantly affecting the value proposition in the urgent care space,” he says.

UrgentCareMagazine.com

“The bigger the size in terms of number of doctors or facilities, the more attractive it is for acquisition. When you get down to the really small ones – one to two doctors – the interest drops off a lot.”

REVENUE

“Buyers want to see a professionally managed operation that presents accurate numbers upfront with details to back them up.”

What’s it Worth? Borglum, who is often called upon to appraise urgent care and medical practices, says that the “recorporatization of healthcare in American under Obamacare” is putting the squeeze on smaller urgent care clinic valuations. He says that, of the three ways to value a practice – income approach, market approach, and asset approach – income is the most important. “With the income approach, we see what owning the business is going to pay the owner above and beyond taking a job somewhere else,” Borglum says. “If there’s no income available to ownership above labor, why bother?” Borglum says that, as accountable care organization physician salaries are escalating to the $200,000 range, valuations for small urgent care clinics are decreasing. “A physician who owns an urgent care center and who makes $180,000 to $200,000 a year no longer has a return on investment,” he says. “No ROI means no value.” One way to shore up value is to leverage non-physician providers, Borglum says. By employing non-physician providers and paying less than what they earn in revenue, you can demonstrate a greater return on investment. And it’s the ROI that matters. According to Borglum, “The going rate for small practices is 65 percent.” While he acknowledges that a 65 percent return rate “sounds extraordinary,” medicine is a high-risk, high-reward business. He contrasts the three percent return rate on the safest vehicle around, U.S. Treasury bills, with the historic eight percent return on an S&P 500 fund. “Even the riskiest 10 percent of the S&P historically pays 13 percent,” Borglum says. Move from publicly traded companies to privately held companies, and the risk increases. “For licensed professions like architecture, engineering, law, and accounting, the expected return is 25 to 35 percent,” Borglum says. “Add the risk of malpractice, the risk of Medicare cuts, the risk of hospital competition, and that’s what pushes the ROI to 65 percent.” Larger groups of urgent care centers are more attractive acquisition targets than smaller operations because there’s less

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risk. “There’s less risk, so the ROI needed is less,” Borglum says. “The value becomes higher.” In an article he authored, Borglum provides a “grossly simplified” income approach to provide a “rule of thumb” for valuing an urgent care center: “First add back to salary and profit all the economic benefits the current owner receives (like auto insurance, life insurance, and health insurance), plus depreciation, Sec. 179 expense, and interest.” Next, “Subtract the cost of employing a substitute person for the owner, as if the owner were disabled and had to hire a replacement person.” Finally, “Multiply the remainder by 1.5 to 2; 1.5 if dependent on insurance reimbursement, 2 if it’s a cashonly practice. The result is your answer of the approximate value.”

Rationale to Sell Barber says that there are three primary reasons to sell urgent care clinics. First is the age of the operator. “If you’ve eclipsed the age of 60, don’t have a succession plan, and don’t want all your eggs in one basket,” it may be time to sell, he says. Second, the clinic or clinics may face increased competition from those worksite clinics, telemedicine, or occupational health clinics. Third, there might be a sound market, but the owner doesn’t have the capital to sufficiently scale the business. “If you hit the wall, someone else will compete with you and it will drive down your value,” warns Barber. “You don’t want to wait until your financial performance starts sliding before making a decision.”

Prepping to Sell Preparing to sell an urgent care center isn’t that different from selling a house. You need to have curb appeal and make sure there aren’t any termites gnawing on the foundation. When Barber consults with prospective sellers, he looks at the financial and operational structures to “see what can be cleaned up to show the best,” he says. He assesses the operation’s strengths and weaknesses, looks at whether the volume is trending up or down, and the revenue per encounter.

He also reviews the competition and its impact, the employers in the market, and the overall health of the market. Finally, he looks at the potential for profitability. If it misses the mark, “I sit down and say now’s not a good time to sell,” he says. Instead, he guides the owners toward making operational course corrections. With them, the financials will reflect the changes and bring a better selling price. What could turn the tide against a sale? “Buyers don’t want to see something messy or disorganized,” says Barber. “They want to see a professionally managed operation that presents accurate numbers upfront with details to back them up.” In the absence of good, clean accounting, Barber says, “Everybody starts raising their eyebrows and things start going south.” Sometimes deals fall through because there are compliance or licensure issues. Buyers have to have confidence in the providers, says Barber. “If there are providers

whose credentials aren’t up to snuff, then that’s going to be a big concern,” he says. If a seller hasn’t successfully sustained their business model, it could be a sale’s death knell. “They have to demonstrate competency in the marketplace,” says Barber. “Volumes can go up and can go down, but you need to understand why they went up or down and show how they’ve been managed.” Finally, all partners must be on the same page, with zero disputes or litigation. According to Barber, buyers “are going to walk if there’s anything like that.”

On the Market Barber’s role is part broker, part matchmaker. “If the owner wants to continue to work, I can help find a buyer with common interests,” he says. “An operator who’s always been independent is likely to get very frustrated if a local hospital wants to acquire the center and he’s never worked in a hospital system.

If he’s been an ER physician, that would be a different story.” After completing an operational assessment and making any corrections, Barber puts together a prospectus, organizes digital documents for due diligence, and waits for a letter of intent to document interest in purchasing the urgent care center. “Then we execute the acquisition agreement and do the due diligence,” he says. As the marketplace sands continue to shift, ensure that your urgent care center isn’t marooned on a desert island. Start by developing a succession or exit strategy. If that includes selling the site or sites, begin taking steps to make certain your financial and operational houses are in order. A consistently well-run, successful center will have a significant advantage over others in the market. ■

UrgentCareMagazine.com

August 2015

LAST WORD

EMBRACING FLAT RATES BY TAMMY MALLOW

or an urgent care operator, shifting reimbursement models and financial management can be a nightmare. As the industry shifts further and further from fee-for-service to flat rates, urgent care clinics must have the tough conversations about the challenges associated with this kind of change. While contracting for a flat rate isn’t a revenue magic bullet, it provides predictable revenue, it streamlines billing, and it’s lucrative for low acuity patient visits. Keeping those advantages in mind, the downsides of a flat rate must be noted, too – taking a loss on higher acuity cases, possibly discouraging in-house testing, and potentially encouraging some providers to send more cases to the emergency room. When deciding whether contracting for a flat rate is worth it, first look at the market and the average reimbursement when negotiating an agreement. That average becomes the threshold. From there, factor in time – the average days to bill and the time in accounts receivable. Also factor in the cost of billing. With a flat rate you bill with one code, so theoretically you can afford to accept a lesser rate because you’ll be paid more quickly and your billing expenses are less. Here’s how you can then maximize that flat rate: market your low acuity cases and stay true to urgent care services. Don’t be distracted by offering additional services like physical therapy or advanced imaging. When insurance companies finally caught on to what urgent care medicine is, they set parameters for services. This is how payors determine the fee they’re going to pay urgent care clinics. You can also maximize the flat rate by seeing higher acuity patients. While you might initially lose money on a patient with a broken ankle, you will likely make up for it when that same patient comes back for an earache – delivering repeat business.

While contracting for a flat rate isn’t a revenue magic bullet, it provides predictable revenue, it streamlines billing, and it’s lucrative for low acuity patient visits. Since the dawn of urgent care medicine, we as an industry set out to reduce emergency rooms visits and overall healthcare costs. However, a number of reports have shown that hasn’t happened. In fact, urgent care clinics tend to draw more from primary care providers and pediatric clinics. If we use flat rates as a reason to send higher acuity patients to the ER, we’re simply feeding into that vicious cycle and potentially damaging our opportunity to demonstrate to insurance companies that urgent care clinics are making a difference in the greater healthcare ecosystem. Hopefully, at some point, urgent care clinics will be recognized for taking on those higher acuity cases and be reimbursed at a higher rate. Understanding the value of flat rates is critical to an urgent care clinic’s success. Ward off the financial frustration and the ensuing headaches by embracing flat rates. Understand the minimum thresholds, the potential uptick in patient volume, the possible referrals from higher acuity patient visits, and the cost of doing business. Flat rates aren’t going away, so it’s time to wake up and find a path to profitability through flat rates. ■

Tammy Mallow is DocuTAP’s Director of Contracting & Credentialing.

August 2015

UrgentCareMagazine.com

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