Change is inevitable in every industry. As the healthcare landscape changes, many hospital systems and urgent care centers are realizing partnerships will lead to better patient care and lower costs. Accountable Care Organizations (ACOs) and Independent Practice Associations (IPAs) are groups of doctors, hospitals, and healthcare providers who come together to voluntarily provide coordinated, high quality care to a population assigned to them. Successful ACOs and IPAs depend on clinical excellence while controlling costs.
Recently, Ivy Urgent Care in Staten Island, New York joined an IPA. A DocuTAP client, we wanted to sit down with Ivy Urgent Care’s Founder and Medical Director Dr. Robert Malizia to discuss the healthcare landscape and Ivy Urgent Care’s future. Dr. Malizia received his undergraduate degree from Princeton University, his medical degree from Jefferson Medical College, and his Emergency Medicine Residency training at Cooper University Medical Center in Camden, NJ.
1. Why did you decide to get into urgent care medicine?
Early in my emergency career, I witnessed widespread overuse and misuse of emergency departments by patients with non-emergent medical problems. In most cases, these patients were well aware that their conditions were not life-threatening, but they didn’t have access to timely healthcare, as most community primary care providers are so overbooked they can’t accommodate patients for days or weeks.
The Emergency triage process necessitates treating the sickest patients first, so these non-emergent patients get passed over again and again, often waiting hours to be seen. They inevitably became frustrated, angry, and at times confrontational about the excessive wait times.
Making matters worse, the sheer volume of patients to be seen by emergency medical personnel often led to substandard care for the non-emergent patients. It was apparent to me that all parties, and the system as a whole, would benefit from more accessible healthcare alternatives. So began my research into urgent care, which seemed to be a potential solution to this problem. Today, although there are urgent cares opening every day, that need has still not been met. There is still tremendous misuse of the ER, and the associated costs of this unnecessary emergency-level care is crippling the system.
2. Ivy Urgent Care recently joined an Independent Practice Association (IPA) with a major New York City hospital system. How did that relationship come to be?
I cared for a patient who, unbeknownst to me at the time, is a high level administrator with the hospital system and had a great experience with us. Staten Island is the only borough in New York City in which the hospital didn’t have a major presence, and a strategic affiliation with an urgent care seemed like a feasible means to establish a presence on the Island, and expand their catchment area.
In our early meetings with the hospital’s executives, we saw eye-to-eye on the role of urgent care in the healthcare continuum. We also agreed that, operated properly, urgent cares run more efficiently by private enterprise. Yet, they can still be of tremendous benefit to the hospital system, by off-loading the emergency departments of the non-emergent cases and only directing truly sick individuals to the hospital. Furthermore, urgent cares are positioned to help patients navigate the healthcare system, by referring them to the appropriate specialists and generalists. This complements the ACO and IPA objectives to redirect healthcare delivery away from the expensive inpatient hospital setting and toward preventative care. The goal is to keep patients healthy enough that they don’t need the hospital. That’s the point of all of this and where we fit in.
3. Are ACOs and IPAs the wave of the future?
It’s undoubtedly the way it’s going.
It’s a land grab right now, with every hospital system fighting to achieve the necessary critical mass to survive in the near future.
Some systems plan to grow through acquisition, some through organic expansion, and some through strategic affiliations. In the latter cases, many hospitals are joining their ACOs in an effort to create a larger infrastructure and value through shared savings and pooling of resources. I expect over the next five-to-ten years our national healthcare landscape will consolidate into four or five of the largest systems.
4. How do urgent care clinics benefit from these partnerships?
First, an affiliation with a well-respected hospital system lends instant credibility and name recognition to an urgent care center.
Second, there may be shared savings through bulk purchasing of medical supplies, co-marketing, and pooling of staff and resources. Depending on the IPA, members may benefit from enhanced contracts with third-party payers, offering significantly higher reimbursements. On the service side, as part of a larger network, an urgent care can facilitate more timely patient follow up care with specialists and diagnostic testing, which improves the overall quality of care.
5. Are there any disadvantages to the ACO and IPA model?
One of the greatest potential risks in today’s highly competitive healthcare environment is that an affiliation will create a conflict of interest, limiting future opportunities with competing systems.
So, one must do their due diligence and choose wisely before entering into such a relationship.
Not all hospitals are created equal, and an urgent care operator must carefully consider the quality and reputation of the institution they are considering getting involved with.
Another risk is that hospitals are notorious for employing highly restrictive and constrictive agreements. Spend the money on legal counsel that specializes in healthcare. Medical agreements can be fraught with hazards and pitfalls that only a specialist knows to look out for. Be particularly wary of one-sided exclusivity clauses, restrictive covenants, non-compete clauses, indemnification clauses, and potential Stark violations. Attorneys are not cheap, but they are worth their weight in gold in the long run.
Finally, from a business perspective, you must beware of putting all your eggs in one basket.
The goal of any entrepreneur should be to build and ultimately sell their business. If an urgent care system reaches a critical mass and wishes to sell its business, being too entrenched with one hospital system could prevent a sale to competing hospital systems, resulting in fewer potential buyers and a lower sale price. Should your agreement include any verbiage restricting ownership rights or a sale of the business to certain parties be sure to amend it to ensure a fair market evaluation.
6. What are Ivy Urgent Care’s goals?
My goal for our centers is to elevate the standard and scope of care of the urgent care specialty, and to provide a true alternative to the Emergency Department for non-life-threatening conditions.
I believe we should be able to handle anything here that can be handled in the ER, but that doesn’t need to be handled in the ER. Unless a patient needs surgery, IV, sedation, anesthesia, airway management or an immediate cardiac or neurologic intervention there’s absolutely nothing that the ER can offer that we can’t do. My goal is to deal with the higher acuity, higher level of care because that’s when urgent care is actually a benefit to the patients and to the system. If we’re not doing that, all we’re doing is adding another level of cost to the system.
7. Is there anything you’d like to add?
I would encourage independent operators to entertain all options and be willing to adapt. What we’re talking about here is the way of the future.
Rather than resisting change, embrace the change and profit from it.
Specifically addressing my physician colleagues, I have observed that many of us have been very resistant to the changes happening all around us, changes that we perceive to be dictating how we practice and how we are reimbursed; this is one of the primary motivators that led so many of us to leave the hospital system to open private urgent care practices in the first place. But, it is naïve to believe we are ever truly free of the system. As long as insurance is reimbursing us, we are very much a part of the system. Rather than resisting change, educate yourselves and learn how to best navigate the system. The ability to adapt is what will determine who is ultimately most successful.