Immediate MedCare Jordan Rice on urgent care (transcript)

This is the transcript of my recent podcast interview with Immediate MedCare CEO, Jordan Rice.David E. Williams:            This is David Williams, co-founder of MedPharma Partners and author of the Health Business Blog.  I’m speaking today with Jordan Rice, CEO of Immediate MedCare (IMC), which operates urgent care clinics.  Jordan, thanks for your time today.Jordan Rice:            You’re very welcome.  Pleasure to be here.Williams:            Jordan, what’s the concept behind IMC?Rice:            When we started doing consulting to set up urgent care centers over 30 years ago, we realized they would be a great solution in the future. We foresaw two huge shortages, which now we know are reality.  One was in primary care. We realized the reimbursement levels would continue to be pushed downward. The second was the emergency department as we realized the burnout rates were getting ridiculously high and that people would have to divert from the ER.So we thought if we could set up an upscale, digital, totally paperless medical office that was open seven days a week, in the evenings and on weekends, and if we took insurance and workers comp, that people would be driven to those centers if they knew they were there through good marketing PR.That was our simple premise 30 plus years ago.Williams:            Say more about the upscale nature of it. That makes it sound expensive.Rice:            It is a little bit costly to us but the patients don’t mind.  They’re going to pay the same co-pay whether they go to an Immediate MedCare center or somebody else, and of course the insurance companies reimburse urgent care centers.  Reimbursement is based on S codes, which are mandated by the United States government through Medicare, Medicaid TriCare or the Indian Health Service. The commercial insurance companies of course followed suit.Basically that gives urgent care centers a global fee. You could come in with a little heart pain, and say, “I went to a Mexican restaurant, I don’t know if it’s something serious or something simple.”  We don’t care if it’s GERD, we don’t care if it’s a minor arrhythmia, we’d give you an EKG, might do a chest x-ray, we get the paid the same one way or the other from the insurance company.You would pay the same, whether it’s something simple or something complicated.  On workers comp cases it’s pretty much fee for service but everybody gets paid the same for a workers comp case.When you come in, it’s very, very upscale.  We’ve got Starbucks coffee, Bigelow teas, we’ve got free massage chairs. The reception area is very large, very well appointed, with carpets in most areas to keep the sound down.When you come back into the exam rooms we have HDTV hooked up to the local cable or satellite, usually anywhere from 100 to 130 channels. And we are totally paperless, totally digital. So if you’re at home you can pre-register. If you’re an HR director from Wal-Mart or Publix and you want to get that employee in and not have to send faxed forms back and forth, you can go online.If you’re at home and you want your lab report or you want to do a prescription refill, you can be online, do it through a mobile device. You can do it from your work, you can do it from anywhere. That’s what we mean by upscale.  It’s the look, the feel, it’s getting you in and out quickly in a very pleasing and very attractive environment.Williams:            Explain more about the use of health IT.  You talked about being digital and paperless and you just described a couple of the things that people could do.  Is it different wiring up one of these clinics than wiring up a primary care office or emergency department?Rice:            It’s no different but we were the first to have a paperless medical office in Georgia.  That led to me being head of the State HIPAA committee here in Georgia and then I ended up being head of the HIPAA committee for all 13 States in CMS regions 6 and 13.I have been a keynote speaker at Comdex, Internet World, and many medical conventions. All I talk about is going electronic in medicine.Medicine is the worst at going to digital and paperless.  We are so far behind.  I mean right now you and I could say hey, let’s go on a trip to Hong Kong and Singapore.  We could be on the Internet, we could book our car, we could book our hotel, we could search the best airfare.  My gosh, we could book a massage at one of our Blue MedSpa’s somewhere.It’s absolutely amazing how every other industry has gone paperless, but you and I both know that health care has been the worst at moving to it.  It’s been resistance in terms of the cost of it when reimbursements keep going down from insurance companies, Medicare and Medicaid.  It certainly has been an issue of the providers not wanting to do it and so we have a mixture of reasons it has not happened.  When we did our first paperless implementation in 1990 in Athens Georgia, we had four of our urgent care centers there.No one had seen anything like it.  We had to work with Bell South who was the local provider.  We had to work with three different national companies to do it.  We did Holter event monitoring before anyone did it.  That actually led to the company that was doing that to set up this little company called Web MD because they had no way to get the data electronically from our urgent care centers in Athens, Georgia 70 miles to the West to the cardiology group that was over-reading the digital EKG’s and of course the digital x-rays.It’s also the expense.  Now of course there’s huge incentives for every provider to do this, to get $44,000 back through Medicare and Medicaid if you meet certain criteria under the Meaningful Use rule. It’s been an expense issue definitely for most primary care offices, certainly emergency departments.  The other problem with hospitals is that they have so many different types of software there. Pathology uses one thing, radiology uses another. The ICU and CCU might have something completely different and of course the ER is different from all the other systems. Then they tie them in with legacy computer systems.  They might still be running on IBM 370s from 25 years ago, so it’s a little easier for an urgent care center to do it.Williams:            It’s interesting to hear the birth of Web MD was a byproduct of your work.  Another issue that you talked about is workforce. I’d be interested in how you’ve applied the insights that you’ve had about the burnout in the emergency department and what’s going on in primary care.  How has that led you to staff your clinics and what kind of an approach do you take towards workforce?Rice:            The advantage for us is that the emergency departments do not want urgent care.  They just don’t.The typical cost --for example in the Atlanta, Georgia area-- of an urgent care center visit would be somewhere between $75 and $150.  Workers comp could be much more but the patient is not paying that.If you walk into any emergency department, your co-pay is anywhere from $75 to $150, but to treat them whether they have something simple like rhinitis, UTI or an infected ingrown toe nail, is going to be $400 plus.  If you go into New York, San Francisco, L.A., you’re looking probably anywhere from $580 to over $650.There is absolutely no way that that hospital will ever get that money back if that patient is not admitted. They love having urgent care centers they can divert to, as long as it’s a friendly urgent care center that refers back to a specialist or primary care physician in that hospital system, which we’re very good about doing.Meanwhile we don’t do primary care at Immediate MedCare.  We would not get paid the urgent care fees if we did and obviously it clogs up the system when you have somebody coming and that person basically has three, four, five different problems.  The whole point of urgent care is you come in one time with a knee sprain, the next time say you might have a little chest pain, another time you have the flu.We want to get you in and out of there. With our staffing we can have one person in the front to register who is usually cross-trained with somebody in the back. Our staff are typically medical assistants and LPN’s who are cross trained front and back.In an urban area the clinician would typically be an MD and in a rural area that might be a nurse practitioner or physician assistant.  Obviously if you do a lot of workers compensation then it needs to be a physician but we can basically staff three people.  During a 12-hour day we can see as many as 72 patients with three people working.  We can do it because we are totally digital, totally paperless. It just makes a huge difference in matriculating patients.Our billing is all electronic so the minute the provider signs off the electronic patient chart that billing goes out immediately to the major insurance companies, Medicare and Medicaid.Williams:            It sounds like you fit in very nicely into the health care ecosystem.  I’m wondering what we might expect to see as we move to Accountable Care Organizations.  Is there a logical fit there for an IMC?Rice:            You know there can be.  The days of hospitals trying to have their own urgent care centers, I think we’ve seen that go by the wayside.  Either the State Attorney General or the GAOs come in and they say look, this is self-referral. There are issues with Medicare, with Stark Laws.Also hospitals by law have to offset any costs they have to the urgent care center, everywhere from marketing to IT to benefits. So basically a hospital can’t really run an urgent care center and make it at all profitable.  It’s a money-losing venture for them.We give our staff 10 percent profit sharing every three months.  So that’s like cash bonus.  We give our clinicians a 15 percent bonus.  When you do that you have incentivized staff.  The staff are looking to control costs, they’re looking to be extremely nice to the patients, they’re out there actually finding patients, everywhere from the PTO to Kiwanis club to their church, temple, synagogue.  Anywhere they are they’re out there always marketing Immediate MedCare.So our bottom line is we fit into it even though we’re for-profit, even though we’re independently owned and operated. Basically there is a place for us in those kinds of organizations if they invite us to the party.Williams:            I read in a recent announcement that you are working with the Claxton Group to get up to 100 centers.  What’s the nature of that partnership?Rice:            We started with Capstone Properties based in Chattanooga, Tennessee.  We basically have a 50/50 arrangement but that also means that we have to find a partner locally who will help us with the funding, either privately or co-sign with the bank.  When Claxton approached us they said we really want to have the whole kit and caboodle.  We want 48 percent ownership in the actual center and we want to have ownership in the building. We said okay, well if you’re willing to do that and we don’t have to worry about finding local funding, we don’t have to run from bank to bank, from area to area we could set up pods of four clinics.Each pod has one practice administrator, one billing manager and one marketing person. It’s another way we control costs.  So if we could do that and Claxton group could come in and guarantee us to do 12 pods of four and we just round it up to 50 that would make our life so much easier and we could do it so much quicker.Since we had already set up over 100 urgent care centers for clients we really felt we had the model down. Of course I’ve been head of the national association twice and the national convention twice and so we had a lot of contacts nationally.  So when they approached us about a year ago, through one of the cofounders of Web MD, we found there was good kismet between the two groups. Capstone understood that they’re still in the picture but Claxton gave us another opportunity to quickly set up a lot of centers.So the total would be 100, essentially 50 with Capstone and 50 with Claxton. Both groups often use the same architect, the same general contractors.  They cross-refer and they go to different areas so there’s no real conflict of interest.We refer to the local hospitals in Atlanta. Piedmont, Northside, Emory, any of the big ones, we refer to all them; number one based on what the patient preference is, number two on what their insurance or workers comp accepts and number three, based on other factors such as what the clinician thinks would be the best. So the Claxton Group really gave us the chance to grow very very quickly without doing an initial public offering, without having to go after bank financing and just do it all as a private equity funding deal.Williams:            About a year ago I was looking for an urgent care center for a relative of mine, I live in the Boston area and I found there aren’t any around here.  Is that just because of the immaturity of the industry or is there something about where I live that makes it unfriendly to businesses like yours?Rice:            The fact is that it takes about 25,000 people to support an urgent care center and the demographic could be a very mixed demographic.  For example in Georgia we’re one of the few urgent care centers taking Medicaid. But as I explained to you we get a different reimbursement schedule as an urgent care center than other people do. We get paid probably two to three times what a primary care practice would get.So what happens is in an area like New England or New York City, areas where it’s high rent, where staffing is extremely high, malpractice is very high, economically it really hasn’t been viable.  We’re just looking at the Philadelphia area right now. Amazingly we have counties of 600,000 plus people, high demographics, median income of $75,000 per household and yet there’s no urgent care centers.Now with our model coming in because we’re lean, we’re mean, because of the profit sharing we offer, yes we do think we can penetrate those markets.Our centers are big.  They’re not small so we definitely do pay more for a building than somebody else does. But an advantage of having a 6,000 square foot center is we can do a lot more procedures and we have a lot of ancillary services that we offer compared to other urgent care centers. So I think it’s a combination of that plus where medicine is going.Finally the other factor is physicians just aren’t commanding the kind of money they did a few years ago because now they can’t go into practice for themselves, banks aren’t lending money, they’re not getting paid what they used to be paid.Now primary care doctors are making $100,000 or $120,000 a year. All of a sudden they’re saying my gosh I can make $200,000 plus a year, put in a 40 or 50 hour week. I don’t have a pager, I don’t have to go to hospital meetings, I don’t have to round in the hospital. It’s a very attractive alternative for a lot of physicians.Williams:            I’ve been speaking with Jordan Rice, CEO of Immediate MedCare about urgent care clinics.  Jordan, thanks so much.Rice:            Well I really enjoyed this opportunity and it’s just always great to be able to wave the banner for all urgent care centers around the U.S.