I was recently attending a hospital association breakout session listening to two reputable healthcare systems present how they aligned their respective medical staffs to achieve quality outcomes. They demonstrated how they achieved reduced unnecessary admissions, reduced lengths of stay and the reduction of clinical testing and procedures. They specifically portrayed how they worked with their medical staffs to strive for best practice outcomes. Clearly the outcomes were impressive, but they neglected a key component of the Triple Aim: Reducing the per capita cost of healthcare.

Never once did they present actual cost reductions that their efforts rendered. When I posed the question about cost savings, the response I received from the two presenters was like it was the proverbial elephant in the room. They told me that they didn’t discuss cost to align their physicians “unless it was absolutely necessary”. They implied that they avoid it at all costs.

I disagree. My experience is that the cost of healthcare, or namely the waste in healthcare, needs to be shared with this key group of decision makers – our medical staff. Estimates of the money wasted on overuse each year range from around $200 billion to over $800 billion – between 10 percent and 30 percent of US health care spending. In 2010, the Institute of Medicine issued a report stating that waste accounted for thirty per cent of health-care spending, or some seven hundred and fifty billion dollars a year. The report found that higher prices, administrative expenses, and fraud accounted for almost half of this waste. Bigger than any of those, however, was the amount spent on tests that are overused, unnecessary or potentially harmful to patients.

Although it’s the “right thing to do”, I guess I can understand the presenters’ obvious trepidation to relate the cost savings to their physician partners. Sometimes it can be potentially career ending. For instance, I had a pulmonologist on staff that was a nightmare for our Case Management department. By himself, he accounted for 29% of all Medicare admissions and had a variance of the geometric mean length of stay for his patients of 2.5 days. His estimated uncompensated cost to the hospital was $1,818,300. Furthermore, we haven’t even touched on the cost of bad outcomes and malpractice cases, but I also had another surgeon on staff that was on the “watch list” for our Medical Malpractice carrier.

Sadly, both of these physicians were on the hospital’s Board of Directors and I paid the ultimate price for “doing the right thing”. They continue their ways unaddressed and I moved on.

Working with physician partners isn’t always negative, though. In the same institution the price being paid for physician preference items by my stand-alone hospital I had just become the CEO at was shockingly high. When I insisted that this egregious price difference for such things as cardiac stents and orthopedic implants be shared with the respective interventional cardiologists and orthopedic surgeons, the alignment towards the hospital point of view was overwhelming. Despite the fact that these physicians had close ties and relationships to the individual companies and/or the representatives, since they were astounded at the price difference they worked with the hospital to leverage an $8M annual savings for the same implants! It was the “right thing to do”.

My message is that reducing the cost of healthcare goes hand-in-glove with the other two prongs of the Triple Aim: improving the patient experience and improving the health of populations. You can be selective in how you share the cost information, but it must be shared with all decision makers in order to achieve the ultimate value.

Healthcare expenditures in the U.S. exceed $2.9 trillion each year, representing more than 17.4% of the GNP(1). It should be noted that 80% of this expenditure is associated with chronic disease and, therefore, it is no surprise that Population Health is addressing the identification of at-risk populations and patients with early stage chronic conditions, not to mention the growth of our aging population. With Healthcare Reform driving the shift from volume to value, Urgent Care Centers (UCCs) represent a key care component of the Patient Protection and Affordable Care Act (PPACA) as well as the IHI Triple Aim that directly impacts access/convenience and reduced costs.

Between UCCs and retail medical clinics that are in stores like Walgreens, CVS and Target, convenient care is approaching 10,000 sites throughout the U.S. The Urgent Care concept originated in the late ‘70s and has proliferated in recent years, fueled by a shortage of primary care physicians and overbooked primary care offices, long emergency room wait times and the high cost of emergency room care. This leaves patients frustrated and feeling like they have no place to turn when they have an immediate need for medical attention but their condition is not an emergency. In fact the Centers for Disease Control and Prevention stated in 2012 that nearly 80% of visits to emergency departments were due to a lack of access to other healthcare providers(2). The niche market of urgent care therefore has a huge opportunity to make an impact.

To the credit of many physicians, they saw and are trying to meet the community need of access at lower cost by starting and owning a majority of the UCCs. These UCCs are designed to function for the convenience of the consumer on a walk-in, no appointment basis and be open for extended hours.

Health Plans, large Medical Groups, Hospitals and Health Systems are realizing the importance of establishing this type of convenient care model and have different strategies for providing Urgent Care such as building their own or affiliating with existing urgent care operators as strategic partners in providing quality outcomes at a lower cost with greater satisfaction.

For Hospitals and Health Systems, UCC affiliations are mutually beneficial. They can relieve excess volume in the hospitals’ overcrowded emergency departments and, by virtue of having a lower volume it will result in a reduction of the hospital write-offs. These relationships will generate downstream referrals for the hospitals when there is a need by the UCCs for a higher level of diagnostics, when specialist referrals are required and when patients with conditions requiring emergency care show up first at the UCCs and need to be directed to emergency departments. UCCs can also assist hospitals by functioning in the capacity of discharge clinics to reduce the hospitals’ readmission rates.

For Primary Care physicians and Medical Groups, there can be a delay of weeks or months for patients getting appointments. The number of aging patients with chronic diseases is increasing as well, making the timely delivery of care challenging. These physician groups can look to UCCs for arrangements to cover after-hours or for vacations as well as for more patient-convenient certified laboratory collections and testing, imaging, suturing, in-house medication dispensing and durable medical equipment.

For Health Plans, UCCs pose a more cost-effective alternative than emergency rooms. Additionally, as it pertains to population health, it is crucial that the respective electronic health records interface so that at-risk patients can be identified and treated for early stage chronic conditions. An EHR would allow a seamless connection with an ACO or a Medical Group as well.

In conclusion, UCCs that are appropriately integrated in the healthcare delivery system will effectively meet the intent of the ACA and Triple Aim by providing greater convenience, satisfaction, reducing cost and be integral in achieving Population Health.

(1) https://www.washingtonpost.com/news/wonk/wp/2014/12/03/heres-exactly-how-the-united-states-spends-2-9-trillion-on-health-care
(2) http://www.cdc.gov/nchs/data/nhis/earlyrelease/emergency_room_use_january-june_2011.pdf