GuideWell, parent company of health insurer Florida Blue, says its urgent care clinics are designed to be a lower-cost option to traditional hospital rooms.
Health Care In Florida
Blurred lines: Health providers and insurers move into each other's turf
Late last year, in the upscale Orlando suburb of Winter Park, the 7,500-sq.-ft. GuideWell Emergency Doctors urgent care clinic opened in the same shopping plaza as a Trader Joe’s, Shake Shack and Marilyn Monroe Spa.
The clinic is neither a freestanding medical practice nor an extension of a local hospital chain. GuideWell is the parent company of Florida Blue, the state’s largest health insurer. And the clinic is a beachhead in Florida Blue’s move into providing primary care as well as paying for it.
The clinic, with 18 exam rooms and equipment ranging from CT scans to IV fluids, is staffed by board-certified physicians who can treat everything from heart attacks and strokes to ear infections and broken bones.
Prices are posted in the lobby: $160 for minor issues (such as coughs, sprains and ear infections), $560 for moderate cases (lacerations that require sutures or staples, a migraine or shortnessof- breath workup, splinting broken bones) and $848 for complex cases (a threatened pregnancy, congestive heart failure or appendicitis).
An ultrasound costs $289, a spinal tap $480 and a CT scan runs from $360 to $510.
A GuideWell spokesman points out that customers pay urgent care rates rather than emergency care rates. Typically, Florida Blue members who visit the clinic pay onethird less than they’d pay to visit a hospital ER.
In today’s health care landscape, the old “fee for service” model in which insurance companies pay providers for each individual procedure a consumer needs is giving way. In its place, a value-based or pay-for-performance approach is emerging in which insurers pay providers a set amount to care for each insured patient.
The shift has forced both traditional insurers and traditional health care providers to focus intently on controlling costs.
One sign of that focus is the increased emphasis by both providers and insurers on preventive care. The changing reimbursement model also creates incentives for hospitals and health insurance companies to encroach on each other’s territory as they scramble to claim a larger share of any savings they can generate.
“All of this ties back to the overarching trend we’re seeing in the industry: Costs are going up at an unsustainable level, so you really have all parties looking for ways to dramatically change their models,” says Yulan Egan, a counsultant with the Advisory Board Co., a health care technology, research and consulting company.
GuideWell partnered with Jacksonville-based Crucial Care to operate its clinics, which are designed to be a lower-cost option to traditional emergency care. Ideally, the approach will save money for consumers and even more for their insurers — a particularly important bonus for GuideWell if the patient also happens to be covered by Florida Blue.
Strategically located in an affluent area, the Winter Park clinic attempts to lure patients with the promise of a shorter, less expensive — and more pleasant — experience than a hospital emergency room can provide. “It’s really about the customer experience,” says Prakash Patel, chief operating officer of GuideWell Mutual Holding and president of its GuideWell Health division, which oversees the company’s “health care delivery businesses.”
“We have seen, unequivocally, some of the highest customer satisfaction surveys that we have ever seen” from patients who use the clinic. “And they don’t have to go the emergency room, where they’re going to get charged a heck of a lot more.”
Business is strong enough that GuideWell opened another Emergency Doctors clinic this summer, less than 10 miles from the first, near Orlando’s upscale Baldwin Park neighborhood.
GuideWell has also struck a deal with Latin American hospital and clinic operator Organizacion Sanitas Internacional to open primarycare clinics in south Florida aimed primarily at recently arrived Latin American immigrants. The partnership will begin with three CliniSanitas clinics in Doral, Kendall and Miami Lakes specifically for Florida Blue customers. Guide- Well expects to build more in the coming years, both in Florida and other key Hispanic markets around the U.S.
Patel says the new clinics are important planks in the company’s overall move to value-based care models. In addition to providing some services itself, Patel says 25%of Florida Blue’s medical spending is now through value-based contracts with providers — up from “almost zero” three years ago.
Meanwhile, as insurers gravitate into medical practice, some traditional health care providers are moving into insurance.
In 2013, Altamonte Springsbased Florida Hospital and Melbourne- based Health First partnered with the goal of offering insurance plans from Tampa to Daytona Beach.
Health First is the only health system in Florida to offer its own insurance plan, which started in 1996 and today covers about 20% of Brevard County, says Drew Rector, Health First’s chief strategy officer. Adding the much-larger Florida Hospital will help substantially expand the plan.
The deal calls for Florida Hospital eventually to take an equity stake in Health First health plans. Already, the number of patients enrolled in the plan has increased from 65,000 to about 130,000, mostly via the addition of Florida Hospital employees. Rector expects the plan will grow to more than 200,000 as the partnership expands.
“I think hospitals, as health care moves to more of a valuebased system, will be increasingly looking for ways to hold first dollar risk (premiums) so they can be responsible for that,” Rector says. “Lowering our costs and our prices and transferring that savings from our hospital systems to our health plan and enrolling members is a really strong value proposition. We want to hold the premium dollars, and we want to be responsible for the service, outcome and overall cost.”
Some other hospitals appear to feel the same way. A 2013 survey conducted by the Advisory Board found that 28% of hospitals hoped to launch their own insurance plans within five years. Some 18% said they already marketed their own plans. (The Advisory Board co-founded a company called Evolent Health which advises hospitals starting insurance plans.)
Insuring their own patients gives hospitals a much fuller picture of their health care history and what, if any, preventive programs they follow, allowing them to better manage care. And in an environment where providers are paid for the quality of care they provide — rather than the number of tests they order or surgeries they perform — it allows them, rather than third-party insurers, to capture the bulk of any savings.
“It’s up to them to manage against a number and, if they keep costs down, they’re actually rewarded for that,” says Egan, of the Advisory Group. “Hospitals see a nice convergence there.”
The Obamacare Factor
While much of the debate and controversy surrounding President Obama’s Affordable Care Act has focused on the individual mandate and other changes to the health insurance landscape, the landmark law has also played a role in driving the entire health care industry away from the fee-for-service payment model to one based on quality of care, says Yulan Egan, a consultant with the Advisory Board Co.
An important component of the law, Egan says, is how it pushes Medicare, which accounts for 20% of total national health expenditures, away from feefor- service agreements and toward “alternative” payment models.
That shift is accelerating: At the start of this year, the U.S. Department of Health and Human Services set a goal of having 50% of all Medicare payments in alternative models by the end of 2018.
What’s more, by establishing public exchanges where consumers can shop for insurance plans, the law has made it easier for hospitals to market any new insurance plans they launch, reducing a key barrier to entry.
Focusing on the Core
Not every hospital is racing to get into the insurance business.
Steven Sonenreich, president and CEO of Mount Sinai Medical Center in Miami Beach, says his hospital’s emphasis has been on developing and expanding a network of hospital facilities, clinics and physicians’ offices that provide integrated care to consumers. Over the last five years, Mount Sinai, an independent, not-for-profit teaching hospital, has roughly tripled its number of locations and the number of physicians it employs, Sonenreich says. The hospital system also has added “patient navigators” to help customers with everything from making appointments to monitoring medicine programs. It has no plans to get into the insurance business, Sonenreich says.
“Our focus is developing our models to better manage our population and developing a very strong network of primary-care physicians — because you always hear that there’s a shortage of primary-care physicians and people want convenience,” he says.
“Being in the insurance business is not our core business,” Sonenreich adds. “Our core business is health care.”