Insights| November 7, 2018
Retail Clinics and Surprise Bills are Changing Healthcare Customer Behavior
The steady rise of retail clinics and other affordable outpatient settings, and accumulated frustrations over ‘balance billing,’ are rapidly changing the way customers purchase their healthcare services.
Multiple recent consumer surveys confirm that the healthcare system is witnessing a shift of behavior in customers.
In part, these changes can be attributed to the lack of medical billing transparency. Balance billing also known as ‘surprise bills’ have been the Achilles heel of the health insurance industry for years. But a new poll by HealthSparq suggests that these bills are driving customers away from traditional healthcare settings such as hospitals more than ever.
Surprise bills make people skip preventive screening
More than half of respondents to the survey said they received a surprise bill for a healthcare service in the past 12 months. In 60 percent of cases, the bills were higher than expected and over 40 percent of responders said they got more bills, when they only expected one. On top of that, over 60 percent of people faced bills for services they assumed were covered by their insurance plans.
The lack of transparency for billing processes made 40 percent of consumers skip a routine check-up, physical, or other preventive screening, said the survey. Patients’ mistrust of the medical billing system altered the decision making process for their families too. About 39 percent have avoided care when they or a family member was sick or injured. Most patients (86 percent) dealing with surprise bills blame healthcare insurers.
Dissatisfied with traditional billing systems, patients started gravitating towards more affordable and transparent retail-style healthcare options. Retail clinics have multiplied five-fold since 2010, according to a new report by Civis Analytics.
Some of the major players in the market include CVS Health (MinuteClinic), Walgreens (Healthcare Clinic), Walmart (The Clinic at Walmart, Care Clinic), and Bellin Health (FastCare).
What appeals most to customers is the convenience and the affordability these clinics provide. Not only do they offer up-front billing for out-of-pocket payments, but they also operate seven days a week and there’s no need for appointments. The waiting time is much shorter than in the emergency room too. The survey found that patients were either seen immediately or waited for less than 15 minutes. More than 90 percent of people said their experience was good, very good, or excellent.
Younger patients gravitate towards retail clinics
Customers no longer have to travel to a hospital, instead, health clinics come to the customer, whether it’s a grocery store or a shopping mall. “Patients want good medical care, but they also value convenience and want healthcare to meet them where they are, rather than cause disruption to their daily lives,” said Crystal Son, Healthcare Analytics Lead at Civis Analytics.
Affordability is another advantage urgent clinics have over hospitals; with treatments up to 10 times less expensive than in the ER. A 2016 study in the Annals of Emergency Medicine revealed that patients with similar diagnostics would pay an average of about $2,200 in the ER versus $168 in an urgent care center.
Civis Analytics found that these ‘quick care’ sites are visited primarily by younger people, either irregular patients or first-time visitors, who only need “one-and-done” primary care services. Around 40 percent of patients seek care for minor illnesses or injuries, over 30 percent of patients come for vaccinations, while a little under 6 percent need a physical exams. And 68 percent of patients ended up buying at least one item during their health visit.
The industry is expected to expand even more in the next couple of years
Experts predict that the U.S. retail clinic market will reach $7.3 billion by 2025. Statistics for Illinois point to an upward trend as well.
The 2017 Health of America Report shows that Blue Cross and Blue Shield of Illinois saw an 11.7 percent increase in the rate of retail clinic visits by patients with insurance through their employers between 2014 and 2015. “They’re just sort of an easy way to get seen for minor conditions like flu, earache, minor things of that nature,” said Dr. Stephanie Vomvouras, vice president and chief medical officer at Blue Cross and Blue Shield of Illinois.
However popular, “retail clinics are not yet replacing traditional primary care providers,” noted Civis Analytics. Around 85 percent of patients who visited a clinic in the last year, also saw a primary care doctor.
On the other hand, retail clinics are changing more than customer behaviors.
The entire healthcare landscape is in the process of a major redevelopment as hospitals jump on the retail healthcare business model. The latest example comes from Amita Health. Amita, the largest hospital system in the Illinois, is planning to turn its hospitals into retail-like outpatient care facilities in locations previously occupied by big-box stores like Kmart.
Hospitals will still be “amazing workshops where we do unbelievable things, but…for the vast majority of patients, the focus has got to be on keeping you out of our hospitals,” said Mark Frey, CEO of Amita Health, the joint operating company formed by Ascension Health.