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Hospitals Have a Field Day Charging High Rates at Urgent Care Centers

Sometimes the best-intentioned moves in health care have negative consequences.

Such was the case when Medicare recently allowed hospitals to bill for care performed at urgent care centers not attached to their emergency departments. The aim was to encourage hospitals to send patients who didn't require emergency care to a lower-cost setting. But the result has been a proliferation of hospital-owned walk-in clinics that, in many cases, charge considerably more than non-hospital-owned centers. And, like hospitals' new focus on sleep centers, the urgent-care sideline may prove to be another trend that boosts health costs.

In south and central Florida, for example, Baptist Healthcare, Memorial Healthcare System, North Broward Hospital District, and Florida Hospital have opened dozens of urgent-care centers. At one walk-in clinic operated by Baptist in Kendall, Fla., a woman whose daughter had been nipped by a dog paid over $500 for a 15-minute visit. That included a $275 "facility fee" charged by the hospital and a $233 doctor fee. In contrast, other urgent-care centers in the region charge $100-$150 for a similar visit.

According to an article in the Orlando Sun Sentinel, charges like those at the Baptist walk-in clinic are not uncommon at hospital-owned urgent care centers in Florida and elsewhere.

Patients across the country have complained about big fees at hospital-owned walk-in clinics, contending they take advantage of cash-paying patients with no health insurance or high-deductible policies.

Baptist counters that their clinics are open at all times and that their doctors offer more sophisticated services than competing urgent care centers. But it's hard to see how those services could justify a four- or five-fold difference in price that rivals ER charges. Also, how can these hospitals get away with such bills when they're competing with non-hospital-owned urgent-center centers?

Perhaps some people really do think they get better care at the hospital-operated facilities. Others may have gone to an ER, were referred to the hospital's urgent-care center, and didn't think to ask what the care would cost. And, in some locations, the nearest non-hospital-owned clinic may be too far away.

Whatever the reason, Baptist's urgent-care unit collected $143 million and made a profit of $52 million in 2009, for a margin of 36 percent. Those kinds of numbers are likely to attract a feeding frenzy by hospitals.

Meanwhile, other healthcare players are also jumping into the urgent-care business -- sometimes from unexpected directions. Last December Humana (HUM), one of the nation's leading insurance companies, bought Concentra, which operates 300 walk-in clinics and 240 worksite clinics, for $800 million. Humana views the acquisition as a way to cash in on the surging demand for primary care that's likely to result when 32 million people gain insurance coverage in 2014.

Image supplied courtesy of Flickr.

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