Dr. Michael Gutman is bullish on the urgent care industry.
Just a year after opening his first urgent care center in West Hartford, the veteran emergency department physician is preparing to open two more locations in Enfield and Simsbury this summer.
Gutman founded his company, New England Urgent Care, last February in an attempt to get in on a business that he sees as the future of non-emergency health care.
Gutman's West Hartford facility on North Main Street is a hybrid between a primary care office and emergency room, offering patients with non-life threatening injuries services like X-rays, IV fluids, respiratory treatments, medications, suturing and casting. Patients are treated primarily by a physician's assistant and there is a full-time emergency department nurse on staff.
Gutman oversees the operation and also treats patients.
Across the country, urgent care centers are popping up at a dizzying pace, as many health care experts see them as a cure to slowing the rising costs of health care and overcrowding in hospital emergency departments.
Urgent care centers are seen as a low cost, more convenient alternative for many patients, Gutman says, because they carry less overhead and require much less wait time than a hospital emergency department.
"Emergency medicine was originally designed to treat individuals who were critically ill or about to become critically ill," Gutman said. "But emergency medicine has become a victim of its own success. Large populations of patients who go to emergency departments don't actually have emergencies. That leads to longer wait times and more expensive treatment because of the large overhead costs hospitals carry."
Gutman said his experience in emergency departments over his 25-year career influenced him to open an urgent care center as an alternative treatment location for patients needing treatment for low-to-moderate acute conditions.
Gutman, who went to medical school in Canada, spent much of his 25-year career at St. Francis Hospital and Medical Center in Hartford, where he still practices today. He says his urgent care center is not affiliated with St. Francis, although he will refer patients there. Gutman said starting his own business has been a challenge. But he is not new to taking risks.
After the Sept. 11 terror attacks, for example, Gutman decided to join the Army, where he was commissioned as an officer in June 2002 and deployed three times over a five-year period.
His service included two stints in Iraq where he treated U.S. soldiers and Iraqi prisoners in Abu Ghraib prison. During his second 2008 Iraqi tour in Mozul, Gutman was stationed just 75 meters from where fellow physician Maj. John P. Pryor, who was head of the trauma team at the Hospital of the University of Pennsylvania, was killed by a mortar round.
"The experience was tough, but rewarding," Gutman recalls.
With his Army days behind him, Gutman is now taking on a new challenge by trying his hand at entrepreneurship.
He started New England Urgent Care with his wife Yahel, an emergency department nurse, with about $500,000 in start-up investment funds, and a Small Business Administration loan from Webster Bank.
His main challenge so far has been trying to educate customers, providers and insurers about what his business actually offers. Retail medicine is becoming a hot trend and many people consider urgent care centers to be equivalent to walk-in clinics, but Gutman says that is not the case.
He said their facility is the only one in Greater Hartford accredited by the Urgent Care Association of America and it offers a larger spectrum of care from pediatrics to geriatrics and even gynecological services. The facility also has an in-house pharmacy, life-saving equipment and more extensive services than a walk-in clinic, which typically treats patients with sore throats or bruises.
"The problem is anyone can put up a sign that says urgent care," Gutman said. "But we are not just anybody. This is a hybrid between primary care and emergency medicine."
Convincing insurers his business is different than a typical "minute clinic" has been especially challenging, Gutman said. He said the state's largest insurer, Anthem Blue Cross and Blue Shield, provides adequate fee-for service reimbursements that cover costs and allow the business to make a profit. But most other insurers are paying a flat fee per patient visit that doesn't always adequately cover the costs of the different services being provided.
"Some insurers see urgent care as equivalent to walk-in clinics," Gutman said. "It doesn't matter whether patients come here for a stubbed toe or we provide two or three hours of respiratory treatment, we get paid the same."
That is putting pressure on their bottom line.
To stay financially viable, urgent care centers need a high volume of business. Initially, New England Urgent Care was only seeing five to six patients a day, but that has grown to about 20 to 25 patients now.
To break even, Gutman said the facility needs to see 600 to 625 patients a month.
He said New England Urgent Care expects to become profitable by next year, so the Webster Bank loan is providing the working capital to stay afloat for now.
Besides commercial payers, Gutman said New England Urgent Care accepts Medicare and Tricare patients, but not Medicaid patients. The lax reimbursements from Medicaid would threaten the operation's financial viability, he said.
Dealing with consultants and billing companies has also been a challenge, Gutman said, and he's had to learn quickly the difference between revenue and cash flow.
"Revenue has been good, but cash flow has been uneven because of billing issues," Gutman said. "You learn quickly that a billing company can make or break a medical practice. I wake up in the middle of the night sometimes thinking about cash flow issues and meeting payroll. There have been some rough patches over the last 15 months, but we are in a good place right now."
Despite being in operation for just over a year, Gutman is bullish on the growth of his company. The center has added an in-house pharmacy, which has provided a new revenue stream. This summer he plans to open two new locations in Enfield and Simsbury. In Simsbury, the plan is to rent space in a St. Francis Hospital access center.
In seven years, Gutman said he wants New England Urgent Care to have five to 10 locations that each treat about 50 or 60 patients a day and earn about $2.5 million in revenue.
Then he would either sell the company or pass it on to his heirs.
"I think this model is one of the answers to what ails the health care world right now," Gutman said.
Ellen Andrews, the executive director of the CT Health Policy Project, agrees. She said as long as urgent care centers meet quality standards, they are good options for expanding health care access. By keeping patients out of the emergency room, urgent care centers reduce costs for self-pay consumers and employers. Urgent care centers are also often open after hours and on weekends.
However, Andrews said, urgent care centers are generally not located in neighborhoods with low access/higher uninsured patient bases. They also often offer simpler, lucrative services that take margin away from physician practices that get left with less profitable services and more complicated patients.