CHRISTUS Health, Velocity Care Form JV in AR, LA

The joint venture intensifies the Dallas health system's push into retail urgent care and freestanding emergency departments. CHRISTUS is bringing the consumer-friendly tactics of retail operations into its acute-care hospitals.

CHRISTUS Health has created a joint venture with Velocity Care Urgent Treatment Centers and its four locations in Shreveport and Bossier City, LA, and Little Rock, AR.

Paul Generale, senior vice president of financial operations and ambulatory services for CHRISTUS Health, says the deal allows the Dallas-based Catholic health system to jump into the region's retail-based convenient care market.

"Quite frankly, what really brought us together was that our analysis on the market in four or five locations was within a quarter mile of where they were," Generale told HealthLeaders Media. "After spending time with these doctor/partner/owners at Velocity Care, we found we were very aligned on mission and patient care. We said for Louisiana, let's try this hybrid where we are in control, we have the percentage. It allows us to get there today and pick up 55,000 visits or access points that we can integrate into our system and truly do population health, rather than spending about the same amount of money, if not more, to open four or five clinics and taking the time to tweak those."

Generale says CHRISTUS last year intensified its efforts to enter the retail urgent care and freestanding ED markets.

"We had a lot of employed primary care docs in offices with extended hours, but nothing that was true retail urgent care and acting like that hybrid, with transparent pricing and times, etc.," he says.

CHRISTUS's push toward retail operations started with the acquisition of four urgent care clinics in San Antonio that took in a combined 60,000 patient visits a year. Generale expects to have as many as 15 urgent care centers system-wide operating by January.

"We picked the right business with the right platform, and we saw that as a good way to get speed to market while we were building urgent care," he says. "In Texas we went from zero to, [that] by the end of the year, we will have seven [sites] that do about 75,000 visits."

Generale says CHRISTUS originally expected to wholly own its urgent care operations in Louisiana and Arkansas, as it does in Texas. But the health system instead entered into a JV with Velocity Care after meeting with the company's physician leaders.

"It's about finding the right partner," Generale says. "We said we wanted to wholly own this because we know it can get complicated. However, we do a lot of partnerships and it is in our DNA, so we're able to make it work."

One reason for the JV, he says, is that the physicians at Velocity Care know the region they serve, but need the business acumen of the larger organization.

"It's like any small business. When you have the original owners and the chassis is small enough and they have their fingertips on it, it does well," Generale says. "When they start to spread into other locations outside of what they know—and we've seen it in Velocity Care numbers and in other businesses—you see longer wait times, you see the financials not working out. It's about finding the bread and butter, and then if you can leverage it with the larger system that has the assets and intellectual property to help grow outside that market, that should be a good recipe."

Hospitals and other traditional medicine venues, which are notoriously laggards in the retail medicine movement, can learn a lot about transparency and pricing from spry newcomers such as Velocity Care, Generale says.

"With the retail and the urgent care, we know our pricing. We've got the visit costs down. We've got our times down. We don't play the out-of-network game. All of our contracts are in-network, and we know that care cost on average is going to be about $100. Your in-and-out copay is $20. [The business model] is trying to not complicate things."

On the acute-care side, CHRISTUS hospitals are adopting the consumer-friendly tactics of urgent and convenient care centers, Generale says. "As you see the market shift to that, you are going to see hospitals shift to this consumerism and use the technology so you can schedule appointments, or geo-tracking so they know where you are, and transparent pricing.

The new market models are "is kind of exciting," he says. "You are seeing doctor-on–demand, and technology where you can be looked at and triaged by a physician using technology in a good-quality, low-cost manner. You're already seeing access to care [improve], whether urgent care [or] immediate care. You're seeing a lower cost base for access rather than the traditional 250 beds and ancillary areas. You are going to see more micro-hospitals, more telehealth, more immediate urgent care, and more money go to this space as you see private equity and others try to gobble up what they can."

A key learning from CHRISTUS's retail ventures is to avoid commingling urgent care costs with other costs within the health system. "What we have tried to do it create a retail ambulatory division that can run independently while integrating into a larger system and maintain those efficiencies and transparencies," Generale says. "That is how you do it, and that is truly key."