Fast and fair

Fast and fair

COMPANIES by Jean Gruss | Editor/Lee-Collier

Taking a cue from the retail industry, a chain of urgent-care networks called Solantic strives to deliver great customer service. Founder Richard Scott has $100 million to back his effort.

Richard Scott makes it sound so simple.

Why can't someone offer reasonably priced health care for routine medical needs in an efficient and friendly manner? After all, most Americans have this miserable experience in common: They get sick, primary-care physicians can't see them for days because they're either closed or booked solid and patients end up overcrowding the hospital emergency room.

Scott's solution is Solantic, a growing network of urgent-care centers staffed by physicians who provide expert care at a reasonable price in a clean, friendly and efficient facility seven days a week.

You've got to wonder: Why hasn't anyone thought of this before?

Some have tried. But the words "urgent-care centers" don't exactly inspire confidence. Most walk-in clinics have a reputation for being dingy, unfriendly and expensive. Think coffee shops before Starbucks arrived. What's more, you can spend as much time waiting to see a doctor at an urgent-care facility as you might in a hospital emergency room.

And new competitors such as drug stores have recently built small clinics within their stores. But the care providers are nurse practitioners, not doctors who are better trained to make a diagnosis.

Solantic takes its cue from what every successful retailer knows is crucial to its survival: great customer service. Its centers are brightly lit, the staff greets you with a smile and you know exactly how long it will be before you can see a board-certified doctor. What's more, prices are reasonable by health care standards. They range from $59 to $169 and they're posted on a big sign above the receptionist.

But what makes Solantic such a promising alternative is the man behind the venture. Scott was the founder, chairman and chief executive officer of Columbia/HCA, which in a decade in the 1980s and 1990s became the largest hospital company in the world with 340 hospitals by the time Scott resigned 10 years ago. He's the chairman of Solantic and is now a Naples resident. Another Columbia/HCA alumna, Karen Bowling, is Solantic's chief executive officer.

Private equity firm Welsh, Carson, Anderson & Stowe in New York City recently agreed to provide $100 million to fund the company's growth. Russell Carson is the former chairman and chief executive officer of Citicorp Venture Capital, and Patrick Welsh was president.

Unlike the torrid growth at Columbia/HCA, Solantic has 13 locations after being in business for five years. But that's deliberate, Scott says, because it's important to establish the systems to manage future growth in advance. Scott says another 100 Solantic centers will be open within five years and eventually as many as 1,000 will dot the country. (By design, the name Solantic has no meaning, Scott says. He says he tried to select a name that wouldn't conflict or be confused with any other company - a problem after he named Columbia.).

The company picked Jacksonville as its headquarters because it could locate centers in different kinds of neighborhoods to see how well they succeeded. One was in a working-class neighborhood, another was across the street from a hospital emergency room and another was in an industrial area, for example. They discovered the Solantic formula worked in all the locations.

While Scott won't reveal financial details about the privately held company, the company will see more than 200,000 patients this year. At $100 a visit, that would generate roughly $20 million in sales. Annual growth rates are running 60% to 70%. About a third of the patients are work-related, including drug screens, physicals and injuries. "We do thousands of school physicals," Scott says. Still, 80% of a center's patients live within 5 miles.

Simplicity is key

Health care is so complicated it's a wonder anyone can make sense of it.

In 2001, Bowling and Scott traveled around the country visiting emergency rooms to speak with patients, doctors and insurance executives. "We started talking with everybody we thought would be important to our success," Bowling says.

They also spoke with competitors, including Stephen Dickey, a Tampa doctor who runs seven walk-in clinics there. "He was incredibly helpful," Bowling says, noting that Solantic will deliberately stay out of Tampa for now because of his help.

Their key findings: doctors were slaves to administrative tasks, insurance billing was a labyrinth of codes and patients were unhappy with doctors and insurance companies.

So Scott and Bowling simplified the process based on what was important to those three groups. At Solantic centers, doctors only treat patients. They leave the administrative work to a center manager and clerical staff and have none of the hassles of running a practice. They have flexible hours, working three days one week and four days the next. "We don't have any beepers," says Nathan Newman, Solantic's chief medical officer. "When your shift is over, your shift is over." Solantic doctors make $150,000 to $200,000 a year, Scott says. There are 35 employees at Solantic's corporate headquarters in Jacksonville who support the centers' operations.

Attracting doctors isn't a problem, Scott and Newman say. Lower reimbursements, higher insurance costs and administrative headaches are driving doctors out of traditional private practices. And young doctors graduating from medical school saddled with student loans can't afford to build a new practice. "We recently hired a family physician who was chief of staff at a hospital, owned his practice and owned a building," Newman says.

There are no billing codes at Solantic. Instead, there are three prices. It costs $59 for a visit with no lab test or other procedure such as blood test. For a visit with one procedure, it costs $109 and for two or more procedures its costs $169. Scott and Bowling negotiated those same three prices with insurers, eliminating complicated billing codes altogether. Scott says his biggest surprise has been how supportive the managed-care industry has been to this and other ideas.

Most important, these three prices are clearly posted on a board above the reception desk for patients to see. People ought to know how much a doctor's visit is going to cost, much like prices are posted on any item inside a store, Scott and Bowling reasoned.

Reasonable prices are key because more than 43 million Americans under age 65 have no health insurance. But just because someone doesn't have health insurance doesn't mean they can't pay for a doctor's visit, if it's reasonably priced. "I wanted the lowest price I could get," says Scott.

Even at those prices, Solantic centers reach break-even after 18 months. It costs $700,000 to open a Solantic center if it's leased space and as much as $1.2 million if it's free-standing. Each center needs 40 patients a day to break even. Scott estimates that 70% of its patients would have gone to a hospital emergency room if a Solantic center were not present.

Hospitals have welcomed Solantic centers because they take the load off their emergency-room doctors, who are swamped with non-emergency cases. "I'm talking to a lot of hospitals right now," Scott says.

Meanwhile, primary-care physicians aren't threatened by Solantic centers because the urgent-care doctors refer chronically ill patients to their primary physicians after a consultation at Solantic. Solantic doctors only treat patients that need urgent care. "I want them to know we're on the same team," says Newman.

In new markets Solantic plans to enter, Newman will visit with primary-care physicians and their local associations to collaborate. "We want them to know that we're not taking their patients," Newman says.

Retail health care

Scott and Bowling are proving that good management in the retail industry also applies to health care. The key to both is great customer service.

A receptionist greets a new patient immediately upon entering a Solantic center. There are no glass windows separating the receptionist from the patient and the receptionist is always standing behind the counter to make eye contact with the customer. Employees must be nonsmokers.

The centers are brightly lit and decorated. The furniture is from top-of-the-line manufacturer Herman Miller that doesn't stain and doesn't easily break. There's a separate waiting area for children. Most centers are in free-standing buildings, including one that was converted from a fast-food restaurant. Two are in strip centers, and three are within Wal-Mart stores, a test by the retailing giant.

A flat-screen television inside the waiting room tells patients exactly how long it will be until they see a doctor. If the wait is longer than usual, the customer can run other errands and can be alerted on his cell phone. You can make an appointment by calling ahead of time.

Once the appointment is completed, patients can buy common prescription drugs from the Solantic center's pharmacy. The drugs are pre-packaged so there's no wait, and they all cost $15. This saves the patient the hassle of driving to a drug store and waiting another 20 minutes for a pharmacist to fill the prescription.

Each Solantic center has a manager with prior retail experience. They hail from grocery stores, car-rental companies and clothing shops. Everyone, from the doctors to the receptionist, is graded and paid based on patient satisfaction from surveys distributed after each patient visit. "If you don't have patient satisfaction, there's no bonus," Scott says.

To attract new patients, Solantic advertises on the radio, television and in some print publications. Ads emphasize convenience, hours, prices and the fact that physicians are always present. In Jacksonville, for example, Solantic spends 5% of sales on creating awareness of the brand.

That, Scott says, has been his biggest challenge. "Awareness is a big deal."

Columbia/HCA alumna leads Solantic

Karen Bowling was swept up by the meteoric rise of Columbia/HCA in 1995.

The hospital company Richard Scott founded in 1987 with two hospitals in Texas became the world's largest health-care company a decade later with more than 340 hospitals, 130 surgery centers and 550 home-health locations in 38 states and three foreign countries. The company's 285,000 employees made it the country's seventh-largest employer.

Scott declines to talk about Columbia/HCA.

In 1995, Columbia acquired Memorial Health Care System of Jacksonville, where Bowling managed the hospital's television studio. Previously, she had covered news and sports for a Jacksonville television station.

Shortly after the acquisition, Bowling moved to Nashville and took charge of the hospital company's marketing and advertising department. "Rick gave people opportunities," Bowling says of her rapid rise within the company. "He always believes that if you've never done it before, you might do it better."

After Scott resigned as chairman and chief executive officer of Columbia/HCA in 1997 following Medicare fraud investigations at some of the hospitals (he was never charged or implicated), he bought a controlling stake in America's Health Network. Bowling followed Scott and became a vice president with the cable channel. "We did the first live birth on the Internet," she recalls.

After Scott sold the channel, Bowling moved to another company in Fort Lauderdale called CyberGuard. Scott was an owner of the Internet security company, and it was at company meetings that Scott and Bowling started to discuss creating Solantic.

"It started out as a discussion about affordable care," Bowling says. "both Rick and I love health care." They asked themselves: "Is there a need? Who can we learn from? Who's doing something like this now?"

"W e read every business book about companies that had been built from scratch," bowling says, especially successful retailers such as Home Depot. They traveled around the country to speak with physicians, patients and insurance companies.

Scott says founding Solantic has been a lifelong ambition. "I've always wanted to do this," he says. Bowling is the right person to lead the company because "she takes it personally," he says. "Great retailers live their models."

INDUSTRY

Urgent competition

Solantic faces competition from relatively new players in the urgent-care business. The one big difference is that Solantic employs board-certified physicians and its rivals employ nurse practitioners.

These include:

• MinuteClinic, a subsidiary of CVS Caremark Corp., with more than 250 locations inside CVS drugstores;

• Houston-based RediClinics, a provider of care in 46 centers in five states, backed by AOL founder Steve Case;

• Pennsylvania-based Take Care Health Systems, a subsidiary of Walgreens, which plans to have 400 clinics inside Walgreens drugstores by the end of 2008.

REVIEW SUMMARY

Industry. Health care

Company. Solantic

Key. Tying everyone's compensation to patient satisfaction drives successful health-care companies.