With Focus On Convenience, Hospital Systems Turn To Micro-Hospitals

In healthcare, seconds mean everything — quick access to care can be the difference between life and death. 

In an effort to be closer and more convenient for patients, health systems are increasingly turning to micro-hospitals to extend their network. Vic Schmerbeck, executive vice president of strategy and development with Emerus, one of the nation's leading developers of micro-hospitals, broke down the trend. 

What each micro-hospital offers is different, making a broad definition difficult. Schmerbeck said not many in the industry even call them 'micro-hospitals.' The term 'small format facility' is preferred because every micro-hospital is so different based on demographic needs. "The core idea behind the concept is to offer co-located outpatient and ambulatory services to provide a more convenient full-service access point," Schmerbeck said.

"It’s not only closer, but more convenient, it's when and where I want it, on terms I think [are] reasonable, both in time and cost," he said. "We’re creating tentacles for their system, to bring care closer to their patients, and to provide great coordinated care if they need to be in larger facility." 

Micro-hospitals bridge the gap in care between free-standing emergency clinics and centers of excellence like a full-scale hospital. Much of the difference between micro-hospitals and free-standing clinics is in the mission. Unlike free-standing clinics, micro-hospitals are mostly operated by not-for-profit systems with mission statements relating to care and treatment. 

"We are very thoughtful to the 'why' of fulfilling access gaps. Why do they want to be served, when and where? A lot of it is retail location analysis, coupled with needs analysis of healthcare for the demographic in the area. It's about providing the right location with right services. Co-locating multiple touch points in the community," Schmerbeck said.

Emerus has analyzed access gaps in over 300 cities. Each is different than the next. That means every micro-hospital has to be different. Emerus worked with Baylor Scott & White on seven projects in Dallas with MOBs attached, and each is unique. 

Schmerbeck said, "In most cases we come to the table with health systems and say 'here's where we see access gaps in your distribution network' and then we overlay that with their strategy." 

Houston, arguably the healthcare capital of the world thanks to the Texas Medical Center, was Emerus' original market. It has two facilities in Houston, yet it's the only city where Emerus doesn't have a health partner. 

"We won’t expand in that market without a health system partner. To the core, we are a health system operator and partner. We’ll end up with a partner and we’ll be opportunistic, but now there’s a lot of noise in the Houston market," Schmerbeck said.

With MD Anderson, Baylor, Memorial Hermann, CHI St. Luke and others operating alongside dozens of independent free-standing emergency clinics, there are not many gaps in coverage in the Houston market, which is why micro-hospitals aren't taking off there. "It's a very fragmented big system market," Schmerbeck said.  

The lack of Houston expansion opportunities hasn't stopped Emerus. The company just signed its 11th health system partnership. Emerus has 50 hospitals either in operation or under development. At the end of 2016, Emerus had 19 operational hospitals, and by the end of 2017 it will have 28 up and running with 20 or more still in development, operating in eight cities. 

"The footprint in a distribution network is the No. 1 rationale for a health system when they think about convenience and access," said Schmerbeck, "It's about [not] only geography but access to meaningful points of presence that are open when patients need them, that also execute from a time standpoint."

Hear more from Vic Schmerbeck and 20+ other healthcare industry experts at Bisnow's National Healthcare South event March 7 in Houston. Register today.