HIStalk Interviews Eric McDonald, CEO, DocuTap

Eric McDonald is founder and CEO of DocuTap of Sioux Falls, SD.

Tell me about yourself and the company.

My background is computer science and mathematics. I founded the company about 15 years ago. We have created an electronic medical record, practice management system, and strong business analytics solution for the on-demand space. That’s also known as the urgent care space, but it is morphing and changing into more what we call on-demand care.

What does that on-demand marketplace look like and how is it changing?

It has been known historically as the urgent care space. The term “urgent care” gives the impression that the patients’ needs are urgent. But realistically, this space is all about convenience and delivering a service to an on-demand society. Over the last half-decade to a decade, we have become more of an on-demand society. This part of healthcare has realized that and shifted its services to meet those needs. Not just in offering convenience and walk-in services, but also with the services themselves.

Historically, people thought of urgent cares as being urgent only and not offering primary care or other services. But now urgent cares are doing that. We’re seeing this shift to more of on-demand care versus urgent care. We’re seeing pediatricians and primary care docs move into this on-demand space and change their business model. Those things have led DocuTap to recognize that this is broader than just urgent care. It’s about being a technology company focused on on-demand care.

Who owns these on-demand centers? How many of them are operated by health systems?

Historically there has been a division between retail care — CVS’s MinuteClinics — and the tried-and-true urgent cares. In the urgent care world, about 25 percent are owned by health systems, Over the last half-decade, that has shifted by two to three points one way or another, but it hasn’t dramatically changed. You have seen a larger presence by corporations, larger chains like MedExpress, American Family Care, NextCare, or FastMed. Those continue to grow to take a larger percentage, probably 40 percent of the market.

The remaining urgent cares are provider owned. An ER doc decides to throw up a shingle and do it himself, and he’s maybe got one to three clinics. Or primary care docs who have changed their model to be more of an on-demand care as a hybrid between primary and urgent care.

That makes it tough to identify how many urgent cares are out there. Some clinics are primary care during the day, and then from 5:00 until 9:00 p.m., they become an “acute care urgent care.” By definition, it’s probably not an urgent care, but it really is. A number of these facilities are at times acting as an urgent care. You also have clinics or facilities that don’t offer x-rays or do laceration repairs, which are the basics that you would expect to have in urgent care.

The high-end number is about 10,000 urgent cares across the country. If you’re looking at a tried-and-true, pure-play urgent care, it’s probably 7,500 to 8,000 locations. That does not include retail clinics like MinuteClinic, which has been separated from urgent care because of their limited scope of service. They don’t have x-ray. They’re not going to manage a laceration. If you fracture something, they will not be taking care of those needs. But those would be expected in a visit to an urgent care. 

Retail clinics are limited in scope to sore throat, cough, earache, and maybe your flu shot. You got a half a dozen things that are going to be common in retail, which is different from urgent care. Having said that, I believe that will potentially shift over the next five years.

What are the technology needs of an urgent care center?

One of the challenges with a hospital-based system is that they are built to manage every specialty, every service. It’s one solution fits all, which means that it’s going to be clunkier. It’s hard to develop software that works well for every specialty. I learned early on that the best way for the company to be successful is to find one niche and be the best in it. When it comes to urgent care, it’s all about speed. How do you get patients in and out as fast as possible? When all we do is urgent care, it makes that simple.

When you start looking at the additional services that an urgent care needs — such as their revenue cycle management services, like billing services — there are some intricacies with urgent care that a hospital system is going to ignore, which impacts their revenue. We have robust data analytics, and when you’re dealing with consumers, you need to understand some of those consumer trends.

The marketing aspect plays into this. The urgent care space is consumer focused, whereas orthopedics and cardiologists aren’t. The tools that we deliver need to have a consumer play in ways that others don’t. When we talk about patient engagement, it will be very different than an oncologist or an ortho.

What kind of information exchange with other providers is typical for an urgent care center?

Interoperability, where you’re downloading information into the urgent care, is usually less important, because they’re usually acute visits such as for a sore throat or fracture. It’s less important for those providers to be aware of what’s going on. What’s important is that we get the information from this acute visit back into the health system or the mother ship. The most common interface is pushing data from our software back into systems like Epic or Cerner.

Having said that, there are situations where the hospital or health system is willing to let us pull that down as a patient walks in the door, but we wouldn’t ever keep those in sync. We would wait for a patient to walk in and do it on an on-demand basis.

How are urgent cares broadening their services?

One of the biggest buzzwords and the most important item within urgent care is patient experience. At the very onset, being able to remotely register from your phone, put your name in the queue, and wait at home or wherever you need to be instead of in the waiting room. The system will automatically text you when it’s your turn to be seen. You essentially walk right on back. Being able to remotely register and take a picture of your insurance card and driver’s license does it all for you and enhances that experience.

Our clients are embracing those items to enhance the experience. When that patient walks in, they’re going to be able to get in and out of that clinic in probably 40-50 minutes, under an hour for sure. The services that are rendered can be anything from acute-related items — sore throat, earaches, fractures – to proactive preventative items related to their care. Diabetic care, an annual physical, and “primary care lite” services. You’re going to see more moms that are using urgent cares as their pediatricians. Whether it’s pediatric care, primary care lite, or truly urgent fracture-related or lacerations stuff, you’ll see all of those happening within urgent cares.

How do you see the market and your company changing in the next 3-5 years?

We have to be very nimble. We have to assess our clients’ needs every year and shift as quickly as we can and stay ahead of them. That is hard to do because they are also quick and nimble. Many of our clients are backed by venture capital or private equity firms, which means that they’re growing quickly. They’re going to change their business models quickly if needed. It’s a tough niche to be in because it’s constantly changing and it’s changing quickly.

Do you have any final thoughts?

We got lucky. Sometimes people think that it’s crystal ball-ish, but in reality, we picked an amazing niche within healthcare. It will be fun to see how the urgent care space continues to evolve and changes how healthcare is delivered. It will push other specialties to be more consumer focused and to pay more attention to an enhanced patient experience.

Five or 10 years from now, we will look back as a healthcare industry and see that the urgent care space — which will be referenced as on-demand care — has changed how providers interact with their patients. There will be a higher expectation to offer an enhanced patient experience. Patients will have more control than they have had historically. I couldn’t be more proud of the niche we’re in, what it’s doing for healthcare, and DocuTap’s role in it.