Business Columns & Blogs

Bill Virgin: Here’s the latest on urgent care, scale at co-ops and phone scams

Hey, whatever happened to that story about (fill in blank of news topic)?

Those stories are still making news. Here are some updates:

▪  Was it just a few weeks ago that we were discussing urgent-care centers, whether freestanding or part of a retail outlet, as part of the broad restructuring of health care?

Why yes it was, and no sooner did that column appear than a new entrant jumped into the local market. Tacoma-based CHI Franciscan Health and CityMD announced plans to open urgent-care centers in Kent and Seattle’s Ravenna neighborhood by early 2017. More locations in Pierce and King counties are to follow.

This is significant news on several counts. It further validates the urgent-care-center phenomenon as something more than a short-lived trend. Even a basic urgent-care facility isn’t cheap to locate, equip and staff, so the health care conglomerates must believe they’ve got some staying power and value to make it worth their while to invest in them.

If they are going to stay around, urgent-care centers carry significant implications for traditional health care providers, specifically the general practitioner (the “family doc”), who could see patient visits for the “routine” stuff drained by the clinics.

The fact that so many players — hospitals and health-care conglomerates, retailers, independent companies — are getting into the sector or growing within it also raises this question: When does the proliferation of clinics saturate the market? The increased availability of such services, and competition among them, is on the whole a good thing, but even the most basic of business sectors have a ceiling on the amount of available capacity that keeps everyone viable.

Markets rarely slow before hitting that equilibrium point. Instead they overshoot it. That’s followed by a correction in which the overcapacity is shed.

Don’t be shocked if the expansion is followed by a period of contraction and exits. That doesn’t mean people don’t like the clinics any more, just that the market can generate only so many sick and injured people to use them.

▪  Speaking of business models and their future, the abrupt closing of the former Tacoma Co-Op after its combination with Seattle-based Central Co-op has people thinking about business cooperatives.

The cooperative movement has had success stories in the Northwest — credit unions such as BECU, retailers such as REI and PCC, health care organizations such as Group Health, and agriculture and food-processor organizations such as Darigold and grower cooperatives east of the mountains.

That movement is in upheaval at the moment. Some credit unions have had to merge, expand their fields of membership, covert to bank charters or go out of business to survive. Group Health is being acquired.

Life can be particularly tough for small cooperatives operating in crowded, competitive, thin-margined business sectors such as groceries. No matter how noble the cause or how uninterested in becoming big or truly member-connected it is, a cooperative still has to have revenues that exceed expenses. Those revenues still have to grow to outpace the increase in expenses (employees are going to expect an occasional raise, for example).

And in businesses such as groceries and banking, scale counts, which puts one more layer of pressure on small cooperatives operating in those sectors. Scale helps hold expenses in check. Without the size that Kroger, Safeway, Costco or even PCC can leverage, small cooperatives are in a tough spot.

The cooperative movement is, like everything else in business, facing restructuring. Co-ops, even the small ones, won’t disappear, but they could well look and operate in new and different ways.

▪  Scam alert update about some old favorites. After weeks of relative quiet, the phone suddenly erupted this week with calls from the “Windows Security Center” about a problem detected in a home computer, and the email inbox suddenly filled to the brim with messages about exciting and rewarding opportunities as a secret shopper.

Among the more frustrating aspects of the scams, aside from the interruption and time spent dealing with them, is that they’re incredibly difficult to stamp out. On occasion, though, something happens. The Federal Trade Commission reported earlier this month that it and the state of Florida went after defendants based in that state as well as Iowa, Nevada and Canada on charges of running a tech-support racket. A federal court temporarily shut down their operation, froze assets and turned over control of the business to a court-appointed receiver.

Good. Now do that a few thousand more times, and figure out how to apply it to international operations, and you might just quash the problem — for a few weeks, or until the miscreants find a new fraud to perpetrate.

Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at bill.virgin@yahoo.com.

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