Too Late to Get In on Urgent Care?

Urgent care (sometimes known as “immediate care”) has been one of the fastest growing segments in the healthcare industry over the past 5 years – for many good reasons.

If you are in the primary care arena, do you have an Urgent Care business strategy? If not, should you?

If you have an urgent care business already, are you staying competitive and winning the market share game? What is your strategy and is it better, smarter and more forward-thinking than your competitors?

If you don’t have an urgent care business already, is it too late to get in and be successful?

Recent Trends in Urgent Care

Urgent care is an industry generating $16 Billion a year and expected to grow by 3 to 4% a year for the next decade. What factors are fueling this trend?

For one thing, almost half of U.S. citizens don’t have a regular primary care doctor and prefer to use urgent care clinics as their primary care providers on an as-needed basis. The percentage is even higher among people in their 20s and 30s.

Additionally, there is a shortage of primary care physicians that is becoming a serious problem for medical access. Urgent care clinics often use nurse practitioners and physician assistants to provide care to patients and this helps offset the shortage of physicians doing primary care.

Another factor is that we are increasingly an immediate gratification society. We want what we want whenever we want it. Waiting to see a family physician, particularly when you are sick, is increasingly frustrating and unacceptable to most Americans. Most urgent care clinics see patients 7 days a week (including holidays), and often have extended evening hours on weekdays.

Who are the Players?

The number of urgent care clinics has actually decreased somewhat over prior years but not because the industry isn’t growing or profitable. Consolidation of urgent care through acquisition and the marginalizing of small players is driving this trend. (The big get bigger and the rich get richer.)

(If you are not one of the bigger urgent care businesses in your market, don’t despair because there may still be an opportunity for you as well. Keep reading.)

Many of the biggest players offer both occupational medical services as well as urgent care. Even smaller businesses offer both sets of services but occupational medicine is a more substantial part of the business model for the biggest competitors.

Among the bigger players, Concentra (acquired by Humana at the end of 2010 and then sold it last June to a private equity group) has over 300 clinics in 38 states. US HealthWorks, acquired by Dignity Health in 2012, has roughly 200 clinics across 20 states. NextCare Holdings, Inc. owns and operates over 100 urgent care clinics in 11 states and is aggressively acquiring other established urgent care clinics.

In addition to Dignity Health, more and more health systems are opening or acquiring urgent care clinics because it is an excellent front door to other hospital-owned services and it is a way for health systems to maintain and grow market share and limit patient attrition.

Private equity firms have invested billions of dollars in the past 5 years in companies that provide urgent care clinics and services. When private equity plays at this level, you know something big is happening in the industry.

Retailers

Target, Walgreens, CVS and Walmart are some of the most prominent retailers to be in the urgent care clinic business with the obvious advantage of enormous foot traffic in their stores every day.

Opportunities for Smaller Players

If you are one of the shrinking number of independent private practice primary care businesses, your prospects for remaining competitive without offering urgent care are diminishing every day.

Urgent care business isn’t easy because you really need to offer those services 7 days a week and have extended evening hours most weekdays. Staffing and shift management are just some of the challenges but the good news is that you can use nurse practitioners and physician assistants to see most or all of your urgent care patients.

You also need to be prepared to do ubiquitous marketing of your clinics because people never know when they need urgent care until they do and then they are looking for a place to go NOW. Cross marketing opportunities between walk-in urgent care without appointments and more traditional primary care appointments must be a key part of your strategy. Your goal should be to convert no fewer than half of your first-time walk-in urgent care patients to your primary care appointment schedule.

A consistently good service experience is essential to keep patients coming back for either your urgent care or primary care services and to build a positive word-of-mouth and online reputation. You can’t just move patients through your system quickly and expect good results without controlling the patient experience. You also can’t keep patients waiting too long for urgent care because that’s why they come to you in the first place.

If you build a successful urgent care business, you will become an acquisition target of the bigger players but that’s not a bad thing, is it?

If you are a smaller hospital or health system and you are struggling to compete and hold on to market share, a well-run urgent care business can help you survive and even thrive. But you have to provide a service experience that is at least as positive as that of your larger competitors or you’ll be wasting your time and your opportunity.

Feel free to contact me directly at Lonnie.Hirsch@HirschHealthConsulting.com if you want to discuss your urgent care strategy and opportunity.