The urgent care model has become increasingly popular and is continuing to show signs of growth, making it a continued area of interest for investment. Experts at the 15th Annual Healthcare and Life Sciences Private Equity and Finance Conference, hosted by McGuireWoods on February 21, 2018, explored urgent care’s continued growth, sharing insights on emerging models and trends within the industry.
Experts on the panel included Dr. Karen Meador, Managing Director at BDO USA LLP, Gregg Osenkowski, Principal at Sverica Capital Management LLC, and Wyatt Ritchie, Managing Director at Cain Brothers & Company, LLC.
Here are five key takeaways from the panel discussion:
1. Urgent Care and Primary Care are Merging. Urgent care was once thought of as an “after-hours alternative” to traditional, primary care physicians; however, urgent care clinics and other health care providers are now partnering to benefit each other through a “catch and release” model, whereby urgent care centers partner with the patient’s primary care physician to ensure continuity of care. Panelists noted that this trend is even more pronounced in established markets, where larger healthcare systems are well-known amongst the patient population. If entering into such an established market, panelists emphasized the need to focus on building a relationship with primary care physicians and integrating into the community to best ensure continued success.
2. Consider Both the Pros and Cons of Partnering with an Established Health System. Hospitals and health systems are often looking to expand their service lines and grow their market share, making urgent care an attractive investment. Partnering with an established health system provides the benefits of integration into the community, established branding, and can often serve as a strategic exit for investors. On the other hand, panelists noted that larger health systems often suffer more significant losses in the urgent care space and are not as nimble when forced to adjust to industry trends.
3. Telemedicine is Growing in Popularity. As value-based care models gain momentum, the growth of telemedicine continues to rise in popularity. Accordingly, urgent care centers are implementing telemedicine models, and panelists expect to see continued efforts throughout the industry. The panelists noted that telemedicine should be embraced for multiple reasons. Telemedicine allows urgent care centers to expand their services by providing a greater number of patients with convenient access to care at all hours of the day. Further, telemedicine offers urgent care centers a way to expand into additional markets, such as counseling or therapy. Payors are also aligning—compensating at rates close to in-office visits. Nonetheless, some panelists caution that although telemedicine offers a plethora of benefits, the urgent care industry should be cognizant so as not to allow telemedicine to supersede or replace in-person patient visits in their entirety.
4. Development of New Service Lines. Patients often choose urgent care because of its ease, convenience, and efficiency. As such, urgent care clinics are focusing on additional ways to drive patient-centric care. For example, expansion in urgent care service lines is on the rise, with many urgent care centers offering more specialization in areas such as behavioral health, dermatology, and weight management. This increased specialization in urgent care is also taking shape in the centers themselves, with pediatric, maternity, and orthopedic-specific urgent care centers growing in popularity.
5. Retail-Based Care Centers are on the Rise. Retail clinics, such as those often found inside grocery or drug stores, offer walk-in health care similar to that offered in freestanding urgent care centers. Notably, however, not all retail clinics are considered urgent care clinics as only some reach the urgent care center standards, and most focus solely on the treatment of less complex illnesses, such as the common cold, allergies, or sore throats. Nevertheless, as retail clinics begin expanding their service lines and aligning with payors, greater competition amongst these similar yet fragmented markets is expected.