Urgent Care – Growth, But Also Increasing Competition and Possible Saturation
Urgent care’s story in the United States has been all about growth. They offer walk-in care and a range of services, expanded hours and limited wait times. They usually have imaging equipment and multiple providers and are in a freestanding location or a dedicated store within a retail strip mall. With approximately 10,000 locations across the country, urgent care clinics (UCCs), are an increasingly important part of the U.S. health care marketplace.
The concept is not new. There are many urgent care centers in operation 30 years or more. There are urgent care centers operating longer than the primary practices surrounding them. But in a sense, urgent care as it exists now is new in that the awareness and utilization of these centers increased greatly.
Growth, with Limits
Urgent care centers are expected to grow in three distinct ways, according to the latest Kalorama Information report. They will grow in the number of locations, there will be more patients visiting them each day, and the centers will earn more revenue from them. The three factors have a multiplier effect. This will lead to a 24.8 billion-dollar market in 2020 and growth near eight percent.
However, urgent care growth will be limited by the competition and saturation of markets, and competition from retail clinics, and extended hours at physician offices. The sheer amount of locations is draining the available patient population. Some insurance carriers will no longer pay urgent care fees in saturated markets such as NY/NJ and Florida. This compounded by the trend of seniors tending to use physician care rather than urgent care does set a limit on the amount of locations there can be in the U.S. in the future. The market is not mature, but the maturation point is visible.
“76.6% of the U.S. population resides within a 10-minute drive to an urgent care center.” – Urgent Care Association
This is good news for urgent cares, but also means there are limits to growth. The industry will not be a “boom mode” forever. The fastest growth, Kalorama estimates, happened in the early part of this decade, between 2011 and 2017. There are limiters to growth as well as drivers, and there is increasing visibility on those limiters. It is estimated a population of 50,000 is needed to fuel an urgent care center. The U.S. has already past the saturation point in urban areas, though rural areas with limited healthcare remain sources of growth.
Urgent Care and Its Competitors
What distinguishes urgent care centers is that they are a walk in clinic offering extended hour access for acute illness and injury care that is either beyond the scope or availability of the typical primary care practice but offer less services than an emergency room would.
The urgent care clinic concept has shown potential to provide affordable, accessible and quality medical care to consumers who otherwise would have to wait hours, days, or even weeks for care. They also provide an alternative to costly, time-consuming emergency room care for sicknesses that could have been prevented if basic health care services had been available.
Table 1-1: Urgent Care Centers vs. Retail Clinics and Physician Practices
|Characteristic||Urgent Care Center||Retail Clinic||Physician Practice|
|Located in a retail store, typically a drug store||No||Yes||No|
|Freestanding or in its own space||Yes||No||Yes|
|Treats broken bones||Yes||No||Yes|
|X-ray and/or ultrasound on-site||Yes||No||Rarely|
|Treats cuts & lacerations||Yes||No||Yes|
|Treats complicated conditions||No||No||Yes|
Urgent care’s sales pitch is its savings over ER. For example, a 2010 Health Affairs report pointed to cost saving potential, finding that up to 27% of emergency department cases could be seen in urgent care; such a transition would generate up to $4.4 billion in annual cost savings. This has mostly held. A more recent white paper from the Urgent Care Association of America estimated that the cost savings of using urgent care centers versus emergency departments could amount to as high as about $18.5 billion per year.
For these reasons, rising rates of utilization are leading to substantial profits for providers, which is in turn fuelling further expansion. More than half of US centers have been open more than 5 years, however, new centers continue to open and existing UCCs continue to expand.
The urgent care business model involves providing a full range of services of nonemergency acute care. UCCs differ from traditional physicians’ offices with procedure rooms for lacerations and fractures, a radiology department for x-ray services, and a laboratory.
More information can be found at Kalorama Information’s report: https://kaloramainformation.com/product/the-u-s-market-for-urgent-care-centers/