It is over the last two decades that the urgent care industry has grown tremendously, and has solidified its role as a crucial component of the healthcare system. However, with the maturation of the industry, there are new challenges emerging—shifting patient expectations, evolving payer landscapes, and the need for operational efficiency.
In a recent Streamline Scientific-sponsored presentation, Alan Ayers, President of Urgent Care Consultants and Senior Editor of The Journal of Urgent Care Medicine, explored the nature of these transformative forces, identified key trends, and offered strategies that urgent care leaders should consider adopting to remain competitive.
Click the play button below to view the complete webinar
Urgent cares have expanded significantly across the United States, with an estimated 14,000 centers now in operation. The industry’s growth is likely the result of several factors:
Despite some expansion in the aforementioned areas, growth rates have slowed overall
(~3% CAGR in post-pandemic years vs. ~7-8% in pre-pandemic years). This is likely a sign that the industry is entering a phase of maturity. No longer is the challenge just about adding new locations—it’s about optimizing operations and delivering high-value services that differentiate one center from the next.
Many of the earliest urgent care facilities were positioned well in high retail traffic areas at the time they were established. However, many of these locations—which once thrived—have witnessed a downturn in traffic in recent years due to shifting consumer patterns, changing trade areas, and market competition. Put simply, their original positioning no longer aligns with patient demand.
In order to stay competitive, some centers are successfully enhancing operational efficiency, differentiating their urgent care model with the addition of services, or implementing other tactics to stay relevant. In other cases, however, it may be more appropriate to relocate, using demographic shift data to guide positioning.
Urgent care leaders should carefully consider their response to a slowing market to ensure continued success. For most urgent cares, their focus should be on increasing operational efficiency to address common problem areas:
Despite the fact that urgent cares operate under a volume-driven model, many centers struggle with unutilized capacity. In many cases, around 40% of provider time is not filled seeing patients, meaning that a significant portion of available care capacity is going to waste.
For urgent cares suffering this issue, significant efforts should be made to improve scheduling, optimize patient flows, and reduce bottlenecks in patient throughput without compromising quality.
Many urgent cares now operate under case rate reimbursement models, where insurers pay a flat rate per visit rather than for itemized services. However, this shift has encouraged urgent cares to prioritize lower-acuity diagnoses which demanded less time per visit and more utilization of physician assistants and nurse practitioners. In response, many payers have cut their rates, citing acuity degradation.
Whereas urgent cares in the past have often avoided areas with high Medicaid population density, evolving Medicaid managed care models are making urgent care a more viable option. In many states, Medicaid expansion and privatization have actually increased reimbursement opportunities. As a result, solely focusing on commercial payers may be too limited of an approach.
This is coinciding with growing evidence that suggests that up to 50% of annual U.S. ED visits could be managed at an urgent care facility instead.1 Urgent cares willing to navigate Medicaid enrollment and compliance (when it is available in their state) may be able to expand their patient base.
Despite the challenges, industry leaders are finding ways to adapt and thrive in this evolving environment, namely by focusing on strengths that are core to the urgent care model itself:
Patients in your urgent care’s community need to know you are still a reliable source for often-neglected or poorly-staffed services, like X-ray, orthopedic care, and minor procedures.
Top centers understand the critical importance of an aggressive marketing strategy—one that effectively balances cutting-edge digital marketing with grassroots marketing. Not only should you utilize traditional media like billboards, direct mailers, etc, but you should be winning on search engines by leveraging new transactional capabilities, reviews, and other techniques.
Short wait times remain a key driver of patient satisfaction and the number one driver of positive NPS scores. Upon analysis, top urgent cares are found to keep average visit times under 47 minutes, compared to the industry average of around an hour. They also accept walk-ins up until closing, rather than closing doors in the last hour.
Many urgent cares have responded to market shifts by adopting a broad variety of ancillary services, from aesthetics to medical weight loss, and others. However, each urgent care must carefully consider the risks of diversifying too broadly: divided management attention, dilution of marketing spend, and the variable nature of consumer discretionary spending.
Rather, urgent cares may consider services that are core to the urgent care model, such as PCR testing and STI screenings. By offering these as in-house ancillaries, urgent cares can:
As the urgent care market enters a phase of maturation, long-term success appears to favor those who can utilize all the payer relationships available to them, effectively fine-tune operations, offer a full range of high-value services, improve the patient experience, and expand ancillary utilization in a manner consistent with the core urgent care model.
Urgent care has solidified its place in the healthcare landscape—but staying ahead requires a commitment to focusing on priorities in order to thrive in an increasingly competitive market.
Interested in learning more about the benefits of in-house PCR testing for your urgent care?