Published Jan 23, 2017 |
194 Pages |
Pub ID: KLI15231165
The Urgent Care Center Market, Defined
- UCCs are now an established segment of the U.S. health care industry, with strong and steady growth expected through 2021.
- Kalorama estimates that the average urgent care center in 2016 saw 294 patients per week and about 15,300 patients throughout the year. (Some of which may be multiple visits from the same patients);
- Patient volume will continue to expand through 2021 to about 300 patients per week, with revenue per UCC increasing to almost $1.7 million;
- Customer Satisfaction is higher than 90%, according to Kalorama Information's survey.
This Kalorama Information report, Urgent Care Market (Clinic Growth, Revenues by Procedure, IVD and Vaccine Sales), defines the market opportunity for urgent care clinics and those companies that supply them. Urgent care centers (UCC’s) provide a range of relatively routine medical care. This includes both basic care such as testing/screening and vaccination, as well as more advanced care such as the setting of broken bones. The report defines the opportunity for urgent care center operators and provides the following market data:
- Number of Urgent Care Clinics Locations
- Forecasted Number of Locations and Growth, 2016-2021
- U.S. Urgent Care Clinics Market 2011-2021
- U.S. Urgent Care Center Market by Procedure Volume (Anxiety/Mental Disorder, Respiratory, Stomach Ailments/Nausea, Skin Disorder/Rash, Fracture/Sprain, Lacerations and Wounds, Cold/Flu/Sore Throat, Lab Services, Pharmacy Services X-Ray and Imaging, Vaccine, Membership and Prepaid Programs, Aesthetic/Spa, Physicals, Headache Allergies, Burn Treatment, Eye Treatment, Earache, Physical Therapy, Other)
- Urgent Care Market Share of Key Operators
- UCC Business Model
- Urgent Care Market Growth Drivers and Challenges
- Out-of-Pocket Cash Expenditures by Consumers
- Out-of-Pocket Credit Card Expenditures by Consumers
- Issues and Trends in Urgent Care
- Health Policy and Relationship to Urgent Care
- Public Awareness of Urgent Care
- Supplier Markets (Point-of-Care, Other IVD, Vaccines)
- Company Profiles
- Supplier Opportunity for Diagnostics and Vaccine Companies
UCC’s represent significant purchasing groups with substantially greater needs than many individual physician practices. This makes UCC’s an attractive opportunity for suppliers. This report contains data on IVD and vaccine supplier sales.
Due to their greater convenience, UCC’s offer some competition to primary care physicians. many patients report that their physicians do not offer extended office hours, which suggests a niche urgent care centers can fill.However, this is changing asUCC’s may have influenced physicians to re-evaluate their competitiveness; in highly competitive markets, almost three out of four family doctors now offer same-day appointments, with nearly half have extended their office or weekend hours. More aggressive medical practices are also:
- providing greater accommodation of walk-in patients with immediate needs;
- entering into relationships with urgent care centers and other clinics;
- more actively participating in community events.
Although such service improvements benefit the public, history shows that competitors to established professions, particularly within the medical field, are often met with resistance from incumbents. Retail clinics, for example, have suffered from strong public statements questioning quality of care from the major medical associations; while UCC’s, which are run and staffed by doctors, do not run this risk, they can and sometimes do experience other kinds of backlash including unwillingness of private practice physicians to collaborate and negative PR.
Urgent care clinics (UCCs) represent an innovation in the U.S. health care market that evolved directly from the health care system’s shortcomings. The following sections describe the gaps that gave rise to these service providers, discuss the emergence of UCCs and detail the current state of these rapidly growing businesses.
Although different operators employ slightly different approaches, the overall business model utilized by urgent care clinics is actually quite consistent. It involves the provision of basic health care services at a low cost, in a facility conveniently situated in a high-traffic location, with broad hours of operation. Care is intended to supplement that provided by the patient’s primary care provider, particularly for common illnesses where the diagnoses are clear-cut and the therapies are proven. Locations such as drug stores, food stores, mass merchandisers and other popular retail outlets with pharmacies enable patient accessibility and make it easy for patients to get their prescriptions filled nearby. Most of the clinics are open seven days a week – twelve hours a day from Monday to Friday and eight hours each on Saturday and Sunday. This schedule is considerably more convenient than a traditional physician’s office. Waiting times are kept short, with most visits taking 10 to 15 minutes. Thus the genesis of the term, “convenience clinic.”
The urgent care business model involves providing a full range of services of nonemergency acute care. The model relies on equipment and staff. Most have a physician on staff, generally more than one. Convenient hours are a key strength of urgent care centers. Most urgent cares have hours as early as 7 am and up to 8 pm at night. By comparison, only 31% of primary care doctors have after-hours coverage.
High visibility and adequate parking is part of their business model, thus centers are usually located in freestanding buildings, though they can be located in strip malls and in some cases they are within a hospital complex with a separate entrance. About half of centers are in freestanding buildings, the rest in strip malls or other attached building structures. The average UCC is between 3,500 square feet and 12,000 square feet. The variation is based on common practice and the extent of services offered.
UCCs differ from traditional physicians’ offices with procedure rooms for lacerations and fractures, a radiology department for x-ray services, and a laboratory. While some traditional physician practices may have these facilities, they are more the exception. It is the rule for UCCs to have these service spaces available.
It should also be noted that while some medical practices are becoming more patient-centric, none are reducing service prices to position more competitively against UCC’s. This is because the scope for cost cutting in most medical practices is limited, with high doctors’ salaries, large fixed overhead costs and heavy expenses related to staff, billing and malpractice insurance.
The competitive landscape of the urgent care market is extremely dynamic, with a growing number of players and rapidly shifting positions. Companies profiled in the report include
- American Family Care
- Aurora Urgent Care
- Bellin Health
- Dignity Health care
- Doctors Care
- Urgent Care Centers
- Intermountain InstaCare
- MD Now
- MedExpress Urgent Care
- Patient First
- Physicians Immediate Care
- U.S. HealthWorks
Where once the market consisted of single centers owned by individuals like entrepreneurs or retired physicians, today’s urgent care center is likely to be part of a chain or hospital.
Urgent care centers represent an option for a physician who is seeking to avoid the hours and work of a private practice. About 38% of urgent care centers are owned by physicians. Some are owned by investors with no profession in medicine who see it as a business opportunity. Corporations own about 28% of UCCs, with insurance companies and holding companies representing the largest non-hospital corporate owners of urgent cares. Hospitals are increasingly opening centers and represent growth in clinic ownership, currently representing about 25% of all UCCs; some hospitals open UCCs as a way to reduce patient traffic at their emergency rooms, or close ER’s entirely. About 5% are owned by chains or franchises and 4% are owned by an individual nonphysician. The largest chains are for the most part hospital owned.
In general, urgent care clinics model their services upon those offered by a primary care physician.
Urgent care centers combine the convenience and quick assistance of an emergency room with a much lower cost model. About 90% or more of all UCC vsits are episodic and acute. Minor wounds, fractures, bumps, sore throats, ear infections, and other "just don’t feel good" conditions are treated here. That being said, they do receive patients who are in need of life-saving care and most centers are prepared for it. UCCs have life support capabilities but do not advertise this service to the public. People who present to the UCC with life threatening situations are immediately transferred to the Emergency Departments or referred to the 911 EMS system. Most urgent care centers have X-ray departments for fracture care, chest exams, etc. Many have a CLIA level II laboratory department for routine blood tests.
Urgent care centers are typically staffed by physicians and are also equipped to address more serious conditions that require, for example, administration of intravenous medications or fluids, injections, setting of broken or fractured bones; or suturing of lacerations. They also usually contain more advanced equipment such as x-ray, EKG and sometimes pulmonary function devices, and routinely accept insurance. In this way, urgent care clinics can be compared to, and to some degree compete with, hospital emergency rooms. Following are the types of conditions treated at urgent care centers, but there are many more:
ear or sinus pain;
redness or pain;
fevers, colds, flu;
frequent and painful urination;
mild to moderate asthma attack;
nausea, vomiting, diarrhea;
In this report, Kalorama breaks out the urgent care market by procedure types.
Pricing for UCC services varies somewhat between centers, but generally is designed to offer a significant discount over similar services performed by a doctor or hospital. While often not as low as retail clinic prices, UCC prices can represent a discount of 75% or more compared with emergency rooms. For routine services such as immunizations, customers may find that prices are already at or below their insurance co-pay Average price per visit is near $100, often as high as $150 although lower cost cold, small ache and vaccination visits bring average cost down. This is roughly double the average price of a retail clinic visit, but less than one quarter of the cost of the average ER visit.
Some clinic networks maintain uniform pricing of services across all locations, while others vary pricing by city and state. Virtually all, however, provide a very high level of transparency. Prices are displayed prominently in clinic facilities and many clinic websites also provide prices. Some clinics offer online bill pay.
The urgent care market is being driven by a variety of factors, related to both the external economic and health care environments as well as consumer trends. continually rising health care costs; inconsistent quality of care; x long waiting times for appointments and at doctors’ offices are among these factors.Physician Shortage Across the U.S., shortages of both general practice and specialist physicians are resulting in delays to treatment and long waiting times. Only about 30% of all physicians practice primary care, compared to about 70% in most other developed countries and about 70% in the U.S. 50 years ago. As the population continues to both expand and age, such shortages are projected to reach 90,000 by 2025, according to the Association of American Medical Colleges (AAMC). This will include a shortfall of 12,500 to 31,100 primary care physicians and another 28,200 to 63,700 specialists. Solutions to this problem are complex and, according to the AAMC, will require a multi-pronged approach that includes:
- innovation in delivery;
- greater use of technology;
- improved, efficient use of all health professionals on the care team;
- an increase in federal support for residency training.
Furthermore, they will take time to implement, as physician education typically encompasses four years in an undergraduate program, followed by four years of medical school, then another three to five years of residency.
Urgent Care Center Franchises
As the urgent care industry matures, some organizations have put together franchise models as a means of growing their footprint. In general, these companies offer franchisees a blueprint for quickly establishing an urgent care center using its established name, brand, promotional materials, operational systems, staffing models, legal & administrative resources, and other tools.
Competitive Positions of Key Players
The competitive landscape of the urgent care market is extremely dynamic, with a growing number of players and rapidly shifting positions. As of the end of 2016, Concentra led the market by a wide margin.
Over the next 3 to 5 years, some of these smaller competitors could emerge as viable market challengers if they are able to demonstrate the scalability of their businesses and/or attract funding to expand.
Other new players entering the urgent care clinic market include hospitals, which typically seek to establish one or two urgent care clinics near their main facility. Unlike urgent care center corporations, whose goal is to create ever-growing profits through rapid expansion, hospitals typically see retail clinics as a value-added service for themselves and their patients. Because many consumers, particularly those without health insurance, use emergency room visits for routine care, and since a typical emergency visit costs between $1,500 to $2,000 compared with $100 at a UCC, these clinics can save hospitals and/or consumers significant sums on emergency room visits alone, while helping to alleviate the pressure on ER’s from overcrowding.
Urgent Care Market for Point of Care Tests
Kalorama Information's report defines the market for POC products sold to urgent care clinics. Point-of-care testing (POC) is defined as diagnostic testing at or near the site of patient care. Their usage is rising as a result of both increased hospital use and expanded utilization in alternate medical settings. The economic benefits of POC testing are somewhat mixed since, on the one hand, the unit cost-per-test is higher through the loss of the economy of scale offered by automation, while it offers the potential of substantial savings through enabling rapid delivery of results, and reduction of facility costs. However, benefits to patient care are substantial, since POC testing enables health care providers to make decisions on patient care significantly faster than when those tests are conducted by a standard laboratory. Additionally, the rising utilization of transportable, portable, and handheld instruments has resulted in growing usage of POC testing in a broader range of medical settings including the workplace, home, urgent care, disaster care and most recently, urgent care clinics. Manufacturers are increasingly introducing minimally invasive tests that can be easily performed on a patient’s saliva, urine, breath or other bodily by-products. The new technologies and distribution channels that have enabled this shift have occurred in response to ongoing demographic changes that are creating a larger market for the products. As the U.S. population continues to live longer, it is becoming increasingly susceptible to a range of medical conditions that require identification.
Over the past several years, POC tests to screen for HIV have also become available in the United States. Although they were broadly available overseas, introduction in the U.S. had lagged and only occurred after the Centers for Disease Control (CDC) announced an initiative aimed at reducing the number of new HIV infections. Several POC HIV tests have now been cleared to market by the FDA; along with a myriad of other tests, they were given waivers under the Clinical Laboratory Improvement Amendments of 1988 (CLIA '88), meaning that they were deemed to be so simple to use that they may be used by non-laboratory professionals. The CLIA waiver is particularly important for urgent care clinics, as it enables these tests to be used in these facilities.
Standalone ER versus Urgent Care
An urgent care, generally speaking is not a free standing ER. Free standing emergency rooms (free standing ERs) operate on a business model of moving the ER outside of the hospital, but keeping the same dynamics in place. Most importantly, facility fees are charged in standalone ERs so consumers may not experience the same. With urgent cares, fees are minimal (though there are usually co-pays). Urgent cares provide x-rays, treatment of wounds, and normally have extended hours.
A standalone ER is best utilized where an emergency condition is present, or where the nature of the injury appears to be serious - heavy abdominal pain, serious infection, extreme dehydration, chest pain. This report focuses on urgent care.