Because urgent care is a retail delivery model for healthcare, its growth trajectory has followed that of big box retail in the affluent suburbs of major cities. In the future, the greatest opportunities to grow urgent care will be found in new settings…rural and urban…but such will require some changes to the operating model. Industry expert Alan Ayers has more in this episode of "Just Checking In."
Good afternoon! This is Alan Ayers and I am Just Checking In from Plain City, Ohio where I’m going to be speaking to you about urgent care growth opportunities.
So, next to me is one of the nation’s newest Costco stores – it opened about seven or eight months ago – and behind me is a new strip of big box retail that is opening adjacent to Costco. Costco came first, and then the big box retail followed Costco. Now, when we look at urgent care, urgent care is a retail delivery model for healthcare. So, what makes urgent care successful are the retail elements of neighborhood locations, extended hours, walk-in service, and an excellent patient experience. Well, if we consider urgent care retail, then it would stand to reason that the growth of urgent care would follow the same patterns as the rest of retail in the United States. Well, when Costco decided to build this new store and then the big box stores followed, it wasn’t for any reason. Retail follows rooftops and retail seeks after money. So, it’s no surprise that if you want to go shopping or find good shopping, you’re going to find better shopping in the affluent suburbs of cities like Chicago and Houston and Dallas than you will in rural areas or urban areas that are suffering economically.
Well, we’ve seen the same with urgent care. Urgent care being retail has followed rooftops and has sought out a patient base with private insurance and a patient base that places a time premium on convenience willing to pay a higher copay, but also understand their benefits. This tends to lead us to middle to upper income families living in suburbs of major cities.
So, if you follow retail and you follow urgent care, it should really be no surprise that we’ve seen the biggest growth in urgent care in the suburban markets of major cities – affluent suburbs of major cities like Dallas/Ft. Worth, Phoenix, and Miami. And also what we’ve seen is urgent care has grown, that these more desirable areas have become somewhat overcrowded. So, as we see saturation occur in major cities, that means that the opportunity for urgent care to grow remains in rural and urban markets. Now, expanding in rural areas and urban areas does present somewhat of a challenge in regards to payers. A center has to have a different business model, typically – using mid-levels – typically using a higher mix of primary care and typically accepting Medicaid, which you may not necessarily see in your conventional urgent cares that prospered in the affluent suburbs of major cities.
One example to look at is Fast Pace. Fast Pace has grown over forty centers in the state of Tennessee. Not one single center in the major cities of Nashville, Knoxville, Memphis, or Chattanooga, but rather targeting small towns that ironically are large enough to score a Walmart. And so if you look at the Fast Pace model in Tennessee – how they’ve developed a model staffed by APC’s, offering a mix of primary care, accepting Medicaid – they built a model that’s sustainable in secondary markets. Well, if you follow Walmart’s footprint – Walmart has over five thousand stores in the United States, approximately half of which are in rural areas. So, just following Walmart, the opportunity would be to grow urgent care by another 2,500-3,000 units in secondary markets just following Walmart. There are plenty of other opportunities, and even when we look at major cities it’s a bit misleading to talk about cities being over-saturated because using an analytical approach, there are still opportunities. It just means we have to be smarter about the markets we choose and the specific real estate we choose.
If you need assistance or would like to have a conversation about locating your urgent care, starting your urgent care – at Practice Velocity and Urgent Care Consultants we would love to speak with you. You can reach us using the contact information on your screen. Again, this is Alan Ayers and I am Just Checking In from Plain City, Ohio.