Fast-growing urgent care centers face challenges

The urgent care center (UCC) industry has grown significantly because of its popularity with patients, but, for this growth to continue, the industry must survive challenges to the business model. In their chapter on UCCs, Aaron Murski and Elliott Jeter, managing directors at VMG Health, point out that these challenges include the proliferation of lower-cost access points such as telemedicine and retail health centers. Threats to growth will also occur from higher-cost, higher-service models such as freestanding emergency rooms. For now, UCCs are well positioned to become a key player in the changing healthcare landscape. To ensure viability, UCCs must understand their position in their local market and how they can be differentiated from a patient’s other options in that market.

As health systems continue to pursue urgent care strategies through acquisition and development, the question remains as to where urgent care centers fit within alternative payment model methodologies. This is not likely to be answered anytime soon; however, until that time comes, urgent care centers are well positioned relative to the “triple aim,” as UCCs provide low-cost quality care in local communities they serve.

Murski and Jeter are the authors of "Valuation Characteristics and Methodologies for Urgent Care Centers," a chapter in the recently published 4th edition of the BVR/AHLA Guide to Healthcare Industry Finance and Valuation.