Urgent-care centers and retail clinics are proliferating as the forces of new healthcare players, mega-mergers, and conservative healthcare reform compel providers to find new ways to capture and retain commercial patients, especially the younger and healthier population. These easy-access, no-sweat facilities are intended to free up crowded emergency rooms and provide patients with immediate care that will reduce health complications and hospital readmissions.
Over the past year, we have seen numerous developments that foreshadow increased use of immediate-care access points by budget-strapped consumers. Keep an eye on the following players as they flex their patient-centered muscles in 2018 and beyond:
- Five Star Urgent Care, which opened in New York in 2012, is rapidly expanding throughout the state. New locations have recently opened in Dewitt and Niagara Falls, and more are expected for Auburn, Batavia, Buffalo, Cheektowaga, Chili, Clay, Dunkirk, East Syracuse, Fairport, Hamburg, Hudson, Irondequoit, Latham, and Oneida. The centers feature up to two full-time physicians and provide follow-up patient consultations within 48 hours of an exam.
- MedExpress, part of UnitedHealth Group’s Optum branch, teamed up with Walgreens in 2017 to open more than a dozen urgent-care centers adjacent to the drugstore (in markets like Las Vegas, Dallas, and Minneapolis). UnitedHealth is currently evaluating whether this adjunct-pharmacy model should be replicated throughout the United States, and it is likely to pursue further relationships with other retailers and health partners if CVS Health successfully acquires Aetna and builds out its own in-store neighborhood health model.
- Tenet Healthcare has long been honing a strategy to focus on high-performing markets and outpatient care. The health system considers urgent-care centers a vital part of its operations and recently opened two such locations in Michigan. Tenet plans to open eight MedPost locations and three CareSpot centers in 2018, some in partnership with regional health systems.
- Hartford HealthCare (Hartford’s dominant player with 40 percent market share) and GoHealth Urgent Care teamed in 2017 to open urgent-care centers throughout central and eastern Connecticut. The two organizations have opened 11 such locations since May 2017, including the most recent center that opened March 19 in Norwich. As many as four more centers are planned to open by the end of 2018.
- American Family Care, one of the nation’s largest urgent-care chains, inked an investment deal with private equity and real estate firm American Development Partners in July 2017 to nearly triple the number of AFC locations nationwide to more than 500, particularly in areas of high population growth like Florida, Georgia, Illinois, Indiana, Kentucky, Maryland, Michigan, Missouri, Ohio, and Texas.
- Kaiser Permanente, one of the nation’s largest and most advanced IDNs, partnered with Target in September 2017 to open 31 retail health clinics inside Southern California Target stores over the next three years. Patients who use the clinics will be allowed a one-time prescription fill at the in-store CVS/pharmacy.
We expect IDNs to invest heavily in urgent and retail care (alongside telemedicine) as federal reimbursement rules shift the system from volume-based to value-based care. Providers may additionally turn to these facilities under the looming threat of Amazon’s entrance into the healthcare business and CVS-Aetna’s disruption of primary care via an expansive network of CVS “healthcare hubs.” And then there is Walmart, the eerily quiet mega-threat that has been slower than expected to upend the primary-care space. Overall, we expect mergers and acquisitions in the convenient-care space to accelerate as retail clinics and urgent-care centers demonstrate their value to patients, payers, and providers alike.