Published by: American Bar Association
The proliferation of urgent care centers (UCCs) across the country has created strong demand for tailored legal advice and guidance for the industry. UCCs are facilities that serve patients with non-life-threatening conditions (i.e. flu symptoms, cuts and sprains, and minor burns) on a retail basis. Historically, the industry has been dominated by private equity investors; however, other market participants, including health systems, physician groups and health insurance companies have demonstrated increased activity in this growing market. These strong future growth patterns in the urgent care industry should continue to pose legal and other issues that potential investors, operators and investors should be aware.
Urgent Care Industry Overview
When advising the urgent care client, legal professionals should have a fundamental understanding of the industry and operations of a UCC. Across the United States, there are approximately 12,000 UCCs,1 or one UCC for every 30,000 residents. UCCs offer more services than retail clinics found in many pharmacies and grocery chains but fewer services than a hospital emergency department. The industry is very fragmented; the largest 10 operators account for only approximately 20 percent of all locations2 and less than 40 percent of all locations are owned by operators with over five locations.3 Based on these statistics, much of the legal work in the industry involves clients that operate one to five locations.
According to a 2016 benchmarking study performed by the Urgent Care Association of America (UCAOA), the industry’s most prominent trade group, the largest owners of UCCs include corporations (39 percent), hospitals or hospital joint ventures (31 percent) and physician groups or single physicians (24 percent).4 The strategic motivations of each ownership group may differ slightly. For example, corporations are typically more focused on financial opportunities whereas health systems may view UCCs within the overall context of an integrated care delivery model for the population (i.e. UCCs serve merely as entry points into the health system and/or allow the system to provide the full spectrum of care). In a recent investor quarterly conference call, a representative from the nation’s largest health insurance company was quoted as follows:
“We currently have about 250 [urgent care] sites, we’ll grow these to about 2,500 or more over the course of the next decade or so….we can accomplish 90% of what happens in an emergency room, but do so for 90% less.”5
