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Are Urgent Care Centers a Threat to Traditional Doctors?

You may have noticed a few new health-related businesses cropping up in local shopping centers - they’re called “Urgent Care Centers” and they are all the rage in many parts of the country.

urgent_careThe state of healthcare in America has been changing so rapidly over the past four years, primarily due to the enactment of the Affordable Care Act (a.k.a. ObamaCare.) While the jury is still out on whether these healthcare reforms will have a positive or negative impact, most people are seeing higher health insurance rates today than they were four years ago.

Starting in January 2014, the final phase of the Affordable Care Act will go into effect, where all individuals must be insured. In preparation for this dramatic next step, you will be hearing a lot about state-based health insurance exchanges and learning about the additional taxes that will be imposed on people who do not purchase health coverage. But you may also notice a few new health-related businesses that are cropping up in your neighborhood shopping centers. They’re called “Urgent Care Centers,” or “Minute Clinics,” and they are all the rage in many parts of the country.

According to an article published last September by Kaiser Health News in collaboration with WAPO (“Urgent Care Centers Are Booming, Which Worries Some Doctors”), families will now have a choice besides the traditional “general practitioner” or the emergency room. With so many families now opting for high-deductible health insurance, it is more important than ever to keep out-of-pocket costs down.

Why out-of-pocket costs are so important today

Most people never reach the annual deductible with these low-cost insurance plans, so they are reluctant to pay higher costs for sick visits and unforeseen illnesses. Just the cost of a visit to the pediatrician and a few prescriptions might set a family back $250 or more. Multiply that by 2 or 3 children a few times a year, and it could throw a family into serious debt. With a business model designed to reduce these costs, urgent care centers are poised to experience rapid growth over the next several years.

What is different about an Urgent Care Center?

One of the selling points about these quick-serve health centers is the convenience. No need for an appointment, no need to leave work early to get to the doctor; most of these centers are open nights and weekends, plus they welcome patients who walk in without an appointment. Most of the people who frequent these centers also have a regular doctor, but they prefer to avoid the long wait for routine injuries and illnesses. The range of treatments available at urgent care centers won’t be as varied as most doctors’ offices, nor can they be counted on to look for patterns in a patient’s medical history. However, they can handle things like ear infections, colds, back pain, stitches and strep. Most centers can also perform an X-ray and provide a temporary splint for a fracture, perform routine blood tests, urine tests or drug tests.

Tracking the popularity of Urgent Care Centers

While you may not have many in your own neighborhood yet, look for them inside your local pharmacy. CVS, Target and Walmart are all looking to increase the number of health facilities by hiring nurse practitioners to run small in-store clinics. According to the Kaiser article, these centers are surprisingly popular and a booming business opportunity for savvy entrepreneurs. The Urgent Care Association of America estimates that 3 million patients visit such centers each week. Since 2008, the number of facilities has increased from 8,000 to 9,300 -- and that doesn’t count the clinics located in big-box stores and pharmacies.

Are traditional doctors concerned?

Some physicians groups have warned that an overreliance on urgent care clinics might complicate efforts to coordinate care through electronic medical records. It might also prevent patients from having a single source of detailed information about their health history. Family doctors look at their patients holistically. They might look at a series of minor illnesses as symptomatic of a larger and less obvious health problem. Despite the skepticism expressed by many healthcare professionals, some doctors are personally investing in the urgent care market. They see a definite consumer need for an alternative source of healthcare, and with ObamaCare adding so many people to the ranks of “insured Americans,” they expect people to become even more frustrated with wait times. It’s possible this trend could make doctors think twice about shuttering their office at 5:00 or taking the weekend off.

The next smart investment?

According to Robert Graw Jr, CEO of Righttime Medical Care, there is plenty of funding available from private equity investors who believe urgent care centers are the next gold rush. Growth is expected to increase very quickly starting in 2014 when another 30 million Americans are expected to enter the ranks of the insured. Considering that almost one in five visits to the hospital ER could have been easily treated at an urgent care center, there is plenty of room for growth.

Rising costs, particularly at hospital emergency rooms, virtually guarantees a growing customer base among all demographic groups. The lower costs have drawn the attention of insurers. Many have added urgent care centers to their provider networks. According to the article, even some hospitals have jumped in, adding their own urgent care centers. Last July, for example, Dignity Health, the nation's fifth-largest hospital system, bought U.S. HealthWorks, the second-largest urgent care chain, with 147 centers.

Photo Courtesy of Stuart Miles / FreeDigitalPhotos.net

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