How the growth of the urgent care industry business model is changing the healthcare market in 2021

Summary List Placement

What are urgent care clinics?

Urgent care centers are convenient, on-demand care outlets similar to walk-in retail clinics, but rather than treating low-acuity conditions such as bronchitis and minor infections, urgent care clinics are equipped to treat more serious ailments, including fractures, sprains, and wounds. They also offer services like blood tests, stitching, and X-rays.

Urgent care centers can serve as a first step in the patient journey as well by referring patients to follow-up appointments or ERs. Though they should not be used for life-threatening emergencies, urgent care clinics provide easy access to quality healthcare for times when your primary care doctor is unavailable.

The urgent care market & business model

According to Consumer Reports, the number of urgent care facilities increased from 6,400 in 2014 to 8,100 in 2018, with another 500 to 600 expected to open. Some 24/7 urgent care centers function like satellite emergency rooms, and incur similar healthcare costs, while other centers simply charge copays.

urgent care

Generally speaking, an urgent care visit is a money-saver for patients. A 2016 study in the Annals of Emergency Medicine found that ER treatment costs were about 10 times more (an average of about $2,200) than in an urgent care center (about $168) — even for patients with the same diagnosis. 

Because of the overlap urgent care centers have with family medicine and emergency medicine, they are typically staffed accordingly with at least one medical physician or specialist, as well as a physician assistant, nurse practitioner, or radiologist available to see patients any time the facility is open.

Urgent care staffing models

Henry Schein Medical cites three major urgent care center staffing models:

  • Physician Only: The most expensive model that uses no mid-level practitioners. However, it could be the most cost effective options for new centers building their patient base.
  • Mixed Model: A balance of physicians, physician assistants, and nurse practitioners for centers increasing in patient volume.
  • Mid-Level Model: Centers staffed entirely by mid-level staff. This option is suitable for low acuity cases, but may not be equipped to handle more complex patient needs.

Top Urgent Care Providers & Companies

Urgent care clinics aren’t necessarily run by traditional hospitals or health systems. In fact, 61% of urgent care clinics in Massachusetts are owned by non-hospital urgent care chains, per a 2018 Massachusetts Health Policy Commission report.

Some of the largest US urgent care operators include:

  • American Family Care
  • City MD
  • Concentra
  • Fast Med
  • GoHealth
  • HCA CareNow
  • MedPost
  • NextCare
  • Patient First
  • U.S. Healthworks

Urgent care industry trends & statistics 

Interest in the on-demand, affordable care of urgent care clinics—particularly amid the coronavirus pandemic—has been growing rapidly. According to the Urgent Care Association (UCA), the total number of urgent care centers in the U.S. reached 8,774 in November 2018 — up eight percent from 8,125 in 2017. St. Louis Urgent Cares

Laurel Stoimenoff, PT, CHC, CEO of UCA, says that urgent care clinics handle about 89 million patient visits each year, which includes more than 29% of all primary care visits in the US, and nearly 15% of all outpatient physician visits.

And nearly all of those visits are more convenient and affordable than a trip to the ER; the UCA’s 2018 Benchmarking Report found that more than 70% of patients waited less than 20 minutes to see a provider at an urgent care center, and nearly 94% were seen in less than 30 minutes. Overall, 85% of urgent care centers patients are taken care of in under an hour.

“Urgent care centers play an increasingly vital role in the continuum of care, providing services for a wide array of patients who may be unable to see a primary care physician for various reasons, including simply not yet affiliating with one,” said Stoimenoff.

Consumer demand for hyper-convenient care has reached a fever pitch, especially among younger cohorts. Nearly one-quarter of millennials haven’t visited a primary care physician (PCP) in five years or more, with about one-third saying that going to get a physical isn’t convenient, per a 2019 Harmony Healthcare IT survey. That’s why we’re seeing more younger patients opt for medical care as well as walk-in appointments for real-time needs such as covid testing.

Interested in more related Digital Health research?

In addition to urgent care, Insider Intelligence publishes a wealth of research reports, charts, forecasts, and analysis of the Digital Health industry. You can learn more about accessing all of this content here. 

And here are some related Digital Health reports that might interest you:

  1. The Digital Health Ecosystem, which explores the key trends driving digital transformation in healthcare and what we expect to see in the year ahead.

  2. Big Tech in Healthcare, which looks at how Alphabet, Amazon, Apple, and Microsoft are moving into the healthcare space.

  3. The Digital Therapeutics Explainer, which explores the drivers lighting a fire under the DTx market, identifies the leading DTx market players, and unpacks the varied ways vendors reach their intended audiences. 

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A startup that raised $175 million to fix primary and urgent care is still struggling with what its CEO called the 'most complex' problem in healthcare

Summary List PlacementSome of healthcare’s problems are so complex that even the most well-funded startups struggle to fix them.
Carbon Health cofounder and CEO Eren Bali found out as much as his company tried to make prices for doctor’s visits, routine procedures like blood tests, and comparative prices for diagnostic tools like MRIs and x-rays transparent for patients, a feat that sounded simple at first but quickly ballooned into a much larger, systemic problem.
In a Twitter thread posted on December 27, Bali ran through the challenges he and his team had identified in trying to create a menu of sorts for different procedures and treatments for Carbon Health patients.
In the end, he ultimately said the fix lies with insurance companies — not healthcare providers — to fix the way patients and clinics are expected to pay for healthcare in the United States.
“The problem is on the payer side,” Bali told Business Insider. “The payer systems are old and antiquated, and that’s opaque to providers. We are doing all we can on the provider side.”
Read more: $1.5 billion digital-health startup Ro wants to be your online doctor. Here’s how its coronavirus response rooted in rapid at-home testing fits into the new unicorn’s long-term strategy.
Calculating prices ahead of visits proved difficult
Carbon Health serves a wide variety of patients with its urgent and primary care services. It offers booking through an app, and also added virtual visits to any patient seeking care but hesitant or unable to go into one of its physical clinics.
Ideally, Bali said, Carbon would be able to show patients the costs of these services upfront so that the doctor and patient can decide on the best course of treatment together, but hasn’t made as much progress as he would like.
Some relatively new healthcare entrants like Walmart have similar ambitions in making shopping for healthcare just as easy as shopping for groceries. Patients can find Walmart’s cash prices online, such as a primary care visit that costs $40.
Carbon Health has developed a system that works well for patients without insurance, Bali said, because pricing is more straightforward. It created a data analysis tool that looks at different inputs such as existing conditions, Carbon’s cost of service, and other factors to provide an up-front cost to uninsured patients, Bali said. For example, Carbon charges uninsured patients $195 for a primary care sick visit and $69 for a virtual visit, according to its website.
But it was when that same system was trained for patients with insurance that things started to unravel, Bali said. The calculated costs for patients with similar backgrounds, insurance plans, and symptoms only matched 40% of the time, Bali said.
“We can’t explain the difference,” Bali said.
Insurance companies are built on out-dated systems
Part of the variance can be explained by how complex insurance plans are, Bali said. Each plan is essentially unique to the individual that has it, and coverage can range widely even among similar plans offered by the same insurance company.
That’s not something that even the most sophisticated data analytics model can fix, Bali explained. If healthcare providers like Carbon want to tell patients how much they can expect to pay for a visit and associated procedures, insurance companies need to update how they bill both patients and providers.
“It’s driven around the inadequate system,” Angela Miles, head of revenue cycle at Carbon Health, told Business Insider. “We need to rebuild that from a payer standpoint to get to a more modern standpoint.”
More complexity leads to increased costs
Startups like Oscar Health are already attempting to bring insurance companies into a more modern model, Bali said, but larger companies have yet to shift in a meaningful way.
Those that do change, albeit in a more superficial way, actually make the problem worse by making it even more complicated, Bali said, because the added complexity adds time, which adds costs.
“A lot of work that goes towards decreasing healthcare costs is making the system more complicated,” Bali said. “My theory is that things that drive increased cost in healthcare is due to increasing complexity because you can’t be transparent and compete on price.”SEE ALSO: The founder of a healthcare venture fund that just raised $200 million shares why she wants to back founders that are building businesses for their communities
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The CEO of major health insurer Humana laid out why he's betting big on primary care

Summary List PlacementLong before Humana became the dominant health insurer it is today, its business revolved around operating hospitals.
Now, decades later, Humana is getting back to its roots of providing medical care.
This time, the company is hyper-focused on transforming primary care for older people.
The national health insurer is investing heavily in building clinics in underserved areas across the country. It’s also partnering with primary-care startups like Oak Street Health, ChenMed, and Iora Health to reach more seniors. And last year, Humana pumped $100 million into telehealth startup Heal to bring primary care into patient’s homes.
Humana’s quest, CEO Bruce Broussard told Insider, is to weave together health insurance with the delivery of healthcare. Integrating the two could lead to lower costs and better health outcomes, he said.
The insurer is focusing on primary care because that’s one type of clinical care that has shown to reduce costs in the long run. Various studies have demonstrated that investing more money into primary care is associated with fewer costly hospitalizations and emergency department visits.
“We’re big believers in primary care,” Broussard told Insider in an interview on Friday. “We see great results, high satisfaction scores, high quality scores, and in addition, from a cost point of view, some really great outcomes there.”
Over the next decade, as Humana continues to invest in primary-care clinics, along with home-based and virtual care, the company may start to look different, Broussard said. Soon, it could employ as many clinicians as it does other types of employees, he said.
“Over the longer run, a decade, you’ll see a very substantial healthcare service business within Humana,” Broussard said. “I think you’ll see considerably larger platform and a changing organization.
Humana got serious about primary care after its Aetna break-up
Humana began buying primary-care clinics about a decade ago, but it became “intentional” about its clinic strategy when it called off its planned merger with rival insurer Aetna in 2017 after a federal judge blocked the deal, Broussard said.
After the break-up, Humana did some soul-searching. It looked to big, integrated health systems like Kaiser Permanente in California and University of Pittsburgh Medical Center and Geisinger in Pennsylvania and concluded that delivering healthcare is most successful when integrated with insurance under one organization.
Primary care was one clinical area Humana decided to focus on. In 2018, Humana moved the various primary-care groups it had acquired under one brand called Conviva. Those clinics were largely concentrated in South Florida.
For a time, Broussard said Humana doubted that a clinic strategy would work outside of Florida, where the strategy had proven successful because people from Cuba and other Hispanic backgrounds who have a large presence in Florida were already used to getting care in clinics, he said.
Humana wanted to see where else a primary-care clinic strategy would work, but there weren’t a lot of senior-focused clinics out there. So it began investing in other primary-care startups like Oak Street, ChenMed and Iora. According to Oak Street’s latest earnings report, Humana comprised nearly half of the startup’s revenue for the first nine months of 2020.
“We wanted to fund a number of different companies, both to see who was going to be successful or not and also to get capacity in the marketplace,” Broussard said.
Humana then started building its own clinics under the brand Partners in Primary Care “both for defensive and offensive reasons,” Broussard said. It struck a deal last year with private equity company Welsh Carson to build out 50 more clinics over three years.

Read more: Humana just made $643 million on its bet on a new way to pay for doctor’s visits — and the CEO signaled that this is just the start
Humana owns 150 primary-care clinics and partners with about 100 more
Humana’s primary-care clinics cater to seniors enrolled in Medicare Advantage, which is a private alternative to the traditional government-run Medicare program that provides health coverage to older people. Humana serves about 4.7 million people in Medicare Advantage plans.
The clinics are paid in a nontraditional way. Insurers give them set monthly fees to care for each patient, so the clinics make money by keeping patients healthy and out of the expensive hospital or emergency room. Doctors see fewer patients than normal so they can give each patient more attention.
Broussard said the company would continue to open clinics in areas that are starved for primary care, both by building its own centers and partnering with startups.
Humana owns about 150 clinics that serve seniors enrolled in multiple health plans and boasts partnerships with 108 additional clinics operated by other companies. It aims to open about 50 to 60 more clinics with partners in 2021, a Humana spokeswoman confirmed.
About 8%, or 300,000, of Humana’s Advantage members, get care in owned and partnership clinics, and company executives have expressed plans to grow that figure.
Beyond primary care, Humana is also pushing deeper into delivering care in patients’ homes.
It bought a 40% stake in Kindred Healthcare’s home health business in 2018 for about $800 million, with a right to buy the whole business after a few years. In addition to its investment in Heal, Humana last year put money into DispatchHealth, which provides urgent medical care in the home.
Broussard said the insurer is testing a model in Atlanta that integrates the services of Kindred, DispatchHealth and Heal so that seniors can see a nurse or doctor, or even “visit” the emergency room, all without leaving the couch.
Read more: This pitch deck helped telehealth startup Heal raise $100 million and win a major partnership with healthcare giant Humana. Here’s how the deal came to be.
Humana’s transformation is emblematic of an industry-wide shift toward integrated healthcare companies
Humana’s focus on delivering healthcare is part of a broader movement among health insurers to become more that just intermediaries who pay medical bills.
This industry-wide shift has been happening for some time, but it seems to be speeding up as insurers look for ways to control runaway healthcare costs.
The poster child for this trend is UnitedHealth Group, the healthcare behemoth that houses insurance company UnitedHealthcare and Optum, a company that manages pharmacy benefits and provides care, under one roof. Optum generates about 45% of UnitedHealth’s total earnings from operations.
Optum includes 1,400 medical clinics and employs or partners with 50,000 doctors. It aims to add at least another 10,000 doctors to its roster in the next year, UnitedHealth CEO David Wichmann said in January.
Broussard told Insider that Optum is a more diverse business than Humana’s healthcare services division aims to be. Humana is focusing more narrowly on integrating clinical services to deliver holistic care to seniors.
Still, Broussard wants to grow the care-delivery side of Humana over the next decade. The insurer’s healthcare services segment collected $25.8 billion in revenue and $789 million in earnings in 2019, driven in large part by its pharmacy benefit management business. Humana’s total revenue that year was $64.9 billion and its net income was $2.7 billion.
He noted that when Humana acquires the rest of Kindred Healthcare’s home health business, Humana will employ as many clinicians as it does other workers. Kindred’s home health operation employs 50,000 clinicians.
The COVID-19 pandemic is accelerating the changes underway at Humana
Broussard said the coronavirus crisis has bolstered the case for offering care through multiple channels, whether in person in a patient’s home or virtually.
“There are many things that are done in the hospital that can be done in someone’s home,” he said. “I think the ability to serve the population in a broader way I think it was coming, but it just wasn’t coming fast enough, and the pandemic pushed that.”
The pandemic also highlighted the benefits of moving away from the traditional way of paying for care based on the volume of services provided, toward a model that pays doctors set amounts to keep patients healthy.
Doctors in such value-based arrangements continued to receive payments when patients stopped coming to the clinic for fear of contracting the coronavirus. Other healthcare providers saw their revenues plummet. Value-based clinics were also able to pivot quicker to telehealth and were more proactive about reaching out to patients, Broussard said.
As a result, Humana is pushing faster and faster into providing care in different settings. It’s also investing heavily in its technology, and launched a new internal Medicare company called Author, which will provide digitally-enabled health plans for seniors.
“I just feel that we’re at this cusp here,” Broussard said. “We still have a lot of development and organic build to do, but the energy level and the effort and the focus and the prioritization is much different.”

Read more:
Humana just launched its answer to the new crop of insurer startups in the red-hot health-plan market for older people
Humana just made $643 million on its bet on a new way to pay for doctor’s visits — and the CEO signaled that this is just the start
Clover Health laid out ambitious growth plans as part of its $3.7 billion deal, but they rely on an untested new Medicare experiment
Primary care startup Oak Street is going public. We pored over its 188-page filing, and it reveals 5 crucial details about the company as it looks to transform how seniors are cared for.
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