Stateside Podcast: What's behind the surge in urgent cares?
Your suspicions are correct. There are, indeed, more urgent care centers in Michigan. In fact the number of locations have tripled since 2010.
Detroit Free Press reporter JC Reindl has been following the trend towards urgent care and found that the number of centers increased from 170 to 541 in 2022, according to the Urgent Care Association.
Who runs these urgent care centers?
While we’ve seen a recent surge in facilities, Reindl said that urgent care has been around since the 1990s. They were often mom-and-pop shops serving as an alternative to Emergency Rooms.
But the locations today are of a different caliber. Reindl reported that 35% are run by or affiliated with hospitals, and are often tied to private equity.
“We've seen that here in Southeast Michigan where, you know, Beaumont has had a very big push into urgent care; Henry Ford. And a lot of these health systems are partnering with, oftentimes, a private equity-backed partner,” Reindl said during an interview with Stateside. “They open up quite a few of them, you know, dozens out at once.”
Why are there so many of them?
During the pandemic, Reindl said, some urgent care operators noted an increase in patients. Urgent care brought in profits through COVID testing, and COVID care when it became harder to see a primary care provider or emergency room doctor.
Another reason why there are so many centers: there are fewer regulatory hurdles to open them up versus other types of health care centers.
“We have – it's called a certificate of need process – and you have to petition to get permission from essentially the government to open up if you want to put a new MRI center in, you know, even put in some more hospital beds,” Reindl said. “You don't have that for urgent care.”
Because urgent care facilities are privately owned, Reindl said that we don’t have numbers on how profitable these centers are. Nonetheless, we can make an educated guess on their profit potential, especially for facilities run by hospitals. Even if a hospital-run urgent care site does not get a ton of patients through the door, they can still profit by getting that parent into their hospital system.
“[Patients] might need a follow up appointment. They might need some more tests,” Reindl explained. “And so it definitely is a revenue source for hospitals, even if not directly when that patient walks in.”
Will urgent care centers last?
Reindl said a lot of people are predicting the bubble to burst.
“There's going to be a shake out because we just got too much proliferation during COVID and there's not enough patients to go to all these urgent cares,” he said. “We've already seen that, you know, some urgent cares have closed…But a lot of the owners are anticipating that the greatest number of closures could still be on the horizon as we see this shake out.”
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