Recent Urgent Care Volume Surge Supports Elevated Patient Volume Forecasts
The urgent care industry has been experiencing accelerated patient visit volume into 2021, continuing trends started in 2020. Factors contributing to this surge include return visits from 2020 first-time users who are more familiar with urgent care offerings, the emergence of the delta variant combined with a reduction in the number of public testing sites for COVID-19, as well as the re-emergence of normal medical conditions (e.g. flu, sprains, etc.) from the reopening of schools and general activity. Whether these volumes are sustainable is the key question buyers and sellers are asking.
By the Numbers
After a moderate spring 2021, visit volume began to surge during the summer, according to patient volume statistics from a report in the fall 2021 issue of Urgent Care Quarterly by Experity Inc., the industry’s leading electronic medical record (EMR) and practice management software company. Example statistics from the report include:
- Industry-wide visit volumes were up 6.5% in 2020 compared to 2019, and are up 14.5% so far in 2021 compared to prior 2020 year-to-date numbers.
- In 2021, same-store urgent care clinics have seen an average of 45 patients per day, a 32% increase since the average of 34 in 2016.
- First-year revenue for a new center averaged $874,000 for those opened between 2016 and 2019; first-year revenue increased to $1.65 million for new centers that opened in 2020. Experity projects revenue of $2.4 million for new centers that open in 2021.
- The percentage of urgent care clinics seeing more than 60 patients per day increased from 6% in 2019 to 43% between January and August 2021. This suggests that a larger percentage of the population is relying on urgent care centers for their urgent health care needs. (See chart below)
Source: Fall 2021 Urgent Care Quarterly, Experity, Inc.
With the surge in volume, a number of new business and operational challenges have emerged, including:
- With the increase in current and projected volume, centers will need to make a concerted effort to recruit and retain talented staff. Operating with sufficient qualified staff will be crucial to serving patients with high standards in a timely manner.
- Higher daily patient volume results in the need to speed up clinical workflows and engage patients in new ways in order to maintain high patient satisfaction metrics.
- Higher patient volume highlights the need for urgent care centers to utilize information technology to their strategic benefit, including the integration of telemedicine.
- The careful measurement, management and maintenance of patient satisfaction metrics in a higher volume environment is crucial to sustain elevated volume in the long term.
Health Care Valuation Takeaways
- Visit volume will likely moderate in the long-term from today’s levels; however, evidence suggests volumes will likely stay well above be above pre-pandemic levels.
- Higher volume creates operational challenges along with increased expenses. These realities should not be ignored, and must be properly managed to ensure sustainable high-levels of profitability.
- With all else being equal, industry characteristics are in place to support higher valuations for urgent care centers due to increased levels of sustainable profits driven by volume growth. Of course, microeconomic factors affecting any single urgent care center may differ from global industry trends.
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This is one in a series of related health care valuation posts:
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