Immediate-care clinics offer more than just speedy stitches and X-rays. For several Chicago-area health systems, they also provide a quick path to growth, so regional hospitals are doubling down on them—and spooking private players that have dominated the local market to date.
"The healthcare systems have been a little slow to grow in the city," says Sarah Cogswell, a senior vice president in the healthcare practice of real estate firm Jones Lang LaSalle. "But as millennials continue to drive population growth, the systems are responding."
Historically, hospitals have tried to increase referrals to their affiliated specialists—and therefore their own bottom lines—by opening primary-care practices. Now, though, more hospitals are looking to drum up business through urgent care, which introduces relatively healthy people to their networks at a fraction of the cost of hiring family docs.
Visits to urgent-care centers increased 19% from 2010 to 2015, according to a study by Accenture. Right now, Chicago proper offers 37 immediate-care clinics, more than double eight years ago, according to JLL, which increasingly represents healthcare systems as they expand and gobble up new space. All but nine are private; the private clinics are run by such players as MedSpring Immediate Care of Austin, Texas, and Concentra Urgent Care, headquartered in Addison, Texas.
Private companies dominate the national market, too, owning about three-fourths of the more than 7,000 quickie clinics across the country. In Illinois, there are 196 immediate-care centers in all, about two-thirds of which are private, according to the Urgent Care Association of America, a Naperville-based industry group. Though the niche has already experienced a decade of explosive growth and investment, health system leaders say they're still bullish.
"We do think there's going to be continued growth in the immediate-care format," says Scott Powder, Advocate Health Care's chief strategy officer. The Downers Grove-based health system operates 22 stand-alone immediate-care centers in metro Chicago, plus 56 retail clinics inside Walgreens stores.
The clinic business model is straightforward and attractive: Treat as many patients with minor injuries and illnesses as quickly as possible—usually in 30 minutes or less. Patients avoid the chaos and eye-popping bills associated with the ER, while hospital systems skip paying for high-tech equipment, large buildings and lots of physicians. As far as cost savings go, many clinics weigh in at a slim 1,500 square feet, come equipped with X-ray machines but not CTs or MRIs, and staff physicians' assistants or nurse practitioners.
The rising wave of consumerism in healthcare has pushed the immediate-care market to $15 billion nationally this year, a 27% spike since 2011, according to Kalorama Information, a publisher of healthcare data in Rockville, Md. The number of urgent-care centers across the country has increased 14% to 9,300 centers since 2008, according to the American Academy of Urgent Care Medicine in Orlando, Fla.
A typical immediate-care center sees 294 patients each week, a number Kalorama predicts will grow for the next four years. Per-site revenue is expected to increase to nearly $1.7 million by 2021.
Hospital system executives are well aware of those attractive stats—and are racing to grab desirable locations near what industry consultant Thomas Charland calls "the slam-dunk": dual-income parents with children who can't disrupt their entire day to finagle a pediatrician appointment for a sick kid.