Over the past 10 years, private equity firms have increasingly invested in urgent care — leveraging an already Rapid growth As patients seek alternatives to bureaucratic primary care and expensive emergency room visits.
But according to a recent study, private equity’s expanding presence in urgent care and the industry’s consolidation have raised concerns about the quality and affordability of care. Report Posted by the Private Equity Stakeholders Project. PESP is a non-profit organization whose mission is to “identify, engage, and connect stakeholders affected by private equity.”
By 2021, the number of urgent care centers in the U.S. will increase to more than 10,400, a 63 percent increase from the previous seven years, the report said. Eileen O’Grady, research and events manager at PESP, said the main appeal of urgent care was convenience. The industry is growing because urgent care clinics have more flexible opening hours than traditional doctor’s offices and are often quicker and cheaper than emergency room visits. O’Grady noted that the pandemic has further demonstrated the benefits of urgent care, as clinics play a key role in improving access to testing and vaccines.
While private equity’s presence in the industry is increasing, private equity still represents a small fraction of urgent care providers. As of 2019, 40% of urgent care facilities are at least partially owned by hospitals, 35% are owned by insurance companies, and 6% are by private equity firmBut Ian Goldberger, head of business advisory services at accounting firm Kaufman Rossin, said the proportion of urgent care facilities owned by investors such as private equity groups may now be higher.
The urgent care industry should be wary of this growing private equity ownership, the report argues.
“The private equity business model, which targets excess returns in the short-term, has been shown to prioritize growth and profits over quality patient care,” O’Grady said. “In areas where private equity firms have been investing for years — such as nursing homes, hospitals and behavioral health — we’ve seen wealth gain through layoffs, pushing through expensive procedures and divesting suppliers.”
The report shows urgent care centers are unlikely to treat Medicaid patients — a shortcoming that even the industry’s main lobby group, the Urgent Care Association, acknowledges.group Citing low reimbursement rates As a reason so few urgent care centers accept Medicaid.
In 2015, Medicaid enrollees accounted for 16 percent of all reported patient visits, the report said. Additionally, federal legislation prohibiting unexpected medical billing largely excludes urgent care, meaning patients are not protected from unexpected billing in urgent care facilities.
For O’Grady, the lack of regulation in the urgent care industry is also a concern. Without adequate oversight, it is difficult to ensure urgent care centers maintain high-quality care, fair billing practices, and equitable access to low-income and underserved communities. Large chains of urgent care should be subject to similar oversight as any health system, she said.
O’Grady also called on the larger health care community to pay attention to these worrisome ownership trends in the urgent care industry.
“Urgent care plays an increasingly important role in our health care system, filling gaps in health care by providing flexible and often affordable care,” she said. “However, the dramatic increase in Wall Street investment in the industry, coupled with the lack of regulation, warrants careful scrutiny. If private equity’s track record in healthcare investing is a bellwether for expectations in the urgent care space, healthcare providers and advocates should be wary Private equity investors are entering the industry.”
Photo: Tanu, Getty Images
