Hospital chains getting into urgent care in a big way

While for-profit hospital chains fight reimbursement cuts tied to the Affordable Care Act and high levels of uncompensated care in states that do not expand Medicaid eligibility, delivery of care at a less complex level could wind up being their salvation, The Motley Fool reported.

The number of urgent care centers will likely grow by 20 percent over the next five years, from 10,000 to 12,000, according to the article. As a result, their growth could help to boost the bottom lines of for-profit hospital chains that choose to go into that business.

"Long waits in emergency rooms for breaks, sprains, and the flu coupled with triple digit out-of-pocket invoices are making hospitals the care-of-last-resort," The Motley Fool reported. However, some hospital operators figured out that providing urgent care services could wind up supplementing their business. For example, HCA Inc. has spent $5.5 billion over the past three years opening new facilities that include standalone emergency rooms and urgent care centers. Tenet Healthcare Corp. has also recently launched a new urgent care brand called MedPost. And the not-for-profit Dignity Health, which acquired U.S. Healthworks in 2012, has since expanded it from 172 locations to more than 200.

A well-located urgent care center can generate up to $250,000 a year more in profit, according to the article, despite the overhead and need to pay the salaries of staff physicians and nurses. Indeed, many operators adopt practices from fast food chains such as McDonald's in order to cut down on waiting times, improve efficiency and attract more patients.

"Hospital [chains] like HCA and Tenet will continue to grow their urgent care footprint in order to maintain market share and offset threats from pharmacy chains including CVS and insurers like Humana," the article states.

To learn more:
- read The Motley Fool article

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