Why Are Health Insurers Making Huge Investments In Urgent Care?

The Urgent Care industry is set for rapid expansion in coming years, according to a new report issued this July. Major health insurers are acquiring or working with large urgent care chains, and investors are taking notice of the growing relationship.

UnitedHealth Group (UNH) will expand its recently acquired chain of urgent care centers, while other urgent care centers and companies have gained the financial backing of other large health insurers, including Blue Cross and Blue Shield. After a health insurance plan buys or invests in an urgent care center, they usually cover visits to such clinics by plan holders.

“Urgent care shows steady growth, predictable margins and private investment from all sectors: private equity, angel investors, health insurers and health systems,” said Tom Charland of Merchant Medicine.

Urgent care centers provide routine, non-emergency medical services, and are bridging the gap between costly emergency room visits and traditional primary care physicians, who might not be available on short notice. The Centers for Disease Control and Prevention reports that 48% of adult emergency room visitors who were not sick enough to be admitted said they only came to the ER after they failed to contact their physician, often because of after-hours medical problems. And while results may vary, patients usually trust urgent care centers to cost less than emergency room visits.

So far this year, the number of urgent care centers in the United States has grown 4.4% to 1,562. Urgent care centers can include single-site neighborhood clinics to large, hospital or insurance company-backed chains of clinics.

UnitedHealth Vice Chairman Larry Renfro pointed out this July that after a recent merge, UnitedHealth is now the country’s largest provider of urgent care clinics.

“We are committed to growing as a leading provider of ambulatory care services, recognizing this capability will be increasingly valuable to the consumer and healthcare system overall,” Renfro said.

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