"We're talking about the pros and cons of the different operating models," Flores said. "We're in a phase right now where we're like, what do we do with urgent care? It's becoming important enough that we're talking about making it internally a companywide service line … [or] organizing as a functional group."

Urgent care expansion could soon hit a limit in some areas

Despite increased urgent care expansion efforts, oversaturation in certain areas may push some health systems to pull back and reevaluate the best uses of their resources.

According to Ash Shehata, national sector leader for KPMG U.S., there has been a slowdown in urgent care growth in individual markets, which means that providers' growth opportunities are limited.

"I think a lot of organizations are hesitant to pull back on their investments," Shehata said. "I think they're right now at that reevaluation phase, but I have a feeling that as overall costs and value to the organization becomes further scrutinized, we're going to move from reevaluations to rationalizations of these businesses."

Some areas that could see urgent care oversaturation include urban markets with a high concentration of residential areas and markets with many providers but unsustainable population growth. Mike Slubowski, president and CEO of Trinity Health, also highlighted southeastern Michigan; Fort Lauderdale, Florida; Chicago, Philadelphia; and Columbus, Ohio, as oversaturated markets.

"The reality is that almost every major market nationally is now saturated with urgent care facilities," Slubowski said. "Everyone jumped in."

In a July interview, Slubowski said Trinity is currently being more cautious with its urgent care strategy, especially since demand for urgent care is no longer as high after the COVID-19 pandemic. Primary care practices are also extending their hours to increase accessibility for patients.

"It is still a popular way to access care quickly, but I think the demand projections were exaggerated," Slubowski said. "We're being very methodical and cautious about growth in that arena."

4 insights for providers investing in urgent care centers

By Nick Hula and Lauren Woodrow

Like many ambulatory assets, health systems often view urgent care as a way to funnel patients to the hospital. While moving patients from outpatient visits to inpatient services remains an important goal for ambulatory strategy, it cannot be the only reason for investment. Market forces like payer/employer steerage and shifting patient preferences limit health system control over care pathways. Organizations that invested in these sites solely for hospital volumes now rationalize these businesses as the market becomes oversaturated.

Rather than trying to maximize urgent care capacity by adding sites, health systems should focus on expanding accessible immediate care capabilities within their communities. That could take the form of an urgent care center, a primary care site with expanded capacity for walk-in appointments, or simply extended hours at existing urgent care centers.

Overall, there are 4 tactics providers should consider when investing in immediate care:

1. Make ambulatory as strategically important as inpatient: Ensure your urgent care business has specific and measurable strategic goals beyond generating inpatient volumes.
2. Get better before bigger: Maximize efficiencies at existing urgent care centers before building or buying new physical assets.
3. Build clinicians’ attachment to the system: Make in-network referrals the path of least resistance for clinicians working in urgent care centers. Consider co-locating specialist offices at these sites to make it easy to keep patients within the system.
4. Look for partners to maximize expertise: Evaluate whether you are the expert in establishing and operating urgent care centers to their maximum potential. If you’re not the expert, partner with a third party who is.