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According to the Urgent Care Association of America, there are approximately 9,000 urgent care clinics in the United States — growing at a rate of over 300 centers per year nationally. The growth trend isn’t slowing any time soon. Urgent care clinics, from single sites to franchises and large organizations, will continue to expand as the aging Baby Boomer population floods the healthcare market in need of episodic or acute care services.
In addition, the Affordable Health Care Act, often referred to as Obamacare, went into effect in 2014, creating the need for more healthcare providers as 30 million uninsured people become insured. The Association of American Medical Colleges estimates by 2020 the United States will face a serious shortage of both primary care and specialty care physicians — at 91,500 fewer doctors than needed for the population.
These factors have contributed to venture capitalists, hospitals, individual physicians, and even insurance companies rushing to open their own urgent cares. While the opportunity is a golden one for business, opening an urgent care requires due diligence in upfront planning for long-term success. Before opening your urgent care clinic, we recommend avoiding these classic missteps.
Not Planning Ahead or Having the Correct Expertise
While it may seem obvious, many clinics say that starting an urgent care takes advance planning (at least a year or more) and requires personnel knowledge in both business and healthcare. Often, clinic owners have expertise in one of these two areas. To give a balanced approach, adding a partner or hiring experienced consultants can help counter areas of inexperience.
A pro forma is required for loan financing, but outlined business and marketing plans are essential, especially in the first years of operation. Experienced clinics advise that you should be prepared to run at a loss (insurance reimbursements can take months) — and to have working capital to get you through the early stages of business. Hiring the correct employees that fit your clinic’s mission will help prevent time-consuming rehiring. In addition, careful selection of staffing models is recommended as hiring choices determine when a clinic will turn a profit.
Human resource requirements, payroll, employee training programs, and policy and procedures are all vital areas a new clinic should be prepared to research and understand. To help guide new clinics, the Urgent Care Association of America offers a Policy and Procedure Manual with sample templates, so clinic administrators don’t have to write documentation from scratch.
Bottom line: Start with experience in both business and healthcare, have a business plan, and take time to hire the correct personnel and consultants.
Underestimating Build-out Time & Choosing the Wrong Open Date
A common oversight is underestimating the time it takes to open clinic doors. Using an existing building or leasing a space can cut down on construction time, but going with an existing building often limits space and lacks customized room layouts. Consider carefully which building solution type is right for your clinic. Don’t overlook having your building set-up to comply with zoning, building, and health regulations.3 Ensure your building contractor has considered building codes during the layout configuration stage so your clinic passes inspection.
Having a detailed timeline will help you meet milestones and open on time. Include some flexibility in your build out schedule for unexpected setbacks, like delays in building construction, hiring employees, and obtaining contracts with payers. When advertising, be vague about the opening date, such as saying “coming soon”, until closer to ribbon cutting time. You may want to consider a soft grand opening in the beginning, until your clinic is up and running smoothly.
It’s important to research patient volume for your clinic’s location for the chosen month of your opening — both for correct staffing amounts and revenue streams. Opening during a slow time of year can potentially bankrupt your clinic, but opening before the busy season can give your clinic a chance to streamline operations. In the beginning, hiring fewer or part-time staff and cross-training them can be a prudent move until patient volumes increase.
Bottom line: Choose your building carefully, have an opening schedule, and research the best month to open.
Not Choosing the Correct Location
Land and building price are often the determining factor when choosing your clinic’s location. However, the mistake of not reviewing nearby competition can be detrimental to your patient volume. Consider current clinics already in your area before choosing a spot. Existing clinics recommend being at least five miles from the nearest competitor. Also consider ease of access via major roadways — in addition to the proximity to residential and commercial areas.
Because of the reliance on consistent walk-ins, most urgent cares are located in high traffic areas, such as on busy roads, local malls, or nearby (sometimes even inside of) retail locations or pharmacies.4 Corner locations can be desirable as it allows your clinic to be seen by traffic from multiple directions. Remember to think outside your local community, too. Would you get more patients in a nearby city or town that has less healthcare options? Do your research first before picking your place.
Bottom line: Research local competition, think about traffic volume, and consider nearby communities or suburbs.
Not Starting Insurance Contracts & Credentialing Soon Enough
While an urgent care clinic may mainly operate with physician assistants, medical assistants, or nurse practitioners, at least one licensed physician is needed on staff.
Not only do physicians need their medical license to practice, it is also necessary to have insurance credentialing for physicians. Credentialing is the process of having a physician affiliated with major insurance companies in your area so your clinic can accept third-party reimbursement.
Physician credentialing allows clinics to receive steady payments; it also means physicians can see more patients, as physicians will be in-network or preferred providers for insurance companies. Credentialing procedures vary from payer to payer, so decide which insurance companies you’ll participate with and start the process as soon as possible.
Once you’re credentialed, begin setting up contracts with the major insurance companies in your area. Starting the contracting process ahead of time (generally six months before opening) helps ensure you have rates and discounts agreed upon before you receive patients. Front desk collections will be an important piece to your clinic’s overall reimbursement. Having a fee for service (FFS) or cash payment schedule in advance will allow the front desk staff to collect the appropriate amount before the patient is seen.
If your clinic is unsure on how to do credentialing and contracting correctly, hiring consultants with experience in this area is advisable. To ensure legal compliance, it’s also recommended that you examine state laws for both physicians and your clinic office so you meet all regulations.
Bottom line: Make sure physicians have insurance credentialing, negotiate contracts with payers well in advance, and verify you have the correct licenses to operate in your state and clinic location.
Not Having a Billing Process Defined
For all the effort put into building a clinic, finding staff, and advertising, one important step often forgot is the clinic’s billing process. Whether you do billing and claims processing yourself or a third-party company handles it, who does your billing is a crucial decision to the success of your urgent care. Billing controls your revenue stream, so it’s important to have timely reimbursements from payers (preferably in 90 days or less). Delays from payers or frequent mistakes in claim submissions can significantly impact your bottom line.
Start-up clinics often use revenue cycle management (RCM) providers so clinic staff can focus directly on patient care. When choosing an RCM company, look for one that has experience in the urgent care industry and offers a clear package or listing of what billing services it will provide. Services like taking patient phone calls and offering transparent billing data can save your clinic time and streamline management processes.
For clinics that choose to do billing “in-house”, a best practice is to hire dedicated billers and certified coders who can review claim submissions for accuracy and ensure proof of timely filing. This will save time and reduce back-and-forth claim rejections from clearinghouses. As clinic management, having access to accounts receivable is crucial as it allows you to see outstanding accounts — and where issues are occurring.
Bottom line: Determine a billing process before opening, consider using a third-party billing company, and have access to accounting figures.
Not Having a Website or Clear Outdoor Signage
Have a clinic name picked out and your marketing budget set? Now, how are you going to reach your patient base? The best way to advertise 24/7 is to have your own website. Think of it as a permanent advertisement and information source for your clinic, available to anyone with an Internet connection. With patient-centric healthcare becoming the norm, your clinic needs to meet web-savvy patients where they are — online. Not only does a well-designed, user-friendly website help give your clinic credibility, it also creates a good first impression and builds an online presence.
In 2012, Manhattan Research conducted a survey of 5,210 adults who use the Internet as a health resource. Fifty-four percent of respondents said they did online research to decide what services they might need and who should provide them.5 On your website, your clinic can post services offered, physician info, hours, contact info, directions to your clinic, and patient resources. Adding social media channels that link back to your website can help grow visits.
Website promotions and helpful content such as a blog with health tips can also improve SEO traffic to your website. However, it’s important to maintain up-to-date copy on your blog and social media to ensure you’re providing beneficial, timely info to patients.
Registering with local online business directories and with urgent care directories is also recommended. Free tools like Google Analytics can help you track website performance. Ensure your website is listed on all your print marketing items—like brochures, t-shirts, and fliers. If possible, add a tracking question, like “How did you hear about us?”, to your patient form.
Physical signage is a given for a new clinic to attract patients. So you’d be surprised how many clinics don’t focus on creating legible, easy-to-view signs. Signs should not only be on the front of your building but also on marquees or in highly visible places within your parking lot. Ensure text is large and in a readable font. If the name of your clinic might not include the phrase “urgent care”, this should be added so your clinic clearly communicates your offerings.
Bottom line: Create a website, offer valuable patient information online, and design clear, visible signage for your clinic.
Opening an urgent care can be a profitable venture, if you avoid common mistakes. While you can prepare to the best of your ability on your own, nothing is more valuable than speaking with those who have actually been involved in opening an urgent care. Current urgent care clinic owners, physicians, or healthcare vendors who are willing to share with you are excellent resources for learning. Hiring long-term consultants, either business-related or health care-oriented, can also be beneficial for this purpose while planning. Reviewing the industry itself and becoming familiar with existing clinics, typical service offerings, vendors, and support resources is helpful — not only in your local area, but also on a national scale.
The urgent care industry offers many opportunities for growth. But with all advice considered, it’s important to remember that a clinic is a service-oriented business. Thus, the quality and speed of service offered is what helps determine a clinic’s longevity. With the right plan and team in place, you can open a successful urgent care clinic that provides patients with efficient, recommendable healthcare services.
To the following interview participants who graciously gave expert advice to be included in this ebook:
(Disclaimer: The below urgent care clinics are clients of DocuTAP and were not compensated for their contributions.)
“We’ve made significant investments with opening urgent care centers, and we need a partner who’s got us covered from the billing and software fronts—and we have one in DocuTAP.”
Dave Adams, Waltham, MA
Doctors Express – Waltham cut two minutes off each visit time by using DocuTAP on a tablet, allowing for mobile triage in the exam room—without the patient having to change stations for treatment.