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An “adage” is “a proverb or short statement expressing a general truth.” Although dismissed by some as “cliché,” the time-honored wisdom of retail adages like “retail is detail,” “retail follows rooftops,” and “location, location, location” are still highly relevant to brand differentiation, operational execution and site selection for urgent care centers.
Long-term, urgent care is successful only to the extent that satisfied patients return for future services and tell friends and family members to do likewise. Patients in urgent care are “satisfied” when the medical need that led to the urgent care visit is resolved, wait times are short and frequently communicated, providers and staff courteously listen to patients, and when the financial transaction is “clean” and “fair.” Only the patient determines whether a center thrives or struggles, therefore the patient’s wants, needs and desires should be the driving forces behind everything the urgent care center does.
The adage, “retail is detail” refers to meeting patient needs by focusing on the elements of service delivery that are most important to patients. This entails designing a patient experience with painstaking attention to everything from the website to the parking lot to the fee schedule and discharge paperwork.
Urgent care exists in a highly competitive marketplace that also includes walk-in primary care, telemedicine from home, and retail health clinics. What differentiates urgent care from these other medical providers is what also what makes urgent care successful in the marketplace—mastery of the “retail elements” of urgent care delivery includes:
Note that of these factors, location is first, indicating that a highly visible building with clear signage and strong traffic counts is the starting place for urgent care. Every time a patient drives by an urgent care center and sees the building and signs, such serves as a marketing reminder that the center is available whenever an urgent care need might arise. Patients are unlikely to use a center they are unaware of so an investment in location magnifies the return on all other marketing expenditures. Selecting a viable site is also the first step in urgent care business planning.
The adage “retail follows rooftops” means that good retailers seek areas of high or growing household density with demographics who need and can pay for the retailer’s products and services. Historically this concept has led urgent care to seek the same demographics as big box retail—affluent, suburban, family households with employer-provided insurance coverage. As urgent care has expanded, some of the most desirable consumer areas including the suburbs of Dallas/Ft. Worth, Denver and Phoenix, have become over-crowded or over-saturated making it increasingly difficult for new entrants to thrive. Analysis of major markets, however, still reveals many under-served trade areas including untapped growth in urban and rural settings, particularly when the center is able to serve Medicaid populations. While finding viable sites for urgent care growth has become more difficult, the use of predictive analytics in site selection greatly improves the odds of attaining break-even volume within 12 to 16 months of opening.
As a retail business, the starting point for urgent care success is a visible, accessible, and attractive physical plant. “Retail adjacencies” refer to the cross-shopping behavior of consumers and the importance of co-locating retailers who attract a similar clientele. For example, in a lifestyle shopping plaza, consumers might take in a movie, peruse Barnes & Noble or the Apple Store, and grab a frozen yogurt afterwards…cross-shopping behavior dictates that these retailers be within walking proximity to one another. The importance of this cross-shopping to generating sales is reflected in the high retail rents in popular shopping centers.
Because urgent care is typically its own destination, used by consumers for one-off purposes whenever injury or illness arises instead of in conjunction with other retail services, it is not necessary for urgent care to be located directly adjacent to other retailers. In fact, traffic and parking congestion in a crowded shopping plaza can deter some urgent care patients. More important than “retail adjacency” is the concept of “retail draw,” which means urgent care should be located in the same vicinity as big box and food/drug retailers…basically in the areas consumers first go when any type of service (from banking to dry cleaning) is needed. And within those areas, urgent care must be visible to the bulk of traffic travelling to the area. See Example 1 of a Concentra Urgent Care center located along a busy highway in Harrisburg, Pennsylvania…the center is stand-alone and across from, but not buried in the congestion of, the big box retail cluster.
Exhibit 1: Concentra Urgent Care in Harrisburg, PA has great building and signage visibility along a heavily travelled highway with quick serve restaurants, hotels, banks and other services…but outside of the congestion of the “big box cluster” across the street.
Real estate is a “spot market” in which prices are directly proportional to quality. To get a highly visible building with good signage and access to heavy traffic, an urgent care operator may have to “pay up.” Endcap or outlot positioning, a high proportion of signage relative to building square footage and strong traffic access typically command landlords with higher rents. But when considering the value of these factors in driving urgent care visits, there may be a business case for the urgent care operator to pay more when the incremental rent will draw incremental, profitable patients to the center (Exhibit 2).
Exhibit 2: High Rents Don’t Raise the Bar Significantly in Terms of Visits:
If the total area leased is 3,200 sqft, the daily cost would be:
@ $20 per sq ft rent cost =$177 per day or 1.47 patients per day
@ $25 per sq ft rent cost = $222 per day or 1.85 patients per day
@ $30 per sq ft rent cost = $266 per day or 2.21 patients per day
@ $35 per sq ft rent cost = $311 per day or 2.59 patients per day
@ $40 per sq ft rent cost = $355 per day or 2.96 patients per day
…based on a $120 average reimbursement per patient visit.
As a retail delivery channel for on-demand medical treatment, the adages that have applied to conventional retail also lead to success in urgent care. Selecting a viable location is typically the starting point for urgent care operators seeking to meet patient needs through a differentiated service offering in their community. A viable location is one that is accessible to high densities of household demographics with frequent urgent care needs, is highly visible to heavy traffic counts, and is in a prime area of retail draw. Even if higher rents are necessary to attain the “right” location, the cost can be justified when the location leads to higher patient volumes.
Alan A. Ayers, MBA, MAcc is Vice President of Strategic Initiatives for Practice Velocity, LLC and is Practice Management Editor of The Journal of Urgent Care Medicine.