There are several key factors to consider when selling a medical practice, and increasingly, doctors are joining larger health systems rather than attempting to run a practice independently. The same is true for urgent care practices, a component of the ambulatory healthcare system. Urgent care practices usually act as stand-alone walk-in clinics where patients can be seen like that of an emergency room.
This type of practice has several advantages, but if you run one, now is a great time to sell. Why? Here are several reasons.
Urgent Care Practice Industry Growth
The urgent care industry is growing. The United States spends 5% of its GDP on Ambulatory Health Care, which includes emergency rooms, emergency dentists, and other urgent care needs. Approximately 40% of this revenue is allocated to physicians.
Due to the lack of family care physicians and the often lengthy wait for an actual appointment, patients tend to use Urgent Care facilities for illnesses rather than just emergency services. This fact is spurring growth in this area, but with that growth comes some significant challenges.
Physicians who work in and run this type of clinic often don’t have regular patients; their workload is irregular and often seasonal, and extended hours are essential to meet patient needs.
The Urgent Care Practice Competitive Landscape
Using urgent care is also popular among patients due to its lower cost compared to emergency room visits and hospital care. However, many hospitals and large healthcare systems offer their urgent care facilities to capitalize on patients’ needs. While many patients use these types of practices, there are also a lot for them to choose from.
As the competitive landscape changes, there is pressure from insurance companies, patients, and even the Federal government to reduce healthcare costs. This makes it harder for an Urgent Care practice to remain profitable. For the system to work, doctors need to see an average of around 20 patients or more each day, leaving little time for in-depth diagnosis and thorough health histories.
Regulations Related to Running an Urgent Care Practice
Like other medical practices and institutions, an urgent care practice is subject to many local, county, state, and Federal regulations. Not only are there physician and facility licensing rules, but various financial regulations must also be adhered to, related to collections, billing, and other everyday medical practice tasks. To expand an urgent care practice, many states that have requirements for staff-to-patient ratios require a Certificate of Need (CON) to be approved.
Federal regulations regarding electronic medical records (EMR) and patient information and privacy have gotten stricter. The cost of healthcare is also being addressed at a Federal level, and no one is certain what the regulations will look like next.
Selling an Urgent Care Practice to the Right Buyer
Selling your urgent care practice now is a good idea simply because you can’t just sell it to anyone. The buyer must be a licensed physician or a healthcare organization, such as an HMO or a hospital group. As more medical practices merge or are acquired by these groups, there are fewer buyers in the market for medical practices, particularly urgent care practices.
As the number of buyers decreases, the market shifts from a seller’s market to a buyer’s market. While your practice may have a particular monetary worth, the likelihood of finding someone who will pay that price is decreasing over time. This means the buyer can set more of the terms and conditions that you may have to comply with to sell your practice at all.
Getting Help Selling Your Urgent Care Practice
Does this sound daunting? It isn’t all bad news. If you prepare correctly and get your urgent care practice ready to sell, the market is still viable. How will you accomplish those tasks and manage your practice?
This is where a business broker comes in. Hire a professional who will be part of a team that helps you prepare your practice to sell and helps you find the right buyer at the right time. Have questions? Ready to talk about selling your urgent care practice? Contact us at Rogerson Business Services today to learn how we can assist you.
Andrew Rogerson is a certified business broker based in Sacramento, California. Call Toll-Free at (844) 414-9700. If you prefer, email him at support@rogersonbusinessservices.com. Andrew services the whole state of California.