A new issue brief by the Private Equity Stakeholder Project was recently featured in a piece by MedCity News on the impact of private equity’s expanding presence in the urgent care industry as well as its rapid consolidation.
MedCity News August 14, 2022: Report: PE firms’ entrance into urgent care raises concerns for quality, affordability of care
The issue brief “Private Equity’s Growing Foothold In Largely Unregulated Urgent Care Raises Red Flags”, written by PESP researcher Eileen O’Grady, raises concerns about the rise of private equity ownership and growing consolidation of the industry. A lack of regulation makes it difficult to track and enforce quality measures, especially considering common private equity practices of targeting outsized returns in an industry already exhibiting signs of saturation.
The MedCity News piece emphasized this rapid growth in PE involvement in urgent care.
“Over the past 10 years, private equity firms have been increasingly investing in urgent care — capitalizing on an industry that has skyrocketed in growth as patients seek alternatives to bureaucratic primary care and expensive visits to the emergency room.”
The PESP report confirms this stunning fact. According to the research, “the number of urgent care centers in the U.S. grew to more than 10,400 locations in 2021, marking a 63% increase over the previous 7-year period.” Convenience is a major factor of the draw toward urgent care services, O’Grady told MedCity News. Being faster and cheaper than most emergency room visits, and having more flexible hours than primary care offices, it’s clear why PE would flock toward acquiring urgent care facilities. Of course, more frequent PE involvement in the urgent care industry calls into question standards of care given previously documented incidents of PE firms favoring returns over quality of care.
“The private equity business model, which targets outsized returns over short time horizons, has been shown to prioritize growth and profits over quality patient care,” O’Grady told MedCity News. “In areas where private equity firms have been investing for years — such as nursing homes, hospitals and behavioral health — we have seen wealth extraction through cutting staff, pushing costly procedures and stripping out assets from providers.”