Private Equity’s Growing Foothold In Largely Unregulated Urgent Care Raises Red Flags
August 9, 2022
A newly released issue brief by the Private Equity Stakeholder Project investigates the role of private equity firms in the quickly growing urgent care sector. “Private Equity’s Growing Foothold In Largely Unregulated Urgent Care Raises Red Flags” 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.
According to the report, the urgent care industry is one of the fastest growing healthcare sectors in the United States, and PE firms are continuing to exploit that growth by investing in and consolidating providers. However, current government regulation of the urgent care industry is sparse, leaving little oversight of the large firms that are profiting from their expansion.
Key points from the issue brief are as follows:
- Urgent care is among the fastest-growing sectors of the US healthcare industry, and private equity firms are increasingly capitalizing on that growth by investing in and consolidating providers.
- High profitability in urgent care relies on growth and expansion. While urgent care has historically been fragmented and ripe for consolidation, the industry is beginning to hit a ceiling in urban markets.
- As urban and suburban markets become saturated, private equity firms have set their sights on rural markets to build out their urgent care platforms.
- Urgent care companies operate in a lax regulatory environment, allowing them to escape the level of scrutiny paid to hospitals and other healthcare providers.
- Urgent care centers are reportedly less likely to treat patients on Medicaid.
- Federal legislation banning surprise medical billing largely does not cover urgent care, meaning patients are not protected from surprise bills at urgent care facilities.
Learn more by downloading the issue brief HERE.