Browse by Topic
More than 40,000 members value HFMA's thought leadership and practical strategies. HFMA is where you need to be.
Get acquainted with the
healthcare finance industry's leading professional association. Find out why our
members rely on HFMA as their go-to source for insight and
Members have many
options for helping them advance their careers. Conferences, seminars,
eLearning, certification, and more -- our education and events will keep you
Connect the dots on today's big issues, explore collaborations, get career-boosting tips, and network with colleagues nationwide at the leading finance conference. Save $150 off the full conference rate when you register by Feb 27.
Real-time presentations with nationally recognized experts, networking opportunities, and industry solutions—no travel required!
Get the latest, practical education in key areas of healthcare finance over 1, 2, or 3 days. Choose Essentials Programs or Master Sessions in DC or Seattle. Register early and save $100.
If you're a subscriber to any of our three newsletters, you have access to online education. Learn more or subscribe.
Get the perspectives of leading healthcare finance professionals on today's hottest issues.
Information about leading vendors helps your buying decisions.
Forum members can network during live webinars or access a library of past webinars on topics such as bundled payment, charity care, and ICD-10.
An ever-expanding collection of spreadsheets, policies, job
descriptions, checklists, and more that you can adopt and adapt.
Forum members can submit vexing questions to a panel of experts
using our Ask the Expert service.
Your source for employment solutions.
Find new employment opportunities or
reach out to qualified candidates.
Distinguish yourself as a
leader among your peers and advance your career by earning certification in our
healthcare finance programs.
Get an objective third-party evaluation of products and services used in the healthcare finance workplace.
MAP App is a web-based application that helps organizations improve revenue cycle performance based on industry-standard metrics called MAP Keys.
Find suppliers and products in this comprehensive vendor directory for healthcare finance professionals.
Guidance for understanding and communicating about the price of health care.
Guidelines on how to make it easier for consumers to get information about healthcare prices.
Improve your revenue cycle performance through standard metrics, peer comparison, and successful practices.
Urgent care is one of the fastest-growing segments in health care, projected to grow almost 40 percent, to $18 billion, by 2017. Drivers include a projected increase in the insured population, a shortage of primary care physicians, the lower cost of urgent care compared with emergency department (ED) visits, and the potential of urgent care centers to reduce demand on chronically over-crowded EDs. Urgent care centers also appeal to consumer desire for greater convenience, through evening and weekend hours and walk-in appointments.
The urgent care industry is highly fragmented, but acquisitions are picking up. Private equity firms acquired three urgent care chains between 2010 and 2012. Hospitals and health systems have also started to make significant purchases, as illustrated by Dignity Health’s acquisition of U.S. HealthWorks in 2012. Payers are recognizing the value of urgent care centers as the push towards lower-care settings increases. WellPoint, for example, has invested in Physicians Immediate Care.
With acquisition comes the need to perform valuation of these centers. This prospect poses a number of challenges. Valuation, at its core, is a matter of projecting net income. Several factors add to the complexity of doing so for urgent care centers.
Factors affecting demand. Valuation must take into account how demand will develop in the local market, including the impact of changes in EDs. Demand for urgent care will be strongly affected by healthcare reform and alternate payment initiatives, whose impact on the market is still a partial unknown. It is estimated that there will be an increase of 26 million nonelderly insured by 2017, while demand for primary care physicians is expected to exceed supply by 53,000. An aging population will also increase demand.
Impact of global-fee reimbursement. Unlike reimbursement for physician practices and hospitals, most urgent care reimbursement is covered under a flat rate that is standard for all visits. Profitability of urgent care centers is strongly affected by case-mix and acuity, and successful negotiation of global fees is critical to determination of financial success.
Complexities of valuing start-ups. There are special considerations in valuing entities that have started operations relatively recently. Start-up costs for urgent care centers are around $1 million per center; this debt decreases value. Projected volume ramp up must be determined—will patients be shifted from the local EDs (which could occur relatively quickly), or will the center need to build a local reputation? A good valuator will account for the differing degree of risk associated with valuing an established urgent care center versus a startup center without a track record.
Lack of guideline companies. The market approach to valuation typically requires "comparables"—data from other, similar entities, referred to as guideline companies. With urgent care centers, many of which are closely held, the availability and completeness of transaction data are limited, and the data may be of questionable comparability. Information about comparable acquisition transactions also may be lacking.
In sum, although the income statement of an urgent care center may seem relatively simple, the nuances of the industry result in a more complex valuation process than one might expect.
Karin Chernoff Kaplan is a principal, DGA Partners, Bala Cynwyd, Pa., and a member of HFMA's New Jersey Chapter.
Publication Date: Wednesday, March 05, 2014
Russ Graney, founder and CEO for Aidin, and John Laursen, head of business development for Aidin, share insights on how to improve care transitions between acute and post-acute care settings and incentivize high-quality patient outcomes.
Scott Elston, strategic accounts manager, GE Healthcare Services, describes how substantial cost reduction in health care requires rethinking business strategy and asset use.
Robert Williams, MD, director, Deloitte Consulting LLP, and Arielle Freiberger, product strategist, ConvergeHEALTH by Deloitte, explain how sophisticated retrospective, real-time, and predictive data analytics can inform decision making to reduce costs and improve care.
Stuart Hanson, director of business development (healthcare solutions) at Citi Retail Services, discusses how improving the payment experience can benefit consumers and healthcare providers.
Scott Schmidt, vice president, Cerner RevWorks, LLC, shares insights on best practices for maximizing a revenue cycle management partnership.
©2015 Copyright Healthcare Financial Management Association
HFMA.org is best viewed using IE9 or the latest versions of Chrome, Firefox, and Safari.
Join HFMA today and enjoy: