David Stern Offers Urgent Care Business Advice

For several years now, I have been receiving emails from across the country, and these e-mails are filled with questions about the urgent care business. I thought that readers might benefit from a few of my recent replies.

Q: I have been considering opening an urgent care facility as a non-physician for some time now.  In what ways, if any, can I attract a physician to practice out of my facility?

A: In order to get a physician to join you, you may need to offer the physician something more than a salary. You may consider a partnership, but you will need to be careful about who you choose as a partner. If things go sour, unraveling the partnership can be very costly from a financial and emotional aspect.

Many primary care physicians would love to open an urgent care center, but they simply do not have the money to do it. If you allowed the physician to earn into the practice over the first 3-5 years, you might be able to find a way to make this work. After five years, he might own (approximately) 30 percent of the practice, or if he put in $100,00 up front, maybe he could own 50 percent at five years. You would have to work out a financial arrangement in advance for either of you to purchase the other’s portion of the practice if things did not work out between the two of you.

Of course, you will need to engage a good lawyer to make sure that you get the proper business documents signed prior to putting one penny into the actual business. Don’t make the mistake of starting up with only a verbal agreement. As someone once said, “A verbal agreement isn’t worth the paper it is written on.”

Q: I have access to 1,000 square feet of retail space (20 feet by 50 feet). Could this be adequate to start an urgent care center?

A: An area of only 1,000 square feet for an urgent care center will be very limiting. Why do you need more space? After you put in a waiting area, reception area, two bathrooms, an X-ray suite, an area for clinical activities (labs, charting, etc.), and storage, you will not be able to build enough exam rooms (let alone a minor trauma room) to maximize your efficiency.

There is no way to see up to 50 patients per day in such a small space. At any given time on a typical day in an urgent care center, you may have one patient with the nurse for a DOT physical, one laceration in another room, a patient waiting for an X-ray, and a patient waiting for strep test results. Four rooms are already occupied; you need another room to see a patient and another room for a nurse to be signing in a patient. 

Thus, you will need a minimum of six rooms to even begin to work efficiently. To get to a minimum of six rooms, you will need over 2,200 square feet (preferably at least 4,000 square feet). If you cheat yourself on space, there will be no way to see enough patients to maximize the efficiency of your staff. If you are paying staff to shuffle patients from room to room or worse yet to sit around waiting for an open room, you may never be able to operate a profitable urgent care center.

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