Urgent Care Start Up, 101

Since there are still several American markets that have inadequate access to urgent care, it’s no wonder that physicians with the entrepreneurial spirit are looking to open their own facilities. But, it’s no easy feat. Where to start? This first segment of ICB’s three-part urgent care start up series will help get the ball rolling.

Location

Site selection is one of the most important decisions to make. Good signage helps an urgent care develop a client base faster, said Michael Zelnik, CCIM, SIOR, senior vice president at Equity Inc., a healthcare real estate firm. Visibility is key. He suggests asking, “Is your location located on a main street with traffic of over 20,000 vehicles per day and can that traffic see the location?”

Two other variables: parking, and the location’s proximity to major shopping areas. A profitable urgent care, for the most part, will see more than 30 patients per day, Zelnik noted. Look for locations that provide a minimum of five parking spaces for each 1,000 square feet of leased area. Sites that have high foot traffic and that are close to grocers and “big box” stores also get good visibility, he continued.

But visibility is not enough; accessibility is important too. Barriers such as medians, one-way streets or “right in only” dramatically hinder access.

Next, demographics. Ken Rabinoff-Goldman, MD, vice president of the Healthcare ID division at Buxton Co., said potential owners should “think like retail executives,”₁ and follow the below advice:

Find out who your best patients are

Find out how many of those best patients live or work in that area

Understand your prospective patients’ distance and drive times to your locations, and the length they’ll go to in order to pay a visit.₁

Once you have an understanding of the physical location and psychographics of your potential site, find out how many patients need to visit per day to pay for the rent or mortgage. Zelnik gave this scenario as an example:

“If an urgent care leased 3,000 square feet at $20 per square foot, the annual cost would be $60,000 per year. If you divide that cost by the number of days that an urgent care will operate (say, 360 days), then the daily cost is $166. If the average patient income is $80 per visit, then the urgent care would have to see two patients per day to pay for the rent or mortgage. 

“As a comparison, if the same space rented for $30 per square foot, the annual cost would be $90,000 annually, $250 daily, or a little over three patients per day at $80 per visit,” he added. “The point is that the higher-priced space may generate more patients and the required increase in patient visits to pay for the increased rent would only be one more patient per day.”

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