Economics of an Urgent Care Center in a Market of Emergency Departments

One of the contributors to the rising cost of Healthcare can be attributed to the over use of emergency departments (EDs) for non-emergency needs. In the greater Capitol/First/Beacon Hill area there are three major hospitals (Virginia Mason, Harborview, and Swedish) with emergency rooms and no urgent care centers with the exception of Group Health which is restricted to Group Health insurance members.
The question I asked myself is, “Why does Group Health have urgent care for their insurance plan members and the major hospitals in Seattle do not.”

Urgent vs. Emergency Care
A study by the CDC showed that approximately 70 % of emergency department visits can be treated in a typical primary care or urgent care setting and another study by National Center for Policy Analysis demonstrated that only 13% of patients that sought treatment in the emergency department were clinically appropriate. Reasons for non-emergency visits to the ED range from access issues to primary care providers (wait times, no primary care provider assigned, or no insurance) to a lack of knowledge that they could have been treated at an urgent care or primary care setting.

There are good reasons to visit the emergency department: * Trauma due to an accident or assault | * A wound that will not stop bleeding | * Shortness of breath | * Vomiting blood | * Chest pain | * Sudden loss of consciousness |

For true emergencies the market is very inelastic, patients will spend whatever it takes to receive treatment. They do not shop around to find the best price but typically visit the closest emergency department.

Urgent care centers provide a wide range of services from simple sports physicals and flu shots to fractures and minor lacerations that need sutures. Patients who typically visit