Affordable Care Act Reforms, Market Realities Force New Jersey Hospitals to Join the Urgent Care Industry

Hackensack University Health Network and The Valley Hospital, both healthcare systems in New Jersey, are taking steps to diversify their networks in hopes of weathering the ever more volatile storm of healthcare reform. The Valley Medical Group, a health network of which the Valley Hospital is part of, has spent the last few years accruing $54 million in additional real estate to expand their systems. Along with Hackensack University Health Network, the Valley Medical Group plans to open 10 new urgent care centers throughout the Garden State over the next couple of years. It’s a sign of the times, as hospitals continue to lose patients and revenue to urgent care centers across the country.

From a Fad to the Fastest Growing Medical Centers in the Country
Plans for the New Jersey hospital systems to expand are being mimicked throughout the United States. At current, there are more than 9,000 urgent care facilities within the U.S.. A third of those centers are owned by private physicians, another third by corporate entities, andapproximately 25% by healthcare systems, like the Valley Medical Group. Of those centers, 39% opened just within the last five years. Within that time, hospitals nationwide have been gaining an increasing foothold in the industry.

The reason is simple enough: urgent care centers, used primarily to treat emergency issues that aren’t life threatening, are known for quicker service and cheaper procedures. In fact, urgent care treatments are so much cheaper than emergency room visits that a study from RAND Corp. found that if the 14 to 27% of people who had issues that could be treated at an urgent care facility actually went to urgentcare centers, it would save the U.S. economy $4.4 billion every year. While urgent care facilities were originally seen as a fad, Americans have taken notice of the level of care and reduced pricing they offer, and that, more than anything else, is the reason traditional healthcare systems are expanding into the industry — it’s the only way they can survive.