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Why Urgent Care is Ripe for Consolidation

Trinity Hunt Partners' move to partner with 16 urgent care clinics in Alabama is one of a number of moves for the growing sector.

Private equity, health systems, and even insurers are all looking to acquire practices in various service lines, and urgent care is continuing to get the attention of consolidating forces in North Texas and beyond. 

The urgent care market is one that is quickly consolidating. The clinics are attractive because it is often more conveniently located and less expensive than hospitals, and easier to book than a primary care physician. In July 2019, national network HCA Healthcare acquired 24 urgent care facilities from Fresenius Medical Care, eight of which are branded as CareNow urgent care facilities in North Texas. 

More recently, Dallas-based middle-market private equity firm Trinity Hunt Partners announced a partnership with MainStreet Family Urgent Care, which includes 16 clinics across Alabama. The partnership will help the organization continue to grow its model. 

But what makes this chain of urgent care facilities and urgent care in general, so attractive to private equity? Convenience, growth, and fragmentation are all part of the puzzle, says Blake Apel, partner at Trinity Hunt Partners.

Urgent care is continuing to take market share from primary care practices and taking advantage of the shortage of such practices. Often places in neighborhoods where people live, with convenient hours, same-day appointments, and efficient care, the number of urgent care clinics have grown significantly over the past fifteen years. There is also still significant fragmentation in the market, with numerous providers all doing their best to succeed. 

MainStreet’s clinics combine a focus on rural primary and pediatric care that Trinity found attractive, Apel says. The shortage of rural primary care physicians and the closure of rural hospitals all over the country has left many rural patients vulnerable and in need of care.

“There’s an extreme shortage of primary care physicians and urgent care in rural locations. The alternative is going to rural hospitals, and many times there are shortages of those professionals as well,” Apel says. “MainStreet had a differentiated model, and many of the larger urgent care providers aren’t able to provide access to urgent care clinics in these rural locations because of their economic model.”

In addition, MainStreet’s revenue cycle management, billing, and scheduling platforms create efficiencies as well. The systems make sense from a chain of clinics founded by a Wharton School MBA with an engineering background. “We are incredibly pleased to partner with Trinity Hunt,” said MainStreet founder and CEO Sam Eskildsen via release. “Trinity Hunt’s industry knowledge, transparency, and excitement in supporting our rural and pediatric growth strategies in the Southeast were what we were looking for in a private equity partner.”

While the pandemic has hampered all healthcare businesses, urgent care was well-positioned to provide testing. With many patients looking to save money, the clinics offer a cost-effective alternative to the hospital or primary care physician. Apel says Trinity is also looking at physician practice management, orthopedics, and gastroenterology as other areas of growth for the firm. 

But when it comes to healthcare, Apel says that culture is a priority for future partnerships and acquisitions. “In healthcare services, culture matters a lot. It really comes down to people helping patients. That’s one thing that we were drawn to at Main Street,” he says. “What we espouse about companies that we own is having strong cultures that keep and retain the best healthcare talent, that then provides terrific service to the patients, and leads to growth.”

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