Alan A. Ayers, MBA, MAcc
Urgent Message: Whether an urgent care center should be open 365 days per year or close on major or minor holidays depends upon factors that influence profitability such as patient demand, competitive positioning, staff availability, payer reimbursement, and the branding impact of after-hours accessibility.
As urgent care operators look to the coming holiday season and begin their strategic planning for the new year, many are faced with the question of how they should approach holiday operating hours.
Specifically, should a center open its doors on Thanksgiving, Black Friday, New Year’s Day, or other holidays, for example? And if so, are full-day operations in order, or should a center offer truncated hours in the interest of keeping operating costs down?
Ideally, a best-in-class urgent care center will be open for business 12-14 hours a day, 7 days a week, 365 days a year, reinforcing the overall message of “care when you need us.” Thus, holiday hours serve to underscore the dual value propositions of urgent care—that fast, convenient medical care is accessible even when primary care isn’t, and that substantial cost/time savings can be realized by foregoing the emergency room for minor injury/illness.
However, the difficulties of provider holiday scheduling, the desire for staff to enjoy time off with their families, and the need to maintain profitable operations can discourage some centers from attempting such extensive hours.
What the Data Reveals
A study of past patient visits in the Experity electronic medical record system, normalized for COVID-19, reveals some interesting findings (Exhibit 1).
Exhibit 1. Analysis of Centers Closed on Holidays
|Day or Date
|Average Visit Variance
|% of Centers Closed
|New Year’s Day
|Martin Luther King Jr. Day
|Day after Christmas
First, on “minor holidays”—meaning those in which schools, banks and government offices are closed but many private businesses remain open—average volume increases by 16%, and an average of 11% of urgent care centers close for these holidays.
Significant is that with the exception of Veterans Day and Juneteenth, these holidays are prescribed by law to always occur on a Monday. Monday tends to be the busiest day of the week in urgent care already, but there may be additional lift coming off of a three-day weekend. Exhibit 2 lists the types of holiday activities that drive urgent care visits.
|Exhibit 2. Holiday Activities Drive Urgent Care Demand
|Unexpected illness and injury don’t take a holiday just because the calendar says it’s a certain day. As primary care offices are closed on major holidays, people with emergent medical needs have their options narrowed to two: the emergency department or an open urgent care facility/walk-in clinic.
• Injuries from cooking accidents – These run the gamut from burns caused by dangling sleeves over hot stoves, haphazard rushing to remove meals from ovens, or general carelessness around outdoor grills. Lacerations, ostensibly from carving meat, are also increasingly seen on holidays.
• Sprains and fractures – Knee, ankle, and hip sprains from slips and falls due to scaling roofs to hang holiday paraphernalia and climbing stools and ladders to adorn trees, bushes, and awnings with decorations are common.
• Heartburn/indigestion – Overindulging in food and drink can lead to gastrointestinal issues, which can also induce chest pains that mimic a heart attack in some patients. • Food-borne illness – Issues can arise from undercooked meat, mishandling of raw meat (eg, salmonella, E. coli exposure), improper storage or thawing of holiday cuisine (eg, foods prepared with eggs, mayonnaise), or cross-contamination.
• Injury from physical activity – Competitive running events, fun runs, days at the lake, golf tournaments and other physical activities tend to occur on holidays, and physical activity always presents risk of an unexpected injury. Whether it’s a youngster awakening Christmas morning with pinkeye, or a weekend warrior who overdoes it at the annual 10k, an open urgent care center can expect a steady stream of patients on the holidays. When considering holiday hours, an urgent care center may start by examining anticipated patient demand.
Second is that “major” holidays tend to experience a drop in visits. The explanation is that patients may not expect urgent care to be open, which is reasonable given that 26% of centers are closed on Easter, 33% on Independence Day, 77% on Thanksgiving, and 86% on Christmas.
If we segment holidays into three categories, the variances become even more apparent:
- Major Holidays (New Year’s Day, Easter, Independence Day, Thanksgiving, Christmas): 57% of centers closed, volume down 28%.
- “Tier 2 Holidays” (Memorial Day, Labor Day): 19% of centers closed, volume up 5%.
- “Tier 3 Holidays” (Martin Luther King Jr. Day, Presidents’ Day, Juneteenth, Columbus Day, Veterans Day): 8% of centers closed, volume up 20%.
Interestingly, the busiest day of the year is the day after Christmas with a 50% uptick in visits. The conundrum is whether it’s better to open with reduced staff on Christmas Day to alleviate pressure on the 26th, or to give employees Christmas Day with their families and double up on staff for the 26th?
Single-Day Profit and Loss
Holiday hours can be considered profitable if the incremental revenue generated on the holiday exceeds the incremental cost of opening. To assess the breakeven volume required, an owner/operator can create a model of expected revenues and costs, as illustrated in Exhibit 3. To identify the number of patients required to break even, divide incremental operating costs by incremental revenue per patient. Only include expenses that would not otherwise be paid if the center had closed on the holiday.
Breakeven Volume for Holiday Operations = Incremental Cost of Opening / Incremental Revenue per Patient Encounter
Profit or Loss on Holiday Operations = Incremental Patient Revenue – Incremental Cost of Opening
|Exhibit 3. Incremental Patient Revenue and Incremental Cost
|Incremental Patient Revenue Generated by Holiday Hours: Incremental revenue is simply the number of patient encounters multiplied by the average net collections per patient.
Incremental Cost of Opening on a Holiday: Incremental costs are costs that would not be incurred if the center were closed for the holiday. Fixed costs such as rent and equipment leases are thus excluded from the analysis. Variable costs of opening include:
• Direct hourly cost of providers and staff working on the holiday, including overtime and/or holiday pay.
• Pro-rated share of benefits, paid time off, incentive pay, and other variable staffing costs per hour worked.
• Costs of advertising the holiday opening (distinct from any regular, ongoing marketing program).
• Janitorial services, courier, security, and other services incurred on days the center is open.
• Costs attributable to specific patient encounters, including billing fees, supplies, x-ray overread fees, etc.
Put simply, a center must see more patients than needed to break even to recoup the cost of opening and realize a profit on the holiday. Because overtime, holiday pay, and holiday advertising costs are not incurred on “normal” operating days, however, the incremental costs of a holiday opening will necessarily require a higher patient volume than on a typical day. For centers that truncate their holiday hours or serve a community with a smaller patient base, they’ll struggle to achieve breakeven volumes.
Conversely, higher volume centers and multilocation operators who appoint a single center to handle the local holiday patient load from its other sites can often reach or exceed breakeven volumes. Regardless, single day profitability, while relevant in the short-term, should not be the lone consideration when deciding whether holiday hours can benefit a center.
Holiday Hours and Branding Goals
Going beyond single-day profitability and payer reimbursements, a center whose doors are open 365 days a year elevates its brand immeasurably. Being known as the urgent care center “that’s always open, even on the holidays” helps engender highly-coveted “top of mind” awareness, as people experiencing holiday mishaps recall right away that the center is indeed open—regardless of the season, or the particular holiday being observed. In a sense, being open every single day, including holidays positions a center’s brand in such a way to be associated with the Walmart’s and McDonalds of the world—synonymous for their convenience and availability.
Additionally, consider the competition when evaluating holiday operations for the urgent care brand. It’s universally known that the emergency department is always open but what about competing centers within the community? A competitor who is open sets a consumer expectation that “urgent care includes holidays” and it’s best to follow suit. If competitors are closed, however, being open differentiates the brand significantly, and lends it a competitive advantage. Even if there’s insufficient local demand to justify holiday hours from a single-day profitability standpoint, the urgent care brand that puts patient convenience above all positions itself to attract more business in the long run.
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