Urgent Care Growth is a Good News/Bad News Scenario for Hospitals

Health system administrators and fans of the Affordable Care Act (ACA, or “Obamacare”) have been lauding the fact that employment in the healthcare industry has been climbing since the ACA was implemented. While that may be factually correct in terms of overall numbers, it is also true that health systems have been cutting jobs strategically in order to cut payroll expenses. Not too long ago, Becker’s Hospital Review identified 48 layoffs that have taken place around the country, owing to declining reimbursements, lower admissions, and subsequent diminishing revenue. The uncertain future of a government health plan isn’t helping, but there’s also one certainty that emerges from considering admissions data: Lower-acuity visits to hospitals are declining, thanks in large part to urgent care operators’ success in convincing patients they don’t need to go to the ED for a sore throat, laceration, or broken ankle. That has helped reduce logjams, which is good for all parties, but it’s also cut revenue for many hospitals. On the other hand, this same trend has forced large healthcare system administrators to consider joining the urgent care market; many have, and surely many more will follow. Inside the hospital walls, though, they’re finding they have to make tough decisions about expenses—including payroll.