Expert: Rise of Urgent Care Centers Transforming Emergency Treatment Options

Since its inception, the urgent care sector has become one of the fastest-growing segments of the American healthcare system. According to a report from IBISWorld, there were more than 9,000 urgent care centers operating in the U.S. in 2013, and that number was projected to grow to more than 12,000 centers by the end of 2018—generating an estimated $18.8 billion in annual revenue. Interestingly, however, the sector is still highly fragmented; according to IBISWorld, the largest four urgent and primary care operators accounted for approximately just more than one percent of industry revenue in 2013.

In contrast, the American public’s large-scale embrace of urgent care centers has been anything but fragmented. This may reflect the widespread appeal of “on-demand” medical care, which can offer treatment with a speed and convenience that traditional emergency room visits can’t muster. Those who dislike the experience of visiting a hospital’s ER are more likely to be attracted to urgent care. As more embrace this option, it could result in a widespread de-institutionalizing of the field of emergency medicine.

According to a July 2015 article in The New England Journal of Medicine, Americans’ increasing demand for convenient, walk-in healthcare has been created by a confluence of factors, including expanded health coverage resulting in more insured individuals, increasingly long wait times for primary care appointments due to physician shortages and higher demand from an aging population, and overcrowded and expensive emergency departments. According to the NEJM, between 13 and 27 percent of all emergency room visits in 2011 could have been treated in an urgent care setting, which would have resulted in overall cost savings of up to approximately $4.4 billion.

John Pappajohn, a pioneering venture capitalist with extensive experience in the life science and healthcare industries, has taken the pulse of the urgent care sector and is convinced there is a tremendous business potential for consolidation within the sector. Having been involved with more than 100 startups and more than 50 IPOs over the course of his long career, Pappajohn has now assumed the role of chairman of the Board of Directors and acting CEO of GoNowDoctors (formerly American CareSource Holdings, Inc.). This publicly traded company currently owns and operates 10 urgent and primary care centers in the east and southeast U.S., with plans to acquire more via acquisitions. The centers offer an expansive array of medical services and are staffed with licensed physicians, nurse practitioners, physician assistants and medical support staff.

Since 1969, Mr. Pappajohn has been the president and sole owner of Pappajohn Capital Resources, a venture capital firm, and president and sole owner of Equity Dynamics, Inc., a financial consulting firm. He serves or has served as a director on the boards of numerous public companies.

Working with Pappajohn is a seasoned executive team. They include president and COO Norman Winland, who previously spent more than 15 years with Dallas-based CareNow, where he served as Senior Vice President responsible for the comprehensive management of the company’s 18 urgent care
centers. He later served as Director of Urgent Care Operations for Tenet Healthcare Corporation, where he assisted in Tenet’s entry into the urgent care market. Winland also served as Chief Operating Officer for PrimaCare Medical Centers, an 11-site urgent care company located in Dallas, Texas.

The GoNowDoctors team also includes Adam S. Winger, who has served as GoNowDoctors’ Vice President of Acquisitions and General Counsel since joining the company in July 2014 and its Interim Chief Financial Officer since August 2015. Prior to joining the company, he was an associate at the law firm Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C., and an associate at KPMG Forensic LLP.

With urgent and primary care services on a walk-in basis representing a growing, consumer-driven trend in healthcare delivery, the future seems bright for those like Pappajohn and his team who forecast its influence continuing to increase over the coming years.

Mr. Pappajohn, Mr. Winland and Mr. Winger are available to address:

• Why is the urgent care sector in the U.S. currently so fragmented?• What are the prospects for consolidation in the urgent care sector?• Is this sector likely to enjoy greater profitability in the years ahead and if so, why? • What are the greatest hurdles to creating a network of urgent care centers with a significant share of the U.S. market?• What are the advantages of being a publicly traded urgent care network?