How much do Urgent Care Centers profit?

[Ambogeo]

I read online that it cost about a million dollars to start an urgent care center.

I was wondering how much PROFITS the owner makes on average.

How much of the total revenue goes to paying salaries and electricity, etc.

Are urgent care centers good business or are there better businesses to use that 1 million?

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[InvestingDoc]

Urgent care centers can be a cash cow if you find the right location. One of my friends from residency went into a group who opened one and he told me their costs to come to market was in the 1.5 to 2 million dollar range. This was in a major city with an above average cost of living.

That being said, the group of hospitals that I am with now has urgent care centers all over town and the surrounding towns. I went to a meeting last month where there was a report as to how our numbers were doing towards the end of the year. Apparently, since so many of these urgent care centers have been created in my neighborhood in Texas, this has really taken a hit on patients seen per location. They quoted us that some places were doing 30-40% less business compared to last year due to intense competition.

If you are thinking of opening a business, you're on the right track. First step is do your research. Second step is to create a business plan where you know your numbers inside and out. Good luck.

 

[Ambogeo]

Oh wow! Thank you for the information.

I was just thinking about the numbers for running an urgent care center. Are these calculations realistic and accurate:

Say you hired one MD (assuming he worked long hours and everyday, with good compensation) and two nurses to help him/her out. Being conservative, say he saw about two patients an hour for 12 hours. While you get $150 per patient. So that's approximately,
150 x 2 x 12 x 30 = 108,000 per month in revenue, which comes out to approximately $1.3 million yearly revenue.

Now if you subtract the costs of the MD (~$500k/yr) and the two nurses (~$100k each/ yr) and maybe another $200k for other costs such as the receptionist, electricity, rent, etc.

That comes out to approximately $400k per year in profits.

Now I don't have much knowledge in running an urgent care center or the numbers behind it, so please correct me if I'm wrong with my numbers. And please tell me the REALISTIC numbers. All help is appreciated. Thanks!

Urgent care centers can be a cash cow if you find the right location. One of my friends from residency went into a group who opened one and he told me their costs to come to market was in the 1.5 to 2 million dollar range. This was in a major city with an above average cost of living.

That being said, the group of hospitals that I am with now has urgent care centers all over town and the surrounding towns. I went to a meeting last month where there was a report as to how our numbers were doing towards the end of the year. Apparently, since so many of these urgent care centers have been created in my neighborhood in Texas, this has really taken a hit on patients seen per location. They quoted us that some places were doing 30-40% less business compared to last year due to intense competition.

If you are thinking of opening a business, you're on the right track. First step is do your research. Second step is to create a business plan where you know your numbers inside and out. Good luck.

 

[Mman]

Now I don't have much knowledge in running an urgent care center or the numbers behind it, so please correct me if I'm wrong with my numbers. And please tell me the REALISTIC numbers. All help is appreciated. Thanks!

I'm assuming it isn't realistic to expect a physician to work 365 days a year regardless of how much you pay them.

The cost of the nurses also isn't realistic (per nurse), but once again you need way more than that to cover 365 days a year. I don't know the details of running an urgent care center, but if you only see 2 patients an hour you probably only need 1 nurse there at a time.

The realistic part of running a business is that you have to account for time off for your employees in the form of days off per week, vacation time, and potential sick days. Those add up in costs and eat into your profit margin.

 

[InvestingDoc]

Oh wow! Thank you for the information.

I was just thinking about the numbers for running an urgent care center. Are these calculations realistic and accurate:

Say you hired one MD (assuming he worked long hours and everyday, with good compensation) and two nurses to help him/her out. Being conservative, say he saw about two patients an hour for 12 hours. While you get $150 per patient. So that's approximately,
150 x 2 x 12 x 30 = 108,000 per month in revenue, which comes out to approximately $1.3 million yearly revenue.

Now if you subtract the costs of the MD (~$500k/yr) and the two nurses (~$100k each/ yr) and maybe another $200k for other costs such as the receptionist, electricity, rent, etc.

That comes out to approximately $400k per year in profits.

Now I don't have much knowledge in running an urgent care center or the numbers behind it, so please correct me if I'm wrong with my numbers. And please tell me the REALISTIC numbers. All help is appreciated. Thanks!

I think you're heading in the right direction with putting all of the numbers on paper.

Just some other thoughts of costs.

Insurance: including but not limited to: malpractice, liability, property
EMR: Can be very expensive
IT: Who will be your IT support when something goes down?
Radiology: Who will you contract with to read your images and will this require any costs?
Taxes: If you are not going to 1099 the employees, take this into account. Otherwise, you need to also consider taxes on the building
Recruitment: There is always turn over in any job. The higher the turn over the higher the cost on the employer. You might find yourself paying 10k dollars to find a doctor to staff the urgent care center. If you don't have a doc for the day you're out a lot of money. You need to have multiple doctors you can rely on.
Lawyer: You will need to pay a lawyer to make sure that your personal assets are protected and that everything is done legally
Rent vs mortgage: How much will it cost to have the space you want.
Maintenance: Don't forget that stuff will break. Will you or your landlord be responsible for that? Will you need to buy a commercial generator if the electricity goes down?

Put everything down on paper, do a market analysis to see if your market can support your planned urgent care center and go forward from there. It's hard to give specifics since each market is different. Hopefully someone else can comment who has actually started one to give you more details responses. The first business plan I ever did took me 2 months and was over 40 pages long. A good one will take some time but doesn't need to take as long as mine did. I admittedly drug my feet when creating my first one.

 

[Smart Money MD]

I've wondered how often these places are mostly staffed by NP's vs MD/DO's. But I agree that there is a potential market for this venue, especially if you can deal with lower urgency issues and have a good means for backup in case more serious health issues arise.

If starting out, you might be able to figure out the business better if you worked shifts in the urgent care that you owned.