By Caroline Hudson - Modern Healthcare
Healthcare systems are reassessing their urgent care strategies as patient demand shifts and tried-and-true business models no longer bring the same returns.
Many systems are looking to facility acquisitions and joint ventures to access new patients through the lower-cost settings, rather than just provide a one-off visit. However, the booming urgent care business has turned into oversaturation in some areas, leaving systems to decide whether their resources would be better used elsewhere.
Provider groups of all sizes have tapped into the urgent care model, but recent growth is driven by larger institutions, such as private equity-backed platforms and health systems, Urgent Care Consultants President Alan Ayers said. More than 430 urgent care centers opened in new locations in the first half of 2025. Nearly 40% of those centers are affiliated with hospitals, according to data from Urgent Care Consultants.
Systems are increasingly viewing urgent care centers as an entry point into the larger organization that can beef up patient volumes. Health systems have to reevaluate where they stand amid retail clinics, telehealth services and other competitors. Transactional patient interactions at many urgent care centers are not sustainable, system executives said.
“The original strategy for the churn-and-burn is dying out because the value of the reimbursement rate just isn’t there,” said Rick Murdock, vice president of strategic planning, network development and physician alignment at HonorHealth. “The way a health system uses [urgent care] is very different. For us, it’s more about getting into new markets with a very low-cost, high[ly] efficient operating model.”
HonorHealth acquired the remaining stake in 26 FastMed urgent care centers in 2023 to expand its reach in Maricopa County. The system now operates 23 urgent care centers, plus two hybrid emergency/urgent care facilities with a third scheduled to open in early 2026.
Murdock said HonorHealth’s urgent care business is profitable, and the system would be open to other urgent care acquisitions if the opportunity arose.
Ashleigh Gerhardt, HonorHealth’s vice president of network operations and emergency services, said the Scottdale, Arizona-based system also tracks downstream referrals from urgent care visits to help determine where other service lines may be needed.
Brentwood, Tennessee-based Ardent Health also decided to advance its urgent care strategy through acquisitions. The for-profit system announced in January it had acquired 18 urgent care centers from NextCare Urgent Care in New Mexico and Oklahoma for $27.5 million. It acquired nine centers in 2024 in Kansas and Texas.
President and CEO Marty Bonick said about 45% of patients at six UT Health East Texas centers that Ardent acquired in early 2024 were new to the system. Approximately 20% of patients required follow-up care within 30 days, 30% of which were new to Ardent, he said.
“If there’s an attractive urgent care center that’s in a location that we think we need access in, we’re certainly going to look at those opportunities,” Bonick said.
Ardent is also building five new urgent care centers in Texas and New Mexico and plans to open them in the second half of this year, he said.
Other health systems are investing in urgent care through joint ventures.
UPMC recently launched a joint venture with GoHealth Urgent Care and rebranded 81 urgent care centers in Pennsylvania and West Virginia. With the joint venture, Pittsburgh-based UPMC now operates more than 100 centers.
UPMC was able to expand into new areas in a shorter time frame with GoHealth’s expertise, a move that would’ve been more difficult to do alone, said Dr. Don Yealy, chief medical officer at UPMC and chair of emergency medicine.
“It’s part of a more coordinated strategy about how do we meet people where they’re at, as opposed to a standalone urgent care strategy, which is, ‘Can this center or group of centers exist by themselves in a particular location?’” Yealy said.
Michigan-based Corewell Health is a longtime partner of WellStreet Urgent Care, with which it formed a joint venture in 2019.
Since then, WellStreet has served as a nimble, experienced partner that can take an urgent care location from lease signing to the first patient visit in less than a year, said Chris Flores, vice president and finance officer for Corewell Health in southeast Michigan. The partners stood up 28 centers in about two-and-a-half years, he said.
Corewell’s relationship with WellStreet continues to evolve. The partners now maintain a management services agreement, rather than a joint venture, Flores said.
“We’re talking about the pros and cons of the different operating models,” he said. “We’re in a phase right now where we’re like, what do we do with urgent care? It’s becoming important enough that we’re talking about making it internally a companywide service line … [or] organizing as a functional group.”
But urgent care expansion may soon reach its limit in some areas.
Ash Shehata, national sector leader for healthcare at KPMG U.S., said he is starting to see a slowdown in urgent care growth in individual markets, in part due to oversaturation. That means providers’ growth opportunities are limited.
“I think a lot of organizations are hesitant to pull back on their investments,” Shehata said. “I think they’re right now at that reevaluation phase, but I have a feeling that as overall costs and value to the organization becomes further scrutinized, we’re going to move from reevaluations to rationalizations of these businesses.”
Shehata said urban markets with a high concentration of residential areas could experience market oversaturation. UPMC’s Yealy said markets with many providers but unsustainable population growth would also be a no-go.
Trinity Health President and CEO Mike Slubowski listed southeastern Michigan; Fort Lauderdale, Florida; Chicago; Philadelphia and Columbus, Ohio, as examples of oversaturated markets.
“The reality is that almost every major market nationally is now saturated with urgent care facilities. Everyone jumped in,” Slubowski said via email.
In a July interview, Slubowski said Livonia, Michigan-based Trinity is being more cautious with its urgent care strategy. Slubowski said demand for urgent care is not as strong after the COVID-19 pandemic, when patients flocked to centers for testing. Primary care practices are also extending hours to be more accessible to patients, he said.
Rapides Regional Medical Center in Alexandria, Louisiana, is closing three urgent care centers this month, citing an overabundance of clinics in the market and the rise of virtual care.
“These changes have significantly shifted how and where patients seek non-emergent care,” Rapides said in a statement.