Last month, Merchant Medicine participated in a three-hour session at the UCAOA conference that brought together leaders from the industry. It was a good reminder that this industry comprises many different players and, despite having been around for three decades, it still has the entrepreneurial spirit of a bunch of startups. There was ownership representation from hospitals, private-equity, health insurance and private
Those are very different ownership types. But the irony is that we are all on the same inevitable path: one of consolidation and sophistication. Labor costs, commercial real estate, and other overhead inflation is a daily reality, while downward pressure on payer rates and high deductible pricing is the new norm. And all of us are facing greater competition and, thus, saturation in our markets.
The situation is not unique. Historically, any industry that has the potential to produce consistent cash flow and growth is going to be attractive to multiple players. Eventually that industry becomes competitive enough that consolidation begins to occur and owners begin to move to ever more sophisticated operating tactics.
The urgent care industry is reaching that inflection point where the corporate model emerges as a emergent characteristic. Other multi-unit operations are a close analogy. The finance function becomes the nerve center, tracking day to day and sometimes hourly performance factors. They know what it costs to not open the center that day, what employees are not generating value, and where the bodies are hidden. In large operators, finance people become the most informed individuals in the organization, to the point that individuals on the finance bench have specialized urgent care competencies.
In many cases, perhaps most cases, urgent care operators have yet to reach the point where the finance organization has reached the level of sophistication of large hotel and restaurant chains. Historically, finance has provided various transactional support functions (closing the books), but the greater value is in driving better decisions that improve operating performance, and in turn, intrinsic value of the entity. We think this starts with the finance team itself beginning to think differently.
Now is the time to think about your finance function, months before 2018 budgeting cycle, tax season, and fall busy season hit. For all of the above reasons, RSM, the fifth largest CPA firm nationally and one of the most well known in healthcare, is co-sponsoring an Urgent Care CFO Boot Camp...
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