No Pain, No Gain

American Family Care has tripled in size following the acquisition of one of the nation’s largest urgent care providers.

Written by Bill Mylius

No pain, no gain. That could well be the mantra of Dr. Bruce Irwin, M.D., founder and CEO of American Family Care (AFC) headquartered in Birmingham.

Long ago he realized that people’s needs for basic medical services and, more importantly, for a fast response to the pain of illness and injury, didn’t always fit within the standard 9-to-5 operating hours of physician offices. He also knew that the only alternative was an expensive and time-consuming visit to a hospital emergency room.

So in 1982, he broke from the standard medical model, joined a pioneering trend and opened an urgent care walk-in clinic in Hoover, giving the facility the non-parochial name of American Family Care. Over the next 30 years, his consumer-driven response to quickly and conveniently alleviating pain and illness saw the operation profit and grow to almost 40 clinics in three states.

This suggests not only entrepreneurial vision in choosing a name, but also a pretty impressive business model and a high level of expertise in multi-facility administrative and operational skills.

And then in mid-April, he penned a deal in which AFC acquired Doctors Express (DRX), one of the country’s largest urgent care clinic operations. Overnight, AFC tripled in size and increased its footprint more than eight-fold.

“We are excited to combine our deep medical experience and commitment to excellence with the talented urgent care professionals and franchisees of Doctors Express as we work together to create a new benchmark for top quality medical care,” says Dr. Irwin. “As we expand our national footprint and broaden our reach, we provide Americans the solution of affordable, accessible and high quality care.”

AFC now operates 140 clinics in 26 states.

For now, Doctors Express clinics will retain their name, but DRX operations will move from Maryland to Birmingham where AFC’s 110 headquarters employees perform all nonmedical backend support, such as accounting, purchasing, human resources, marketing, training, claims processing and such, which results in cutting costs and streamlining efficiencies so the clinics can focus on delivering quality health care.

Additionally, by the end of the year, AFC expects to complete the opening of another 15 sites, including a major eight-facility expansion into the Orlando market, and the DRX acquisition has accelerated plans for 2014. Irwin says the DRX deal now gives AFC a single clinic presence in the Memphis market, which fits perfectly with plans already in motion.

“Memphis was next in our sights in terms of Tennessee markets,” he says, noting AFC will begin scouting for future Memphis locations in July. “We’re currently in Nashville and building clinics in Knoxville and Chattanooga, so the next logical step is and was Memphis.”

Each new clinic opened represents an investment of $2c$3 million and 20 jobs. They average in size from 4,300–4,800 square feet depending on whether or not an internal AFC-branded U-Save Pharmacy is included, and all have electronic medical records, digital X-ray systems and an on-site laboratory.

The clinics—all physician-based—are designed, equipped and staffed to provide urgent care as well as accessible primary care, family care, minor emergency treatment, and occupational medicine. Visit an AFC clinic and the waiting room usually mirrors two or more of those categories. Patient customers range from those suffering from the standard Birmingham-area sinusitis and upper respiratory trouble, to those seeking flu shots and other preventive services, to those needing pre-employment physicals or treatment for on-the-job injuries, to those making follow-up visits for diabetes and other chronic disease.

And while urgent care may represent the founding concept and initial growth stimulus for AFC, it may well be the aspects of primary care that represent the future.

According to the Urgent Care Association of America, there are currently some 9,000 urgent care clinics in the country that experience more than 160 million patient visits each year. Additionally, the rate of new clinic openings has doubled from an average of 300 per year in 2010 to some 600 per year now. The association’s research shows that roughly half of adults who have a regular primary care doctor don’t have access to same-day or next-day medical appointments, and the vast majority have no access to care on nights, weekends or holidays without resorting to a hospital emergency department.

So even people with a regular doctor they can call will often turn to an urgent care clinic for their immediate medical needs.

Now factor in two critical elements: first, the fact that the number of primary care physicians is falling with the Association of American Medical Colleges predicting a massive shortage of 45,000 primary care doctors by 2020; and second, the Accountable Care Act (aka Obamacare) is poised to provide insurance coverage, and therefore the immediate need for a primary care physician, to another 32 million Americans.

In a medical system already strained, Irwin expects AFC and operations like it to become medical relief valves and help fill the ever-widening gap between physician supply and patient demand.

“This (growth) is critical because as our nation’s healthcare model continues to evolve, the number of insured patients without a primary care physician will increase,” he says. “It is our mission to provide the best healthcare possible, in a kind and caring environment, while respecting the rights of all patients, in an economical manner, at times and locations convenient to the patient. When patients walk through our doors, that is what they can expect.”

Interestingly, growth through acquisition was not on Irwin’s radar. Then he learned about DRX.

The large system had been acquired a year earlier by a healthcare management company with expertise in assisted living, skilled nursing, rehabilitation, home health and hospice services, but not in urgent care. For that, the company relied on an operational partner. That partner’s departure left the company with a large urgent care system it could not run. And it created an opportunity for AFC to expand quickly and massively while, according to Irwin, employing “the advantages of economies of scale.”

The deal, he adds, took only six weeks to complete and is “going so well that we’ve already discussed some additional acquisitions.”

“It’s more likely than not that we will be acquiring some other units before the end of the year or at some point next year.”

In 1982, Irwin’s concept of a free-standing, no-appointment necessary, walk-in urgent care center and doctor’s office was viewed as an alternative to a hospital emergency room and a step outside the traditional medical system. Today, it stands not only as a profitable, wide-spread and growing business model, but it may well represent the new standard for providing a full range of primary medical care to the American healthcare consumer.

Not bad. And he’s not through yet.

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