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AFC Plans Five New Clinics in 2009

January 23, 2009

American Family Care is capitalizing on depressed property prices and expanding its urgent medical care business with five new clinics slated to open in 2009.

The Hoover-based operator of 20 primary care clinics in Alabama will open new sites in Orange Beach, Tuscaloosa and Huntsville this year, according to President Randy Johansen. American Family also plans to open clinics in Vestavia Hills and in the Bessemer/McCalla area in 2009.

Johansen said the recession won’t hamper American Family’s long-term growth strategy, which includes adding four or five new clinics annually. In fact, he said it has aided expansion opportunities because property prices have fallen and there is less competition for those locations.

“It means we have a chance to get some properties that in the past would’ve been very difficult to get,” Johansen said.

American Family has instituted some cost-saving measures in its latest round of expansion that set the stage for future growth. It has cut the size of its clinics to 5,000 square feet from 7,500. American Family now spends between $2 million and $3 million to construct each new clinic, Johansen said. In the past, the price tag was generally $3 million.

An Orange Beach location is scheduled to open Feb. 9, followed by the Vestavia Hills site, which is located off U.S. 31 at the old Seale Harris building. The Tuscaloosa location is slated to open in late summer. American Family’s new Huntsville location is scheduled to open in the fall, which will give it four sites in the growing North Alabama city. Johansen said Huntsville can support five clinics, leaving room for future growth.

No date has been set for opening the clinic in the Bessemer/McCalla area, but American Family has property under contract.

American Family researches traffic counts and seeks locations with high visibility, Johansen said. Convenience for potential patients to their homes or workplace is key, he said.

University of Alabama at Birmingham health policy professor Michael Morrisey said urgent care clinics have the potential to thrive in downturn economies with the number of uninsured rising. He said uninsured patients, or those with high-deductible policies, seek care at outpatient clinics because they seek value for routine care. Urgent care centers treat patients with non-life threatening illnesses and often have extended hours, including weekends.

Morrisey said American Family’s locations allow them to tap into population segments with the resources to pay for care.

“There’s a real growth opportunity in that niche in the market,” Morrisey said.

 

American Family has 400 employees with 15 at each location, including as many as three full-time physicians. It expects to treat 300,000 patients in 2009, Johansen said.

 The demand for convenient medical care has not dwindled, Urgent Care Association of America Executive Director Lou Ellen Horwitz said. Horwitz said patients choose urgent care clinics for treatment of non-elective illnesses. While hospitals might be hurting because patients are delaying elective surgeries, that is not the case for her constituency.

“I have not seen any slow down from my members,” Horwitz said. “Health care is one of those industries that is relatively recession proof. People are always going to get sick or injured.”

Established and successful urgent care companies have experience operating efficiently, Horwitz said.

“It’s always been a narrow-margin business,” Horwitz said. “Urgent care businesses have been very careful running their operations. I don’t expect there to be a great shift because of the recession.”





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