Someone once asked me why I write so often about primary care when Merchant Medicine’s focus as a consulting firm is urgent care strategy, development and operations. It is a very legitimate question, and one that naturally leads to what I believe is a roadmap of how primary care and urgent care will evolve over the next few years.
First, remember that urgent care is nothing more than a carve-out of primary care medicine at one end and emergency departments at the other. Retail clinics are also a carve-out of primary care, but also a carve-out of urgent care. It’s hard to separate them based on their scope of services.
Second, you can’t ignore what’s going on in the marketplace. Here are three quotes that illustrate the transformation going on around us:
“By delivering the combined capabilities of our two leading organizations, we will transform the consumer health experience and build healthier communities through a new innovative health care model that is local, easier to use, less expensive and puts consumers at the center of their care.” -- CVS Health President and Chief Executive Officer Larry J. Merlo on November 28 in the press release announcing the completion of CVS’ acquisition of Aetna.
“We are building the nation’s first comprehensive, next-generation, primary and ambulatory care system.” -- David Wichmann, chief executive officer of UnitedHealth Group, at a recent investor meeting.
“Our population thinks about urgent care and primary care as the same thing. That includes illness, injury and prevention.” – David Sanders, M.D., co-founder and CEO of Zoom+Care in a recent blog post on Merchant Medicine’s website.
A number of years back we introduced the concept of “ConvUrgentCare,” (pronounced convergent care) to capture that fact that many categories of care, particularly at the low end of the acuity spectrum, are beginning to blur and converge. The quotes above are all examples of companies pushing healthcare delivery beyond traditional boundaries. When MedExpress opened an urgent care inside Walgreens, it was a convergence of retail clinics and urgent care. Even before that, when the Walgreens’ Take Care division acquired the two largest work site clinic operators, it was convergence between work-site clinics and retail clinics. When Zoom+Care began offering primary care services, we saw urgent care converge with primary care. Optum’s acquisition of MedExpress is also convergence between primary care and urgent care. And CVS’s acquisition of Aetna marks the beginning of a broad and aggressive convergence of retail, clinical, and payment.
All of this leads to what I believe will be some undeniable characteristics of primary care in the near term, many of which already are showing up in certain markets.
Millennials represent a large population of consumers who don’t really distinguish between the acute episodic care they have received at urgent care centers from ongoing chronic disease management. In other words, they don’t see why they can’t get any type of primary care in an on-demand fashion. Couple this demographic trend with population health and value-based care, and you have the ingredients for a major fork in the road facing large medical groups across the country.
Add to this a new crop of investors who are not apologetic about competing directly with established primary care practices. The quote above from David Wichmann at UnitedHealth Group refers to Optum. And Optum is on a buying spree of urgent care and primary care platforms that are being designed from the ground up to be consumer-oriented and technology driven. If you read the CVS press release announcing the completion of its Aetna acquisition, you will see on-demand elements throughout their description of where this will go.
Behaviors Aligned with Economics
One of our recent ConvUrgentCare Strategy Symposium speakers, Zeev Neuwirth, M.D., produces an excellent podcast called Creating a New Healthcare. It was from listening to one of his episodes that I learned for the first time about “Behavioral Economics.” Dr. Neuwirth did an interview with Kevin Volpp, M.D., Ph.D, who is the director of the Center for Health Incentives and Behavioral Economics (CHIBE), at the University Of Pennsylvania Wharton School. The interview was fascinating for all kinds of reasons, among them that we’re not just talking about how patient behavior impacts the economics around healthcare, but also about how provider behavior impacts healthcare costs.
The ideas percolating from CHIBE have also made their way into a private consulting company called VAL Health, where Dr. Volpp serves on the company’s board. The CEO of that company, Karen Horgan, is one of the speakers at our ConvUrgentCare Strategy Symposium next month, where we will explore the impending arrival of value-based care and its intersection with on-demand medicine. One concept Ms. Horgan will explore is that if a patient has choice in the matter and if we reduce friction around their care, they become more engaged. On-demand medicine is all about choice and simplicity: choice of location, choice of time, choice of provider, choice of retail platform. And it is all about reducing friction. As I just mentioned, in the coming decades as millennials take over as the largest segment of the healthcare population, patients will expect on-demand care as an option for the vast majority of care episodes. That includes primary care and chronic disease management. Could the environment of choice that on-demand medicine creates result in better outcomes?
“I do think it makes a big difference,” says Horgan. “If the preferred path is the easy path, they are more likely to stay involved. Doctors need to change the way they practice medicine, meeting the individual where the individual is.”
The concept of a patient coach has been around for a long time, but the economics haven’t been so favorable until now. A recent New York Times article highlighted how Comcast is doing direct contracting with Accolade, a patient coaching platform, aimed at reducing healthcare costs. But the whole space around coaching is become more nuanced and sophisticated.
You can bet that CVS will incorporate patient coaching in the new model of care they are creating with Aetna. But there are a number of new companies entering this space as well. MOBE is one of those companies. They provide coaching based on self-management principles to individuals with multiple disease states of moderate complexity and unresolved health issues. This group represents roughly five percent of the population but averages about 20 percent of the cost. MOBE takes on full risk when contracting with payers to engage with these populations, all of which are covered under fully insured plans.
The MOBE platform always has a guide or coach in the background, but the engagement can take the form of texting, chat, videos or written content. A typical participant might be a 54-year-old male diabetic with ADHD who gets frequent upper respiratory infections. Over the course of three years, he has $94,000 in medical expenses, an office visit every 21 days, 238 prescriptions, 35 different doctors and six emergency department visits.
“These individuals can spiral downward quickly and they don’t really know what to do,” says says Eric Hamborg, Chief Customer Officer at MOBE. Hamborg says an on-demand coach is a logical solution to a complex set of circumstances that a primary care office may not be equipped to handle in time. And the potential for savings is significant.
Hamborg will also be speaking at the Strategy Symposium in January, going into more detail on the economics behind their at-risk model, how they contract and how they make money.
Primary care is going back toward a model where referrals are managed much more carefully, possibly even ending up back in a capitated system similar to what we had during the managed care days. But a number of things are different today. Remember, under that capitated model, we didn’t have access to telemedicine, virtual care, email consults, or e-prescribing. The potential to do capitated primary care in a way that is responsive and customer friendly is enormous compared to the 1990s. And under this model, unnecessary referrals to specialists and subspecialist will begin to drop dramatically. In Minnesota, the trend is already beginning to show up. A recent report by Minnesota Community Measurement, a healthcare nonprofit, showed that medical spending slowed significantly driven largely by primary care physicians working to control costs. For large medical groups with expensive multispecialty mouths to feed, this is not good news.
Finally, we expect to see a number of primary care practices begin to work directly for large employers. A couple of years back, Rushika Fernandopulle, M.D., founder and CEO of Iora Health, reminded me that primary care is cheap in the whole scheme of things. There’s no reason we should make primary care providers fill out claim forms and perform so many other administrative tasks. His statement is beginning to show up in the form of direct-bill primary care medicine, where an employer negotiates a fixed amount per covered life for primary care, and a percent of Medicare for specialty and subspecialty care.
New Entrants are Unapologetic
This is by no means a comprehensive list of the future characteristics of primary care medicine. But these are more likely to be the characteristics of new entrants in this space. We have come across a number of multi-center urgent care practices that are “going vertical” into primary care. UnitedHealth Group is unapologetic in transforming primary care medicine, even if it means competing with established medical groups. And although CVS doesn’t come out and say they are going to practice primary care medicine, add up all of the words in their recent press release and you can’t avoid coming to the conclusion that this is where they are going.
My previous blog went into detail about Zoom+Care, a hybridized primary care/urgent care model started by David Sanders, M.D. that is now the basis of an Aetna ACO in the Pacific Northwest. Dr. Sanders will be one of our keynote speakers at the symposium in January.
Adam Stavisky from Walmart will also join us at the symposium, talking about direct contracting with providers. Mai Pham from Anthem will talk about a new generation of narrow networks. And Tianna Umann from Microsoft will talk about a new generation of technology that will transform how patients access and control their medical records.
New payment models support innovation and economic advantage. A new generation of patients have no loyalty to traditional primary care. This new generation expects technology to drive their healthcare in the same way technology underpins everything else they do in life. And more than anything else, we believe there will almost always be an on-demand component driving consumer engagement.
The implications are enormous for all constituents: payers, health systems, EMR companies, private urgent care operators and most of all, patients.
We hope to you are able to join us in Fort Lauderdale for this highly interactive gathering of leaders from across the country. You can find the full agenda here. More information about registration and logistics can be found on the Merchant Medicine website.