Gabriel Perna | September 23, 2020
When it comes to primary care, the status quo isn’t cutting it.
Take for instance a study from Annals of Internal Medicine published in February 2020. The research found that visits to primary care physicians declined 24.2 percent from 2008 to 2016. One of the biggest reasons why? There is a shortage of primary care physicians, which will reach a scarcity of 55,200 by 2032, according to one estimate.
The emergence of COVID-19 has exacerbated the problem. According to a survey of primary care physicians from the Primary Care Collaborative, 20 percent were considering leaving primary care because of the financial strain from the pandemic. The convergent trends have left the door wide open for opportunistic players.
“There is a primary care shortage,” says Alan Wheatley, Retail Segment President for Humana. “Challenges in access have been a trend that we as a country continue to face. The more primary care retail clinics I can put up, the more access I can create for individuals to get care.”
Humana, which primarily serves senior citizens, has opened up a number of tech-enabled, primary clinics through its Partners in Primary Care subsidiary, with plans to create 20 more in the coming year. The insurer teamed with private equity company, Welsh, Carson, Anderson & Stowe, on a $600 million joint venture to open primary care clinics for Medicare Advantage patients.
Humana is not the only organizations heading down this path. A few weeks ago, Walmart Health announced plans to open nearly two dozen in-store clinics in Georgia, Florida, Arkansas and Illinois by the end of 2022. At the same time, Walmart detailed its intention to team up with Oak Street Health, a growing network of primary care centers for Medicare patients, to open clinics in the Dallas-Fort Worth area. CVS Health, for its part, is working to operate 1,500 HealthHUB clinics by the end of 2021.
“The existing ecosystem hasn’t served [primary care] well,” says Amir Dan Rubin, CEO of One Medical, a growing tech-enabled, membership-based primary care company that had an IPO earlier this year and plans to significantly expand its footprint over the next two years.
Disruptors in retail, big tech, health insurance and other non-traditional provider-based organizations are eager to address the country’s primary care problems. Health Evolution spoke with leaders at four different disruptors to examine the changing primary care landscape, the impact of COVID-19, and the challenges of scaling up their businesses.
Humana: Focusing on Medicare Advantage patients
For Humana, the investment into increasing primary care access for its senior population with the expansion of in-person clinics is just the beginning. The Louisville, Kentucky-based company announced a $100 million investment in July into Heal, a startup that offers tech-enabled doctor house calls. The payer’s moves into primary care, Wheatley says, comes from a belief that that senior-focused primary care leads to superior outcomes and patient satisfaction, especially among the Medicare Advantage population.
“Marrying the Medicare Advantage population with the primary care clinic business can help provide unique solutions to the most unique population, in terms of health care needs,” Wheatley said. “We’ve been able to demonstrate that through some of the work we’ve done with COVID-19.”
In particular, Wheatley says, its primary care programs have expanded telehealth initiatives, used claims data to evaluate members for social determinants of health issues, and ensured easy access to medications during the pandemic. He also notes that COVID’s financial strain has meant more primary care physicians are willing to forgo a fee for service model for one that reimburses them based on value.
Last year, Humana saved approximately $3.5 billion in hospital use through value-based care in Medicare Advantage. “I would say to any health care CEO, embrace the value-based care programs, ultimately they’ll deliver the best care and create the highest level of satisfaction,” Wheatley says.
In terms of how the company is choosing to strategically expand its primary care clinic business, Wheatley says Humana focuses on markets with a density of Medicare Advantage patients, a need for primary care and partners in the market willing to work with Humana. “You can’t just drop into a market and be successful, you’ve got to become part of the ecosystem,” he says.
One Medical: Combining an in-person and virtual experience
One Medical has had a memorable year to say the least. The company went public in January. In March, it announced a collaboration with Ascension Texas. In August, it announced it had grown membership by 25% year over year. And a few weeks ago, in early September, it announced a collaboration with OSU Wexner Medical Center. Rubin credits the growth to the fact the company has integrated convenience, easy-to-use technology and a friendly user experience design into its model.
“The incumbent health care system is based upon high infrastructure and big overhead costs, which frankly makes sense for operating rooms, infusion centers and surgical suites…but for high volume, low-acuity cases of care, these high infrastructure, central complexes create barriers to access,” says Rubin, who has been CEO of the member-based primary care company since 2017.
One Medical contracts with consumers directly, employers, payers and increasingly health systems themselves that are outsourcing primary care. The company offers immediate and weekend access to providers through tech capabilities or in-person clinics. In COVID times, the company’s investment into digital health has paid off, says Rubin.
“Before COVID, we had seven engagements per patient per year and five of those were digital. We’re seeing people engage with us and they’re reaching out to us. I think this accelerates our model of combining digital and in-person care. It accentuates having a flexible, digital technology stack, which we built ourselves. You’re able to modify and adapt it to COVID screening questionnaires and integrate behavioral health into primary care because of this flexibility,” Rubin says. Like Wheatley, he also says COVID has exposed the issues of the traditional fee-for-service model and made capitated arrangements more enticing to patients and physicians.
Rubin is confident that the One Medical market can be expanded almost anywhere, although it has thus far focused primarily on major metropolitan areas such as New York, Chicago, and San Francisco. The biggest challenge in scaling up is the company’s model aims to address the needs of multiple stakeholders simultaneously. “We’re not just virtual care or in-person care, or B2B or B2C, or developing a virtual care platform, or integrating systems across primary care and specialties, we’re all of those things simultaneously,” he says.
Rick Gates, Walgreens
Crossover Health: Teaming with big tech and using tech
Amazon’s emergence as a health care player has been the subject of great discourse over the last few years with bouts of speculation following the company’s every move. In July, the tech giant announced its latest foray into health care: The opening of 20 health clinics for its employees in five cities across the U.S with the help of a company named Crossover Health.
Crossover, a digital health-focused, national medical group that works with self-insured employers, began in 2010 and got an early boost from another big tech company: Apple. Starting in 2011, Apple used Crossover for its employees. Since then, Crossover has seen double digit growth in revenue every year and lured other big tech clients, including Microsoft and Facebook.
Nate Murray, COO of the company, says Crossover’s growth has been a counterreaction to the trend of primary care becoming more transactional and a faster referral engine to specialty care, evidenced by the number of primary care entities getting acquired by hospitals and health systems. “That’s where we started and have demonstrated the most success, by coming in and repositioning primary care not as a transactional speedbump on the way to the hospital or specialist, but rather a relationship with a care team that can solve many problems,” Murray says.
Another factor, Murray says, was the usage of virtual tech to keep patients connected with their doctor. Like One Medical, Crossover’s investment into technology was starting to pay dividends before COVID-19 and the pandemic has only affirmed its importance. He says it’s not just a two-way video capability but Crossover offers messaging that connect its members to physicians at any time around the clock. The direct primary care model, he notes, means that doctors are incentivized to maintain the patient relationship outside the four walls of the clinic, which is another quality of Crossover that’s been emphasized by the COVID pandemic.
“What’s happened with COVID is the way people have consumed care has changed. No longer is it you’re scheduling a 30-minute visit and you share all your information. These messages we have with patients over a condition or diagnosis last multiple days, weeks or over a month. So we’re seeing people go from a 30-minute visit to a longitudinal conversation where things are becoming more proactive,” Murray says.
Walgreens: Health care must be solved on a local level
When it comes to primary care retail clinics, Walgreens has gone on a rollercoaster ride over the last few years. It works with Humana on Partners in Primary Care and operates more than 200 clinics through partnerships with health systems, such as TriHealth in Ohio, Novant Health in North Carolina, and Sacred Heart Health in Florida. But in November of 2019, the retail chain announced it was shutting down approximately 160 of its in-store health care clinics, citing costs.
Most recently, in July, Walgreens announced a partnership with VillageMD, a value-based primary care, focused provider that operates free-standing clinics across the country. The goal is to open 500 to 700 clinics in Walgreens locations across 30 U.S. markets over the next five years. The deal comes after the two successfully launched a couple of pilot clinics in the Houston area.
“In the U.S., we spend $4 trillion per year on health care and about 85 percent of that is tied to patients with chronic disease on multiple medications,” says Rick Gates, Senior Vice President of Pharmacy and Healthcare at Walgreens. “What we’ve learned from our partnership with VillageMD is the integration of primary care with pharmacy does increase medication adherence. It contributes to improved patient outcomes. For those patients with chronic conditions, it results in lower than average emergency visits. Hospitalizations and readmissions are reduced as well.”
Walgreens and VillageMD are focusing on expanding their reach into underserved markets with a high Medicare population, says VillageMD CEO Tim Barry. Building relationships with local community organizations, such as senior centers and churches, is important to getting a foot in the market, he adds. Also important to their strategy has been hiring local doctors, nurses and practitioners who understand the region.
“At the end of the day, health care is local. The people who are working and managing those clinics are hyper local to that area,” Barry says. Gates agrees with this and says the community aspect to these clinics will be an important factor in their success. This mentality is not just acknowledged through their partnership with VillageMD, but their alliance with health systems like TriHealth as well.
“Community driven care is going to be important going forward. Partnerships are even more important going forward to solve patient needs. As you look at partnerships, leveraging the health care providers that are in your market and using their talents in innovative ways will drive new models of care,” Gates says. “It comes down to how we work together in an ecosystem through partnerships.”