Budget retailer Dollar General announced this week that it’s partnering with mobile medical service provider DocGo to deliver routine primary care in mobile clinics outside three stores near its Goodlettsville, TN headquarters.
The mobile clinics will accept public and select commercial insurance plans, as well as offer services for a flat fee. It’s the latest step in Dollar General’s tentative exploration of healthcare, which includes a partnership with Babylon Health to offer telehealth visits in several Missouri stores, and the DG Wellbeing initiative, which has placed basic health and wellness products in roughly 3,200 of its 19,000 stores nationwide.
The Gist: With an unmatched footprint in rural areas (an estimated 75 percent of the US population lives within five miles of one of its stores) Dollar General has the capacity to transform rural healthcare access.
Rather going head-to-head with other national retailers who are quickly expanding into healthcare delivery, Dollar General has so far taken a measured approach, aiming to develop workable services that improve rural healthcare access at the margins.
Since it hired a chief medical officer in 2021, it has dabbled in small care delivery pilots like this one, but one of these pilots will need to succeed at scale for Dollar General to enter the ranks of serious retail disruptors.
Hospitals experienced a slight boost to operating margins in November, but not enough to restore the median negative margins that persisted for 2022 to date.
Kaufman Hall’s December “National Flash Hospital Report“ — based on data from more than 900 hospitals — found hospitals’ median operating margin was -0.2 percent through November, a slight improvement from the median of -0.3 percent recorded a month prior.
A 1 percent decline in expenses from October to November drove the eleventh-hour improvement to margins and tipped the scales on hospitals’ relatively flat revenue. Additionally, hospitals saw labor expenses decrease 2 percent in November, potentially driven by less reliance on contract labor.
The median -0.2 percent margin recorded in November 2022 marks a 44 percent decline for margins in 22 year-to-date compared to 2021 year-to-date. Kaufman Hall’s index shows hospitals’ median monthly margins have been in the red throughout 2022, starting with the -3.4 percent recorded in January, driven by the omicron surge. November is tied with September as hospitals’ best month of the year, with both sharing a median margin of -0.2 percent.
Outpatient care marks one of the brighter spots for hospitals’ finances, with outpatient revenue up 10 percent year-over-year while inpatient revenue was flat over the same time period.
“The November data, while mildly improved compared to October, solidifies what has been a difficult year for hospitals amidst labor shortages, supply chain issues and rising interest rates,” Erik Swanson, senior vice president of data and analytics with Kaufman Hall, said. “Hospital leaders should continue to develop their outpatient care capabilities amid ongoing industry uncertainty and transformation.”
What role should the federal government play in addressing major healthcare issues? And does the way you vote affect your prospects for a long and healthy life? We talked about it on today’s episode of the 4sight Friday Roundup podcast.
David Johnson is CEO of 4sight Health.
Julie Vaughan Murchinson is Partner of Transformation Capital and former CEO of Health Evolution.
David Burda is News Editor and Columnist of 4sight Health.
This week’s contributor is Paula Chatterjee, a physician and assistant professor at the Perelman School of Medicine at the University of Pennsylvania. Her research focuses on improving the health of low-income patients and evaluating policies related to safety-net health care delivery and financing.
Low-income patients face many barriers to care, one of which is the high cost of prescription medications. The 340B program lets certain hospitals and clinics (like federally qualified health centers) receive discounts on outpatient medications. They can then use those savings to provide medication and additional care for little to no charge to low-income patients. However, policymakers and other stakeholders have raised concerns that the 340B program might not be reaching the patients it was designed to support.
A recent paper in the American Journal of Managed Care by Sayeh Nikpay*, Gabriela Garcia, Hannah Geressu and Rena Conti sheds light on one of the latest examples of 340B mistargeting: so-called contract pharmacies. These are retail pharmacies that fill 340B prescriptions and split the savings with the hospital or clinic. These relationships have been on the rise, with hospitals and clinics arguing they make it more convenient for patients to get their prescriptions. Given their growth, the authors looked at whether contract pharmacies were more likely to open up in areas where low-income and uninsured people live.
They found the pattern was different for pharmacies contracting with 340B clinics vs. 340B hospitals:
The number of counties with a pharmacy contracted with a 340B clinic grew from 20.8% to 64.8% over the past decade. Counties with higher poverty rates were more likely to gain a clinic-contracted pharmacy.
The number of counties with hospital-contracted pharmacies grew much more (from 3.2% to 76.3%), but those counties had fewer uninsured residents and were less likely to be medically underserved.
The researchers acknowledge that counties may be an imperfect geographical area to represent a pharmacy’s market and that they were unable to collect information on how many (if any) 340B prescriptions a pharmacy actually filled.
Nonetheless, their results reveal a mismatch between where the 340B program is growing and where low-income patients live, especially for pharmacies contracting with 340B hospitals. The authors argue that any 340B policy changes should take these differences between hospitals and clinics into account.
Despite decades of policies designed to bolster the safety-net, it remains perennially reliant on a patchwork of subsidies that are often mistargeted.
This study adds to a growing body of work highlighting the opportunity to improve the 340B program so that it achieves its intended goal of improving access for low-income patients.
Last week, we introduced our framework for value delivery as a “healthcare platform”, in which an organization’s proximity to both the consumer and to the premium dollar determines how it competes as a “care supplier,” a “care ecosystem,” a “premium owner,” or a “population manager.” Traditionally, different healthcare companies have operated primarily in one of these four domains. However, as shown in the graphic below, we’ve recently seen many shift their business into one or more additional quadrants, as they seek to expand their value propositions. UnitedHealth Group is an obvious example: it has moved well beyond the traditional insurance business, via numerous provider and care delivery acquisitions across the continuum.
Other players have shifted from their own “pure play” positions toward more comprehensive “platform” strategies as well: One Medical adding Iora Health to enhance population health capabilities; Walmart moving beyond retail and pharmacy services, partnering with Oak Street Health to expand its ability to manage Medicare patients; Amazon getting into the employer health business.
There’s a clear pattern emerging—value propositions are converging on a “strategic high ground” that encompasses all four dimensions of platform value, creating a comprehensive set of solutions to deliver accessible care, promote health, and grow consumer loyalty, with an aligned financial model centered on managing the total cost of care. Health systems looking to build platform strategies will find many of these competitors also vying for pride of place as the “platform of choice” for healthcare consumers and purchasers.
A certain segment of the health policy world spends a lot of time trying to get more states to expand Medicaid and reduce underinsurance.
But are we doing enough to make sure care is accessible once people enroll? One issue is access to physicians, who are less likely to treat patients on Medicaid than Medicare or private insurance because Medicaid payment rates are lower.
A new paper in Health Affairs by Avital Ludomirsky and colleagues looked at how well the networks of physicians supposedly participating in Medicaid reflect access to care. The researchers used claims data and provider directories from Medicaid managed care plans (the private insurers that most states contract with to run their Medicaid programs) in Kansas, Louisiana, Michigan and Tennessee from 2015 and 2017 to assess how the delivery of care to Medicaid patients was distributed among participating doctors. Their results were striking:
One-quarter of primary care physicians provided 86% of the care; one-quarter of specialists provided 75%.
One-third of both types of physicians saw fewer than 10 Medicaid patients per year, hardly contributing any “access” at all.
There was only one psychiatrist for every 8,834 Medicaid enrollees after excluding those seeing fewer than 10 Medicaid patients per year. This is especially concerning given that the COVID-19 pandemic has worsened mental health in the U.S., particularly among children.
The authors note that their study only covers primary care and mental health providers in four states, so it is not necessarily generalizable to other states or specialties. But these results are still concerning.
States have so-called network adequacy standards for their Medicaid managed care plans that are supposed to make sure there are enough providers. These standards typically rely on either a radius (a certain number of providers for a geographic area) or ratio (number of providers per enrollee), but the authors’ findings show these methods fall short if they are based on directories alone.
The authors specifically recommend states use claims-based assessments like the ones in the study and “secret shopper” programs — like this recently published one from Maryland by Abigail Burman and Simon Haeder — to better evaluate whether plans are offering adequate access to physicians. We absolutely need people to have coverage, but it needs to be more than just a card in their wallet.
Spurred by the Consumer Financial Protection Bureau’s investigation into how credit companies report medical debt, TransUnion, Equifax, and Experian—the country’s three largest credit bureaus, who keep records on 200M Americans—are revising how they report medical debt.
As a result, the companies could eliminate up to 70 percent of medical debt from consumers’ credit reports. Starting in July, medical debts paid after going to collections will no longer appear on credit reports, and unpaid debts won’t be added until a year after being sent to collections (instead of six months, per current policy). And beginning in 2023, medical debts of less than $500 will also be excluded from credit reports altogether.
The Gist:The poorest and sickest patients have been disproportionately saddled with the highest levels of medical debt. In 2017, 19 percent of US households carried medical debt, including many with private insurance.
While these changes will help mitigate the impact of medical debt for some, they aren’t a fix to the larger underlying problem of rising healthcare costs and access to adequate health insurance coverage.
The stress, disruption, isolation, and lives lost during the pandemic have exacerbated longstanding challenges in access to mental healthcare. In the graphic above, we highlight how COVID has impacted the state of mental health across generations.
Younger Americans are faring much worse. This week, the nation’s leading pediatric professional societies declared a national mental health emergency for children and adolescents, and nearly half of “Generation Z” reports that their mental health has worsened during COVID.
Mental health-related emergency department (ED) visits increased in 2020 across all age groups, with the steepest rise among adolescents. Because of a national shortage of inpatient psychiatric beds, patients with mental health needs are increasingly being “boarded” in the ED—even asnearly two-thirds of EDs lack psychiatric services to adequately manage patients in crisis.
Case in point: research on behavioral health access in Massachusetts shows one in every four ED beds is now occupied by a patient awaiting psychiatric evaluation. ED boarding of patients in mental health crisis not only delays necessary care, but leads to throughput backups in hospitals, and increases caregiver stress and burnout.
Access to inpatient treatment is most challenged for children and adolescents, as well as “med-psych” patients, who also have significant physical health needs that must be managed. New solutions have emerged during the pandemic: burgeoning telemedicine platforms don’t just increase access to outpatient therapy, they also enable psychiatrists to evaluate emergency patients virtually.
In the long term, a three-part approach is needed—new virtual solutions, expanded inpatient capacity, and greater community resources to address the social needs that often accompany a behavioral health diagnosis.
Democrats’ push to extend health coverage to millions of very low-income people in red states has a lot working against it: It’s expensive, it’s complicated, it may invite legal challenges, and few national Democrats stand to gain politically from it.
Yes, but: The policy is being framed as a test not only of Democrats’ commitment to universal health coverage, but also their commitment to racial equity.
The big picture: Democrats are still figuring out how much money they have to spend in their massive social policy legislation, but there’s already intense competition among policies — including between health care measures.
Progressives are adamant about expanding Medicare to cover dental, vision and hearing benefits. But a handful of prominent Democrats are making the case that closing the Medicaid coverage gap is equally, if not more, important.
The gap exists in 12 Republican-controlled states that have refused to accept the Affordable Care Act’s Medicaid expansion, the majority of which are in the South.
What they’re saying: Closing the coverage gap is “very, very important to people of color. The majority of Black people in this country still live in the South,” said Rep. Jim Clyburn, one of the leading proponents of the measure.
More than 2 million adults are in the coverage gap, and 60% of them are people of color, according to the Center on Budget and Policy Priorities.
“What is the life expectancy of Black people compared to white people? I could make the argument all day that expanding Medicare at the expense of Medicaid is a racial issue, because Black people do not live as long as white people,” Clyburn added. “If we took care of Medicaid, maybe Black people would live longer.”
Between the lines: In terms of raw politics, it’s pretty easy to see why many Democrats would prioritize Medicare expansion over closing the Medicaid gap: Seniors live in every district and state in the U.S.
Only three Democratic senators represent non-expansion states, and in 2020, only ine of the 41 battleground House seats identified by Ballotpedia were in non-expansion states.
Yes, but: Sens. Jon Ossoff and Raphael Warnock, both from Georgia, are the reason that Democrats are able to consider their social policy legislation at all. Warnock is up for re-election next year.
“This is about people in this country, and I wish we’d stop this red state and blue state stuff,” Clyburn said. “Warnock and Ossoff won a runoff that nobody gave them a chance to win by promising they would close this gap.”
The catch: States that have already expanded Medicaid are covering a small portion of those costs themselves, and may question the fairness full federal funding for the holdout states.
That could create an incentive for existing expansion states to drop the ACA’s Medicaid expansion and pick up the new program instead. And any effort Congress makes to stop them could invite legal challenges.
“The case law in this domain is a bit of a moving target, and as we’ve seen over the past decade, there’s an awful lot of litigation over things pertaining to health reform,”said Nick Bagley, a professor at theUniversity of Michigan Law School.
The bottom line: Like Democrats’ other proposed health policies, filling the coverage gap could cost hundreds of billions of dollars.
But “if your goals are relieving health care cost burdens or expanding access to care, then it’s hard to do better on a dollar-for-dollar basis than buying coverage for uninsured people below the poverty line,” said Brookings’ Matt Fiedler.
What we’re watching: “I don’t see Medicaid as being on the radar of some of my friends in the caucus who seem to feel it’s more important to do Medicare,” Clyburn said. “I’m trying to get Medicaid on their agenda.”
“I’m tired of my party perpetuating … inequity,” he added. “Treating people according to their needs is what breaks the cycle.”
HENRY KOTULA 