This week Mayo Clinic and Kaiser Permanente announced a $100M joint investment in Boston-based Medically Home, a provider of virtual hospital solutions. Founded in 2016, Medically Home is one of a handful of companies that coordinate with hospitals and doctors to provide in-home clinician visits, round-the-clock communications and monitoring, and access to support services to enable hospital-level care in the home. While interest has surged during the pandemic, the first hospital at home programs launched in the 1990s, and the model has a proven track record of delivering care that is lower cost and clinically equivalent (or better), when compared to a traditional hospital admission.
A confluence of market forces has driven rapid expansion in the model across the past year. Health systems are increasingly looking to hospital at home to address emerging consumer demand for care outside the hospital, and achieve the longer-term goals of providing flexible, lower-cost acute care capacity. And payers are looking to add hospital at home capabilities to their growing virtual and home-based care platforms to manage acutely ill Medicare Advantage beneficiaries in a lower-cost care setting.
Early adopters estimate that as many as 30 percent of patients admitted to hospitals today could be candidates for treatment at home. The large infusion of funding from Kaiser and Mayo will enable Medically Home to scale across the US, and also provides an endorsement of, and commitment to, the care model from these respected systems, which may help convince physicians who remain skeptical.
Coupled with the Centers for Medicare & Medicaid Services’ waiver program, allowing payment for home-hospital care, this investment should drive a new wave of growth in the model—and will likely make hospital at home a routine part of the care options available to patients.
Given regulatory barriers and structural differences in practice, private equity firms have been slow to acquire and roll up physician practices and other care assets in other countries in the same way they’ve done here in the US. But according a fascinating piece in the Financial Times, investors have targeted a different healthcare segment, one ripe for the “efficiencies” that roll-ups can bring—small veterinary practices in the UK and Ireland.
British investment firm IVC bought up hundreds of small vet practices across the UK, only to be acquired itself by Swedish firm Evidensia, which is now the largest owner of veterinary care sites, with more than 1,500 across Europe. Vets describe the deals as too good to refuse: one who sold his practice to IVC said “he ‘almost fell off his chair’ on hearing how much it was offering. The vet, who requested anonymity, says IVC mistook his shock for hesitation—and increased its offer.” (Physician executives in the US, take note.) IVC claims that its model provides more flexible options, especially for female veterinarians seeking more work-life balance than offered by the typical “cottage” veterinary practice.
But consumers have complained of decreased access to care as some local clinics have been shuttered as a result of roll-ups. Meanwhile prices, particularly for pet medications like painkillers or feline insulin, have risen as much as 40 percent—and vets aren’t given leeway to offer the discounts they previously extended to low-income customers. And with IVC attaining significant market share in some communities (for instance, owning 17 of 32 vet practices in Birmingham), questions have arisen about diminished competition and even price fixing.
The playbook for private equity is consistent across human and animal healthcare: increase leverage, raise prices for care, and slash practice costs, all with little obvious value for consumers. It remains to be seen whether and how consumers will push back—either on behalf of their beloved pets, or for the sake of their own health.
A new study out this week revived an old argument about whether telehealth visits spur more downstream care utilization compared to in-person visits, potentially raising the total cost of care. Researchers evaluated three years of claims data from Blue Cross Blue Shield of Michigan to compare patients treated for an acute upper respiratory infection via telemedicine versus an in-person visit, finding that patients who used telemedicine were almost twice as likely to have a related downstream visit (10.3 percent vs. 5.9 percent, respectively).
They concluded that these increased rates of follow-up likely negate any cost savings from replacing an in-person encounter with a less costly telemedicine visit.
Our take: so what? The study failed to address the question of whether a telemedicine visit was easier to access, or more timely than an in-person visit. Further, it evaluated data from 2016-2019, so the results should be caveated as pertaining to the “pre-COVID era”, before last year’s explosion in virtual care. Moreover, it’s unsurprising that patients who have a telemedicine visit may need more follow-up care (or that providers who deliver care virtually may be more aggressive about suggesting follow-up if symptoms change).
This focus on increased downstream care as a prima facie failure also ignores the fact that telemedicine services likely tap into pent-up, unmet demand for access to care. More access is a good thing for patients—and policymakers should consider that limiting reimbursement for virtual access to primary care (which accounts for less than 6 percent of total health spending) is unlikely to deliver the system-wide reduction in healthcare spending we need.
- Uber Health is partnering with e-prescription startup ScriptDrop in a deal expanding the ride-hailing giant’s prescription delivery footprint from a few cities to dozens of U.S. states.
- Uber first forayed into medication delivery in several metro areas in August through a deal with digital delivery marketplace NimbleRx, as the pandemic caused a surge in patient demand for the service.
- With this latest deal, Uber’s hundreds of thousands of drivers will be accessible to pharmacies using ScriptDrop in 37 states across the U.S. ScriptDrop, a third-party tech platform connecting patients and pharmacies with couriers nationwide, will pay Uber for the cost of each delivery.
Uber’s main thrust in the healthcare sector is non-emergency medical transportation, and it has netted some 1,500 partners, including major health systems and payers, since launching in the space three years ago.
But the San Francisco-based company is also hoping the crowded but lucrative at-home prescription drug delivery market will be profitable, following mounting losses last year as the coronavirus pandemic pummeled ride-hailing companies.
Growth in Uber’s delivery business has outpaced plummeting ridesharing revenue during COVID-19. In fourth quarter earnings released February, Uber’s gross bookings in its mobility business were down 50% year over year, while gross bookings in its delivery segment were up 130%.
This latest deal suggests Uber is doubling down on delivery, banking that demand for at-home drug delivery remains high beyond COVID-19.
ScriptDrop integrates with a pharmacy’s software system to provide same-day shipping medication delivery options, and also has a consumer-facing portal for drop-offs. As of today, Uber is integrated with ScriptDrop via an application programming interface, and will become the default option for select pharmacies depending on location and driver availability, the companies said.
ScriptDrop doesn’t share the exact number of U.S. pharmacies working with its platform, but a spokesperson told Healthcare Dive they partner with thousands. ScriptDrop clients include prominent pharmacies like Albertsons, Kmart and Safeway; pharmacy systems such as PDX and a number of courier companies, health systems and insurers.
The partnership is operational in 37 states as of today, including California, Florida, New York and Texas. Uber and ScriptDrop have additional plans for near-term expansion, in some cases in new states in the next couple of weeks, the spokesperson said.
Uber first launched consumer-facing prescription delivery in several U.S. cities through the Uber Eats app, in the partnership with NimbleRx. That’s grown from a pilot in Seattle and Dallas to cities including New York, Miami, Austin and Houston, with more metro areas to come, according to Uber.
Prescription drug delivery companies have reported skyrocketing utilization during COVID-19. Columbus, Ohio-based ScriptDrop has said delivery volume jumped 363% from February to April last year, while revenue tripled between October 2019 and October 2020. The startup announced a $15 million funding round in October to drive growth, bringing its total funding to $27 million since launching in 2017.
Partially as a result of COVID-19 tailwinds, the prescription tech sector, which includes e-prescription vendors like NimbleRx and ScriptDrop, is expected to grow at a compound annual growth rate of 16%, the quickest of the enterprise health and wellness segments, according to a February report from Pitchbook.
Despite consumer demand for at-home prescription delivery, it’s a crowded market. Most major pharmacies, including CVS Health and Walgreens, have hustled to build out their delivery networks in the past few years, facing potential disruption from outside entrants, notably Amazon.
It’s long been accepted as a truism that “moms” make most of a family’s healthcare choices. This has led many health systems to invest in high-end women’s services, especially labor and delivery facilities, with the hope of winning the entire family’s long-term healthcare loyalty.
This conventional wisdom has existed since the middle of the last century, when the postwar Baby Boom coincided with the rise of commercial insurance. But it’s hard to find real evidence that these investments deliver on their intent—and we think the argument deserves to be reexamined.
An expectant mother is likely years away from her family’s major healthcare spending events. Giving her a fantastic virtual care experience, or taking great care of her teenager who blows out a knee playing soccer, is likely to engender greater loyalty to the health system when she’s looking for her first mammogram, than her labor and delivery experience from a decade earlier. That’s not to say that top-notch obstetrics isn’t important—but market-leading labor and delivery facilities are likely more critical for wholesale purchasers, such as an employer considering a narrow network, or for physicians choosing where to build an OB practice.
Direct-to-consumer strategies should be built on more sophisticated consumer research that takes into account the preferences of a new generation of consumers, for whom not all healthcare choices are equal—that same consumer will be in different “segments” and make different choices for different problems over time, not all pre-determined by one memorable birthing experience.
We had occasion this week, when asked to weigh in on a health system’s “primary care strategy”, to assert once again that primary care is not a thing.
We were being intentionally provocative to make a point: what we traditionally refer to as “primary care” is actually a collection of different services, or “jobs to be done” for a patient (to borrow a Clayton Christensen term).
These include a range of things: urgent care, chronic disease management, medication management, virtual care, women’s health services, pediatrics, routine maintenance, and on and on. What they have in common is that they’re a patient’s “first call”: the initial point of contact in the healthcare system for most things that most patients need. It’s a distinction with a difference, in our view.
If you set out to address “primary care strategy”, you’re going to end up in a discussion about physician manpower, practices, and economics at a level of generalization that often misses what patients really need. Rather than the traditional E pluribus unum (out of many, one) approach that many take, we’d advise an Ex uno plures (out of one, many) perspective.
Ask the question “What problems do patients have when they first contact the healthcare system?” and then strategize around and resource each of those problems in the way that best solves them. That doesn’t mean taking a completely fragmented approach—it’s essential to link each of those solutions together in a coherent ecosystem of care that helps with navigation and information flow (and reimbursement).
But continuing to perpetuate an entity called “primary care” increasingly seems like an antiquated endeavor, particularly as technology, payment, and consumer preferences all point to a more distributed and easily accessible model of care delivery.
Walmart has continued to grow its presence in healthcare over the past few years, with expansions of its primary care clinics and the launch of its new insurance arm.
Here are nine numbers that show how big Walmart is in healthcare and how it plans to grow:
Walmart has opened 20 standalone healthcare centers and plans to open at least 15 more in 2021. The health centers offer primary care, urgent care, labs, counseling and other services.
Walmart’s board approved a plan in 2018 to scale to 4,000 clinics by 2029. However, that plan is in flux as the retail giant may be rolling back its clinic strategy, according to a February Insider report.
Walmart in January confirmed plans to offer COVID-19 vaccines in 11 states and Puerto Rico.
In 2020, Walmart established 600 COVID-19 testing sites.
Walmart said it believes expanding its standalone clinics will help bring affordable, quality healthcare to more Americans because 90 percent of Americans live within 10 miles of a Walmart store.
The Walmart Health model lowers the cost of delivering healthcare services by about 40 percent for patients, according to Walmart’s former health and wellness president Sean Slovenski.
In October, Walmart partnered with Medicare Advantage insurer Clover Health on its first health insurance plans, which will be available to 500,000 people in eight Georgia counties.
Walmart’s insurance arm, Walmart Insurance Services, partnered with eight payers during the Medicare open enrollment period in 2020 to sell its Medicare products. Humana, UnitedHealthcre and Anthem Blue Cross Blue Shield were among the insurers offering the products.
COVID-19 accelerated a number of trends already brewing in the healthcare industry, and that’s not likely to change this year, according to a new report from CVS Health.
The healthcare giant released its annual Health Trends Report on Tuesday, and the analysis projects several industry trends that are likely to define 2021 in healthcare, ranging from technology to behavioral health to affordability.
“We are facing a challenging time, but also one of great hope and promise,” CVS CEO Karen Lynch said in the report. “As the pandemic eventually passes, its lessons will serve to make our health system more agile and more responsive to the needs of consumers.”
Here’s a look at four of CVS’ predictions:
1. A looming mental health crisis
Behavioral health needs were a significant challenge in healthcare prior to COVID-19, but the number of people reporting declining mental health jumped under the pandemic.
Cara McNulty, president of Aetna Behavioral Health, said in a video attached to the report that it will be critical to “continue the conversation around mental health and well-being” as we emerge from the pandemic and to reduce stigma so people who need help seek it out.
“We’re normalizing that it’s important to take care of our mental well-being,” she said.
Data released in December by GoodRx found that prescription fills for depression and anxiety medications hit an all-time high in 2020. GoodRx researchers polled 1,000 people with behavioral health conditions on how they were navigating the pandemic, and 63% said their depression and/or anxiety symptoms worsened.
McNulty said symptoms to look for when assessing whether someone is struggling with declining mental health include whether they’re withdrawn or agitated or if there’s a notable difference in their self-care routine.
2. Pharmacists take center stage
CVS dubbed 2021 “the year of the pharmacist” in its report.
The company expects pharmacists to be a key player in a number of areas, especially in vaccine distribution as that process inches toward broader access. They also offer a key touchpoint to counsel patients about their care and direct them to appropriate services, CVS said.
CVS executives said in the report that they see a significant opportunity for pharmacists to have a positive impact on the social determinants of health.
“We’ve found people are not only open and willing to share social needs with their pharmacists but in many cases, they listen to and act on the advice and recommendations of pharmacists,” Peter Simmons, vice president of transformation, pharmacy delivery and innovation at CVS Health, said in the report.
3. Finding ways to mitigate the cost of high-price therapies
Revolutionary drugs and therapies are coming to market with eye-popping price tags; it’s not uncommon to see new pharmaceuticals priced at $1 million or more. For pharmacy benefit managers, this poses a major cost challenge.
To address those prices, CVS expects value-based contracting to take off in a big way. And drugmakers are comfortable with the idea, according to the report. Novartis, for example, is offering insurers a five-year payment plan for its $2 million gene therapy Zolgensma, with refunds available if the drug doesn’t achieve desired results.
CVS said the potential for these therapies is clear, but many payers want to see some type of results before they fork over hundreds of thousands.
“Though the drug may promise to cure these patients for life, these are early days in their use,” said Joanne Armstrong, M.D., enterprise head of women’s health and genomics at CVS Health, in the report. “What we’re saying is, show us the clinical value proposition first.”
CVS said it’s also offering a stop-loss program for gene therapy to self-funded employers contracted with Aetna and/or Caremark to assist them in capping the expenses associated with these drugs.
4. Getting into the community to address diabetes
Diabetes risk is higher among vulnerable populations, such as Black patients, and addressing it will require local and community-based solutions, CVS executives said in the report. Groups at the highest risk for the disease are less likely to live in areas with easy access to a supermarket, for example, which boosts their risk of unhealthy eating, according to the report.
The two key hurdles to addressing this issue are access and affordability. The rise in retail clinics and ambulatory care centers can get at the access issue, as they can offer a way to better meet patients where they are.
At CVS’ MinuteClinics, patients can walk in and receive a number of services to assist them in managing diabetes, including screenings, consultations with providers and connections to diabetes educators who can assist with lifestyle changes.
Retail locations can also assist with medication costs, creating a one-stop-shop experience that’s easier for many diabetes patients to slot into their daily lives, CVS said.
“Diabetes is a case study in how a more connected experience can translate to simpler, affordable and more accessible care for underserved communities,” said Dan Finke, executive vice president of CVS Health and president of its healthcare benefits division.
This week Brookdale Senior Living, the nation’s largest operator of senior housing, with 726 communities across 43 states and annual revenues of about $3B, announced the sale of 80 percent of its hospice and home-based care division to hospital operator HCA Healthcare for $400M. The transaction gives HCA control of Brookdale’s 57 home health agencies, 22 hospice agencies, and 84 outpatient therapy locations across a 26-state footprint, marking its entry into new lines of business, and allowing it to expand revenue streams by continuing to treat patients post-discharge, in home-based settings.
Like other senior living providers, Brookdale has struggled economically during the COVID pandemic; its home and hospice care division, which serves 17,000 patients, saw revenue drop more than 16 percent last year. HCA, meanwhile, has recovered quickly from the COVID downturn, and has signaled its intention to focus on continued growth by acquisition across 2021.
In separate news, Optum, the services division of insurance giant UnitedHealth Group, was reported to have struck a deal to acquire Landmark Health, a fast-growing home care company whose services are aimed at Medicare Advantage-enrolled, frail elderly patients. Landmark, founded in 2014, also participates in Medicare’s Direct Contracting program.
The transaction is reportedly valued at $3.5B, although neither party would confirm or comment on the deal. The acquisition would greatly expand Optum’s home-based care delivery services, which today include physician home visits through its HouseCalls program, and remote monitoring through its Vivify Health unit.
The Brookdale and Landmark deals, along with earlier acquisitions by Humana and others, indicate that the home-based care space is heating up significantly, reflecting a broader shift in the nexus of care to patients’ homes—a growing preference among consumers spooked by the COVID pandemic.
Along with telemedicine, home-based care may represent a new front in the tug-of-war between providers and payers for the loyalty of increasingly empowered healthcare consumers.