Covid-19 has decimated independent US primary care practices—how should policymakers and payers respond?

Covid-19 has decimated independent US primary care practices—how should policymakers and payers respond? 

9 ways Covid-19 may forever upend the U.S. health care industry - STAT

The coronavirus pandemic has torn through the global economy, suppressing consumer demand and industrial production. As countries look to an eventual recovery, but in a very different environment characterized by continuing distancing measures and loss of public confidence, businesses in many sectors, such as hospitality and retail, are asking how they can adapt to survive these new economic conditions. Yet perhaps surprisingly, those feeling threatened include independent primary care practices in the United States. Despite the USA being one of the most expensive healthcare systems in the world, many primary care practices are now facing financial collapse. Some estimates suggest that primary care practices will lose up to $15 billion during 2020 as a consequence of the coronavirus pandemic.

Covid-19 has highlighted a fundamental weakness in how primary care is paid for in the USA. Many practices are financed by fee-for-service (FFS) reimbursement. Put bluntly, providers make money from office visits, diagnostic tests, and procedures. This has long been criticized for encouraging an expansion of what is considered disease and overtreatment, contributing to the high cost of the American health system. However, it can only work as long as patients keep coming, and they are no longer doing so, at least not in sufficient numbers for many primary care practices to remain viable. The imposition of social distancing policies has seen a severe reduction in office visits, and with it a substantial decline in revenue. The pandemic has taught Americans that the financial model that underpins primary care needs to be reformed. It needs to move from a per-visit reimbursement to a per-patient reimbursement, in other words primary care capitation, as used in many other countries, including the UK.

If the existing reimbursement model is not reformed, the clinical and financial implications for struggling primary care practices, which could play a key role in the continuing coronavirus pandemic, will be far-ranging. From a clinical standpoint, primary care practices that need to lay off staff or close will not be able to respond effectively to an influx of patients who have been delaying care since the pandemic began. Given that primary care is often the entry point into the healthcare system, this could lead to severe reductions in access to routine health care as well as referrals to specialty providers for advanced complaints. From a financial standpoint, many of these independent practices may consider consolidation with larger health systems, something that has been shown to increase prices without improving quality in the long run.

To overcome these issues, insurers and primary care practices could work together to construct capitated payment models. In capitated contracts, providers are paid a risk-adjusted sum for each patient enrolled in the practice. Payment to providers is not reliant on volume of office visits, but rather delivering cost-effective care focused on the health of primary care patients.

As we noted above, this system is already widely used internationally, but there are also good examples in the USA. For example, Iora Health is a venture-backed primary care company that partners with insurers to obtain a flat $150 per-member-per-month (PMPM) fee for taking care of its patients. They also receive bonuses for reducing total cost of care (TCOC). As a result, they have been able to use their dollars for health-related interventions, such as hiring health coaches. They have also demonstrated significant reductions in hospitalizations and health spending along with high patient satisfaction scores. Most importantly, they were able to quickly adapt to the needs of their patient population in the pandemic using alternative models of care, such as online consultations, without the added stress of losing revenue.

There are also many other promising examples of both public and private payers designing capitated contracts for independent primary care practices. In the public sector, the Centers for Medicare and Medicaid Services (CMS) introduced the multi-payer Primary Care First (PCF) Model. Under PCF, primary care practices will receive a risk-adjusted population-based payment for patients as well as a flat fee for any office visits performed. In addition, there are bonuses for practices to limit hospitalizations, an expensive component of delivering care. However, this is still an experimental program that is supposed to begin in 2021, which may be too late for primary care practices that are already facing financial strain from the pandemic.

In the private sector, Blue Cross Blue Shield of North Carolina (BCBS NC) has created the Accelerate to Value program for independent primary care practices. Through this program, BCBS NC is offering independent primary care practices a supplemental stabilization payment, based on the number of members a particular practice serves. In return, it is asking them to remain open for patients and deliver care appropriate to the circumstances created by the pandemic. In the longer term, it also asks them to join an accountable care organization (ACO) and consider accepting capitation for future reimbursement. 

While CMS and BCBS can offer blueprints for a path towards primary care capitation, there will be challenges to implement capitation at scale across the nation’s primary care system. A key defining aspect of the US healthcare system is its multitude of payers, from commercial to Medicaid to Medicare. For primary care capitation to succeed, practices will need to pursue multi-payer contracts that cover a critical mass of the patients they serve. Independent practices will also have to adapt to a fixed budget model where excess healthcare utilization could actually lead to financial losses, unlike in fee-for-service.

Ultimately, it is important to recognize that no payment model will be a panacea for healthcare providers during the pandemic and afterwards. However, the coronavirus pandemic has highlighted clear deficiencies in the American fee for service system that have existed for almost a century. Covid-19 has created an opportunity for policymakers and providers to look anew at a model that is already implemented widely in other countries, and in parts of the US. At some point there will have to be an inquiry into the many failures that have characterized the American response to covid-19. Given the magnitude of the catastrophe that has befallen the US, in stark contrast to the relative successes achieved in many other countries, it will be essential to challenge many things once taken for granted. One must be the fee for service system that has so clearly undermined the resilience of the US health system. Covid-19 has provided an almost unprecedented opportunity to create a healthcare system that rewards providers caring for patients in a coordinated manner, rather than prioritizing expensive and often wasteful healthcare provision.

 

 

 

 

Trump sidelines public health advisers in growing rift over coronavirus response

https://www.washingtonpost.com/health/trump-sidelines-public-health-advisers-in-growing-rift-over-coronavirus-response/2020/07/09/ad803218-c12a-11ea-9fdd-b7ac6b051dc8_story.html?fbclid=IwAR0MI5VGiJQmUsyEpzYDj09Q0VVxxYMlHwx-UjfHdmMu1PdGD6uIzv8R2fM&utm_campaign=wp_main&utm_medium=social&utm_source=facebook

The Health 202: Health officials promise to ramp up pandemic ...

The June 28 email to the director of the Centers for Disease Control and Prevention was ominous: A senior adviser to a top Health and Human Services Department official accused the CDC of “undermining the President” by putting out a report about the potential risks of the coronavirus to pregnant women.

The adviser, Paul Alexander, criticized the agency’s methods, and said its warning to pregnant women “reads in a way to frighten women . . . as if the President and his administration can’t fix this and it is getting worse.”

As the country enters a frightening phase of the pandemic with new daily cases surpassing 62,000 on Wednesday, the CDC, the nation’s top public health agency, is coming under intense pressure from President Trump and his allies, who are downplaying the dangers in a bid to revive the economy ahead of the Nov. 3 election. In a White House guided by the president’s instincts, rather than by evidence-based policy, the CDC finds itself forced constantly to backtrack or sidelined from pivotal decisions.

The latest clash between the White House and its top public health advisers erupted Wednesday, when the president slammed the agency’s recommendation that schools planning to reopen should keep students’ desks six feet apart, among other steps to reduce infection risks. In a tweet, Trump — who has demanded schools at all levels hold in-person classes this fall — called the advice “very tough & expensive.”

“While they want them open, they are asking schools to do very impractical things. I will be meeting with them!!!” Trump tweeted Wednesday. Within hours, Vice President Pence had asserted the agency would release new guidance next week.

“The president said today we just don’t want the guidance to be too tough,” Pence told reporters. “And that’s the reason next week the CDC is going to be issuing a new set of tools.”

Analysts say the deepening divide is undermining the authority of one of the world’s premier public health agencies, which previously led fights against malaria, smallpox and HIV/AIDS. Amid the worst public health crisis in a century, the CDC has in recent months altered or rescinded recommendations on topics including wearing masks and safely reopening restaurants and houses of worship as a result of conflicts with top administration officials.

“At a time when our country needs an orchestrated, all-hands-on deck response, there is simply no hand on the tiller,” said Beth Cameron, former senior director for global health security and biodefense on the White House National Security Council.

In the absence of strong federal leadership, state and local officials have been left to figure things out for themselves, leading to conflicting messaging and chaotic responses. Trump’s decision to pull the U.S. out of the World Health Organization further undermined efforts to influence global strategies against the coronavirus, including how vaccines will be distributed.

The CDC, meanwhile, is increasingly isolated — a function both of its growing differences with the White House and of its own significant missteps earlier in the outbreak.

Those stumbles include the botched rollout of test kits likely contaminated at a CDC lab in late January, which led to critical delays in states’ ability to know where the virus was circulating. And the CDC’s initial decision to test only a narrow set of people gave the virus a head start spreading undetected across the country.

During a May lunch with Senate Republicans, Trump told the group the CDC “blew it” on the coronavirus test and that he’d installed a team of “geniuses” led by his son-in-law Jared Kushner to handle much of the response,” according to two people familiar with the lunch who spoke on the condition of anonymity.

“There is a view the CDC is staffed with deep state Democrats that are trying to tweak the administration,” said one adviser who also spoke on the condition of anonymity to reveal private conversations.

White House officials, who see the president’s reelection prospects tied to economic recovery, also say they’ve been deeply frustrated by what they view as career staffers at the agency determined “to keep things closed,” according to a senior administration official who spoke on the condition of anonymity to reveal internal deliberations.

Trump believes the CDC is “ineffective” and a “waste of time,” but doesn’t blame CDC Director Robert Redfield and generally likes him, said another official speaking on the condition of anonymity. “He just thinks he is a poor communicator,” the official added.

Joe Grogan, former head of the White House Domestic Policy Council, said Redfield had fans inside the White House who work on “addiction issues, on life issues, on HIV issues,” among other topics.

But he said Redfield has few political appointees to help him run a complex agency. “How do you run a place like that with … [few] appointees?” Grogan asked.

HHS Secretary Alex Azar called the director “a key scientific guide for the President and his administration, a trusted source for the American people, and a closely engaged partner of state and local governments.”

But Redfield is not a voice in coronavirus task force meetings, and “is never really in the Oval [Office] with the president,” said another senior administration official, who also spoke on the condition of anonymity to discuss the internal dynamics.

Even Redfield’s supporters say he has failed to be an effective advocate for the agency.

“Bob Redfield’s commitment to public health is completely strong,” said William Schaffner, a veteran infectious-disease specialist at Vanderbilt University. But he said Redfield lacks the standing, deftness, and communication capacity to persuade skeptical audiences, including those in the White House, that protecting public health and fostering economic recovery are not opposing goals.

Redfield, for his part, downplayed Trump’s criticism of the CDC school reopeniing guidelines after a coronavirus task force briefing Wednesday, saying the agency and the president were “totally aligned.”

“We’re both trying to open the schools,” he said.

White House spokesman Judd Deere also disputed big differences, saying in a statement the White House and the CDC “have been working together in partnership since the very beginning of this pandemic to carry out the President’s highest priority: the health and safety of the American public.

“The CDC is the nation’s trusted health protection agency and its infectious disease and public health experts have helped deliver critical solutions to save lives. We encourage all Americans to continue to follow the CDC’s guidelines and use best-practices they have learned, such as social distancing, face coverings, and good hygiene, to maintain public health and continue our Transition to Greatness.”

But some health experts were indignant the agency had been ordered to rewrite guidance to reopen schools to “make it easier and cost less” — a demand that effectively “turns science on its head,” said Tom Inglesby, director of Johns Hopkins University’s Center for Health Security.

“CDC should be giving their best judgments on how to lower risks to make schools safer,” he said. “That’s their job. If they aren’t allowed to do that, the public will lose confidence in the guidance.”

Why are they ‘not shouting “fire”?’

The diminished role of the 74-year-old agency has bewildered infectious-disease experts, as well as members of the public seeking guidance.

After six states set one-day case records on July 3, Carlos del Rio, executive associate dean at Emory University’s School of Medicine, tweeted at Tom Frieden, a former CDC director, “Tom, where is @CDCgov ? Why are they not out there shouting ‘fire’?”

Frieden shot back: “They are still there, still doing great work, just not being allowed to talk about it, not being allowed to guide policy, not being allowed to develop, standardize, and post information that would give, by state and county, the status of the epidemic and of our control measures.”

Jeffrey Duchin, the health officer at Seattle and King County health department, added: “Agree. Muzzled, neutered and exiled.”

The agency has been largely invisible. After more than three months of silence, it resumed briefings for the public last month. There have been two.

By comparison, when the H1N1 swine flu pandemic hit the United States in the spring of 2009, the CDC held briefings almost every day for six consecutive weeks.

During this outbreak, the agency’s regular briefings ended abruptly after White House officials were angered when a top CDC leader warned that Americans could face “significant disruption” to their lives as a result of the virus’s spread to the United States.

CDC officials say they are still getting their message out, pointing to more than 2,000 documents providing pandemic-related information about reopening and staying safe for dozens of groups and venues, including funeral home directors, amusement parks, and pet owners. Each Friday, the CDC also posts CovidView, a weekly report of selected data and trends on testing, hospitalizations, and reported deaths.

But the information is posted without additional explanation or analysis.

“I want to hear a real person give me three minutes based on these findings,” said del Rio, also a global health and infectious-disease professor at Emory. “I want to see them in the news, being interviewed, giving us the data.”

Scientists at the CDC and former colleagues speak of deep frustration and low morale over its inability to fully share and explain scientific and medical information.

Researchers are fearful for their jobs and want to protect the integrity of the data they release. “If you want to say something, you’re thinking, ‘what’s the White House going to say and how are they going to use it,’ ” said one longtime scientist who spoke on the condition of anonymity for fear of retaliation.

The lack of briefings has fostered misunderstandings at times. In early April, for instance, when the agency reversed its position and recommended the use of cloth face coverings, CDC scientists gave no public briefings explaining why they made the change.

“It’s not rocket science,” said Nancy Cox, a virologist and former CDC official who led the influenza program for 22 years and was part of the agency’s response during the 2009 H1N1 swine flu pandemic. “But the reasoning behind those changes should be explained as clearly as possible and then you can get everyone on board.”

In the CDC’s absence, academic medical centers, public health and professional disease groups have filled the void by holding coronavirus briefings and providing analysis of key issues, data and research studies. Frieden, the president of Resolve to Save Lives, a New York nonprofit, has also been posting long Twitter threads analyzing the weekly CDC data released on Fridays.

Speaking ‘with an unfettered voice’

Alarmed at the agency’s diminished role, nearly 350 public health organizations sent a letter Tuesday to Azar urging him to advocate for the CDC. The agency must be allowed to speak based on the best available science “and with an unfettered voice,” said John Auerbach, president and chief executive of Trust for America’s Health, a public health nonprofit that led the effort.

House Democrats echoed those concerns in a separate letter to Azar last month. Reps. Diana DeGette of Colorado and Frank Pallone Jr. of New Jersey, who chairs the House Energy and Commerce Committee, said they were troubled by reports that administration officials are considering narrowing the CDC’s mission and embedding more political appointees at the Atlanta-based agency.

Traditionally the CDC has one political appointee, the director. Now it has Redfield and five other political appointees, including two advisers who were added in recent weeks.

“Now more than ever, the American people need a robust and effective CDC that is not repeatedly undermined by others in the administration, including the President and the Vice President,” the letter said.

White House Chief of Staff Mark Meadows views the agency as a problem and has criticized the CDC repeatedly to other administration officials, said a senior administration official.

White House and HHS officials are discussing what the CDC’s “core mission needs to be,” said one adviser familiar with the talks who spoke on the condition of anonymity to comment on policy deliberations. The discussions were first reported by Politico.

Over the years, the agency that was founded to fight malaria now works on virtually every aspect of public health. “It has tried to be everything to everyone,” the adviser said, suggesting the agency might need to refocus more narrowly.

On the global front, administration officials are also weighing a $2.5 billion initiative called the President’s Response to Outbreaks that would move a significant portion of national and international pandemic responses to the State Department, according to a draft obtained by The Post. Details were first reported by Devex.

“There is no clear leadership role for CDC” in this plan, said Jennifer Kates, a senior vice president for global health and HIV policy at the Kaiser Family Foundation. “In global health, you need an engaged CDC.”

Taken together, the administration efforts seem “designed to position CDC to the margins,” said one federal health official who spoke on the condition of anonymity for fear of retaliation.

‘Boogeyman where there aren’t any’

The report that drew the email attack, accusing the agency of undermining the president, had provided detailed but incomplete information about pregnancy risks related to the coronavirus. It found pregnant women with covid-19 were more likely to be hospitalized, admitted to an intensive care unit, and to need ventilator support than infected women who are not pregnant.

The sender, Alexander, a specialist in health research methods, is a senior adviser to Michael Caputo, a longtime Trump ally who was recently appointed assistant HHS secretary for public affairs , which includes the CDC.

The email was directed to Redfield and Caputo.

Even amid the intense criticism of the agency, the email “crosses the line,” said the official, who was aware of the content.

Like all of the CDC’s reports, the analysis itself noted several limitations. One key one that researchers acknowledged was that they did not have data to indicate whether the pregnant women were hospitalized because of labor and delivery, or because they had covid-19.

Administration officials are “seeing political boogeymen where there aren’t any,” the federal health official said, adding that such narratives could further hamper the U.S. response.

“It could feed the fire to limit the flow of scientific data and communication to the general population,” the official said. “People are getting sick and dying. Can we just focus on the science?”

Alexander said in his email that the lack of data about why women were hospitalized was a “key issue.”

“The CDC is undermining the President by what they put out, this is my opinion and sense, and I am reading it and can see the subtle and direct hits,” he wrote.

Alexander, also a part-time assistant professor at McMaster University in Hamilton, Ontario, did not respond to emails and telephone calls seeking comment.

Caputo said in an interview that he agreed with Alexander. The CDC represents itself as the gold standard for public health agencies, he said, “but in the case of pregnancy analysis, it wasn’t even bronze.”

He called CDC’s track record “spotty” and “questionable,” pointing to Zika diagnostic testing errors in 2016.

“In many cases over the years, regardless of administration, the CDC has undermined presidents and themselves,” Caputo said, referring to leaked drafts of CDC guidances. “Who says the CDC is the sole font of wisdom when it comes to detecting and fighting deadly pathogens?”

Experts say that even with some big unanswered questions, the pregnancy findings represent the best available evidence and are important. The lack of data reflects decades of long-neglected national surveillance on pregnancy.

“I don’t think this is frightening women,” said Denise Jamieson, who heads the obstetrics and gynecology department at Emory University and Emory Healthcare. True, the report “suffers from completeness of data,” she said. But now doctors can be more confident that pregnant women are more likely to have severe disease and use “this really important information” to counsel patients, she said.

 

 

Texas and Arizona ER doctors say they are losing hope as hospitals reach capacity

https://www.cnn.com/2020/07/08/us/emergency-room-doctors-coronavirus-capacity/index.html?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202020-07-08%20Healthcare%20Dive%20%5Bissue:28354%5D&utm_term=Healthcare%20Dive

Texas and Arizona ER doctors say they are losing hope as hospitals ...

As concerns over the capacity of hospitals resurface amid surging Covid-19 cases, two emergency room doctors say they worry about where the pandemic could take them next.

Dr. Mina Tran, an emergency room doctor in Texas, said 70 to 80% of her patients have been admitted with upper respiratory or coronavirus complaints.
In Arizona, which saw its lowest-ever number of available ICU beds Tuesday, Dr. Murtaza Akhter told Lemon so many patients are coming in that he is already having to make tough decisions over resources.
“I’m trying not to be an alarmist. I’m an emergency physician — we’re prepped for this. Dr. Tran and I both trained very hard for this. But we can’t just build beds overnight. We can’t just hire staff overnight. And like I said, our numbers are only increasing,” he said. “It’s only going to get worse and that’s the scary part.”
With a rise in hospitalization rates across the US, doctors like Akhter are reporting waiting lists for ICU beds and having to decide who will be admitted for treatment and who will not.
Surges in hospitalization and infection rates have followed larger crowds gathering in newly reopened public spaces. Every state has started their plan to reopen, and 35 are currently seeing more new cases reported compared to last week.
Tran applauded Texas Gov. Greg Abbott closing down bars once again but said she does think the state was too quick to open back up.
While many states have paused or rolled back reopening in light of a resurgence of cases, Akhter said seeing individuals continue disregard safe practices as his emergency room treats coronavirus patients makes him feel like he is “losing hope.”
“I’m going through shifts making some very tough decisions and then I’m driving home and seeing people who are clearly not distancing, having their Fourth of July celebrations, being in big congregate settings, and it feels like what I’m doing is futile,” Akhter said. “I don’t know what more people need to hear.”
And California and Florida are feeling the strain as well.
In Florida, where cases have surged, ICUs at 56 hospitals have reached capacity. And California’s hospitalizations were at an all-time high on Tuesday with nearly 6,000 coronavirus patients.

 

 

 

Providence, Humana back ad campaign urging patients to stop ‘medical distancing’

https://www.healthcaredive.com/news/providence-humana-back-ad-campaign-urging-patients-to-stop-medical-distan/581172/

Dive Brief:

  • A coalition of providers, payers and other healthcare organizations on Tuesday launched an ad campaign to encourage patients not to put off important care during the COVID-19 pandemic.
  • The announcement encourages people to continue social distancing but not “medical distancing” by putting off routine care or avoiding checking on concerning symptoms. That could be either through telemedicine or an in-person visit.
  • The campaign will be on TV, in print and across social media. The 11 organizations behind it include Providence, Humana, Baylor Scott & White, LabCorp and Walgreens.

Dive Insight:

While some hospitals in hotspots in Texas, Florida, California and Arizona have had to once again put off non-emergency procedures, providers in other areas of the country are trying to ramp up regular patient volumes as the number of positive cases eases.

Surveys show, however, that people are wary of returning to the doctor’s office, either because they worry about exposure to the novel coronavirus or have lost coverage to help pay for care.

The new ad campaign seeks to ease these concerns. No dollar figure was attached to the plan, which advertising agency MullenLowe U.S. took on pro bono. It follows an ad the American Hospital Association launched in May to ensure the public facilities are still available for non-COVID-19 care.

Since the pandemic’s onset in the United States, health officials have been concerned about the short- and long-term consequences of routine and preventive care being delayed or put off entirely. Chronic diseases that are caught early can be managed more easily and less expensively.

Also, research shows even some crucial services aren’t being sought even for issues such as strokes and heart attacks. In April, emergency room visits nationwide dropped more than 40%, according to the Centers for Disease Control and Prevention.

Public health experts are also beginning to fear vaccinations may be avoided, which could cause trouble with the upcoming flu season.

For providers the reduction in patient volumes has meant a major revenue loss. Some patient volume has been recaptured, but that rolled back again in recent weeks with hospitals in large states like Texas and Florida again reaching capacity with a COVID-19 surge.

At the end of June, hospital traffic in Arizona, New York and Texas was down week over week, according to an analysis from Jefferies.

Primary care has particularly suffered. Visits to medical offices were down nearly 60% in March and April, meaning losses to those practices could top $15 billion this year, according to a recent Health Affairs study.

The ad campaign stresses that providers have guidelines in place to keep patients safe, such as isolation of those suspected of having COVID-19 and increased virtual options.

“While we understand the fears that many people have around contracting the virus, our country’s medical facilities have adopted CDC guidelines and best practices and even telemedicine options to make your visit as safe as possible to prevent the spread of the virus,” Humana CMO William Shrank said in a statement. “The intent of the campaign is to let people know that protecting yourself against getting this virus does not need to come at the expense of your overall health.”

 

 

 

 

Walgreens invests $1B in primary care clinics with VillageMD deal

https://www.healthcaredive.com/news/walgreens-invests-1b-in-primary-care-clinics-with-villagemd-deal/581208/

Walgreens plans to open up to 700 primary care clinics as part of ...

Dive Brief:

  • Walgreens on Wednesday announced plans to open up to 700 primary care clinics across the country over the next five years in partnership with medical services provider VillageMD, and “hundreds more” after that.
  • As part of the agreement, Walgreens will invest $1 billion in equity and convertible debt in Chicago-based VillageMD over the next three years, including a $250 million equity investment Wednesday. VillageMD will use 80% of the funds to pay for opening the clinics, called Village Medical at Walgreens, and integrate digitally with Walgreens.
  • Walgreens, which saw its stock rise slightly in early morning trading on the news, anticipates owning 30% of VillageMD once the investment is done. More details on the partnership will be released in the first quarter next year.

Dive Insight:

Retail clinics, which can generate additional script-writing and drive front-of-store sales for their owners, have seen renewed interest in recent years from giants like pharmacy rival CVS Health and retail behemoth Walmart. But Walgreens is the first national pharmacy chain to work toward building out a primary care infrastructure in stores across the U.S.

The move represents a massive investment in the healthcare delivery space for the Illinois-based company, which began trialing the full-service doctor’s offices in its stores late last year with five clinics in Houston, Texas. The pilot was successful, Walgreens said, driving high patient satisfaction scores.

Additionally, the integrated pharmacy model is correlated with increased medication adherence and better patient outcomes, according to internal VillageMD data — important factors in managing chronic conditions, which drive roughly 85% of all U.S. healthcare spend.

As such, Walgreens plans to open 500 to 700 stores over the next five years, staffed by more than 3,600 primary care physicians recruited by VillageMD, along with nurses, social workers and therapists working alongside Walgreens’ pharmacists in 30 U.S. markets.

The two companies are still finalizing what those initial markets are going to be, but the very first will be in Texas and Arizona, Walgreens’ Director of Pharmacy and Healthcare Services Communications Kelli Teno told Healthcare Dive. More than half of the clinics will be located in government-designated medically underserved areas such as Houston, which have a large share of low-income populations, migrant workers and Medicaid beneficiaries.

The stores will accept a broad array of insurance options, according to the release. Many plans VillageMD works with have a zero dollar to $10 co-pay for primary care services, Teno said.

The clinics use a sliding scale payment model for patients who don’t have insurance to try to make care more affordable for the broad range of primary care services provided, like preventative visits, acute infection or minor trauma care or chronic condition management.

Telehealth will be available around the clock for consumers via Walgreens’ healthcare marketplace app, called Find Care, or via VillageMD’s internal capabilities. VillageMD doctors can also provide at-home doctor visits for vulnerable populations, such as senior citizens or the immunocompromised.

Walgreens already has 14 in-store primary care clinics operated by different partners like Partners in Primary Care, Southwest Medical — part of Optum’s physician group — and VillageMD. Late last year, Walgreens announced it was closing 160 of its internally staffed walk-in clinics, though it still has more than 400 clinics nationwide, most staffed or run by local health systems or physician groups.

Its outsourcing model flies against CVS, which built out its health-focused store network, called HealthHUBs, through acquisitions and builds. HealthHUBs designate at least a fifth of floor space to health and wellness focused products. CVS plans to have a chain of 1,500 locations by the end of 2021 as part of its enterprise growth strategy, adding to its almost 10,000 retail locations and more than 1,100 walk-in medical clinics.

For its part, Walgreens’ clinics will be between 3,300 and 9,000 square feet and use existing space within Walgreens’ locations. To make room, clinic-linked stores will offer fewer unhealthy front-end products like snacks and sodas. Tobacco products will not be sold in the first 200 Village Medical at Walgreens locations.

“Many of the stores that we’re initially looking at to build these clinics naturally sell more pharmacy and health and wellness products,” Teno said. “It will really depend on the needs of that local community.”

VillageMD, through its subsidiary Village Medical, includes more than 2,800 doctors across nine markets. The seven-year-old company, which competes with other primary care management companies like UnitedHealth-owned Optum has raised $216 million in total funding across three rounds from investors like Oak HC/FT and Town Hall Ventures, a firm founded by Andy Slavitt, former CMS administrator under President Barack Obama.

 

 

 

A brewing physician-health system disconnect

https://mailchi.mp/7d224399ddcb/the-weekly-gist-july-3-2020?e=d1e747d2d8

Addressing The Consumer-First Disconnect - B&T

We’re hearing from medical groups around the country that in the past few weeks, office visit volumes have quickly approached pre-COVID levels. Some are even busier, running at 110 percent of their February volumes, or more. At the same time, practice has become more stressful, with doctors balancing virtual care with in-person visits, new safety procedures slowing operations, and staff and patients worried about COVID exposure. Everything feels different, and irrespective of the number of patients on today’s schedule, all of the changes make a physician feel like she’s working harder than before.

A chief clinical officer from a Midwestern health system relayed the discord this has created when discussing incentives: “Our doctors were fully on board with the need to reduce salaries back in April, so we all took a 15 percent pay cut through the summer. Now that they’re busy again, they want to be bumped back to 100 percent. But the system’s financial picture hasn’t changed.

The growing disconnect between how hard many staff are working and the economic reality of the system isn’t unique to doctors. But physicians, most of whom have their compensation tied to individual productivity, may feel it more acutely. While there are no easy solutions, it’s critical to discuss this disconnect openly, rather than letting resentment fester under the surface.

The pandemic has brought to light the brittleness of health system and physician practice finances. Prescient systems will use this moment to work with their doctors to rethink practice and align compensation with the financial success of the system, while meeting doctors’ needs for stability and security.

 

 

Primary care physicians could take $15 billion hit due to COVID-19 in 2020

https://www.healthcaredive.com/news/primary-care-physicians-could-take-15-billion-hit-due-to-covid-19-in-2020/580600/

Dive Brief:

  • The financial impact on primary care practices due to the COVID-19 pandemic has been profound and will likely continue in the months ahead, according to a new study published in Health Affairs.
  • Visits of all types to medical practices declined 58% in March and April compared to the baseline average, and in-person patient encounters declined by 69%, the study found. Although visits are expected to have rebounded by June, volumes are still below pre-COVID-19 levels.
  • The drop in fee-for-service revenue for the 2020 calendar year is nearly $68,000 per physician, contributing to an estimated revenue decline of 12.5%. That’s a steep enough loss to threaten the financial viability of many practices. Losses to primary care practices nationwide could top $15 billion over the year — a number that could grow if the federal government reverts increased telemedicine payment rates.

Dive Insight:

Medical practices across the United States have been hit hard by the COVID-19 outbreak.

The new study by researchers from Harvard Medical School and the American Board of Family Medicine attempts to put a price tag on that hit by running a microsimulation for projected 2020 revenues based on volume data for general practices, general internal medicine practices, general pediatric practices and family medicine practices.

As a result, they concluded that the average revenue loss per practice per physician will be $67,774, even taking into account revenue generated by telemedicine visits, which did not make up for the massive loss of patient volume during the spring.

That loss could be cut to as little as $28,265 per full-time physician if other staff is furloughed and salaries are cut to the 25th percentile of such cuts that took place during the peak of the stay-at-home orders.

Some practices are also projected to have steeper losses. Rural primary care practices are projected to lose $75,274 per physician. Other studies have suggested that pediatric practices have been hit harder than other primary care fields. Some organizations, such as the American Medical Group Association, say revenue won’t rebound fully even next year.

The study also conducted various alternate scenarios for the remainder of 2020, including a second wave of COVID-19 in the fall. The researchers estimated that would cut patient volumes by about half as much as what occurred during the spring. However, the financial hit would deepen even further, reaching $85,666 per physician.

Altogether, the study projects primary care practices will lose $15.1 billion in fee-for-service revenue this year, not even accounting for a second wave of the coronavirus. The study’s authors note that “this loss would balloon substantially if telemedicine payment rates revert back to pre-COVID-19 levels towards the end of the year.”

The study concluded that while primary care physicians as a whole have not been as hard hit as the hospital sector, the services they provide in managing chronic diseases such as diabetes and as the port of entry for many into the healthcare system makes them too valuable to suffer sustained levels of financial damage.

 

 

 

5 health systems cutting physician salaries

https://www.beckershospitalreview.com/compensation-issues/5-health-systems-cutting-physician-salaries.html?utm_medium=email

Pay Cuts, Furloughs, Redeployment for Doctors and Hospital Staff ...

To help offset revenue losses attributed to the COVID-19 pandemic, many hospitals have implemented pay cuts for staff, including physicians.

Below are five hospitals or health systems that have announced pay cuts for clinicians, reported by Becker’s Hospital Review in the last month.

1. ThedaCare physicians, advanced practice clinicians take pay cuts
ThedaCare physicians and advanced practice clinicians will take a 10 percent pay cut to help reduce the Appleton, Wis.-based health system’s financial hit due to the COVID-19 pandemic.

2. Providence to cut salaries of 1,200 providers
Renton, Wash.-based Providence plans to reduce the salaries of 1,200 high-paid medical providers in its Oregon division to help offset losses from the COVID-19 pandemic. Providence told Becker’s Hospital Review that the decision to cut salaries was made by local leadership and is limited to Oregon-based providers.

3. Cleveland’s University Hospitals to cut all physician, clinical leader pay
University Hospitals, based in Cleveland, said it will temporarily cut pay for all physicians and clinical leaders in the organization to help offset losses driven by the pandemic.

4. Sentara executives, physicians take pay cuts
Senior leaders, executives and physicians at Norfolk, Va.-based Sentara Healthcare are taking pay cuts to help address an anticipated $778 million shortfall against projected revenue due to COVID-19, the organization confirmed to Becker’s Hospital Review.

5. Loyola Medicine CEO, physicians take pay cuts amid pandemic
Leadership and faculty physicians at Maywood, Ill.-based Loyola Medicine will take three-month pay cuts in response to the COVID-19 pandemic, CEO Shawn Vincent said in an interview with Becker’s Hospital Review.

 

 

 

 

Moody’s: Patient volume recovered a bit in May, but providers face long road to recovery

https://www.fiercehealthcare.com/hospitals/moody-s-patient-volume-recovering-may-but-providers-face-long-road-to-recovery?mkt_tok=eyJpIjoiWmpjeVlXVTRZV0l5T1RndyIsInQiOiJLWWxjamNKK2lkZmNjcXV4dm0rdjZNS2lOanZtYTFoenViQjMzWnF0RGNlY1pkcjVGcFwvZFY4VjFaUUlZaFRBT1NRMGE5eWhGK1ZmR01ZSWVZWGMxOHRzTkptZVZXZmc5UnNvM3pVM2VIWDh6VllldFc3OGNZTTMxTDJrXC8wbzN1In0%3D&mrkid=959610

Moody's: Patient volume recovered a bit in May, but providers face ...

Patient volumes at hospitals, doctors’ and dentists’ offices recovered slightly in May but lagged well behind pre-pandemic levels, according to a new analysis from Moody’s Investors Service.

In all, the ratings agency estimated total surgeries at rated for-profit hospitals declined by 55% to 70% in April compared with the same period in 2019. States required hospitals to cancel or delay elective procedures, which are vital to hospitals’ bottom lines.

“Patients that had been under the care of physicians before the pandemic will return first in order to address known health needs,” officials from the ratings agency said in a statement. “Physicians and surgeons will be motivated to extend office or surgical hours in order to accommodate these patients.”

Those declines narrowed to 20% to 40% in May when compared to 2019.

Emergency room and urgent care volumes were still down 35% to 50% in May.

“This could reflect the prevalence of working-from-home arrangements and people generally staying home, which is leading to a decrease in automobile and other accidents outside the home,” the analysis said. “Weak ER volumes also suggest that many people remain apprehensive to enter a hospital, particularly for lower acuity care.”

The good news:  The analysis estimated it is unlikely there will be a return to the nationwide decline of volume experienced in late March and April because healthcare facilities are more prepared for COVID-19.

For instance, hospitals have enough personal protective equipment for staff and have expanded testing, the analysis said.

For-profit hospitals also have “unusually strong liquidity to help them weather the effects of the revenue loss associated with canceled or postponed procedures,” Moody’s added. “That is largely due to the CARES Act and other government financial relief programs that have caused hospital cash balances to swell.”

However, the bill for one of those sources of relief is coming due soon.

Hospitals and other providers will have to start repaying Medicare for advance payments starting this summer. The Centers for Medicare & Medicaid Services doled out more than $100 billion in advance payments to providers before suspending the program in late April.

Hospital group Federation of American Hospitals asked Congress to change the repayment terms for such advance payments, including giving providers at least a year to start repaying the loans.

Another risk for providers is the change in payer mix as people lose jobs and commercial coverage, shifting them onto Medicaid or the Affordable Care Act’s (ACA’s) insurance exchanges.

“This will lead to rising bad debt expense and a higher percentage of revenue generated from Medicaid or [ACA] insurance exchange products, which typically pay considerably lower rates than commercial insurance,” Moody’s said.