Amazon to acquire primary care company One Medical for $3.5B

https://mailchi.mp/efa24453feeb/the-weekly-gist-july-22-2022?e=d1e747d2d8

While Amazon has been amassing a range of healthcare assets in recent years, including an online pharmacy, virtual and in-home care capabilities, and even diagnostics, this marks the e-commerce giant’s first significant push into bricks-and-mortar healthcare delivery.

One Medical, which went public in 2020, operates 182 medical offices in 25 markets, and acquired Medicare-focused primary care provider Iora Health last year. It offers an access-forward, concierge-lite model to employer clients and individual consumers, and more recently has pursued a partnership strategy with anchor health systems in the markets where it operates.

The Gist: Amazon’s pricey purchase of One Medical, for which it will pay a 77 percent premium over market value, is sure to set the healthcare punditocracy afire—even more than its earlier, ill-fated arrangement with JPMorgan Chase and Berkshire Hathaway.

Clearly, Amazon is shifting from a build-and-tinker to a buy-and-scale approach to its Amazon Care business, which has been slow off the mark since the company first started selling its own employee clinic services to other employers. With One Medical, Amazon gets thousands more employer relationships, a much larger physical footprint, and a buzzy brand in primary care.

But the deal is less “disruptive” than it might first appear. There is still a missing piece—namely, a risk model that lets Amazon profit from managing patients in the primary care setting. One Medical’s model is expensive—it has yet to turn a profit—and despite the acquisition of Iora’s population health platform, it has doubled down on creating linkages with high-cost health systems rather than truly investing in care management. 

Primary care on its own is not an attractive growth business, even in a hybrid virtual/in-person model, even at Amazon’s scale. To truly disrupt healthcare, Amazon will need to wade into the risk business, either by partnering with a health plan or creating its own risk arrangements with employer clients.

That’s going to be hard, for all the same reasons that Haven was hard—entrenched payer relationships, slow-moving benefits managers, and a murky and conflicted broker channel. We’d love to be proven wrong, but this deal feels less like true innovation and more like a frothy story for slide decks and conference panels.

Amazon to acquire One Medical in $3.9B deal

Amazon plans to acquire virtual and in-person primary care company One Medical, the online retailer said July 21.  

In a cash deal valued at $3.9 billion, the aim is to combine One Medical’s technology and team with Amazon, it said in a news release. The goal of the acquisition, according to the two companies, is to offer more convenient and affordable healthcare in-person and virtually.

“The opportunity to transform healthcare and improve outcomes by combining One Medical’s human-centered and technology-powered model and exceptional team with Amazon’s customer obsession, history of invention and willingness to invest in the long-term is so exciting,” said Amir Dan Rubin, CEO of One Medical, in a company news release. “There is an immense opportunity to make the healthcare experience more accessible, affordable, and even enjoyable, for patients, providers and payers. We look forward to innovating and expanding access to quality healthcare services together.”

Amazon will acquire One Medical for $18 per share.

Completion of the transaction is subject to customary closing conditions, including approval by One Medical’s shareholders and regulatory approval. 

If the acquisition is approved, Mr. Rubin will remain CEO of One Medical. 

Primary care companies attract growing interest from insurers

https://mailchi.mp/9e0c56723d09/the-weekly-gist-july-8-2022?e=d1e747d2d8

Concierge primary care company One Medical is reportedly considering a sale after receiving interest from CVS Health, according to Bloomberg. While talks with CVS are no longer active, sources familiar with the situation say the company is weighing offers from other suitors. Also this week, there were rumors that Humana is interested in acquiring Florida-based Cano Health, which provides comprehensive care to over 200K seniors enrolled in Medicare Advantage plans across six states. 

The Gist: We’ve long thought that the ultimate buyer for these primary care startups would be large, vertically integrated insurers, as many have struggled to achieve profitability while maintaining strong enrollment growth.

Competition among insurers to acquire care delivery assets has intensified, as payers look to Medicare Advantage as their primary growth vehicle, and aim to amass primary care networks capable of managing their growing senior care businesses. 

CVS Health to launch a virtual-first primary care platform

https://mailchi.mp/31b9e4f5100d/the-weekly-gist-june-03-2022?e=d1e747d2d8

The digital platform is designed to provide consumers with a coordinated healthcare experience across care settings. It’s being sold to Aetna’s fully insured and self-insured plan sponsors, as well as CVS Caremark clients, and is due to go live next year. According to CVS Health, the new offering “enables consumers to choose care when and where they want,” whether that’s virtually, in a retail setting (including at a MinuteClinic or HealthHUB), or through at-home services.

Patients will have access to primary care, on-demand care, medication management, chronic condition management, and mental health services, as well as help in identifying other in-network care providers. 

The Gist: CVS Health has been working to integrate its retail clinics, care delivery assets, and health insurance business. This new virtual-first care platform is aimed at coordinating care and experience across the portfolio, and streamlining how individuals access the range of services available to them.

CVS is not alone in focusing here: UnitedHealth Group, Cigna, and others have announced virtual-first health plans with a similar value proposition. Any payer or provider who aims to own the consumer relationship must field a similar digital care platform that streamlines and coordinates service offerings, lest they find themselves in a market where many patients turn first to CVS and other disruptors for their care needs. 

CVS wants to employ doctors. Should health systems be worried?

https://mailchi.mp/96b1755ea466/the-weekly-gist-november-19-2021?e=d1e747d2d8

HealthHUB | CVS Health

We recently caught up with a health system chief clinical officer, who brought up some recent news about CVS. “I was really disappointed to hear that they’re going to start employing doctors,” he shared, referring to the company’s announcement earlier this month that it would begin to hire physicians to staff primary care practices in some stores. He said that as his system considered partnerships with payers and retailers, CVS stood out as less threatening compared to UnitedHealth Group and Humana, who both directly employ thousands of doctors: “Since they didn’t employ doctors, we saw CVS HealthHUBs as complementary access points, rather than directly competing for our patients.” 

As CVS has integrated with Aetna, the company is aiming to expand its use of retail care sites to manage cost of care for beneficiaries. CEO Karen Lynch recently described plans to build a more expansive “super-clinic” platform targeted toward seniors, that will offer expanded diagnostics, chronic disease management, mental health and wellness, and a smaller retail footprint. The company hopes that these community-based care sites will boost Aetna’s Medicare Advantage (MA) enrollment, and it sees primary care physicians as central to that strategy.

It’s not surprising that CVS has decided to get into the physician business, as its primary retail pharmacy competitors have already moved in that direction. Last month, Walgreens announced a $5.2B investment to take a majority stake in VillageMD, with an eye to opening of 1,000 “Village Medical at Walgreens” primary care practices over the next five years. And while Walmart’s rollout of its Walmart Health clinics has been slower than initially announced, its expanded clinics, led by primary care doctors and featuring an expanded service profile including mental health, vision and dental care, have been well received by consumers. In many ways employing doctors makes more sense for CVS, given that the company has looked to expand into more complex care management, including home dialysis, drug infusion and post-operative care. And unlike Walmart or Walgreens, CVS already bears risk for nearly 3M Aetna MA members—and can immediately capture the cost savings from care management and directing patients to lower-cost servicesin its stores.

But does this latest move make CVS a greater competitive threat to health systems and physician groups? In the war for talent, yes. Retailer and insurer expansion into primary care will surely amp up competition for primary care physicians, as it already has for nurse practitioners. Having its own primary care doctors may make CVS more effective in managing care costs, but the company’s ultimate strategy remains unchanged: use its retail primary care sites to keep MA beneficiaries out of the hospital and other high-cost care settings.

Partnerships with CVS and other retailers and insurers present an opportunity for health systems to increase access points and expand their risk portfolios. But it’s likely that these types of partnerships are time-limited. In a consumer-driven healthcare market, answering the question of “Whose patient is it?” will be increasingly difficult, as both parties look to build long-term loyalty with consumers. 

Walmart partners with Epic for its health technology platform

https://mailchi.mp/a2cd96a48c9b/the-weekly-gist-october-1-2021?e=d1e747d2d8

Walmart to Deploy Epic EHR Platform in 4 New Health Centers

This week, retail giant Walmart announced a partnership with Epic, the country’s most widely-used electronic health record (EHR) system, as the technology platform to support its health and wellness businesses. Epic will first be installed in four Walmart Health Center clinics slated to open in Florida early next year.

The company currently operates 20 health centers in Georgia, Arkansas and the Chicago area, offering an expanded range of services including comprehensive primary care, behavioral health, dental, hearing and vision care, as well as labs and other diagnostics. Skeptics have noted that Walmart has fallen behind in its ambitious plans to broadly roll out the expanded clinics, the first of which opened in an Atlanta exurb in 2019.

The partnership with Epic, which is used by more than 2,000 hospitals nationwide, signals that Walmart is serious about expanding its role as a healthcare provider—and sees opportunity in being able to share information and connect with health systems and doctors’ offices.

However, the vision of a “unified health record across care settings, geographies and multiple sources of health data” outlined by Walmart’s EVP of health and wellness may be more difficult to achieve than expected, if the experience of health systems, who have been stymied by upgrades and version mismatches in their quest for a unified EHR, is any indication.

Welcome, Walmart, to the wonderful world of EHRs—if you thought healthcare was complicated, just wait until you begin your first Epic install!

Primary Care Faces Existential Threat Over Healthcare Workforce Woes

40% of primary care clinicians worry that the field won’t exist in five years as many in the healthcare workforce experience burnout and plan to leave the field.

 Clinician burnout, lay-offs, and other healthcare workforce challenges coming out of the COVID-19 pandemic are creating issues for primary care, according to a new survey.

About 40 percent of over 700 primary care clinicians recently surveyed by the Larry A. Green Center, Primary Care Collaborative (PCC), and 3rd Conversation worry that primary care won’t exist in five years’ time. Meanwhile, about a fifth say they expect to leave primary care within the next three years.

“Primary care is the front door to the healthcare system for most Americans, and the door is coming off its hinges,” Christine Bechtel, co-founder of 3rd Conversation, a community of patients and clinicians, said in a press release. “The fact that 40 [percent] of clinicians are worried about the future of primary care is of deep concern, and it’s time for new public policies that value primary care for the common good that it is.”

The threat to primary care comes as practices ramp up vaccination efforts. The survey found that more than half of respondents (52 percent) report receiving enough or more than enough vaccines for their patients, and 31 percent are partnering with local organizations or government to prioritize people for vaccination.

Stress levels at primary care practices are also decreasing compared to the height of the pandemic, according to survey results. However, over one in three, or 36 percent, of respondents say they are experiencing hardships, such as feeling constantly lethargic, having trouble finding joy in anything, and/or struggling to maintain clear thinking.

Clinician fatigue could spell trouble for the primary care workforce and the field itself, researchers indicated.

“The administration has now recognized the key role primary care is able to play in reaching vaccination goals,” Rebecca Etz, PhD, co-director of The Larry A. Green Center, said in the release. “While the pressure is now on primary care to convert the most vaccine-hesitant, little has been done to support primary care to date. Policymakers need to bear witness to the quiet heroism of primary care – a workforce that suffered five times more COVID-related deaths than any other medical discipline.”

Many primary care clinicians are hoping the federal government steps in to change policy and bolster primary care and the healthcare workforce. The government can start with how primary care is paid, respondents agreed.

About 46 percent of clinicians responding to the survey said policy should change how primary care is financed so that the field is not in direct competition with specialty care. The same percentage of clinicians also said policy to change how primary care is paid by shifting reimbursement from fee-for-service.

Over half of clinicians (56 percent) also agreed that policy should protect primary care as a common good and make it available to all regardless of ability to pay.

Alternative payment models helped providers during the COVID-19 pandemic, research from healthcare improvement company Premier, Inc. showed. Their study found that organizations in alternative payment models were more likely to leverage care management, remote patient monitoring, and population health data during the pandemic compared to organizations that relied on fee-for-service revenue.

“Many of the practices, especially in primary care, have been extremely cash strapped and have been struggling for many years,” Sanjay Doddamani, MD, told RevCycleIntelligence last year.

This has been a big moment for us to act in accelerating our performance-based incentive payments to our primary care doctors. We moved up our schedule of payments so that they could at least have some continued flow of funds,” added the chief physician executive and COO at Southwestern Health Resources, a clinically integrated network based in Texas.

Value-based contracting could be the key to primary care’s existence in the future, that is, if practices get on board with alternative payment models. A majority of respondents to the latest Value-Based Care Assessment from Insights said over 75 percent of their organization’s revenue is from fee-for-service contracts. This was especially true for respondents working in physician practices, of which 64 percent relied almost entirely on fee-for-service payments.

Could physician “income inequality” hold back the medical group?

https://mailchi.mp/f42a034b349e/the-weekly-gist-may-28-2021?e=d1e747d2d8

Physicians' income inequality | British Columbia Medical Journal

We spoke this week with a medical group president looking to deploy a more consistent consumer experience across his health system’s physician practices, beginning with primary care.

The discussion quickly turned to two large primary care practices, acquired several years ago, whose doctors are extremely resistant to change. “These guys have built a fee-for-service model that has been extremely lucrative,” the executive shared. “It was a battle getting them on centralized scheduling a few years ago, and now they’re pushing back against telemedicine.”

With ancillary income included, many of these “entrepreneurial” primary care doctors are making over $700K annually, while the rest of the system’s full-time primary care physicians average around $250K.

The situation raises several questions. Standardized access and consistent experience are foundational to consumer strategy; in the words of one CEO, if our system’s name is on the door, any of our care sites should feel like they are part of the same system, from the patient’s perspective.

But how can we get physicians on board with “systemization” if they think it puts their income at risk? Should the system guarantee income to “keep them whole”, and for how long? And is it possible to create consensus across a group of doctors with a three-fold disparity in incomeand widely divergent interests? While there are no easy answers, putting patients and consumers first must be the guiding goal of the system.

Asking the wrong questions about telemedicine’s impact

https://mailchi.mp/da8db2c9bc41/the-weekly-gist-april-23-2021?e=d1e747d2d8

Telemedicine – Creating Positive Impact in Healthcare – iPatientCare

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 careMore 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.

Sam’s Club launches $1 telehealth visits for members: 7 details

https://www.beckershospitalreview.com/telehealth/sam-s-club-launches-1-telehealth-visits-for-members-7-details.html?utm_medium=email

On-Demand Text-Based Primary Care App | 98point6

Sam’s Club partnered with primary care telehealth provider 98point6 to offer members virtual visits.

Seven details:

1. Sam’s Club now offers members access to telehealth visits through a text-based app run by 98point6.

2. Members can purchase a $20 quarterly subscription for the first three months; the regular sign-up fee is $30 per person. After the first three months, members pay $33.50 every three months.

3. The subscription gives members unlimited telehealth visits for $1 per visit. The service has board-certified physicians available 24 hours per day, seven days a week.

4. Members can also subscribe for pediatric care.

5. Physicians can diagnose and treat 400 conditions including cold and flu-like symptoms as well as allergies. They can also monitor chronic conditions including diabetes, depression and anxiety.

6. Members can use the app to obtain prescriptions and lab orders as well.

7. Sam’s Club has around 600 stores in the U.S. and Puerto Rico and millions of members.

Offering access to telemedicine was on our roadmap in the pre-COVID world, but the current environment expedited the need for this service to be easily accessible, readily available and most of all, affordable,” said John McDowell, vice president of pharmacy operations and divisional merchandise at Sam’s Club. “Through providing access to the 98point6 app in a pilot, we quickly realized that our members were eager to have mobile telehealth options and we wanted to provide this healthcare solution to all of our members as a standalone option.”