The Disappearing Doctor: How Mega-Mergers Are Changing the Business of Medical Care

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Is the doctor in?

In this new medical age of urgent care centers and retail clinics, that’s not a simple question. Nor does it have a simple answer, as primary care doctors become increasingly scarce.

“You call the doctor’s office to book an appointment,” said Matt Feit, a 45-year-old screenwriter in Los Angeles who visited an urgent care center eight times last year. “They’re only open Monday through Friday from these hours to those hours, and, generally, they’re not the hours I’m free or I have to take time off from my job.

“I can go just about anytime to urgent care,” he continued, “and my co-pay is exactly the same as if I went to my primary doctor.”

That’s one reason big players like CVS Health, the drugstore chain, and most recently Walmart, the giant retailer, are eyeing deals with Aetna and Humana, respectively, to use their stores to deliver medical care.

People are flocking to retail clinics and urgent care centers in strip malls or shopping centers, where simple health needs can usually be tended to by health professionals like nurse practitioners or physician assistants much more cheaply than in a doctor’s office. Some 12,000 are already scattered across the country, according to Merchant Medicine, a consulting firm.

On the other side, office visits to primary care doctors declined 18 percent from 2012 to 2016, even as visits to specialists increased, insurance data analyzed by the Health Care Cost Institute shows.

There’s little doubt that the front line of medicine — the traditional family or primary care doctor — has been under siege for years. Long hours and low pay have transformed pediatric or family practices into unattractive options for many aspiring physicians.

And the relationship between patients and doctors has radically changed. Apart from true emergency situations, patients’ expectations now reflect the larger 24/7 insta-culture of wanting everything now. When Dr. Carl Olden began watching patients turn to urgent care centers opening around him in Yakima, Wash., he and his partners decided to fight back.

They set up similar clinics three years ago, including one right across the street from their main office in a shopping center.

The practice not only was able to retain its patients, but then could access electronic health records for those off-site visits, avoiding a bad drug interaction or other problems, said Dr. Olden, who has been a doctor for 34 years.

“And we’ve had some folks come into the clinics who don’t have their own primary care physicians,” he said. “So we’ve been able to move them into our practice.”

By opening clinics to compete with urgent care centers, Dr. Carl Olden’s practice in Yakima, Wash., was able to retain its patients and move some walk-ins into the fold.
Merger Maneuvers

The new deals involving major corporations loom over doctors’ livelihoods, intensifying pressure on small practices and pushing them closer to extinction.

The latest involves Walmart and Humana, a large insurer with a sizable business offering private Medicare plans. While their talks are in the early stages, one potential partnership being discussed would center on using the retailer’s stores and expanding its existing 19 clinics for one-stop medical care. Walmart stores already offer pharmacy services and attract older people.

In addition, the proposed $69 billion merger between CVS Health, which operates 1,100 MinuteClinics, and Aetna, the giant insurer, would expand the customer bases of both. The deal is viewed as a direct response to moves by a rival insurer, UnitedHealth Group, which employs more than 30,000 physicians and operates one of the country’s largest urgent-care groups, MedExpress, as well as a big chain of free-standing surgery centers.

While both CVS and UnitedHealth have large pharmacy benefits businesses that would reap considerable rewards from the stream of prescriptions generated by the doctors at these facilities, the companies are also intent on managing what type of care patients get and where they go for it. And the wealth of data mined from consolidation would provide the companies with a map for steering people one way or another.

On top of these corporate partnerships, Amazon, JP Morgan and Berkshire Hathaway decided to join forces to develop some sort of health care strategy for their employees, expressing frustration with the current state of medical care. Their announcement, and Amazon’s recent forays into these fields, are rattling everyone from major hospital networks to pharmacists.

Doctors, too, are watching the evolution warily.

“With all of these deals, there is so much we don’t know,” said Dr. Michael Munger, president of the American Academy of Family Physicians. “Are Aetna patients going to be mandated to go to a CVS MinuteClinic?”

Dr. Susan Kressly, a pediatrician in Warrington, Pa., has watched patients leave. Parents who once brought their children to her to treat an ear infection or check for strep, services whose profits helped offset some of the treatments she offered, are now visiting the retail clinics or urgent care centers.

What is worse, some patients haven’t been getting the right care. “Some of the patients with coughs were being treated with codeine-based medicines, which is not appropriate at all for this age group,” Dr. Kressly said.

Even doctors unfazed by patients going elsewhere at night or on weekends are nervous about the entry of the corporate behemoths.

“I can’t advertise on NBC,” said Dr. Shawn Purifoy, who practices family medicine in Malvern, Ark. “CVS can.”

Nurse practitioners allow Dr. Purifoy to offer more same-day appointments; he and two other practices in town take turns covering emergency phone calls at night.

And doctors keep facing new waves of competition. In California, Apple recently decided to open up its own clinics to treat employees. Other companies are offering their workers the option of seeking medical care via their cellphones. Investors are also pouring money into businesses aiming to create new ways of providing primary care by relying more heavily on technology.

Dr. Olden’s office door. In the age of urgent care centers and consolidations, the traditional doctor is being pushed closer to extinction.CreditDavid Ryder for The New York Times

Dr. Mark J. Werner, a consultant for the Chartis Group, which advises medical practices, emphasized that convenience of care didn’t equal quality or, for that matter, less expensive care.

“None of the research has shown any of these approaches to delivering care has meaningfully addressed cost,” Dr. Werner said.

Critics of retail clinics argue that patients are given short shrift by health professionals unfamiliar with their history, and may be given unnecessary prescriptions. But researchers say neither has been proved in studies.

“The quality of care that you see at a retail clinic is equal or superior to what we see in a doctor’s office or emergency department,” said Dr. Ateev Mehrotra, an associate professor of health care policy and medicine at Harvard Medical School, who has researched the retail clinics. “And while there is a worry that they will prescribe antibiotics to everybody, we see equal rates occurring between the clinics and doctor’s offices.”

Still, while the retail clinics over all charge less, particularly compared with emergency rooms, they may increase overall health care spending. Consumers who not long ago would have taken a cough drop or gargled with saltwater to soothe a sore throat now pop into their nearby retail clinic for a strep test.

Frustration with the nation’s health care system has fueled a lot of the recent partnerships. Giant companies are already signaling a desire to tackle complex care for people with a chronic health condition like diabetes or asthma.

“We’re evolving the retail clinic concept,” said Dr. Troyen A. Brennan, the chief medical officer for CVS. The company hopes its proposed merger with Aetna will allow it to transform its current clinics, where a nurse practitioner might offer a flu shot, into a place where patients can have their conditions monitored. “It requires new and different work by the nurse practitioners,” he said.

Dr. Brennan said CVS was not looking to replace patients’ primary care doctors. “We’re not trying to buy up an entire layer of primary care,” he said.

But people will have the option of using the retail clinic to make sure their hypertension or diabetes is well controlled, with tests and counseling provided as well as medications. The goal is to reduce the cost of care for what would otherwise be very expensive conditions, Dr. Brennan said.

If the company’s merger with Aetna goes through, CVS will initially expand in locations where Aetna has a significant number of customers who could readily go to CVS, Dr. Brennan said.

UnitedHealth has also been aggressively making inroads, adding a large medical practice in December and roughly doubling the number of areas where its OptumCare doctors will be to 75 markets in the United States. It is also experimenting with putting its MedExpress urgent care clinics into Walgreens stores.

Big hospital groups are also eroding primary care practices: They employed 43 percent of the nation’s primary care doctors in 2016, up from 23 percent in 2010. They are also aggressively opening up their own urgent care centers, in part to try to ensure a steady flow of patients to their facilities.

One Medical has centers in eight cities with 400 providers, making it one of the nation’s largest independent groups. 

HCA Healthcare, the for-profit hospital chain, doubled its number of urgent care centers last year to about 100, according to Merchant Medicine. GoHealth Urgent Care has teamed up with major health systems like Northwell Health in New York and Dignity Health in San Francisco, to open up about 80 centers.

“There is huge consolidation in the market right now,” said Dr. Jeffrey Le Benger, the chief executive of Summit Medical Group, a large independent physician group in New Jersey. “Everyone is fighting for the primary care patient.” He, too, has opened up urgent care centers, which he describes as a “loss leader,” unprofitable but critical to managing patients.

Eva Palmer, 22, of Washington, D.C., sought out One Medical, a venture-backed practice that is one of the nation’s largest independent groups, when she couldn’t get in to see a primary care doctor, even when she became ill. After paying the annual fee of about $200, she was able to make an appointment to get treatment for strep throat and pneumonia.

“In 15 minutes, I was able to get the prescriptions I needed — it was awesome,” Ms. Palmer said.

Patients also have the option of getting a virtual consultation at any time.

By using sophisticated computer systems, One Medical, which employs 400 doctors and health staff members in eight major cities, allows its physicians to spend a half-hour with every patient.

Dr. Navya Mysore joined One Medical after working for a large New York health system, where “there was a lot of bureaucracy,” she said. She now has more freedom to practice medicine the way she wants and focus more on preventive health, she said.

By being so readily available, One Medical can reduce visits to an emergency room or an urgent care center, said Dr. Jeff Dobro, the company’s chief medical officer.

As primary care doctors become an “increasingly endangered species, it is very hard to practice like this,” he said.

But more traditional doctors like Dr. Purifoy stress the importance of continuity of care. “It takes a long time to gain the trust of the patient,” he said. He is working with Aledade, another company focused on reinventing primary care, to make his practice more competitive.

One longtime patient, Billy Ray Smith, 70, learned that he needed cardiac bypass surgery even though he had no symptoms. He credits Dr. Purifoy with urging him to get a stress test.

“If he hadn’t insisted,” Mr. Smith said, “it would have been all over for me.” Dr. Purifoy’s nurse routinely checks on him, and if he needs an appointment, he can usually see the doctor that day or the next.

“I trust him 100 percent on what he says and what he does,” Mr. Smith said.

Those relationships take time and follow-up. “It’s not something I can do in a minute,” Dr. Purifoy said. “You’re never going to get that at a MedExpress.”

 

 

Bowing to physician pressure, CMS delays visit code changes

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Yesterday the Center for Medicare & Medicaid Services (CMS) finalized the 2019 Physician Fee Schedule (PFS), announcing they will delay implementation of changes to physician evaluation and management (E&M) codes until 2021. CMS had proposed to collapse five E&M codes into two, and to streamline physician documentation requirements.

The delay is a win for the thousands of physicians who submitted comments opposing the changes, complaining that the proposal would penalize doctors who see more complex patients. Doctors also expressed concern that the rates assigned to the proposed codes were too low, discouraging doctors from seeing Medicare patients and creating access challenges.

Along with the two-year delay, CMS also raised base rates, and created an additional code for complex visits. These changes are a win for doctors—and provide time for continued lobbying to permanently forestall implementation.

The 2019 rule also includes several other noteworthy changes that were largely lost in hubbub surrounding E&M visit coding, most of which will be well-received by doctors.

At the top of our list: CMS significantly expanded telemedicine coverage, and will now reimburse for telemedicine and telephone visits for brief check-ins, evaluation of patient-submitted images or remote monitoring data, as well as more comprehensive and preventive care visits. This is a substantial step toward increasing access for the two-thirds of Medicare beneficiaries who are ineligible for telemedicine coverage today. 

We will be continuing to make our way through the details of the rule, and sharing our thoughts on its impact for doctors and health systems. In the longer term, it is worth watching whether continued pressure from doctors postpones further action, and whether the administration will enact changes that could upset the physician base—significantly, the 2021 PFS rule will likely drop in the weeks just before the 2020 Presidential election.

Walmart looks to add health clinics in its parking lots

https://www.beckershospitalreview.com/finance/walmart-looks-to-add-health-clinics-in-its-parking-lots.html

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Walmart stores in several states are transforming extra parking lot space into “town centers,” some of which could include health clinics, according to Business Insider.

“The Walmart Town Center concept is an exciting approach to how we serve our customers by moving beyond the store’s four walls and reimagining how we use our unique assets — our existing stores and the surrounding land — to transform how customers experience Walmart,” a Walmart spokesperson told Business Insider.

Walmart provides details about a few of the new hubs on a website established for the projects. The Atlanta Business Chronicle reports that Walmart is evaluating whether to add health clinics in some of the new “town centers.”

“We envision a more robust and dynamic shopping experience that combines entertainment venues, curated local food vendors, health and fitness services as well as recreational opportunities in a way that connects and engages with the community,” a Walmart spokesperson told Business Insider.

Walmart has established its position as a one-stop shop, but the retailer may be redefining what that means by surrounding its stores with a variety of complementary tenants, according to the report.

 

Welcome to “The Dose,” a New Health Policy Podcast

https://www.commonwealthfund.org/publications/podcast/2018/oct/doctor-who-prescribed-cooking-classes

 

Today we launch the Commonwealth Fund’s brand-new health policy podcast, The Dose.Every other Friday, host Shanoor Seervai will sit down with a leading expert to break down the latest research, hear personal stories about interactions with health care and the health system, and learn about innovations that could make life easier for patients, families, and caregivers.

In episode 1 of The Dose, Seervai talks to Martin Marshall, a primary care physician in East London. Through the stories of his patients and his own experience, Marshall explores what’s different about delivering primary care in the U.K. versus the United States. You’ll hear how Marshall helps one of his patients manage his diabetes with cooking classes, and how he leans on his intimate knowledge of a client’s family history to arrive at a diagnosis.

Click here to listen, and then subscribe wherever you get your favorite podcasts.

WHY HEALTH SYSTEMS SHOULD WORRY ABOUT WALGREENS AND CVS

https://www.healthleadersmedia.com/strategy/why-health-systems-should-worry-about-walgreens-and-cvs

 

There’s a building threat from the nation’s two retail drugstore giants to hospitals and health systems as providers move toward value-based care and lower-cost outpatient services.

Even with Amazon threatening to compete with retail drugstore chains CVS Health and Walgreens with its own online pharmacy, these retailers aren’t giving up on brick-and-mortar as a way to attract more patients into their stores.

And that’s bad news for the nation’s hospitals and health systems.

There’s a building threat from the nation’s two retail drugstore giants to hospitals and health systems as medical care providers move away from fee-for-service medicine to value-based care and lower-cost outpatient services.

Walgreens and CVS are looking to healthcare as a way to keep customers coming into their stores, particularly in an era where consumers are fleeing brick-and-mortar to shop online via Amazon.

As front-end retail sales have fallen in recent years, CVS and Walgreens are moving more rapidly into healthcare from simply their historic role of filling prescriptions beyond the pharmacy counter and treating routine maladies with nurse practitioners in their retail centers to more services.

They are partnering more closely with health insurance companies that will work harder to funnel more patients to outpatient healthcare services inside the stores that will make them direct competitors of U.S. hospitals and health systems.

CVS has more than 1,100 retail MinuteClinics compared to 800 five years ago and 400 a decade ago.

CVS was opening 100 clinics per year 10 years ago, and that has slowed because they are now focusing on expanding healthcare services in the clinics as well as their stores generally. The same goes for Walgreens.

Walgreens has increased the services in its retail clinics, advertising the ability of nurse practitioners to conduct routine exams and student physicals and has been aggressively lobbying states across the country to change scope-of-practice laws to allow pharmacists to administer an array of vaccines.

“Why not use those locations as a strategy for healthcare?” Walgreens Chief Medical Officer Dr. Patrick Carroll says of the drugstore chain’s nearly 10,000 locations across the country. “We have the space. We should use it.”

To be sure, Walgreens is looking to provide more physician services like x-rays and procedures by partnering with UnitedHealth Group’s Optum to connect its MedExpress brand urgent care centers to an adjacent Walgreens. Like most retailers, Walgreens’ sales of general merchandise in the front end of the store is falling just as pharmacy sales, personal healthcare, and wellness revenues rise.

In the first such ventures, the Walgreens store and the MedExpress center each have their own entrance with a door inside connecting the urgent care center with the drugstore. It’s designed for a medical provider to guide a patient to either facility depending on their prescription or other needs.

For now, there are 15 locations in six states that have MedExpress urgent care centers connected to Walgreens stores as part of the pilot. The markets include Las Vegas; Dallas; Minneapolis; Omaha, Nebraska; two cities in West Virginia; and Martinsville, Virginia.

“We’re working closely with a number of partners in the healthcare community to bring services closer to our customers,” Carroll said. “With our stores serving as more of a neighborhood health destination, we can best meet the changing needs of our customers, while also complementing our expanded pharmacy services.”

Meanwhile, CVS plans to offer more healthcare services inside its stores after its merger with Aetna closes. CVS executives say they aren’t ruling out developing urgent care centers as well.

CVS’ network of nearly 10,000 pharmacies and over 1,000 retail clinics, and Optum’s growing network of ambulatory facilities like the MedExpress urgent care centers are emerging as a model health insurers want to do business with as fee-for-service medicine gives way to value-based care that keeps patients out of the hospital.

And in CVS’ case, the pharmacy will soon own Aetna, a health plan with more than 20 million members. That combination, which is currently wending its way through the regulatory process, is expected to lead to more narrow network health plans that encourage patients to use providers in the Aetna-CVS network over other health systems’ facilities.

Health systems should be concerned, healthcare analysts say.

“CVS and Aetna, in their own words, are promising to reinvent the front door of American healthcare,” says Kenneth Kaufman, managing director and chair of the consulting firm Kaufman Hall. “That promise should be of serious concern for legacy hospital providers since those providers have occupied that front door for the past 75 years.”

CVS Health President and CEO Larry Merlo is beginning to offer some details to their strategies.

While cautioning that it’s “very early” in the development of new programs the combined company will develop, Merlo has said the larger company plans to first focus on three primary patient populations: those patients with any of five chronic diseases: diabetes, hypertension, hyperlipidemia, asthma, and depression.

CVS and Aetna will also focus on “patients undergoing transitions in care,” and a third “broader focus on managing high-risk patients,” Merlo told analysts on the company’s second quarter earnings call in May.

“By extending our new health care model more broadly in the marketplace, patients will benefit from earlier interventions and better connected care leading to improved health outcomes,” Merlo said on September 20 at a CVS Health town hall meeting in Los Angeles.

“Think again about that senior leaving the hospital, knowing that the care plan prescribed by her doctor is being seamlessly coordinated by CVS and her caregiver. By fully integrating Aetna’s medical information and analytics with CVS Health’s pharmacy data and our 10,000 community locations, we can enable more effective treatment of the whole patient,” he says.

 

Humana completes sale of long-term care insurance policy business KMG, at a loss of $790 million

https://www.healthcarefinancenews.com/news/humana-completes-sale-long-term-care-insurance-policy-business-kmg-loss-790-million?mkt_tok=eyJpIjoiWTJNeE5UZzRNalU1WWprMSIsInQiOiJRNjRWYXFQcSt3aHpGMlB4RVwvbXA3ckt4MVlxZ04zeHl5VWtKMzB4V2dpa21LTTY3U2pMdWlnSHh3MXRMWlwvWkdQNEdldGVjRWpWUG5Md0xmbTlQVE0zVTdFUStxY0lQcmNpUkRRRHpPelZSOUNBTW90WDNNbGd1ekZsZGZHVU04In0%3D

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Humana has completed the sale of its wholly-owned subsidiary KMG America Corporation, in a transaction first announced in November 2017.

Humana has owned KMG since 2007.

KMG subsidiary, Kanawha Insurance Company, offers commercial, long-term care insurance policies and currently serves an estimated 29,300 policyholders.

Humana sold its shares in KMG for a reported $2.4 billion to HC2 Holdings, which includes Continental General Insurance Company, based in Texas.

In its second quarter earnings statement, Humana reported a $790 million loss on the sale of KMG, which is expected to close during the third quarter.

Humana said it would no longer have plans in the commercial long-term care insurance business.

Humana instead is closing on two transactions to acquire an at-home provider in Kindred at Home and Curo Health Services, which specializes in hospice care, according to the Q2 report.

Curo provides hospice care in 22 states. Humana and a consortium of TPG Capital and Welsh, Carson, Anderson & Stowe, purchased Curo for $1.4 billion, Humana announced in April.

Humana will have a 40 percent interest.

Also, this past June, Humana partnered with Walgreens Boots Alliance in a pilot to operate senior-focused primary care clinics inside of two drug stores in the Kansas City, Missouri area.

Revenue remained strong for the insurer, which specializes in Medicare Advantage plans. Its MA business in Q2 realized both growth and lower utilization.

While revenue remained strong, Humana’s net income dropped to a reported $684 million this year compared to $1.8 billion last year.

The insurer benefitted from a lower tax rate year-over-year as a result of the tax reform law and negatively felt the return of health insurance tax in 2018.

“Our strong 2018 financial results are testimony to the underlying improvement in our operating metrics, like Net Promoter Score, digital self-service utilization and call transfer reduction, and to the growing effectiveness of our national and local clinical programs,” said Bruce D. Broussard, Humana’s CEO and president. “Also, we took another large step this quarter in helping our members, especially those living with chronic conditions, by beginning the integration of important clinical services through our investments in Kindred at Home and Curo, and through our partnership with Walgreens.”

 

Ascension’s latest ad campaign touts online scheduling

https://www.beckershospitalreview.com/healthcare-information-technology/ascension-s-latest-ad-campaign-touts-online-scheduling.html

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St. Louis-based Ascension rolled out a national ad campaign June 4 across television, radio, billboards and direct mail to promote its online scheduling capabilities, which are available in all 22 Ascension markets.

The campaign is aimed at raising brand awareness and communicating patient scheduling options, even for last-minute or same-day appointments.

“Most of us use technology daily to simplify our lives, and the process of getting the care we need, when and where we need it, should be no different. Online scheduling allows consumers to view available appointments at their preferred location and select a time that fits their busy schedules,” Joseph Cacchione, MD, president of Ascension Medical Group, said in a press release. “As we work to improve access to compassionate, personalized care, we must also ensure we are letting consumers know about the new and innovative ways in which we are making the healthcare delivery process easier for them.”

Ascension currently offers online scheduling across 1,200 providers in primary care, urgent care and emergency department care. It has plans to add online scheduling capabilities for specialists and diagnostic and imaging services in the future.