Health reform may have signaled the shift from hospital-based “sick” care to primary care and “wellness” but the ACA failed to provide a detailed roadmap. All we know for sure is that primary care (PC) will be hugely important. Increasingly it also seems that it will look quite different. “Old” PC is being battered; Medicaid primary care physicians (PCP) saw their the two-year ACA bonuses expire in December, the OIG just reported that way too many Medicaid-listed doctors are not taking new patients, and the coverage-doesn’t-equal-access mantra is born out by persistent reports of PCP shortages. If PC as we have known it is not going to step up to the plate, what is the “new” model and who will end up owning it?
The ACA gave hospitals both good (fewer uninsureds in ERs, Medicaid expansion) and bad news (fewer profitably occupied beds because of HAC and readmission penalties). Not surprisingly there was a sharp increase in hospitals buying PCP practices. In part this was just hospitals following the money as usual, looking to roll these practices into their new ACOs. But, longer term strategies also persisted, such as strengthening networks, intercepting patients before they turn up in ERs, and creating local or regional dominant positions. Smaller PCP practices have also been more willing to sell as they faced financial regulatory disincentives (such as meaningful use penalties) if they continued as independents.
However, we are seeing hospitals doing more than increasing the number of hospital-based clinics. Many are also opening their own free-standing urgent care clinics, the “new” PC. There are several models, including full ownership as with the Intermountain Healthcare group or, perhaps for those late to the game, strategic partnerships with urgent care specialists like Premier Health or MedSpring.
Urgent clinics also are proliferating in traditional retail stores such as Wal-Mart, Target, CVS and Walgreens. Although originally designed to capture additional revenue for the stores’ pharmacies or, in the case of Walmart, to provide care for employees, these clinics increasingly are owned by their retail hosts and are viewed as important and growing sources of revenue. Of this cohort CVS may be worthy of particular attention; reportedly they already have 800 walk-in MinuteClinics with plans to double that number by 2017.
Joining hospitals and traditional retailers in this booming urgent care space are health insurers. For example, in 2010 Humana purchased Concentra, the largest urgent care provider, while CareFirst BlueCross BlueShield is a major regional player. There has also been speculation that WellPoint will enter the space.
It is a fair assumption that “new” PC will be quantitively and qualitatively different from the old, and much maligned, “Doc in a Box” model. But, who will win the urgent care PC war? A good bet would be on the players with the highest level of cost-controlling vertical integration, suggesting the health insurers may be early favorites, with larger networks not far behind. However, as always seems to be the case with healthcare, it is likely that IT prowess, deal making nimbleness, and local variables will throw up many different winners (and losers). Remember, also, that we’ve seen major PCP acquisition activity before, and the last cycle ended badly.
Beyond any scorecard, “new” PC suggests an array of policy and legal issues. Will urgent care centers be in or out of traditional MCO networks? How many will accept Medicaid or treat the uninsured (and should they be required to)? Might “urgent care” nomenclature confuse patients seeking emergency care (on which see this new Illinois statute)? Will conventional healthcare providers harness state laws (everything from the corporate practice to telemedicine licensure, and physician-extender scope of practice) to slow down some or all of these disruptive forces? Will a promise of increased access be accompanied by reduced cost (some studies suggest urgent care clinics cost 20 to 40 percent less per visit)? Or, true to the familiar integration-consolidation narrative, will costs edge up? And, on that note, will current healthcare antitrust litigation alter the landscape of practice acquisitions? The next year or two should answer at least some of these questions.
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