New Marketplace

New Marketplace Survey: Convenient Care — Opportunity, Threat, or Both?

Insights Report · July 11, 2019

Analysis of the NEJM Catalyst Insights Council Survey on Convenient Care. Qualified executives, clinical leaders, and clinicians may join the Insights Council and share their perspectives on health care delivery transformation.

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Advisor Analysis

By Ateev Mehrotra and Edward Prewitt

The health care landscape has seen a proliferation of convenient care options in recent years, such as retail clinics, urgent care, and direct-to-consumer (DTC) telemedicine. Health care systems across the country have responded in different ways — some expanding their own offerings to include a convenient care presence, others taking a wait-and-see approach. A survey of the NEJM Catalyst Insights Council shows conflicting views about both the value of convenient care and what respondents’ organizations should do.

Convenient Care Has Been Good Overall for the Health Care Industry

From the New Marketplace Insights Report: Convenient Care — Opportunity, Threat, or Both? Click To Enlarge.

Ateev Mehrotra, MD, MPH, is an Associate Professor of Health Care Policy and Medicine at Harvard Medical School and a hospitalist at Beth Israel Deaconess Medical Center. Much of his research has focused on innovations in delivery such as retail clinics and e-visits and their impact on quality, costs, and access to health care.

“The results from the NEJM Catalyst survey show just how mixed health care leaders are on how to respond to convenient care models,” says Mehrotra. “Many believe they are a threat and that convenient care provides poor quality and increases health care spending. Yet, at the same time, others view them as an opportunity and are having their systems incorporate these new options.”

A March 2019 survey of Insights Council members — who are clinical leaders, executives, and clinicians at U.S.-based organizations directly involved in care delivery — shows significant involvement in urgent care clinics, much less in retail clinics, and growth interest in DTC telemedicine. While a quarter of survey respondents (26%) say their organizations own a retail clinic or partner with others, the rate of ownership or partnership in urgent care clinics is double at 52%. Possibly urgent care is more closely aligned with provider care models and margins.

The rate of ownership or partnership for DTC telemedicine (34%) falls between that of urgent care and retail clinics. But the upside for DTC telemedicine is largest of the three options studied in the survey; 15% of respondents plan to get into DTC telemedicine during the next three years, compared with 6% for both retail and urgent care clinics.

The biggest benefit for hospitals and health systems in owning or partnering in convenient care facilities is to meet consumer demand, according to 63% of respondents. The number-two choice (43%) is to respond to the competitive threat and prevent “leakage” of patients to other organizations.

Edward Prewitt, MPP, Editorial Director for NEJM Catalyst, says, “Traditional health care providers are trying to figure out how to meet patients where they are by providing retail and urgent care and technology-enabled options, amid new competitors and concerns about the impact to their own bottom lines. Many Insights Council members show deep concern about new entrants such as CVS Health–Aetna.”

In verbatim comments, Council members weighed in on the impact of CVS Health’s acquisition of Aetna in late November 2018. “Combination of a large payer and convenient care provider will help their bottom line, but it will continue to erode primary care and drive up overall health care costs,” says one clinical leader from the western United States.

A third of Insights Council members (35%) say DTC telemedicine is the top competitive threat to traditional health care organizations, followed by retail clinics (25%), with urgent care clinics viewed as a minor competitive threat (8%).

“I would have expected retail clinics to top the list [of threats] because of the Aetna-CVS merger,” Mehrotra says. “But it is intriguing to me that direct-to-consumer telemedicine, which is currently quite small compared to the other options, is viewed as the greatest threat to their organizations. If you look at the numbers nationally, urgent care clinics provide many more visits. Possibly they are not viewed as a threat because of familiarity. It’s this new stuff that is the most scary.

Convenient Care Is Both a Threat and an Opportunity to Health Care Providers

From the New Marketplace Insights Report: Convenient Care — Opportunity, Threat, or Both? Click To Enlarge.

“We recently documented the growth in telemedicine in our research,” Mehrotra adds. “The volume of visits is very low on a national scale, but the growth curve is very impressive. So that could be partly playing a role in providers viewing it as a threat. Plus, telemedicine providers are national in scope. Health care has traditionally been a local business, but these new entries, because of their geographic scope and low barriers to entry, represent a different form of competition.”

Prewitt says that providers are starting to understand the impending impact that telemedicine will have on the industry. “Even though telemedicine has been around for a long time, people are finally waking up to it,” he says. “Perhaps now that some of the regulatory barriers are being knocked down, they’re really seeing its disruptive potential.”

Health care leaders are mixed in which type of option they believe is the best option for their organization. A small share of respondents (13%) indicate that their organizations are participating in all three convenient care models. But to do this requires organizational scale and financial resources, and not surprisingly, the survey data reveals that it is larger health systems and hospitals that dominate this allencompassing approach to providing convenient care.

Quality and Cost Concerns for Convenient Care

One notable survey finding is that nearly two-thirds (62%) of respondents think that convenient care offers lower quality of care than from primary care physicians.

These concerns “have some validity,” Mehrotra says. “We published several papers in just the last year on the quality of direct-to-consumer telemedicine. They highlighted some quality concerns. Among children, we found overuse of antibiotics, underuse of testing, increased rates of follow-up, and so forth.”

Survey respondents also worry about the impact of convenient care on health care costs. Just over half (53%) say that the growth in convenient care options will greatly increase or moderately increase overall industry spending.

It may seem somewhat counterintuitive that these cheaper options may increase total spending. But Mehrotra makes the case that health care leaders are correct in their intuition. “This has been a key focus of my research, trying to quantify the impact of convenient care options on spending. We have found that both retail clinics and direct-to-consumer telemedicine increase health care spending. However, our estimates indicate that it’s a small increase.

“For example, retail clinics are about 30% to 40% cheaper than a physician office visit. Therefore, to the degree a retail clinic represents a replacement of a physician office visit, then it saves money,” he says. “However, most retail clinics are not replacement but rather new utilization; in the absence of a retail clinic, patients would have stayed home. This is also true for DTC telemedicine, where we estimate roughly 90% of visits are new utilization.”

Despite mixed results in the survey about convenient care’s impact on individual organizations, quality, and cost, two-thirds of Insights Council respondents (67%) say that the proliferation of convenient care has been good for the health care industry. This is likely because it helps improve access to health care and satisfies unmet demand in patient populations where this has been a challenge, Prewitt says.

“In operating convenient care facilities, traditional health care providers are responding to consumerism,” he says. “Patients want to be seen quickly and on their own hours, and hospitals and health systems are following suit, despite their concerns.”

VERBATIM COMMENTS FROM SURVEY RESPONDENTS

What will be the impact of the CVS Health–Aetna merger on health care? Please explain.

“A disaster that will drive up the cost of health care.”
— Director at a small nonprofit teaching hospital in the West

“Further deterioration of the physician-patient relationship. Professionalism has left the building.”
— Chief Medical Officer at a midsized for-profit health organization in the South

“Exciting partnership that will generate experimentation we can all learn from.”
— Executive at a large nonprofit health system in the Midwest

“Likely will spur other such mergers to the detriment of medicine and healthcare delivery in the U.S. Monopolies will become the norm, leaving patients with fewer and fewer options for various services, and physicians with steadily decreasing freedoms and compensation.”
— Clinician at a small nonprofit community hospital in the Northeast

“Too soon to truly know, however I envision it will eventually provide a product which is a large disrupter. Providing care when the ‘consumer’ wants and at a location they want is a likely goal. This will be coupled with directing or providing testing at a cost which health systems with brick and mortar cannot match.”
— Vice President at a large nonprofit health system in the Midwest

Download the full report for additional verbatim comments from Insights Council members.

Charts and Commentary

by NEJM Catalyst

We surveyed members of the NEJM Catalyst Insights Council — who comprise health care executives, clinical leaders, and clinicians — about convenient care. The survey explores ownership or formal partnership with retail clinics, urgent care clinics, and direct-to-consumer telemedicine; the biggest benefit to own or partner in convenient care; the threat or opportunity of convenient care; the quality of care at convenient care options versus primary care; the impact of convenient care growth on health care industry spending; the greatest competitive threat to traditional health care organizations; and the overall impact of convenient care proliferation on the health care industry. Completed surveys from 664 respondents are included in the analysis.

Ownership/Partnership Varies Widely for Different Convenient Care Settings

From the New Marketplace Insights Report: Convenient Care — Opportunity, Threat, or Both? Click To Enlarge.

Responses from Insights Council members indicate that roughly one-quarter (26%) have either ownership or partnership in a retail clinic, and there is little evidence that this result will change much in the coming years. Survey responses also indicate a higher level of participation in urgent care clinics than retail clinics, and roughly one-third (34%) of respondents say that their organization has either ownership or partnership in direct-to-consumer telemedicine. However, while a nearly equal number (35%) say they have no plans to participate in telemedicine, 15% plan to do so within three years, which would bring participation levels to nearly half (49%).

Insights Council members indicate that meeting consumer demand and preventing “leakage” of patients to clinical sites out of the system are the two biggest benefits to owning or partnering in convenient care. A higher incidence of respondents from not-for-profit (66%) than for-profit (55%) organizations say that meeting consumer demand is the biggest benefit.

Download the full report to see the complete set of charts and commentary, data segmentation, the respondent profile, and survey methodology.

Download Full Report

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