New Marketplace

Survey Snapshot: Mega-Mergers and Telemedicine Accelerate Convenient Care Growth

Insights Report · July 25, 2019

While retail health and other convenient care options have been steadily reshaping the health care industry for some time, recent mergers such as CVS Health–Aetna and the growing use of direct-to-consumer telemedicine are accelerating the shift in where patients receive care.

According to a new survey of the NEJM Catalyst Insights Council, health care provider views on the advance of convenient care are generally positive, recognizing the importance of increasing access to care and improving patient utilization behavior with regard to receiving care in the most appropriate setting. But concerns about mega-mergers involving nontraditional players remain.

In New Marketplace Survey: Convenient Care — Opportunity, Threat, or Both?, 67% of respondents say that the proliferation of convenient care has been good for the health care industry. Furthermore, while 42% say that convenient care is both an opportunity and a threat for the industry, 32% say that it is a major opportunity and only 8% say that it is a major threat.

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.

Opinions on the potential impact of the CVS Health–Aetna merger are more mixed.

“I believe that Aetna will use the CVS bricks-and-mortar footprint to build a substantial retail and primary care delivery network,” comments Daniel Durand, MD, Chief Innovation Officer and Chairman of Radiology at LifeBridge Health in Baltimore. “Downstream of this, there will likely be additional acquisitions (e.g., freestanding imaging) as well as CIN and narrow network partnerships with high-value specialists (e.g., episodic bundles). Hopefully, we will also see them use their PBM capability productively in order to address the growing cost of prescription drugs, rather than merely using it to obfuscate pricing and hide margins.”

CVS Health–Aetna recently announced plans to expand its network of HealthHub locations to 1,500 by 2021. HealthHub stores widen the range of CVS MinuteClinic offerings to include monitoring of patients with chronic diseases such as diabetes, high blood pressure, and high cholesterol, a significant increase in the complexity of care provided by its stores.

While there will be many benefits to patients in increased access to care and potentially improved cost efficiencies from the merger, the final impact comes down to how CVS Health–Aetna plans on using its unique retail provider/payer status, says Allen R. Nissenson, MD, Chief Medical Officer at DaVita Kidney Care and emeritus Professor of Medicine at the David Geffen School of Medicine at UCLA.

“The key will be how physicians are integrated into any new care delivery paradigm created by this merger,” he says. “To the extent this relationship becomes an expanded insurance product, fueling use of the CVS PBM, using patient data to drive or constrain utilization, this could be very problematic. In addition, the announced entry into chronic diseases, starting with kidney disease, will be particularly challenging for them since established systems of care are maturing/evolving in this space.

“But I think there could be a value-add here, particularly if you are looking at what is happening with nephrology. Of all the medical specialties, this is one of the ones that is suffering from workforce shortage issues on the physician side and additional care options could be helpful to patients,” Nissenson says.

Rachel Bishop, MD, Medical Director of Telemedicine at Houston Methodist, and a practicing primary care physician, says that CVS Health–Aetna should mostly be a positive development for the health care industry because of its ability to expand convenient care access. She cites Houston Methodist’s recent partnership with Walgreens and other retail and corporate partners as an example of how traditional providers need to have an open mind when it comes to partnering with large retailers.

“CVS Health–Aetna will be the first major conglomerate in health care and will bring convenient care access to a large number of patients,” says Bishop. “It will be interesting to see if patients choose the CVS option or go through their health system when they have a choice. Either way, our health system is looking to partner with Walgreens and other partners to provide their direct-to-consumer telehealth in our area.”

Direct-to-Consumer Telemedicine Is the Biggest Coming Threat to Traditional Health Care Organizations

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

Survey respondents say that the greatest competitive threat to traditional health care organizations is direct-to-consumer telemedicine (35%), followed by retail clinics (25%). However, while the threat of direct-to-consumer telemedicine from a large, low-cost provider located outside of a local provider’s service area may be real, the reality of patient preferences is another matter, says Durand.

“I’m very familiar with the difference between theory and practice when it comes to distributed models versus local models,” he says. “The truth is that you get some scale and efficiencies at a better price point with these macro-distributed models. But they don’t work for everything and they certainly don’t work for everyone. And I promise you, every patient is going to want some kind of relationship with their provider.

“This is particularly true as things get more complicated and [patients] get more engaged in their health,” he adds. “The direct-to-consumer telemedicine model presupposes that there’s a way of delivering most of somebody’s care that way. I see telemedicine, and I think most providers see telemedicine, as a way that certain types of primary care and specialty encounters can occur more efficiently. And we really need things like telemedicine because the single biggest problem facing U.S. health care, besides cost, is probably access right now.”

Nissenson also has a favorable view of direct-to-consumer telemedicine, pointing out that it also benefits specialties such as nephrology. “We’ve made progress on the dialysis side with telehealth with the passage of some favorable legislation last year, which allows the patient’s home to be a site of care for telemedicine visits. So people doing home dialysis don’t have to go to the clinic for every interaction with the care team,” he says.

Most providers are embracing telemedicine, seeing it as an opportunity to extend their offerings. In our survey, 34% of respondents either had ownership (22%) or a partnership (12%) with a direct-to-consumer provider, and 15% currently did not offer it but planned to in 3 years.

At Houston Methodist, says Bishop, “We partner with American Well for our video health platform for urgent care, and for all of our direct-to-consumer care. And we’re also on Zocdoc and conduct direct-to-consumer [telemedicine] through the MyMethodist app. So the visits that are coming through Zocdoc and Walgreens go straight to our MyMethodist app and American Well platform.”

LifeBridge Health features a variety of different approaches to convenient care, says Durand, including minority ownership in an urgent care network of approximately 42 ExpressCare locations. LifeBridge also is building a network of monitoring kiosks through a partnership with Higi. There is currently one unit in the field, but up to 30 kiosks are planned for LifeBridge’s gyms and wellness centers, as well as retail pharmacies such as Walgreens and Rite Aid.

“At LifeBridge, we look at telemedicine as our single best tool to redeploy our own care model and make our own physicians more efficient,” Durand says.

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