By Brian Klepper, PhD, Managing Principal,
Healthcare Performance Inc.
October 2008 Edition
Though it probably went mostly unnoticed in the cacophony of health care stories, the Wall Street Journal’s mid-March report—that Walgreen's had bought the 2 largest and most well-established worksite clinic firms in the nation, iTrax and Whole Health Management—was a harbinger of big changes in health care.
Walgreens, the ubiquitous drugstore company that, along with Wal-Mart and CVS, has already leveraged its pharmacy platform to establish a strong footprint in retail care (also referred to as convenience) clinics, undoubtedly startled many health care observers with its announcement. After all, isn't the company doctor a relic?
Actually, no. The worksite clinic has been reinvented and refitted with 21st century tools, promising nothing less than a paradigm shift toward dramatically better care at significantly lower cost. Understanding how these structures work and how they differ from both old-fashioned medical practices and retail clinics provides clues into what Walgreens likely sees and why that matters to U.S. health care.
The Primary Care Crisis
Primary care currently faces a labor shortage crisis because for many years the American Medical Association has worked hand-in-glove with Centers for Medicare and Medicaid Services (CMS) to create financial rewards for specialists at the expense of primary care physicians (PCP). This sabotage has been abetted by health plans who have blindly followed CMS's lead on reimbursement. (Cynics might also argue that because health plans’ profits are a percentage of total cost, they want primary care to be less engaged since that engagement drives down unnecessary utilization and cost.) As the Wall Street Journal’s Dr. Benjamin Brewer has compellingly argued, the resulting financial pressure on PCPs has made their practices increasingly untenable. Reform is a pipedream, he says, unless health care's foundation—primary care—can be reestablished.
The inequities between primary care and specialty income have not been lost on medical students. The average family physician now makes about ¼ the income of the average cardio-thoracic surgeon. Between 2000 and 2008, the percentage of medical students going into family medicine dropped from a low 14% to an atrocious 5%. Only 2% of graduating medical students plan to become internists.
Another reason that primary care is failing is that, as a discipline and similarly to the rest of medicine, it has remained a cottage industry. Its practitioners lack unity and the strength that organized collaboration conveys. PCPs mostly work in small businesses that, on the whole, have not invested in newly available administrative and management tools.
Perhaps most telling and most corrosive to their market position, as a group PCPs have failed to leverage their ownership of patient referrals and their ability to steer patients. If they had worked together on this issue, then PCPs, rather than specialists, would almost certainly have become the center of power in U.S. health care.
A Problem of Perception
Forced into a day-to-day struggle to care for patients and keep their practices financially afloat, most community-based PCPs have become dependent on health plan reimbursements that have been tethered to a narrow definition of their roles.
Many internists, family physicians, and pediatricians see themselves as “cognitive physicians.” Primary care’s mission is to understand and help patients comprehensively, working through diagnostic and management puzzles. Even so, many specialists and health plans have come to define primary care in terms of quick handling of the simple and routine. The health plans have reinforced this view through painfully low per-patient payments. To cope financially, many primary care practices have come to rely on high patient volumes with relatively short patient visit times. At best, it’s an arrangement that makes for an unsatisfying professional life.
Once the patient leaves the primary care office, the PCP typically has little involvement in the services—appropriate or inappropriate—delivered by the specialist. Each physician's office is its own silo and, even though we know that most wasted services and cost occur downstream of primary care, nearly all health care reimbursement discourages primary care physicians from participating as expert patient/purchaser advocates in the management of the full continuum of care. It's a corrosive policy that is reinforced by the niceties of professional courtesy: "Don't mess with the care I give to my patients."
The Market Responds
Markets, like nature, abhor vacuums. Over the last several years we’ve seen the rise of retail (or convenience care) clinics. Catering to convenience, the uninsured, the underinsured, and those who aren't interested in a regular PCP relationship, this is catch-as-catch-can medicine, mostly provided by nurse practitioners and physician assistants under the notable sponsorship of Wal-Mart, Walgreens, and CVS, which stand to gain through cross-selling within their pharmacies and other departments.
Many physicians and their associations are apoplectic over the apparent success and staying power of the retail clinics, arguing that these operations may deliver substandard care and that they lack a real connection to the full continuum. I’m not sure this is a good expenditure of their energies. Retail clinics are corporations, after all, and unlike most physicians, who practice what they manage to keep up with, these corporate clinicians access continuously updated information tools and practice based on evidence-based guidelines. No room in corporations for flying by the seat of your pants. And, in a sense, this is their strength. It seems very unlikely that organized medicine will win the battle against retail clinics. They seem to be thriving.
Even so, there's no question that retail clinics, for all their positive attributes, are not medical homes. At this point in their history, anyway, their clinicians and patients probably don't generally develop deep, trusting relationships, and the professional medical capabilities at play only go so far.
Not Our Parents’ Doctors’ Offices
Let's also not forget that the great majority of people in the United States still do get their coverage, however tattered and iffy, through their workplace. Which brings us back to a fascinating phenomenon: the reemergence of worksite clinics.
Unlike retail clinics, worksite clinics are medical homes. Although most early worksite clinic ventures have focused on jumbo employers, properly configured they work even for small employers. One clinic firm I've worked with has operated an onsite clinic for their 62 employees and their families for 3 years. It operates 5 hours a week, has created tremendous savings, and the employees are very happy with it. The clinicians eat lunch every day with the employees and develop bonds that matter when managing care.
These aren't our parents' doctors' offices. National Committee for Quality Assurance’s Peggy O'Kane said it well: “[The worksite clinics model] is much more proactive than the old model of just thinking about you when you show up for an office visit. It creates an ongoing relationship with the patient.”
Because they're built from scratch, these clinics can incorporate incentives, an array of information technology patient management tools, and care management programs. These help the practice identify and manage health problems and costs.
In the clinics developed and managed by WeCare TLC, an Orlando-based clinic firm and one of my clients, employees and their family members come to the clinic for free, without copays and without paying for drugs and labs. This approach is compelling for rank and file workers for whom out-of-pocket health costs have become a major burden. It also attracts low-income employees and their families who often don't see doctors because they might have to pay something for the visit or for their prescriptions, and it dramatically reduces the costs of care that are created when people avoid primary care.
All WeCare physicians use electronic medical records (EMR) that can receive or transmit patient information to other systems. The EMR has embedded best practice guidelines that include the most current medical information and that alert physicians to potential gaps in care (e.g., a mammogram or prostate exam or, for a diabetic, a check of eyes, feet, and blood sugar levels). These tools are extremely effective in preventing care and costs that result when these basics are missed.
All WeCare patients are encouraged to receive health risk appraisals, and those evaluations are validated through claims analysis that help identify chronic patients and those who might, on the basis of historical information, potentially have an acute event in the near future. Identified patients are paired with clinicians for further evaluation and management to try to impact or head off the problems.
When data on the employer’s health plan network is available, the high performing specialists (in terms of quality and cost) within each specialty are identified and referrals are steered to them. And when the patient is referred, the primary physician contacts the specialist to collaborate on the care that will be delivered. In other words, the worksite clinic’s primary care physician becomes an expert guide and advocate as the patient navigates through the system, working on behalf of both the patient and the purchaser, and helping to hold other players in the system accountable.
While the health plan benefit structure can be tweaked to optimize use of the clinic, the clinic itself is distinct from and sits in front of the health plan. The employer invests upfront in the clinic to generate immediate, substantial savings in the plan.
Employers Save
These savings occur in 2 ways. First, worksite clinics replace higher costs in the health plan network—for primary care visits, drugs, and laboratory tests—with much lower costs inside the clinic. Second, they are a platform to aggressively manage any care that might occur downstream from the clinic on the network.
Nothing but inertia prevents conventional primary care practices from reconfiguring in this way, but it takes a concerted focus on managing population- and systems-level information as well as individual patients' conditions. It's an expansion of the traditional primary care physician's role, and so far, there don't seem to be a lot of PCPs with the leadership and business focus to drive these models from the base of a conventional practice.
Of course, it’s very difficult for PCPs to make this transition unless the health plans will compensate them for the additional time required to participate in managing a patient throughout the continuum of care. Even though there is growing awareness that more primary care and less specialty care dramatically improves outcomes and lowers costs, health plans have dragged their feet. So far, no health plan has announced that they’ll unilaterally pay PCPs more to collaborate with specialists on the management of patients’ care.
And this has created an opportunity for, first, the worksite clinic vendors, and, second, behemoth corporations like Walgreens who see the potential to capture primary care, and with its control of referrals and pharmacy, the possibility of controlling all health care. Because worksite clinics are focused directly on employers, they work around the health plans and so have become a disruptive innovation that the health plans must learn to accommodate.
By realigning the incentives; using tools, data, and programs to identify and manage risk at the level of primary care; and by enforcing downstream accountability from the primary care base, worksite clinic models have the potential to reinvigorate primary care, drive tremendous new improvements in quality and efficiency, and to help reestablish health care stability and sustainability.
Walgreen's—and undoubtedly other big organizations will follow—surely sees the vacuum and, through its purchases, has placed a bet squarely on the transformative power of worksite clinics. This step could be more meaningful than anything occurring in state and national health policy reform. If nothing else, if the physician community remains scattered and disunited, it could spell the end of medicine as a cottage industry and the next big phase of true corporate medicine in America.
Brian Klepper is a health care analyst, speaker, and commentator whose consulting firm, Healthcare Performance, helps organizations understand and negotiate market-based health care reforms that are gaining traction now. www.brianklepper.net.