At a glance
The primary care market is poised for a makeover. Faced with new payment models and an aging population with chronic conditions, the health sector looks to a reimagined primary care ecosystem to help deliver on the promise of value.
A growing ecosystem of companies that have primary care capabilities is disrupting the market with business models that bank success on convenience, good service and evidence-based protocols. Click on any of the icons below to learn more.
An in-depth analysis by PwC’s Health Research Institute (HRI) suggests forecasts of looming physician shortages—perhaps 90,000 by 2025—are based on outdated care delivery models. In the New Health Economy, with the emphasis on giving purchasers greater value for their healthcare dollar, do-it-yourself consumers and integrated care teams armed with a black bag of virtual tools are poised to reinvent primary care and close the gap.
An impersonal, splintered healthcare system confounds consumers and costs more and more each year. Overall, the nation spends $3.2 trillion on medical care with mixed results. By 2020, 81 million Americans are expected to suffer from multiple chronic health conditions, further taxing the system. Revving up the role of primary care—with digital technology, a focus on prevention and expanded roles for non-physicians—offers a cost-effective remedy.
After decades of being undervalued in a fee-for-service system that emphasizes transactional medicine at times of distress, primary care is poised for an extreme makeover. The time is right for its true worth to be revealed—and rewarded. “We need to flip the system on its head,” said Nancy Gagliano, MD, senior vice president at CVS Health and chief medical officer of CVS/minuteclinic.
Rather than playing its historic role as gatekeeper to a scattered array of specialties, primary care has to become the nexus, providing simplicity, value and better health outcomes. That will mean taking risks and challenging old assumptions.
Primary care must synch up with the pulse of the American people and assuage the twin pressures of cost and competition in the health sector. Incumbent players with a desire to succeed over the long term will look to new entrants to help them adapt in a vastly changed market.
Hispanics are helping to rewrite the definition of primary care. This fastest-growing US demographic—expected to double in size by 2050—presents enormous possibilities for the market with an estimated $1.5 trillion in purchasing power and a willingness to go outside of the traditional parameters of the primary care system to find better value. This exodus from the traditional system offers lucrative possibilities for health industry veterans and new entrants looking to test innovative approaches.
In the New Health Economy, Hispanics will be primary care’s consumer mavericks according to HRI’s latest consumer survey. Across all income levels and insurance status, the group is poised to outshine other populations. Here is why:
Hispanics are pioneers in mobile health. Hispanics have adopted mobile health at a faster rate than non- Hispanics, as many other patients are still slow to e-mail their physician or refill a prescription by text message. Additionally, Hispanics are nearly three times more likely than non-Hispanics to use a mobile device for health-related reasons such as scheduling an appointment or purchasing care, and are more willing to use technology to monitor health by checking vital signs or glucose levels.
Hispanics pay closer attention to costs. Price is the most important aspect of care to Hispanics, and they are willing to act on this preference. The 2015 HRI survey found that 95% of Hispanics believe it is important to obtain an accurate price for health services—compared with 82% of non-Hispanics—and will often ask about cost before going to the doctor or having a procedure done. Hispanics are also more likely than non-Hispanics to rank cost above quality when selecting a medical provider.
Hispanics access a wider door to primary care. Appreciating convenience over traditional “institutional” medicine, Hispanics willingly gravitate toward lower-cost retail health settings and alternative care providers in the community. According to the 2015 HRI survey, 54% of Hispanic consumers—regardless of income or insurance status—have used a retail clinic at least once in the past year, compared with 33% of non-Hispanics. They are also more likely to rely on nonphysicians, such as pharmacists, for care and advice. In the 2014 HRI survey, 66% of Hispanics reported going to the doctor for non-emergency conditions, compared to 76% of non-Hispanics.
Hispanics, with their tech savvy, cost consciousness and willingness to seek care outside of the traditional doctor’s office, have sprinted ahead of non-Hispanics in the New Health Economy. And the rapidly growing population—106 million by 2050—Hispanics in the US provide a hefty opportunity for the increasingly segmented primary care market to offer convenience and value.8 To compete, companies need to consider low-cost primary care options that rely on a broader team of mobile-friendly health professionals. To learn more about the preferences, values and habits of this diverse consumer group, read HRI’s Hispanics: A growing force in the New Health Economy.
The ability to build and maintain meaningful doctor-patient relationships is nearing extinction among primary care practices. But in the New Health Economy, Massachusetts-based startup Iora Health —with more than $48 million in investor backing—is breathing life into the way consumers can connect to their care team.
“We want to get rid of the transactions and build the relationships,” Iora CEO Rushika Fernandopulle told HRI.
Co-founded by Fernandopulle – a Harvard-trained physician – in 2014, Iora Health focuses on highly personalized primary care as the key to better health outcomes and happy, empowered patients. Rather than relying on fee-for-service, the company partners with insurers, unions and employers in value-based payment schemes that focus on achieving improved health outcomes for targeted patient populations.
Iora’s model is team-based; meaning that clinicians such as nurses, social workers, nutritionists and diabetes specialists are as important as physicians when caring for patients. At the center is a health coach who, Fernandopulle explained, is responsible for 80% of the patient interactions and ensures continuity of care. The health coach connects patients with specialists and helps them identify activities to achieve their health goals.
Iora practices start the morning with a 30-minute morning staff huddle to discuss patients, group visits, patient-accessible electronic health records and virtual care. Fewer patients allow for longer appointments – which often run a full hour – and patients can view their records on a screen in the exam room, which makes them feel more involved in their care and results in a better dialogue with caregivers.
The different Iora practices closely mirror the needs, characteristics and preferences of the populations they serve. Depending on the complexity of health needs in each Iora group, Fernandopulle said that patient loads range from 600 for the sickest practices to 1,500 for the healthiest, both presenting stark contrasts to the average patient load of 2,300 for a traditional primary care practice.
Services are tailored to each practice. For example, what is simply referred to as yoga class at Iora’s Collective Primary Care practice in New York City is “Hammer Time” to the New England carpenters’ union members at another Iora clinic. Hammer Time is yoga using carpentry tools to remove the potential stigma of such exercise for macho men who suffer from back pain and other musculoskeletal issues. In Nevada, where Iora serves the culinary workers of the Las Vegas strip, the company has designed specific programs to manage severe or chronic illnesses such as diabetes and congestive heart failure.
Fresh thinking even permeates Iora’s billing practices. Employers and insurers receive a one-line email each month that includes the cost of all the patients’ services instead of separate bills for physician care, lab tests and specialty services.
One health insurance giant has been attracted to the company’s innovative business model: Humana now partners with Iora to deliver care to its Medicare Advantage members at eight locations in Denver, Seattle, Phoenix and Tucson. The insurer already reports seeing positive results.
Iora’s unique approach is starting to pay off. The number of Iora’s patients with controlled hypertension improved by 25% last year alone. At one Iora practice, hospitalizations were 37% lower when compared to a traditional practice and two other practices reported a 30% reduction in emergency room visits. Eighty-five percent of Iora patients say they would recommend the company to a friend.
Iora offers the industry a sneak preview of what outcomes-focused, convenient, and customer friendly should mean for primary care in the future.
CVS Health made its primary care debut in 2006 when it opened its first retail clinic. Almost a decade later, the company now owns and operates nearly 1,000 clinics and partners with more than 60 health systems in 25 states to deliver primary care. Half of the country now lives within 10 miles of a CVS/minuteclinic.
Yet CVS Health is not necessarily looking to take the place of the traditional primary care provider. Through its health system affiliations the company aims to become part of a community-based care model that “maximizes the impact of primary care physicians, allowing them to coordinate a patient’s care across various sites,” said Nancy Gagliano, MD, senior vice president of CVS Health and chief medical officer of CVS/minuteclinics.
In fact, CVS Health and a group of eight family medicine associations – including the American Academy of Family Physicians – announced in November that they will collaborate to improve care coordination between traditional primary care practices and pharmacy-based retail clinics.
CVS Health believes convenient, community-based care is important to extending the traditional primary care practice’s reach. “Diabetic patients are inside of a CVS pharmacy six to eight times per month,” she said. “But they typically only see their primary care provider once a quarter.”
CVS Health also fills data gaps between retail care settings and its partner health systems. If a patient from one of its partners seeks care at a CVS/minuteclinic anywhere in the country, the patient may have his record sent to his primary caregiver.
But retail clinics are just the beginning for CVS Health. While most health systems still worry about losing primary care office visits to more convenient walk-in retail clinics and debate how to compete with them and whether to partner, the company has leaped ahead into offering an expanded array of care services.
With its purchase of Coram last year, the retailer turned health company began offering infusion services to patients with chronic diseases such as rheumatoid arthritis, multiple sclerosis and cancer in their own homes and in more than 85 locations nationwide, including 65 outpatient centers.
Earlier this year CVS Health announced a partnership with direct-to-consumer telehealth giants American Well, Doctor-on-Demand and Teladoc to offer consumers and its health system partners even more options for primary care. As a reflection of its broader commitment to care delivery, CVS Caremark changed its name to CVS Health in 2014, casting a message to the industry that the company is in it for the long haul – and a force beyond the prescription business.
In summer 2015, HRI interviewed 25 executives from industry trade associations and academia and surveyed 1,500 clinicians and 1,000 consumers on the future of primary care.