Primary care in the New Health Economy: Time for a makeover

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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. In summer 2015, HRI interviewed 25 executives from industry trade associations and academia and surveyed 1500 clinicians and 1,000 consumers on the future of primary care.

  • 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Health Research Institute (HRI) suggests forecasts of looming physician shortages—perhaps 90,000 by 2025—are based on outdated care delivery models
  • 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.
  • 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.

Meet tomorrow’s primary care consumers

In the New Health Economy, consumers, spending more of their own money, are choosing how and where to receive primary care. To be competitive, companies must deliver a la carte care to seven major consumer markets.
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Explore today’s segmented primary care market

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.

Convenient care

Convenient care is well ingrained through retail health clinics and urgent care centers that many consumers rely on in lieu of an appointment with their regular doctor. Visits to these clinics tripled from 2010 to 2014, and the six largest retail chains have put over 1,600 such storefronts on the streets. An overwhelming number of consumers (95%) are satisfied with the care, and the steady flow is reducing unnecessary visits to emergency departments. Physicians in traditional practice that HRI surveyed concede that these sites have increased access and patient satisfaction.

Leading health systems such as Cleveland Clinic, Texas Health Resources and Kaiser Permanente are partnering with retail health clinics to extend their reach into the community.  “Now the hospitals and health systems are knocking on their doors to partner versus the other way around,” said Tine Hansen-Turton, executive director of the Philadelphia-based Convenient Care Association. These health systems use retail clinics to triage patients with lower acuity health issues away from more expensive mothership locations. Some are also developing joint programs to manage patients needing chronic disease.

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House calls

House calls are coming back in modern forms, including an Uber-like model of providing doctors on-demand through a downloaded app. In a 50-year stretch, from the 1930s to the 1980s, house calls diminished from 40% of all doctor visits to 1%. Rather than becoming extinct, however, new companies are finding that there is value in repurposing old-fashioned care for the contemporary patient-consumer.

Although many HRI-surveyed physicians expressed reluctance at home visits, consumers are ready for it. According to the HRI survey, nearly two-thirds of consumers would be interested in having a clinician treat them at home. And new companies are forming to meet this market.

Home care offers fresh alternatives that may prove increasingly competitive, especially among the elderly. A successful government model is paving the way for private businesses to bring healthcare back into the home. The Centers for Medicare and Medicaid (CMS) found that participants saved over $25 million in the first year of its Independence at Home Demonstration—an average of $3,070 for each of the 8,400 Medicare beneficiaries that participated. CMS also noted fewer hospital readmissions, more follow-up contact, and less use of inpatient and emergency department services for chronic conditions.

Using slightly different models, many health industry startups are providing in-person visits with the ease and swiftness of on-demand smartphone apps. One company in New York City, Pager, uses Uber to dispatch doctors and practitioners for $200 ($50 for the first visit). An app called Heal can be downloaded to bring a doctor to the house for a range of nonemergency services such as treating strep throats and stitching lacerations. Partnerships are already forming. Centura Health, Colorado’s largest hospital chain, is teaming up with True North Health Navigation, which offers on-scene care to 911 callers in lieu of a costly ambulance ride to the emergency room.

The training of fast-responding paramedics to care for people on the scene rather than rushing them to the hospital is a growing trend. Known as community paramedicine, trained paramedics are dispatched to treat chronic disease management, medication compliance and home safety. They can take vital signs and administer IV medications and work with doctors and others on a team to coordinate future care.

Geisinger Health System’s Mobile Paramedic Program in central Pennsylvania is one example. While in the patient’s home, the paramedic enters notes into the electronic health record. If additional clinical support is needed, the paramedics have real-time audiovisual teleconnectivity with Geisinger emergency physicians. The program has reduced the rate of admissions and ER visits for heart failure patients by 50%, lowered the 30-day hospital readmission rate for heart failure by 15%, and prevented an estimated $2.1 million in charges that Medicare would not have reimbursed. Geisinger reported 100% patient satisfaction with the program. A similar program exists in Canada through a partnership between Atlantic Canada and insurance giant Medavie Blue Cross.

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At-your-service care

Subscription-based, at-your-service care focuses on personalized, boutique-like care without the exorbitant fees long associated with traditional concierge medicine. Competing most directly with traditional practices, these lower-cost concierge companies offer consumers shorter wait times and more personal attention. This team-based model treats the “whole” person in one location with short waiting times, savvy technology systems and access to nutritionists, diabetes specialists, and much more.

One Medical Group offers tech-enabled primary care practices that are focused on improving quality and affordability. The company accepts most forms of insurance and charges a $150 to $200 annual fee to support care that insurers typically do not cover, including wellness coaching and integrative services such as acupuncture and naturopathy to complement medical care. It often partners with employers or insurance firms in half a dozen major cities. The company’s founder, Dr. Tom X. Lee, both a physician and an MBA, has created a model that cuts in half the average number of patients seen each day by primary care physicians—from 25-30 to 15-16.  Lee claims that One Medical does this at one-third the cost of a traditional practice by reducing overhead through new technology, more efficient processes and a patient-centric design that.

Another newcomer, Iora Health – which targets specific patient populations through relationships with employers, unions and health plans – boasts that it is “restoring humanity to healthcare.” Physician CEO Rushika Fernandopulle fears that primary care has turned into a series of transactions. “We want to get rid of the transactions and build the relationships,” he said. One of the most important relationships is with a health coach.

Venture capitalists have given both One Medical and Iora Health a real boost in recent years and 71% of physicians HRI surveyed believe that this model will become more dominant over the next decade.

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Nurse-led care

Nurse-led care has the potential to make a sharp ascent in the primary care market if states continue to relax the restrictions they have on nurse practitioners’ ability to practice without physician oversight. By the end of 2014, more than half of states were weighing expanding the clinical duties of nurses. The master’s-trained nursing workforce is blossoming with help from government programs such as the Medicare Graduate Nurse Education Demonstration, which has doubled the number of graduates across five sites since 2012 – and the introduction of the doctor of nursing practice degree in 2006. The supply of primary care nurse practitioners is expected to increase by 30% from 2010 to 2020 and, unlike studies that project major physician shortages, workforce studies for nurse practitioners foretell a surplus.

A growing number of consumers (75%) say they would be comfortable seeing a nurse practitioner or physician’s assistant. “There is a cadre of patients that wants to see the primary care physician every time but that group is shrinking,” said Richard Kalish, MD, of the division of primary care at Lahey Health. Kalish is leading the charge at Lahey to embed elements of the NCQA patient-centered medical home model and extend Lahey’s primary reach care beyond the traditional office visit.

Two states lead the way in nurse-led primary care: Vermont – where Appletree Bay Primary Care opened its doors in 2014 with seven primary caregivers, all of whom are faculty members of the University of Vermont College of Nursing and Health Sciences – and Indiana, where Purdue Family Health Clinics opened the same year to care for medically underserved regions. Forty percent of primary care physicians in Vermont’s Champlain Valley were not accepting new patients in 2012, meaning nurse-led practice in the state has a great deal of room to grow.

Using nurse practitioners or physician assistants instead of more costly doctors has been estimated to save Massachusetts over $8 billion in the next decade and managed primary care delivered by nurse practitioners cost 23% less compared to the average costs of other primary care physicians in Tennessee.

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Digital health

Digital health has seeded booming businesses in virtual care, remote monitoring, and do-it-yourself home diagnostics. Burgeoning wireless equipment gives all primary care players the tools to compete efficiently. Even so, new companies offering solely virtual care, remote monitoring and telemedicine have become well situated in a short period of time. Analysts expect the global market for telemedicine to exceed $30 billion by 2020. Gone are the days when consumers required face time with their doctors; now, 60% of consumers say they would be open to a virtual doctor’s visit. Companies such as PlushCare, Teladoc and Doctor-on-Demand brings a doctor to the house through a simple App download.

Government payers and major private insurers are starting to make the shift from physical to virtual. In January, Medicare began reimbursing clinicians $40 per patient per month for offering patients 24/7 virtual access to care. UnitedHealthcare—which provides insurance coverage for more than 45 million people, will start offering telemedicine doctor visits this year in 47 states and the District of Columbia. The American Telemedicine Association estimates that 12 million Americans received such services in 2014, and that number is expected to double in 2015.

Many of Kaiser Permanente’s health systems are already performing more than half of patient visits through mobile, secure messaging or video and virtual care accounts for 50-60% of Iora Health’s interactions with patients. </p>
  <p>Telehealth is also connecting care teams to fill knowledge gaps. Leading health systems in both rural and urban areas are using video consultations among physicians, nurses, and other caregivers – connecting generalists with specialists. For example, Carolinas Healthcare has implemented behavioral telehealth in many of its primary care practices to connect primary care teams with specialists for on-demand advice. Patients can also visit virtually with social workers, psychologists, and behavioral health nurses without having to leave the primary caregiver’s office. The health system plans to expand the program to each of its 200 primary care practices.

HRI research shows that consumers and clinicians are placing more faith in DIY options such as at-home diagnostic tests for simple ailments such as strep throat, ear infection and urinary tract infection. HRI estimates these tools threaten more than $64 billion in traditional provider revenues.

Remote patient monitoring is expected to save the system $36 billion globally by 2018 through alerts to clinicians well before a patient’s health status turns into an emergency. Companies specializing in remote monitoring promote care delivery models that are built less on the volume of interactions with a patient and more on the volume of patient data that is shared among caregivers.

One-third of the consumers HRI surveyed said that they were interested in a wearable device that could monitor their vital signs and 85% of physicians said that the primary care physician of the future will spend more time using mobile applications and health wearables to monitor patients. Just 10% of physicians surveyed said they rely on remote monitoring devices now.

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Karen Young

US Health Industries Leader, PwC US

Benjamin Isgur

Health Research Institute Leader, PwC US

Vaughn Kauffman

Principal, Health Industries, PwC US

Sarah Haflett

Director and Research Leader, PwC Health Research Institute, PwC US

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