Rebuilding The Medical Home: What Walgreens Surely Sees

Posted on | March 27, 2008 | Comments Off on Rebuilding The Medical Home: What Walgreens Surely Sees

Walgreen’s purchase of two worksite clinic companies could be the most important health care development in recent years

Though it probably went mostly unnoticed in the cacophony of health care stories, last week’s news that Walgreen’s had bought the two largest and most well-established worksite clinic firms, iTrax and Whole Health Management, was a harbinger of very big changes in health care. Walgreens, the ubiquitous drugstore company that, with Wal-Mart and CVS, has already leveraged its pharmacy platform to establish a strong footprint in retail clinics, undoubtedly startled many health care observers with its announcement. After all, isn’t the company doctor a relic?

Actually, no. The worksite clinic – and by way of disclosure for the better part of the last year I have worked closely with a small, very innovative, Orlando-based startup worksite clinic firm, WeCare TLC – has been reinvented and refitted with 21st century tools, and offers the promise of 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 American health care.

There are several parts to this puzzle, but one is the abject failure of America’s primary care community to establish a strong base of power by leveraging its ownership of the referral process. Last December I pointed out that primary care faces a labor shortage crisis because, for many years, the AMA has worked hand-in-glove with CMS to create financial rewards for specialists at the expense of primary care physicians (PCPs). This act of sabotage has been abetted by the health plans, who have blindly followed CMS’s lead on reimbursement, and who likely have their own reasons for disempowering primary care. As Benjamin Brewer, MD, argues compellingly in yesterday’s Wall Street Journal, the resulting financial pressure on primary care physicians has made their practices increasingly untenable. Reform is a pipedream, he says, unless health care’s foundation, primary care, is re-established. The current issue of Medscape Family Medicine has a point-counterpoint discussion that chews on how practicing docs or policy-makers might respond to this problem. Robert Centor, MD, argues that physicians could develop smaller concierge practices, while Charles Vegas, MD, calls for a single payer system that would reimburse primary care physicians at levels that are more sustainable.

To me, though, these discussions miss the deeper and more practical point. Part of the reason that primary care is failing is that, as a discipline and like the rest of medicine, it has remained a cottage industry. Its practitioners lack unity and the strength that organized collaboration conveys, mostly working in little businesses that, on the whole, have not seen the need for or been able to afford investment in management tools and practices that have become available to them.

Even though many internists, family physicians and pediatricians view primary care in terms of its "comprehensiveness" and its "diagnostic and management puzzles," to use Dr. Centor’s terms, over time the downstream medical specialists and the health plans have defined primary care in terms of quick handling of the simple and routine. Embroiled in the day-to-day struggle to care for patients and keep their practices afloat, dependent on health plan reimbursements that have been tethered to a narrow definition of their roles, they have suffered from a failure to imagine what the broader needs of their patients and purchasers might involve, what opportunities might exist and what those opportunities might mean.

One unhealthy byproduct of these circumstances has been a disconnect between PCPs and the specialists they refer to. Patients and purchasers (i.e., the patient, the employer, or the government) have been the pawns of this lack of continuity. Encouraged by health plans alternately chanting the "choice" and "managed care" mantras, health care has become dominated by two models. In the gatekeeper model, the PCP makes the decision to provide care or to refer. In the independent patient model, the patient refers himself. (In Medicare-heavy markets, like Miami, specialists like cardiologists and endocrinologists have become primary care physicians to the elderly, poor management of resources but comfortable for patients and lucrative for the specialists, if expensive to the rest of us.) 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 curiously corrosive policy that is re-enforced by the niceties of professional courtesy: "Don’t mess with the care I give to my patients."

There is dawning awareness that this is a core, resolvable problem in health care, though, and some change is afoot. The Patient-Centered Primary Care Collaborative, a coalition of large employers and professional groups, has been advocating for changes in reimbursement and the roles of primary care physicians. Longtime progressive health care heavyweights like IBM’s Paul Grundy, MD, Bridges To Excellence’s Francois de Brantes and NCQA’s Peggy O’Kane are doing a great job articulating a new vision of primary care, but whether their campaigning can get traction with mainstream health plans and provision of care is another matter.

Markets, like nature, abhor vacuums. As Scott MacStravic noted a few days ago, over the years various efforts have taken stabs at what we now know as retail clinics. Catering to convenience, the uninsured, the underinsured, and those who aren’t interested in a regular primary care physician 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 co-incidentally, stand to gain through cross-selling in their pharmacies and other departments as well.

Many physicians and their associations are apoplectic over the apparent success and staying power of the retail clinics, arguing that these operations may deliver sub-standard care and that they lack a real connection to the full continuum. I wonder whether all the fuss makes sense, and whether this is really a good expenditure of their energies. Retail clinics are corporations, after all, and unlike most physicians, who practice what they’ve managed 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 the 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, anyway, their clinicians and patients probably don’t generally develop deep, trusting relationships, and the professional medical capabilities at play only go so far.

Let’s also not forget that the great majority of American’s still do get their coverage, however tattered and iffy, through their workplace. Which brings us back to a fascinating phenomenon: the re-emergence 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. (The group I’m working with has operated an onsite clinic for their 60 employees and their families for three 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 a bond that matters when managing care.

These aren’t our parents’ doctors’ offices. Peggy O’Kane said it well. "It’s much more proactive than the old model of just thinking about you when you show up for an office visit. It’s creating an ongoing relationship with the patient.”

Because they’re built from scratch, these clinics can take advantage of incentives, IT, analytics and care management programs that in turn help the practice identify and manage health problems and costs. In the WeCare clinics, employees and their family members come to the clinic for free, without co-pays and without paying for drugs and labs. This approach brings in 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 is needed when people avoid primary care.

All WeCare physicians use Electronic Medical Records (EMRs) that can receive or transmit patient information to other systems. Soon we should have embedded best practice guidelines that alert physicians to potential care gaps, and help them avoid exacerbated care and costs. All 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 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, ideally the primary physician connects with the specialist, and urges that he/she be consulted prior to any significant care. In other words, the 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 the other players in the system accountable.

At this point, employers, more than health plans, see the sense in this model. 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 up front in the clinic to generate immediate, substantial savings in the plan.

And those savings can be VERY substantial. In a report by the City of Port St. Lucie on the WeCare clinic’s performance during its first 6 months of operation, the clinic was found to produce a 3.1:1 hard return on investment, with dramatic savings in primary care visits, drugs, laboratory, sick hours and employee out-of-pocket savings. There were also soft savings that they know exist but that haven’t been quantified yet in HR testing (like drug screens and Department of Transportation testing), in the full range of lost productivity costs, and in workers’ compensation savings.

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 PCP’s with the leadership and business focus to drive these models from the base of a conventional practice.

And that 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, the possibility of controlling all health care. Because worksite clinics are focused directly on employers, they work around the health plans, and so become a disruptive innovation that the health plans must learn to accommodate. By realigning the incentives, by 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, these models have the potential to reinvigorate primary care, and to drive tremendous new improvements in quality and efficiency, and to help re-establish health care stability and sustainability.

Over the long slog of the last several decades, the health care’s various sectors have become increasingly inward-focused, unaware that their roles are within a larger system, and insensitive to the larger well-being of both the patient and the purchaser. Primary care has been compromised. There is rampant excess in the specialties. Health plans have often abrogated cost and quality management in favor of simply bundling, financing and marketing health care services. And employers have become frustrated with unrelenting, rampant cost growth.

These dynamics have created an opportunity for vendors who can establish systems that identify and manage health/financial risk directly on behalf of employers and others who own that risk. Walgreen’s – and undoubtedly other big organizations will follow suit here – surely sees the vacuum and, through its purchases, has placed a bet squarely on the transformative power of worksite clinics. That 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 dis-united, 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 and commentator based in Atlantic Beach, FL. He can be reached at [email protected]. Opinions expressed by Health Commentary guest bloggers do not necessarily represent the views of Health Commentary.)