Rebuilding The Medical Home: What Walgreens Surely Sees

Walgreens_logo 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 based in Atlantic Beach, FL.

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11 replies »

  1. I agree that many health plans, as well as disease management companies now see the medical home as the ideal and there is a great deal of medical home discussion across the industry. I think that retail health clinics definitely have a role to play but don’t feel that they will become medical homes as they don’t treat any major health care conditions or emergencies.
    For those who might be interested, DMAA: The Care Continuum Alliance will broadcast from its annual meeting a complimentary, live Webcast of a keynote presentation on the medical home and population-based approaches to care Monday, Sept. 8, from 10:15 to 11:30 a.m. The speakers are Bruce Bagley, MD, medical director for quality improvement, American Academy of Family Physicians; and Paul Grundy, MD, MPH, chair, Patient-Centered Primary Care Collaborative, both mentioned in Brian’s article. They will discuss the evolution of the medical home and the contributing role of prevention, wellness, disease management and other population health improvement strategies. You can register at TheForum08.org/Webcast

  2. I am a quality engineer working in the healthcare arena. I think that many of the ideas that Brian puts forth make sense from both clinical quality and business quality. He seems to be advocating what many larger businesses are already doing–using Lean Models for quality or some similar models. Perhaps what is happening in healthcare now, especially at the primary care level, can be compared to what happened in the auto industry. The Big Three finally found the business sense of continuous quality improvement in the marketplace after Toyota and the other Japanese auto makers forced them to do so. What is ironic is that it took an American, Edward Deming, to bring about the transformation in Japan. Will it take a company like Walgreen to show America’s primary care sector what is necessary to deliver a good product at a reasonable cost with a good return on investment.

  3. Obviously, Walgreens and a lot of employers think employers will be involved in their workers health insurance and health care for a long time even though it doesn’t make sense.

  4. > many of the people who have chosen this profession
    > didn’t sign on to become part of team Walgreens.
    But isn’t this just another manifestation of the underlying problem, Dr. B? Lots of docs (probably half) didn’t sign on to become part of any team. No, no! They signed on to be their own show, but minimum efficient scale is certainly greater than one doc, probably greater than ten, and who knows but it might be a hundred. Why this is so is beside the point…

  5. Just what I want to hear as a PCP; that working for a large corporation as a faceless provider in a walmart or employment center should be my dream job. whoo-hoo. While I can not argue about the economic efficiencies discussed (and in fact most of it is true, it not cost effective for me to implement), the reality is that these companies still need to hire someone to actually be the doctor, and many of the people who have chosen this profession (and not nursing or PA school) didn’t sign on to become part of team Walgreens. And for those that like large groups, many are quite successful within the current system.
    As for technology, remember that until recently, Stark has made it near impossible for larger institutions to give independents anything, even if was beneficial to patients, providers and institution. Now its only difficult. Legal issues need to be remembered in any talk of a new paradigm.

  6. Joe, I’ll add one more to your “don’t want to be engaged” list.
    Primary docs don’t take the time to do proper diagnosis.
    Last year I needed a doc for the first time in many years. Stomach upset that just wouldn’t go away. He did some blood tests to eliminate some stuff but basically blamed it on too much stomach acid and gave me a 21 day supply (samples) of Nexium. Drug seemed to work for the most part but I found out after much proding that Prilosec OTC would work the same at a fraction of the cost. Stomach still did not FEEL right though so I went on a quest of my own to figure this out. Long story short it turns out that I have developed a difficulty in digesting wheat. It seems there are many more out there like me. So I cut way down on my wheat consumption and now no stomach problems no Nexium. “It’s the food stupid.”

  7. My focus is on primary care physicians working actively to become unemployed. Anecdotal evidence is not to be trusted, but talking with many patients, I believe that primary care physicians do not want to stay engaged.
    Examples: some primary care physicians admit patients, stay too long at the hospital, and then miss patients at the office. Good reason to leave that physician.
    Some primary care physicians admit patients, stay too long at the office and don’t provide timely and accurate orders for their hospitalized patients.
    Some primary care physicians say, “I do not accept any more Medicare patients.”
    Some primary care physicians say, “You seem to be getting your care at Mayo (for example), why do you come here?”
    Some primary care physicians say, “I don’t need the reports from Mayo (for example), I will develop my own file.”
    Now, go to a RediClinic or similar. The clinic’s physician is there – not at the hospital. The clinic’s physician refers to an admitting physician if needed – one that will generally be monitoring in-patients without the distraction of office patients. Most clinic’s physicians usually are receptive to all the useful records they can get. Most clinic’s physicians are focused on diagnosis and treatment. Seldom do they become involved with the decision to accept or reject a Medicare patient.
    I think the the gatekeeper model died because primary care physicians have not been trained to be conduits rather than road blocks. A personal experience a few years ago. I thought I had developed a good relationship with a primary care physician. Full medical history, past pertinent medical records, annual check up, etc. One day I had an obvious hernia (the other side). I called and said, “Can you suggest a surgeon that will use a local anesthetic?” This was not a question out of the blue. The records showed my desire to avoid general anesthetics. The records showed my previous hernia repair. The reply, “The doctor can see you next week.”
    I spent the week cultivating my own referral sources, for physicians that were receptive to using locals. I had the appointment with a surgeon within 10 days. No need to have my “personal” physician tell me what I already knew.
    Since, I am not much of a fan for primary care physicians. I enjoy asking and listening about others’ experiences with theirs. I hear some excellent care stories. However, it seems the weight is shifting rapidly to “let me go out of business” stories.
    Here are my best wishes that primary care physicians wake up and become the “primary” *conduit* for medical care.

  8. As Peter notes, this management model applies not only to employers, but to any entity holding risk. It could be useful to health plans trying to develop affordable small group insurance products, or to rural areas seeking a physician coverage solution.
    We have been astonished not just by the reception from mid-sized and large employers, but by how many claim to have been thinking about this or similar models for several years.
    It wont occur overnight, of course, but I stand by my prediction that corporations are becoming poised to capture primary care and, by using data and other mechanisms, rationalize health care in ways weve been imagining for years. The result will be extremely disruptive for many entrenched health industry players, but good for patients and the people paying the bills.

  9. Brian, I’m with you all the way until you reach your conclusion — “the transformative power of worksite clinics”.
    That’s a big leap.
    I question how many employers have the interest, scale, trust of employees, capital, etc. to make this happen. Many employers want to go completely in the opposite direction –they want to wash their hands of any involvement in financing or delivery of health insurance or care.
    Worksite clinics as an interesting development? Yes.
    Worksite clinics as transformative…???

  10. This is a very enlightening. I guess you could say that if easy and free (for patient) access to primary care with patient follow-up and treatment monitoring did not work the “private” sector would not be doing it. The other important issue I see here is that the on-site doc is paid not FFS/patient but a flat rate? The company doc also has the best cost interests of the company in mind if they want to keep the position. So why can’t this model work in the general population?

  11. Brian,
    Thank you for the insights, there is a lot to digest here. Are there statistics regarding the growth of worksite clinics that you are aware of?
    Since I seldom comment except to disagree, let me revert to form. I do think you misconstrue the role of health plans in the present state of primary care (disclosure: I work for an insurer). Health plans look at the same data everyone else does, and they know well that a heavier reliance on primary care is superior for health outcomes as well as cost control. Many health plans now see the Medical Home model as the ideal. They just don’t see it as realistic to achieve very widely in the near term. The obstacles are huge, starting with the desire of most physicians to be paid on a FFS basis, without outcomes-based payment, and to operate in independent small practices without EMRs.
    Health plans have tried to privilege primary care in the past, and were beaten back. The gatekeeper model was created by health plans, not doctors. Yes, plans have gone along with CMS in the mistake of making specialist care far more lucrative than primary care. It can certainly be argued that they made mistakes in the past and that they are not taking enough risks to drive change now, but most are quite aware of the value of primary care and are exploring ways to improve it.
    Final thought: I think you overestimate how much employers understand the value of primary care. Very large employers tend to be sophisticated, but the vast middle and small group market is really still not getting it. They tend to think of health in passive terms and sickness as something that happens to a person in the natural order of things, rather than something that an employer and its health plan should be designed to control. They operate on the treatment model rather than the prevention model, and what they care about as a purchaser is how much treatment they can buy with their dollar. This is supported by surveys we’ve done and isn’t just from anecdotes of salespeople. It’s beginning to change, but we’re not close to the inflection point of the “S” curve yet.

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