PRIMARY CARE IN THE NEW HEALTH ECONOMY: TIME FOR A MAKEOVER - PWC
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Primary care in the
New Health Economy:
Time for a makeover
Health Research Institute
November 2015
At a glance
Rather than playing its
historical role as gatekeeper
to a splintered array of
specialties, primary care
has to become the nexus,
providing simplicity, value
and better health outcomes.Table of contents
The heart of the matter................................................................. 2
Executive summary...................................................................... 2
An in-depth discussion................................................................. 4
Why primary care needs a makeover: Consumers and other purchasers
want better convenience, quality and cost ...............................................4
CVS Health: Onward and upward in the New Health Economy...........5
Today’s segmented primary care market: Newcomers and innovative
approaches displacing traditional practices.............................................7
Iora Health: Putting value back into primary care one
relationship at a time.........................................................................9
A la carte primary care.............................................................. 13
Hispanics: Primary care’s consumer mavericks................................15
What this means for your business............................................. 16
Conclusion................................................................................. 19
Endnotes.................................................................................... 20
Acknowledgments...................................................................... 22The heart of the matter
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.
Executive summary An in-depth analysis by PwC’s Health Key findings
Research Institute (HRI) suggests HRI interviewed 25 executives
An impersonal, splintered healthcare forecasts of looming physician from industry, trade associations
system confounds consumers and costs shortages—perhaps 90,000 by and academia and surveyed 1,500
more and more each year. Overall, 20253 —are based on outdated care clinicians and 1,000 consumers on the
the nation spends $3.2 trillion1 on delivery models. In the New Health future of primary care and found that:
medical care with mixed results. Economy, with the emphasis on
By 2020, 81 million Americans are giving purchasers greater value for • Purchasers are banking on
expected to suffer from multiple their healthcare dollar, do-it-yourself primary care to save money.
chronic health conditions,2 further consumers and integrated care teams The US government is pumping
taxing the system. Revving up the armed with a black bag of virtual tools billions of dollars into primary care
role of primary care—with digital are poised to reinvent primary care improvement and innovation.4
technology, a focus on prevention and and close the gap. Employers are igniting change by
expanded roles for non-physicians— adding lower cost, more convenient
offers a cost-effective remedy. Primary care must synch up with the primary care options: 48% of
pulse of the American people and employers will make telehealth
After decades of being undervalued assuage the twin pressures of cost services available to employees
in a fee-for-service system that and competition in the health sector. in 2015.5
emphasizes transactional medicine Incumbent players with a desire to
at times of distress, primary care is succeed over the long term will look to
poised for an extreme makeover. The new entrants to help them adapt in a
time is right for its true worth to be vastly changed market.
revealed—and rewarded.
“We need to flip the system on its
head,” said Nancy Gagliano, MD,
senior vice president at CVS Health An in-depth analysis by PwC’s Health Research Institute
and chief medical officer of (HRI) suggests forecasts of looming physician shortages—
CVS/minuteclinic. perhaps 90,000 by 2025—are based on outdated care
Rather than playing its historic delivery models. In the New Health Economy, with the
role as gatekeeper to a scattered emphasis on giving purchasers greater value for their
array of specialties, primary care healthcare dollar, do-it-yourself consumers and integrated
has to become the nexus, providing care teams armed with a black bag of virtual tools are
simplicity, value and better health
poised to reinvent primary care and close the gap.
outcomes. That will mean taking risks
and challenging old assumptions.
2 Primary care in the New Health Economy: Time for a makeover Health Research Institute• Consumers are selecting primary Recommendations • Pull it all together: The future
care that fits their lifestyles. As As the health sector undergoes rapid of care will be based on a triage
busy individuals take on greater transformation, health systems must system that rearranges the
responsibility for their health bill, reimagine primary care to stay ahead traditional patient office visit to the
many by-pass the family doctor. Yet in the New Health Economy. This HRI most-appropriate, least-expensive
about eight in 10 consumer survey report recommends four strategies clinicians and sites of care.
respondents said they would be for competing: Successful companies will offer a
open to non-traditional ways of combination of services through
receiving basic medical attention. • Know what you’re good at and a primary care ecosystem that
whom to serve: Traditional embraces the health needs of the
• New entrants are disrupting the healthcare organizations need to whole person, rather than isolating
health industry with innovative inventory strengths and identify one acute problem for attention.
primary care models. Newcomers consumer targets. Consumers
offer convenience and value to want multi-dimensional health
consumers and purchasers through interactions with a broad team of
five modern options: convenient experts. Since there is money to
care, house calls, at-your-service be made in all consumer markets,
care, digital health, and nurse-led look beyond health status and
care. consider location, income, age and
individuals’ health and wellness
• Some traditionalists are adapting
priorities when deciding how to
to stay relevant: About one-third
staff up and build clientele.
of physicians told HRI they have
changed their business model • Explore new roles: Nurses,
to adapt to changing models of pharmacists, behavioral health
care. Some have started providing specialists and other non-physicians
entirely new services to compete have big roles to play in progressive
with new entrants on virtual primary care models such as
care and one-stop-shopping patient-centered medical homes,
conveniences such as co-locating accountable care organizations
care team offices with lab, imaging, and at-your-service care practices.
physical therapy and other Primary care teams that explore
complementary services. new roles are expected to surpass
others.
• Seven core consumer markets
are emerging. Companies must • Partner where it makes the most
cater distinctly to seven major sense: One-third of physician
consumer markets identified by practices are partnering, or
HRI by delivering a la carte care to: planning to partner, with industry
the frail elderly, consumers with newcomers such as retailers,
complex chronic disease, consumers telecommunications companies and
with chronic disease, consumers data companies that use tried-and-
with mental illness, healthy true approaches to expand their
families, healthy adult enthusiasts market footprint. New entrants are
and healthy adult skeptics (See also teaming up. Partnerships with
Figure 5, page 14). community organizations such as
schools, churches and community
centers should also pay off.
3 Primary care in the New Health Economy: Time for a makeover Health Research InstituteAn in-depth discussion
New approaches to primary care for models from scratch and then swiftly half of Americans have at least one
the old, young, sick and well may expanding their footprint and services. chronic disease and 52% are at risk for
reshape the health sector by giving (See page 5: CVS Health: Onward and developing one.8 The United States tops
consumers and purchasers the choice, upward in the New Health Economy). the list of most obese countries.9
service and quality they want—at
more competitive prices. Industry A recent HRI survey of 1,500 clinicians Why the reluctance to visit
newcomers—many of whom never suggests that some pioneering the doctor?
attended medical school—are shaking practices acknowledge that competing Today’s consumer wants on-demand
things up, offering care anytime with industry newcomers requires a service, whether purchasing a sweater
anywhere. Even some traditional new set of tools. Nearly one-third of or playing a song. But try calling the
primary care practices realize physicians said they have changed doctor’s office and hours can pass
that, to survive, they must rethink their business model to respond to before a human connection is made.
their approach. non-traditionalists in the market By then, many have gone to the
and about one-fifth said they have emergency department for a quick fix
started providing new services such as at a higher cost.
“We need to flip the virtual visits and one-stop-shopping to
Even when an appointment can
compete with them.
system on its head.” be made, the travel-and-wait time
Nancy Gagliano, MD, CVS Health And people want these new easy and generally far exceeds the five or 10
affordable services. An HRI survey of minutes spent with an overextended
1,000 consumers found that 81% of physician. Wait times to see a
At the same time, the US government, respondents would be open to family practitioner average 19.5
employers and health plans—with non-traditional ways of getting days, surpassing wait times of other
the objective of reclaiming value for medical attention. Those options specialists including cardiologists (16.8
their health dollars—are nudging the would include retail health clinics, days) and orthopedists (9.9 days).10
industry toward new payment models virtual visits, clinician house calls,
81%
that reward smarter, more do-it-yourself home diagnostics and
cost-effective approaches to clinical remote monitoring through a medical
care and overall health. device or smartphone app.
Consumers open to non-
The result is primary care with Why primary care needs traditional care delivery
a modern twist predicated on a makeover: Consumers
technology-enabled care teams, new and other purchasers want
care sites, data-driven decisions better convenience, quality Even best-in-the-field care is not worth
the wait, according to two-thirds of
and superior customer service. Such and cost
sophisticated personalized attention consumers responding to the recent
can detect health problems early, Americans often postpone critical HRI survey. Consumers are fighting
monitor chronic conditions and early care. When chronic disease back, demanding convenient care that
prevent costly and invasive treatments goes unmanaged, the results are provides value for their dollar.
later. Instead of merely bending the devastating. Each year chronic disease Fifty-four percent said they would not
cost curve, new entrants are trying causes 70% of deaths in the US6 and travel farther for the best care and 81%
to shift healthcare costs along a accounts for 86% of the nation’s $3.2 said they would not pay more.
different curve: building new care trillion in healthcare spending.7 About
4 Primary care in the New Health Economy: Time for a makeover Health Research InstituteCVS Health: Onward and upward in the New Health Economy
CVS Health made its primary care debut in CVS Health believes convenient, offering infusion services to patients
2006 when it opened its first retail clinic. community-based care is important to with chronic diseases such as rheumatoid
Almost a decade later, the company now extending the traditional primary care arthritis, multiple sclerosis and cancer
owns and operates nearly 1,000 clinics and practice’s reach. “Diabetic patients are in their own homes and in more than
partners with more than 60 health systems inside of a CVS pharmacy six to eight times 85 locations nationwide, including 65
in 25 states to deliver primary care. Half of per month,” she said. “But they typically outpatient centers.iv
the country now lives within 10 miles of a only see their primary care provider once
CVS/minuteclinic.i a quarter.” Earlier this year CVS Health announced
a partnership with direct-to-consumer
Yet CVS Health is not necessarily looking CVS Health also fills data gaps between telehealth giants American Well,
to take the place of the traditional primary retail care settings and its partner health Doctor-on-Demand and Teladoc to offer
care provider. Through its health system systems. If a patient from one of its consumers and its health system partners
affiliations the company aims to become partners seeks care at a CVS/minuteclinic even more options for primary care.v As
part of a community-based care model that anywhere in the country, the patient a reflection of its broader commitment
“maximizes the impact of primary care may have his record sent to his primary to care delivery, CVS Caremark changed
physicians, allowing them to coordinate caregiver.iii its name to CVS Health in 2014, casting a
a patient’s care across various sites,” said message to the industry that the company
Nancy Gagliano, MD, senior vice president But retail clinics are just the beginning for is in it for the long haul – and a force
of CVS Health and chief medical officer of CVS Health. While most health systems beyond the prescription business.
CVS/minuteclinics. still worry about losing primary care
office visits to more convenient walk-in
In fact, CVS Health and a group of eight retail clinics and debate how to compete
family medicine associations – including with them and whether to partner, the Half of the country
the American Academy of Family company has leaped ahead into offering an now lives within
Physicians – announced in November expanded array of care services.
that they will collaborate to improve care 10 miles of a
coordination between traditional With its purchase of Coram last year, the
retailer turned health company began
CVS/minuteclinic.
primary care practices and pharmacy-
based retail clinics.ii
CVS Health strengthens its foothold in the primary care market
2006 2009 2014 2015
• Opens its first • Establishes first CVS/ • Purchases company • Announces plans to buy
retail clinic minuteclinic health Coram, expands into and rebrand Target’s
system affiliations infusion centers and pharmacies and clinics
home infusion • Partners with Teladoc,
• Changes name to CVS American Well and
Heath to solidifiy the Doctor-on-Demand
company’s broader
emphasis on care
i. Data shared with HRI by Nancy Gagliano on November 10, 2015.
ii. CVS Health Announcements: Ehley B “Political Pulse: Examining the latest in health care policy every
weekday morning” November 13, 2015 http://www.politico.com/tipsheets/politico-pulse
iii. PwC Health Research Institute. Healthcare delivery of the future: How digital technology can
bridge time and distance gaps between clinicians and consumers, 2014.
iv. https://www.cvshealth.com/about/history
v. “CVS Health to Partner with Direct-to-Consumer Telehealth Providers to Increase Access to Physican Care” CVS Health, August 26, 2015,
https://www.cvshealth.com/content/cvs-health-partner-direct-consumer-telehealth-providers-increase-access-physician-care
5 Primary care in the New Health Economy: Time for a makeover Health Research InstituteIn fact, more than one-third (36%) Primary care physicians are not being Without a strong primary care
of consumers with a primary care effectively deployed. According to the backbone in the health system, the
physician told HRI that they have HRI survey, they spend more than emergency department—the highest
also gone to a retail clinic such as one-third of their time doing cost setting for outpatient care14 —
Walgreens or Target for treatment something other than providing continues to be overused. On average,
of ear aches, sore throats, cuts medical care. Tasks include discussing 37% of these visits are for non-urgent
and broken bones, and even some social barriers to care and behavioral services.15 One study projected that
monitoring of chronic disease. An health issues with patients and $4.4 billion could be saved annually if
overwhelming majority (95%) have performing administrative work. these visits took place in retail clinics
been satisfied with the care. or urgent care centers.16
Only 23% said they are highly
Allegiance to one primary caregiver satisfied with how frequently they After years of primary care erosion,
is waning in today’s healthcare maze. are able to work at the top of their the US government and other
Only about half of consumers said training and 40% said they refer purchasers are recognizing the
that it was very important that they patients to specialists somewhat value that has been lost. Rather than
have one clinician to coordinate all regularly because of staffing and time bolstering the old model, however,
their medical needs and the needs of constraints rather than a health issue. the push is toward using technology
their family. and consumer preferences to find
In fact, family practitioners, general new approaches. The US government
The other half—including the 81 internists, pediatricians and is pumping billions of dollars into
million Americans that will be living obstetricians and gynecologists— primary care improvement and
with multiple chronic conditions by traditionally referred to as primary innovation (See Figure 1).17
202011—require a care hub to manage care providers—deliver a fraction of
a wide variety of health issues. When overall primary care services today. New payment models such as
5% of the population consumes 50% Higher cost medical specialists such the National Council on Quality
of the healthcare dollars,12 something as cardiologists and pulmonologists Assurance’s (NCQA) patient-centered
has to change. Primary care providers provide up to 40% of primary care medical home model and Medicare
could be the change agents, but not services in the US to treat the growing accountable care organizations also
using the traditional model. Each number of Americans with conditions focus on revving up the role of primary
patient requires more attention such as diabetes, congestive heart care.18 Models such as these might
than physicians alone can cost- failure and chronic obstructive get a lift from recent legislation that
effectively provide. pulmonary disease.13 persuades physicians to practice in an
Figure 1: The US government is pumping billions of dollars into primary care improvement and innovation
$1.6b $11.8b $3.6b $11b
Workforce training and Reimbursement and Medicaid annual wellness New community health
loan support quality bonuses visits centers
New primary care training Increase primary care Cover the cost of annual Establish community health
programs, including loan reimbursement rates and new checkups and preventative centers and expand primary
repayments and scholarshipsi bonuses for Medicaid and care services for seniorsiii care services in federally-
Medicareii qualified health centersiv
$322m $10b $240m
Comprehensive Primary Center for Medicare and Primary Care Extension
Care Initiative Medicaid Innovation Program
Reduce hospital readmissions Develop innovative payment Educational support and
and emergency room visitsv and care models, including assistance to increase
primary carevi preventative care servicesvii
i.,ii.,iii.,vii. Abrams, M, Nuzam, R, Mika, S, and Lawlor, G “Realizing Health Reform’s Potential” The Commonwealth Fund (January 2011)
iv. US Department of Health and Human Services “Health Centers and the Affordable Care Act” http://bphc.hrsa.gov/about/healthcentersaca/index.html and “HHS awards nearly
$500 million in Affordable Care Act funding to health centers to expand primary care services” September 15, 2015 http://www.hhs.gov/news/press/2015pres/09/20150915a.html
v. Hancock, J “Mixed Results for Obamacare Tests in Primary-Care innovation” Kaiser Family Foundation. January 30, 2015; http://khn.org/news/mixed-results-for-obamacare-
tests-in-primary-care-innovation/
vi. Centers for Medicare & Medicaid Services “The CMS Innovation Center” Accessed October 23, 2015 online at https://innovation.cms.gov/initiatives/#views=models
6 Primary care in the New Health Economy: Time for a makeover Health Research Institutealternative payment model to achieve HRI examined five emerging models calls diminished from 40% of all doctor
higher reimbursement.19 in today’s primary care market: visits to 1%.22 Rather than becoming
Convenient care, in-home care, extinct, however, new companies
Employers are igniting change too. at-your-service care, and are finding that there is value in
Some large employers are now nurse-led care. repurposing old-fashioned care for the
adding lower cost, more convenient contemporary patient-consumer.
primary care options—such as virtual Convenient care is well ingrained
care—to employee benefit packages. through retail health clinics and Although many HRI-surveyed
Forty-eight percent of employers will urgent care centers that many physicians expressed reluctance at
make telehealth services available to consumers rely on in lieu of an home visits, consumers are ready for
employees in 2015.20 appointment with their regular it. According to the HRI survey, nearly
doctor. Visits to these clinics tripled two-thirds of consumers would be
The case for change in primary care from 2010 to 2014, and the six largest interested in having a clinician treat
is evident. This report explains how retail chains have put over 1,600 them at home. And new companies are
a segmented market of traditional such storefronts on the streets.21 An forming to meet this market.
healthcare organizations and new overwhelming number of consumers
entrants is responding by bringing (95%) are satisfied with the care, Home care offers fresh alternatives that
innovation to the market and and the steady flow is reducing may prove increasingly competitive,
competing for customers. unnecessary visits to emergency especially among the elderly. A
departments. Physicians in traditional successful government model is
Today’s segmented practice that HRI surveyed concede paving the way for private businesses
primary care market: that these sites have increased access to bring healthcare back into the
Newcomers and innovative and patient satisfaction. home. The Centers for Medicare
approaches displacing and Medicaid (CMS) found that
traditional practices Cleveland Clinic, Texas Health participants saved over $25 million
Resources, and Kaiser Permanente in the first year of its Independence at
Modern players in primary care are partnering with retail health Home Demonstration—an average of
A growing ecosystem of companies clinics to extend their reach into the $3,070 for each of the 8,400 Medicare
that have primary care capabilities community. “Now the hospitals and beneficiaries that participated. CMS
is disrupting the market with health systems are knocking on their also noted fewer hospital readmissions,
business models that bank success doors to partner versus the other way more follow-up contact, and less use of
on convenience, good service and around,” said Tine Hansen-Turton, inpatient and emergency department
evidence-based protocols. The menu executive director of the Philadelphia- services for chronic conditions.23
keeps growing across physical and based Convenient Care Association.
virtual realms, offering a broader team
of clinicians and community-based These health systems use retail
collaborations that are tailored toward clinics to triage patients with lower
“Just as the health food
consumer preferences. acuity health issues away from more aisle once had 100
“Just as the health food aisle once
expensive mothership locations. Some items and now has
are also developing joint programs
had 100 items and now has 1,000, to manage patients needing chronic 1,000, primary care is
primary care is now being segmented disease management. now being segmented
down to more and more options,” said
Chris Stenzel, senior vice president House calls are coming back in down to more and
for business development and modern forms, including an more options.”
innovation at Kaiser Permanente, who Uber-like model of providing
Chris Stenzel, Kaiser Permanente
is responsible for the health system’s on-demand service through a
retail health strategy. downloaded app. In a 50-year stretch,
from the 1930s to the 1980s, house
7 Primary care in the New Health Economy: Time for a makeover Health Research InstituteUsing slightly different models, many enters notes into the electronic health care that insurers typically do not
health industry startups are providing record. If additional clinical support is cover, including wellness coaching
in-person visits with the ease and needed, the paramedics have and integrative services such as
swiftness of on-demand smartphone real-time audiovisual teleconnectivity acupuncture and naturopathy to
apps. One company in New York with Geisinger emergency complement medical care. It often
City, Pager, uses Uber to dispatch physicians.26 partners with employers or insurance
doctors and practitioners for $200. firms in half a dozen major cities. The
The startup recently announced a The program has reduced the rate company’s founder, Dr. Tom X. Lee,
partnership with Walgreens to expand of admissions and ER visits for heart both a physician and an MBA, has
the retailer’s virtual care services in failure patients by 50%, lowered the created a model that cuts in half the
New York City and San Francisco. 24 30-day hospital readmission rate for average number of patients seen each
An app called Heal can be downloaded heart failure by 15%, and prevented day by primary care physicians from
to bring a doctor to the house for a an estimated $2.1 million in charges 25–30 to 15–16.
range of nonemergency services such that Medicare would not have
as treating strep throat and stitching reimbursed. Geisinger reported 100% Lee claims that One Medical does
lacerations. patient satisfaction with the program. this at one-third the cost of a
A similar program exists in Canada traditional practice by reducing
Partnerships are already forming. through a partnership between overhead through new technology,
Centura Health, Colorado’s largest Atlantic Canada and insurance giant more efficient processes and a
hospital chain, is teaming up with Medavie Blue Cross. patient-centric design.27
True North Health Navigation, which
offers on-scene care to 911 callers in Subscription-based, at-your-service Another newcomer, Iora Health—
lieu of a costly ambulance ride to the care focuses on personalized, which targets specific patient
emergency room.25 boutique-like care without the populations through relationships
exorbitant fees long associated with with employers, unions and health
The training of fast-responding traditional medicine. Competing most plans—boasts that it is “restoring
paramedics to care for people on the directly with traditional practices, humanity to healthcare.” Physician
scene rather than rushing them to the these lower-cost concierge companies CEO Rushika Fernandopulle fears
hospital is a growing trend. Known offer consumers shorter wait times that primary care has turned into a
as community paramedicine, trained and more personal attention. This series of transactions. “We want to
paramedics are dispatched in chronic team-based model treats the “whole” get rid of the transactions and build
disease management, medication person in one location with short the relationships,” he said. One of
compliance and home safety. They waiting times, savvy technology the most important relationships is
can take vital signs and administer IV systems and access to nutritionists, with a health coach. (See page 9—
medications and work with doctors diabetes specialists, and much more. Iora Health: Putting value back into
and others on a team to coordinate primary care one relationship at
future care. One Medical offers tech-enabled a time).
primary care practices that are
Geisinger Health System’s Mobile focused on improving quality and Venture capitalists have given both
Paramedic Program in central affordability. The company accepts One Medical and Iora Health a real
Pennsylvania is one example. While most forms of insurance and charges boost in recent years and 71% of
in the patient’s home, the paramedic a $150 to $200 annual fee to support physicians HRI surveyed believe
that this model will become more
dominant over the next decade.
60% of consumers say they would be
open to a virtual doctor’s visit
HRI Consumer Survey 2015
Digital health has seeded booming
businesses in virtual care, remote
monitoring, and do-it-yourself home
diagnostics. Burgeoning wireless
8 Primary care in the New Health Economy: Time for a makeover Health Research InstituteIora Health: Putting value back into primary care one
relationship at a time
The ability to build and maintain Iora practices start the morning with a company has designed specific programs to
meaningful doctor-patient relationships 30-minute morning staff huddle to discuss manage severe or chronic illnesses such as
is nearing extinction among primary care patients, group visits, patient-accessible diabetes and congestive heart failure.
practices. But in the New Health Economy, electronic health records and virtual
Massachusetts-based startup Iora Health care. Fewer patients allow for longer Fresh thinking even permeates Iora’s billing
—with more than $48 million in investor appointments – which often run a full practices. Employers and insurers receive a
backing1—is breathing life into the way hour – and patients can view their records one-line email each month that includes the
consumers can connect to their care team. on a screen in the exam room, which cost of all the patients’ services instead of
makes them feel more involved in their separate bills for physician care, lab tests
“We want to get rid of the transactions and care and results in a better dialogue with and specialty services.
build the relationships,” Iora CEO Rushika caregivers.
Fernandopulle told HRI. One health insurance giant has been
The different Iora practices closely mirror attracted to the company’s innovative
Co-founded by Fernandopulle – a Harvard- the needs, characteristics and preferences business model: Humana now partners with
trained physician – in 2014, Iora Health of the populations they serve (See Figure Iora to deliver care to its Medicare Advantage
focuses on highly personalized primary 2 below). Depending on the complexity members at eight locations in Denver,
care as the key to better health outcomes of health needs in each Iora group, Seattle, Phoenix and Tucson. The insurer
and happy, empowered patients. Rather Fernandopulle said that patient loads already reports seeing positive results.3
than relying on fee-for-service, the range from 600 for the sickest practices to
company partners with insurers, unions Iora’s unique approach is starting to pay off.
1,500 for the healthiest, both presenting
and employers in value-based payment The number of Iora’s patients with controlled
stark contrasts to the average patient load
schemes that focus on achieving improved hypertension improved by 25% last year
of 2,3002 for a traditional primary care
health outcomes for targeted patient alone.4 At one Iora practice, hospitalizations
practice.
populations. were 37% lower when compared to a
Services are tailored to each practice. For traditional practice and two other practices
Iora’s model is team-based; meaning that example, what is simply referred to as reported a 30% reduction in emergency
clinicians such as nurses, social workers, yoga class at Iora’s Collective Primary Care room visits.5 Eighty-five percent of Iora
nutritionists and diabetes specialists are practice in New York City is “Hammer patients say they would recommend the
as important as physicians when caring Time” to the New England carpenters’ company to a friend.6
for patients. At the center is a health union members at another Iora clinic.
coach who, Fernandopulle explained, Iora offers the industry a sneak preview of
Hammer Time is yoga using carpentry
is responsible for 80% of the patient what outcomes-focused, convenient, and
tools to remove the potential stigma of
interactions and ensures continuity of customer friendly should mean for primary
such exercise for macho men who suffer
care. The health coach connects patients care in the future.
from back pain and other musculoskeletal
with specialists and helps them identify issues. In Nevada, where Iora serves the
activities to achieve their health goals. culinary workers of the Las Vegas strip, the
Figure 2: The many faces of partnership and population health at Iora Health
Practices Partners Location Patient population
Culinary Extra Clinic Culinary Health Fund Las Vegas Hotel and restaurant casino workers with severe
and chronic illness
Dartmouth Health Connect Dartmouth College, King Arthur New Hampshire Adults with diverse health needs
Flour, NE Carpenters Fund
Grameen VidaSana Grameen America Queens Hard-working, low-income women in immigrant
communities
Hartford HealthCare Health Center Hartford HealthCare Connecticut Hartford HealthCare employees and families
Iora Primary Care (2) Tufts Health Plan Massachusetts Seniors with Medicare Advantage or Senior Care
Options plans
Iora Primary Care (multiple) Humana Denver, Seattle, Seniors with Medicare Advantage Plans, Adults
Tucson, Phoenix over 55
Iora Primary Care NE Carpenters Benefits Funds Dorchester Members of the New England Carpenters union
Turntable Health Downtown Project Las Vegas Las Vegas residents
Collective Primary Care (2) The Freelancers Union New York City Members of the Freelancers Union health plan
9 Primary care in the New Health Economy: Time for a makeover Health Research Instituteequipment gives all primary care caregivers—connecting generalists Nurse-led care has the potential to
players the tools to compete efficiently. with specialists. For example, make a sharp ascent in the primary
Even so, new companies offering Carolinas Healthcare has implemented care market if states continue to
solely virtual care, remote monitoring behavioral health in many of its relax the restrictions they have on
and telemedicine have become well primary care practices to connect nurse practitioners’ ability to practice
situated in a short period of time. primary care teams with specialists without physician oversight. By the
for on-demand advice. Patients can end of 2014, more than half of states
Analysts expect the global telehealth also visit virtually with social workers, were weighing expanding the clinical
market to exceed $30 billion by psychologists, and behavioral health duties of nurses.
2020.28 Gone are the days when nurses without having to leave the
consumers required face time with primary caregiver’s office. The health The master’s-trained nursing
their doctors; now, 60% of consumers system plans to expand the program to workforce is blossoming with help
say they would be open to a virtual each of its 200 primary care practices. from government programs such
doctor’s visit. Companies such as as the Medicare Graduate Nurse
PushCare, Teladoc, and Doctor-on- HRI research shows that consumers Education Demonstration, which has
Demand bring a doctor to the house and clinicians are placing more faith in doubled the number of graduates
through a simple app download. DIY at home diagnostic tests for simple across five sites since 2012—and the
ailments such as strep throat, ear introduction of the doctor of nursing
Government payers and major private infection and urinary tract infection. practice degree in 2006. The supply
insurers are starting to make the shift HRI estimates these tools threaten of primary care nurse practitioners
from physical to virtual. In January, more than $64 billion in traditional is expected to increase by 30%
Medicare began reimbursing clinicians provider revenues.34 from 2010 to 202036 and, unlike
$40 per patient per month for offering studies that project major physician
patients 24/7 virtual access to care.29 Remote patient monitoring is expected shortages, workforce studies for nurse
UnitedHealthcare—which provides to save the system $36 billion globally practitioners foretell a surplus.37
insurance coverage for more than by 201835 through alerts to clinicians
45 million people, will start offering well before a patient’s health status
telemedicine doctor visits this turns into an emergency. Companies
year in 47 states and the District of specializing in remote monitoring “There is a cadre of
Columbia. The American Telemedicine promote care delivery models that are
Association estimates that 12 million built less on the volume of interactions
patients who want to
Americans received such services in with a patient and more on the see the primary care
2014, and that number is expected to volume of patient data that is shared physician every time,
double in 2015.30, 31 among caregivers.
but that group is
Many of Kaiser Permanente’s health One-third of the consumers HRI shrinking.”
systems are already performing more surveyed said that they were
than half of patient visits through interested in a wearable device Richard Kalish, MD Lahey Health
mobile, secure messaging or video32 that could monitor their vital signs
and virtual care accounts for and 85% of physicians said that the
50–60% of Iora Health’s interactions primary care physician of the future A growing number of consumers
with patients.33 will spend more time using mobile (75%) say they would be comfortable
applications and health wearables seeing a nurse practitioner or
Telehealth is also connecting care to monitor patients. Just 10% of physician’s assistant.38 “There is a
teams to fill knowledge gaps. Leading physicians surveyed said they rely on cadre of patients that wants to see the
health systems in both rural and urban remote monitoring devices now. primary care physician every time but
areas are using video consultations
among physicians, nurses, and other
10 Primary care in the New Health Economy: Time for a makeover Health Research Institutethat group is shrinking,” said Richard the same year to care for medically Figure 3 below compares how
Kalish, MD, of the division of primary underserved regions. Forty percent of clinicians and consumers feel about
care at Lahey Health. Kalish is leading primary care physicians in Vermont’s HRI’s five emerging models in
the charge at Lahey to embed elements Champlain Valley were not accepting primary care.
of the NCQA patient-centered medical new patients in 2012,39 meaning
home model and extend Lahey’s nurse-led practice in the state has a How traditional practices are
responding to threats in the
primary care reach care beyond the great deal of room to grow.
primary care market
traditional office visit.
Using nurse practitioners or physician The NCQA patient-centered medical
Two states lead the way in assistants instead of more costly home and Medicare accountable
nurse-led primary care: Vermont— doctors has been estimated to save care organization models—which
where Appletree Bay Primary Care Massachusetts over $8 billion in the emphasize efficiency and care
opened its doors in 2014 with seven next decade40 and managed primary coordination through team-based
primary caregivers, all of whom are care delivered by nurse practitioners care—have been the most widely
faculty members of the University cost 23% less compared to the average publicized attempts by traditional
of Vermont College of Nursing and costs of other primary care physicians primary care practices to simplify
Health Sciences—and Indiana where in Tennessee.41 healthcare for consumers, reduce
Purdue Family Health Clinics opened emergency room visits and
Figure 3: Modern primary care models—what clinicians and consumer say
What consumers say Modern primary care models What physicians say
36% visited a retail clinic in the past year 47% say retail clinics increase patient satisfaction
95% were satisfied 69% say they increase access
89% would recommend retail clinics 83% do not partner or plan on partnering with a
Convenient care retail clinic
76% value high patient satisfaction scores 71% say concierge care will increase
when choosing providers over the next decade
At-your-service
care
60% are open to a virtual doctor’s visit 42% would rely on certain DIY test results to
prescribe medicine
50% would use a DIY diagnostic test
16% are implementing technology to teleconsult with
patients and families
Digital health
31% are interested in monitoring vital signs 85% say the future PCP will rely more on mobile apps
with a wearable and wearables
75% would see a nurse practitioner or 56% say nurse practitioners/physician assistants
physician assistant for care Independent should lead their own patient panels
practice
nurse-led care
66% are interested in in-home care 79% believe that non-physician house calls will
increase over the next 10 years
House calls
Sources: HRI Consumer Insight Surveys 2013, 2014, and 2015, and HRI Clinician Surveys 2014 and 2015
11 Primary care in the New Health Economy: Time for a makeover Health Research Instituteadmissions, and lower overall costs. About one-third of physicians said they payment systems that rewarded
Medicare recently reported $400 have changed their business model to clinical outcomes and efficiency
million in savings from its Pioneer adapt to changing models of care and rather than traditional fee-for-service
ACOs over two years.42 Despite the about one-fifth said they have started payments based on volume. These
generally positive results, adoption providing entirely new services to practices are being incentivized to
has been slow. compete with non-traditionalists find more effective ways to deliver
(See Figure 4 below). primary care.
While most primary care practices
cling to antiquated operating models, These practices are investing With the Department of Health and
a minority is starting to realize that primarily in virtual care, technology Human Services’ goal of shifting more
new entrants to the health industry to simplify the administrative than 50% of fee-for-service payments
herald change and, to survive, nuances of healthcare such as into value-based reimbursement
older practices must compete with scheduling and billing, and one- models by 2018,43,44 the health
or partner with the newer or risk stop-shopping conveniences such as industry might expect to see an
losing patients. For example, 69% of co-locating care team offices with lab, increase in the number of primary care
physicians that HRI surveyed believe imaging, physical therapy and other practices introducing new services.
non-traditional care models have complementary services.
increased access to care and almost
half believe that they have had a Physicians were more likely to test new
positive effect on patient satisfaction. services if they were using alternative
Figure 4: How traditional practices are responding to threats in the primary care market
How is your practice changing its business model in response to growth in retail health clinics, concierge medicine services, on-demand
telehealth services, and other non-traditional ways to access healthcare? (Select all that apply)
No change 68%
Started providing
18% Which of the 51% Virtual technology 17% House calls
certain services
following new
services have 41% One-stop-shopping 9% Group visits
you started
providing? 24% Behavioral health services 11% Other
Increased delivery
of certain services 14% 19% Pharmacist services
Stopped providing
certain services 7%
Source: HRI Clinician Survey, 2015
12 Primary care in the New Health Economy: Time for a makeover Health Research InstituteA la carte primary care
In the New Health Economy, status but on their location, income, For more information about their
consumers, spending more of their age and what they value in care. demographic profiles, care utilization
own money, are choosing how and While the traditional model forces and spending patterns see Figure 5 on
where to receive primary care. the sick and the healthy into the same page 14.
Instead of one-dimensional, in- location, the growing trend is toward
person visits with a primary care segregating complex care from minor Health status should be the main driver
physician, consumers will have or maintenance care. of where consumers go for primary care
multi-dimensional interactions with a services. The sites they choose will be
broader team of caregivers among an To be competitive, both traditional different for scheduled—or planned—
array of convenient care sites. and new players must cater distinctly care versus unscheduled, urgent care
to seven major consumer markets (See Figure 6 on page 17). Health
Consumers may log in virtually for (shown below). Each market is defined systems must guide them for both
care or decide to be examined in the by consumers’ primary health issue. cost and health reasons.
clinician’s office or in the home. How
these interactions occur will depend
not only on the consumer’s health Complex chronic disease
For more insights about how age, geography, income Consumers with complex chronic disease live with one or more
chronic diseases affecting multiple body systems and requiring
and care preferences impact where consumers will complicated disease management. These individuals account for
go for primary care in the future, visit HRI’s online $281 billion in total spending each year, with $11,000 in per capita
interactive model at pwc.com/us/futureofprimarycare spending, the second highest among the seven consumer groups.
On average they interact with the health system 12 times and
have 30 prescriptions filled. About 25 million Americans, or 8%,
are dealing with complex chronic disease.” People with complex
chronic disease need intense care management and coordination
Frail elderly and are ideal candidates for 24/7 remote monitoring, clinician house
calls, patient centered medical homes, and nurse-managed clinics.
Frail elderly consumers are over the age of 75, living at home and
facing health issues related to falls or dementia and suffer generally
poor health. At $92 billion in healthcare spending annually, these
retirees are not the health system’s most expensive but they are the Mental illness
heaviest utilizers of care services and prescription drugs—with an
average of 16 visits and 34 prescriptions fills—and have the highest Consumers with mental illness face depression and mood
per capita spending. About 5.8 million consumers, or 1.8% of the disorders, post-traumatic stress disorder, addictions and suicidal
American population, meet the definition of frail elderly. Frail elderly ideations. These patients spend $23 billion on care each year
patients need intense care management and coordination and are and have an average of $2,500 in per capita spending, have six
ideal candidates for 24/7 remote monitoring, clinician house calls, touchpoints with the system and fills seven prescriptions. About 9.4
and either patient centered medical homes or geriatrician/internist million, or 3%, of Americans have a mental illness as their primary
practices with team-based care. health issue. The mentally ill may find a match in medical homes
with integrated behavioral health services and may use on-demand
telehealth for unscheduled care.
Chronic disease
Consumers with chronic disease have problems affecting a single Healthy adult enthusiasts
body system such as hypertension and require uncomplicated
disease management. Because of their sheer numbers, these Healthy adult promoters value a regular physical, wellness/coaching
consumers rank first in total spending at $847 billion each year, services, and get recommended screenings. These consumers spend
however their per capita spending of $4,800 is much less than that approximately $30 billion on healthcare services annually, average
of consumers in the complex chronic disease market. They average $1,300 in per capita spending and interact with the health system
seven care visits each year and fill 12 prescriptions. 177 million one or two times throughout the year. About 23 million Americans
Americans, or 56%, fit this description and are the wealthiest of the form this group. Healthy adult enthusiasts will likely gravitate toward
consumer markets. Consumers with chronic disease may benefit digital options and convenient care clinics and value the preventive,
from population-based care teams, specialized nurse clinics and wellness and integrative services at-your-service care practices offer.
retail clinics that offer disease management.
Healthy families Healthy adult skeptics
Healthy families are households with healthy dependent children Healthy adult skeptics generally avoid interacting with the health
under the age of 18. There are 62 million people living in healthy system and are less likely to have health insurance than other
families in the US and they spend $70 billion on healthcare each consumer groups. This market is approximately 12 million strong with
year. They interact with the health system slightly more than Healthy $7 billion total and $600 per capita spending. Individuals in this market
Adult Enthusiasts (described below)—mainly for vaccinations and make visits to the emergency room and are admitted to the hospital at
the occasional cold or sinus infection—but have lower spending nearly the same rates as Healthy Adult Enthusiasts, but they go to the
per capita at $1,100. Healthy families will likely gravitate toward doctor less often. Healthy adult skeptics are likely to gravitate toward
digital options and convenient care clinics and value the preventive, digital health options such as DIY diagnostics and DTC telehealth
wellness and integrative services at-your-service care practices offer. companies as well as retail clinics and clinician house calls that keep
them out of traditional care settings.
For more information about HRI’s methodology for defining
the consumer markets, see page 22.
13 Primary care in the New Health Economy: Time for a makeover Health Research InstituteFigure 5: The consumer markets for primary care
Complex Healthy Healthy
Frail chronic Chronic Mental Healthy adult adult
elderly disease disease illness families skeptics enthusiasts Total
Demographics
Number
of people 5.8m 24.9m 176.3m 9.4m 62m 12.1m 23.1m 313.5 m
Average age 82 49 40 29 22 39 39 ---
Average
family income $44,973 $58,623 $73,490 $70,916 $67,828 $63,663 $69,806 ---
Total spending1 $92,391.6m $280,819.7m $846,732.4m $23,306.3m $70,338.1m $7,286.2m $29,846.7m $1,350,720.9m
Per Capita
Spending $16,010 $11,284 $4,803 $2,490 $1,135 $603 $1,291 $4,309
Out-of-pocket
spending $2,050 $1,197 $709 $526 $167 $222 $281 $610
Spending on care
Inpatient $4,974 $3,248 $1,453 $345 $493 $86 $374 $1,305
Ancillary 2
$417 $722 $461 $208 $74 $35 $170 $359
ED $375 $344 $210 $96 $64 $86 $98 $178
Office $2,869 $2,119 $1,219 $804 $249 $160 $267 $1,006
Other medical
services $7,375 $4,851 $1,461 $1,036 $255 $235 $382 $1,461
Care utilization
Total 15.7 11.9 6.9 5.7 1.6 0.9 1.4 5.7
Discharges 0.4 0.2 0.1 0.0 0.0 0.0 0.0 0.1
Ancillary visits 0.8 1.1 0.4 0.2 0.1 0.0 0.1 0.4
ED visits 0.5 0.4 0.2 0.1 0.1 0.1 0.1 0.2
Office visits 13.9 10.2 6.2 5.3 1.4 0.7 1.2 5.1
Prescription drugs (out-of-pocket)
Retail drug
spending3 $14,761.5m $96,912.3m $167,606.7m $6,664.6m $3,315.3m $659.3m $3,037.4m $292,957.1m
Retail drug
spending
per capita $2,558 $3,894 $951 $712 $53 $55 $131 $935
Prescriptions
per capita4 34.4 30.3 12.0 6.9 0.7 0.7 1.4 10.3
Source: Medical Expenditure Panel Survey, 2012
1. Total spending represents the Medical Expenditure Panel Survey (MEPS) reported total health expenditures for inpatient,
outpatient, ED, office-based, provider, prescription drugs, home health, and other medical services.
2. Ancillary includes outpatient medical services.
3. Retail drug spending represents MEPS retail perscription drugs expenditures.
4. The total prescriptions per capita represents MEPS-reported prescription drugs per person, including all refills. For example,
if a person has 2 perscription and refilled them each twice in a year, the total perscriptions per capita is listed as 6.
14 Primary care in the New Health Economy: Time for a makeover Health Research InstituteHispanics: Primary care’s consumer mavericks
Hispanics are helping to rewrite the definition of primary care. This fastest-growing US demographic - expected to
double in size by 20501—presents enormous possibilities for the market with their estimated $1.5 trillion in purchasing
power2 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.3
Hispanics will be primary care’s consumer mavericks in the New Health Economy, 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:
Hispanic
Percentage of customers who… Non-Hispanic
Hispanics pay closer attention to costs. …ask about the price of a visit before a clinician raises the issue
4
Price is the most important aspect of care to Hispanics, and 50%
they are willing to act on this preference. The 2015 HRI survey 28%
found that 95% of Hispanics believe it is important to obtain
…believe that it is important to receive an accurate cost
an accurate price for health services - compared with 82%
estimate before getting care
of non-Hispanics - and will often ask about cost before going
to the doctor or having a procedure done. Hispanics are also 95%
more likely than non-Hispanics to rank cost above quality when 82%
selecting a medical provider.5
Hispanics are pioneers in mobile health. …use mobile technology to monitor or diagnose a health problem
Hispanics have adopted mobile health at a faster rate than non- 14%
Hispanics, as many other patients are still slow to e-mail their 5%
physician or refill a prescription by text message. Additionally,
Hispanics are nearly three times more likely than non-Hispanics …use mobile technology to make a medical appointment
to use a mobile device for health-related reasons such as 31%
scheduling an appointment or purchasing care, and are more 5%
willing to use technology to monitor health by checking vital
signs or glucose levels. …use mobile technology to order a refill of a prescription
27%
20%
Hispanics access a wider door …visited a retail health clinic more than once last year
to primary care. 54%
Appreciating convenience over traditional “institutional” 33%
medicine, Hispanics willingly gravitate toward lower-cost retail …primarily go to a doctor for non-emergency care*
health settings and alternative care providers in the community.
According to the 2015 HRI survey, 54% of Hispanic consumers 66%
- regardless of income or insurance status- have used a retail 76%
clinic at least once in the past year, compared with 33% of non-
…would be willing to use videoconferencing to meet
Hispanics. They are also more likely to rely on non-physicians,
with a clinician
such as pharmacists, for care and advice. In the 2014 HRI
survey, 66% of Hispanics reported going to the doctor for non- 65%
emergency conditions, compared to 76% of non-Hispanics. 6 47%
Source: *HRI Consumer Insight Survey, 2015 and *HRI Consumer Insight Survey, 2014
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 Hispanics in
the US by 20507—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.
15 Primary care in the New Health Economy: Time for a makeover Health Research InstituteYou can also read
