The friction is palpable. Providers are frustrated to the point of openly criticizing payers ‒ seemingly oblivious to the reality that insurance is for most Americans the only mechanism for any healthcare at all.
On the other side are patients who are equally frustrated by providers who demand adherence to antiquated (often analog) processes around scheduling and redundant bureaucracies while the ubiquitous smartphone moves everyone further and further into a mobile and connected reality.
The gulf is widening and the trajectory for many primary care physicians is entirely unsustainable for a host of reasons. Here are the top 3 that I see.
1.The economics for the old model of low‒acuity primary care simply doesn’t work
2.New models of low acuity/primary care are pushing prices even lower
3.In a mobile, smartphone‒connected world, the value proposition around primary care is being redefined
Clearly, the definition of primary care itself has blurred substantially, but the model that’s on life‒support (even if it’s not technically dead) has the following general profile.
•Low‒acuity, general (or “family”) practice in a single geographic location
•Standalone clinic often located in a small strip center (or medical practice archipelago)
•Requires patient scheduling for on‒premise, exam‒room consultations
•Uses 3rd party insurance (public or private) as the primary means of reimbursement
The economics for this model are brutal ‒ and getting worse. By any measure, primary care providers are the lowest paid (of 25 specialties) and often the hardest working. A 2012 study opened with this introduction:
“Estimates suggest that a primary care physician would spend 21.7 hours per day to provide all recommended acute, chronic, and preventive care for a panel of 2,500 patients. The average US panel size is about 2,300. Estimating a Reasonable Patient Panel Size for Primary Care Physicians With Team-Based Task Delegation ‒ Annals of Family Medicine
A summary assessment on the future of primary care in this 2008 study was equally grim.
“Our estimates suggest that the marginal cost of a primary care physician visit is between $51 and $77 and the marginal cost of a primary care physician-provided Medicare relative value unit (RVU) of work is between $37-$50. At current levels of supply, the marginal social costs of primary care visits appear to be equal to or greater than marginal social benefits. We estimate that the private return to primary care practice is between 7-9%. These estimates suggest that substantial increases in primary care physician supply are unlikely to be socially beneficial. Moreover, at current fee levels, such increases are unlikely to occur. Alternative, lower cost strategies are needed for supplying primary care services. The Cost of Primary Care Doctors
While it’s tempting to discount this summary given the age (now about 6 years old), healthcare isn’t that fast moving and the prices quoted for this level of service haven’t changed significantly. Adding a $10 bill would more than likely account for any statistical discrepancy for the last 5 or 6 years.
Lower cost retail models are also emerging that put even more pricing pressure on primary care practices of all stripes. Last month Walmart announced $40 pricing for a visit to one of their in‒store clinics and they claim it’s a full 50% of the industry standard ($80). Walmart currently operates about a dozen in‒store clinics and they expect to add another 5 by the end of this year. That’s a small number to be sure, but the potential is provocative (as both a retail and work-site clinic).
Sutter Express Care offers a similar flat‒fee visit for $75. Most common health screenings and minor illness or injury visits through CVS Minute Clinics range from about $60 to $100 (price list here).
That’s just the economics. Patients are equally frustrated with the inconvenience of advance scheduling, redundant paperwork and waiting in exam rooms that are inconvenient because of their location in archipelagos of medical practices. All of which has to be navigated for a brief encounter with a physician who’s often glued to a keyboard and monitor for data-entry.
Here’s a recent tweet from a mom with 2 kids in tow ‒ who just happens to be the Chief Medical Officer and Executive Director of The Advisory Board Company.
She’s right of course. The old analog model just can’t compete with a hectic, busy life ‒ and the luxury of accommodating healthcare delivery with antiquated thinking (and technology) just won’t last.
The numbers aren’t trivial. For 2010, the CDC estimated about 550 million “primary care” visits (here) and cited “cough” as the most frequent principal illness‒related reason for the visit. The most commonly diagnosed condition was “essential hypertension” (high‒blood pressure with no identifiable cause).
All of which means that the old model of primary care may not be completely dead, but it’s definitely on life‒support. Whether we agree with the efficacy of low-acuity, retail healthcare or not, there’s no question ‒ it has arrived.