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Curbside Consult with Dr. Jayne 12/13/21

December 13, 2021 Dr. Jayne 7 Comments

The hot gossip around the physician lounge towards the end of the week centered on CVS Health’s plans to enter the world of primary care delivery. For anyone that missed it, their plan is to use telehealth, new clinics, and teams of physicians, nurses, and pharmacists to help solve the primary care problem. CVS Health believes that because it owns resources across many of the touch points of the healthcare system, it is uniquely positioned to enter the market.

If you are not in the US or are less familiar with the company, it not only owns thousands of retail pharmacy locations (some of which offer urgent care-type services), but also a pharmacy benefit manager (Caremark). Additionally, CVS owns a health insurance company (Aetna), so I don’t disagree that it has a pretty broad portfolio.

Not too long ago, CVS Health began rebranding some of its stores as HealthHub locations. I could never figure out what that differentiator really meant. My local store was rebranded, but nothing changed – still the same products, still the same square footage, and no increase in the number of exam rooms or appointments for its retail clinic. The company plans to keep adding these HealthHub stores (including 1,000 this year) and they are supposed to host a physician-led care team that includes dieticians, mental health professionals, and social workers. At the same time, the company is planning to close several hundred other retail locations as populations shift.

Digging deeper into the company’s press releases, it sounds like the company plans to further shift store formats, stating “Three distinct models will serve as community health destinations,” including sites that are dedicated to primary care, sites that are an enhanced HealthHub “with products and services designed for everyday health and wellness needs,” and traditional CVS Pharmacy stores “that provide prescription services and health, wellness, personal care, and other convenient retail offerings.” I couldn’t find mention of any changes to the CVS relationships with Target stores or the regional grocery chains with which it has also partnered.

I don’t disagree with their goal of providing a resource to better coordinate care or manage chronic conditions. The company is well aware of what we in primary care have known for a long time – primary care services are relative cheap in the grand scheme of healthcare spending (about 10% of annual spend in the US) and can actually help prevent disease and slow the progression of chronic diseases. This can lead to overall savings in healthcare spending.

However, there simply aren’t enough primary care physicians to go around, and in our culture, the perceived value of having a primary care physician is low. People seem to prefer transactional care that happens on their schedule, and I understand that as well.

Knowing that there aren’t enough physicians, many of my physician colleagues were speculating on how CVS plans to do this. CVS apparently plans to acquire physician practices, which should be interesting. Nearly 70% of physicians in the US are employed by hospitals or corporations, which have been on a buying spree during 2019 and 2020. The hospital/health system-employed portion of that number is about 50%. The remaining corporate entities include insurers and private equity firms. When they haven’t been purchased outright, independent physicians are consolidating into larger networks.

When you stratify the data by physician specialty, it becomes more interesting. The specialties with the highest rates of being physician-owned or independent are surgical subspecialties, anesthesiology, and radiology. Among the bottom five: pediatrics, family medicine, and internal medicine – in other words, primary care. I’d be interested to learn more about the CVS Health acquisition strategy because frankly I’m not sure where they’re going to find the headcount. Just because you purchase a practice doesn’t mean a patient will stay with it. Patients may not like how the new practice runs, and I can pretty much bet that a CVS-owned location will run differently than the average private practice.

Physicians may not stay with the practice. Perhaps they are closer to retirement than advertised and decide to leave immediately following any earn-out or guarantee period. Even if you can convince a subset of physicians to join a new practice with CVS Health, they’re likely to be hampered by non-compete clauses or other negative incentives that will make recruiting their patients a challenge. Additionally, folks who have remained independent for this long, in the face of ongoing market consolidation, might not be terribly well suited for the corporate medicine life.

Being cared for by a physician affiliated with a hospital or health system is a powerful idea. Patients, especially those who are medically complex, often feel a sense of security about having all their subspecialists and consulting physicians within the same system. Even with interoperability, there’s a sense that outsiders might not have access to all the records or might not provide the same level of care. There’s also backlash against corporate entities in some communities, with concerns that profit-oriented organizations will use patient medical records for marketing or other purposes.

One of the largest challenges I see for CVS Health acquiring these primary care practices is the matter of electronic health records. Many of the independent practices that they might acquire have EHRs that support that independence, like those from Athenahealth, NextGen Healthcare,EClinicalWorks, Greenway Health, etc. Having been through countless EHR conversions, I know that getting data out of those systems is usually easier said than done. I hope CVS Health has a substantial EHR conversion budget and is right-sizing their staff to handle it because patients expect their records to move with the physician, especially if the whole practice makes a transition.

Additionally, from a human resources standpoint, the altruistic physician candidates who are causing medical school admissions to surge won’t be ready to hang out their shingles for another seven or eight years. There’s no guarantee that they will find primary care attractive unless there are major changes. On the other side, there are a lot of burned-out physicians in the world right now who might just see working for CVS Health as a good thing. Time will tell how well their recruiting efforts will pay off as well as how challenging the technical pieces will be.

What do you think of the CVS Health move into primary care? Leave a comment or email me.

Email Dr. Jayne.



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Currently there are "7 comments" on this Article:

  1. Primary care has evolved to a practice very different from the training I had as a family physician. The current model, which focuses on flow chart protocols for common acute problems and chronic conditions, is ideal for midlevel provider delivery and physicians only exist to make it legal. Ideal for corporate for profit ventures. After all, it has been those so-called “non-profit” hospital systems that brought it to this point.

    My bet is CVS is will do well. But meanwhile, any patient-focused efforts that truly address the unqiue circumstances of an inidividual’s health as opposed to patient populations will continue to struggle.

    Change ultimately is never good nor bad, just change. Until we radically redesign American health care, change is what we can expect. as everyone seeks to make the most money they can and patients lack power as effective as the lobbyists of the big organizations making the money.

  2. Unless CVS is able to cope better with fewer people working I don’t see them having much traction.
    Here in VA folks are fed up with the CVS pharmacy being closed due to unavailable pharmacists, rude employees (sometimes only 1 person) or lack of stock. I understand the supply problem and staff finding new/different jobs but their culture needs adjusting too!

    • After years of dealing with awful CVS customer service, I finally woke up and realized I could change, with little effort. So moved to big grocery store down the street (who had acquired the well loved town pharmacy years before) and love them.

  3. My preference is for multispecialty medical groups apart from hospital systems as the vehicle for the best care and cost-effectiveness. CVS doesn’t seem all that attractive yet I like it if it slows the drift to hospital employment.

  4. CVS has been trying to do retail clinics for close to two decades and haven’t had much success. They say that Aetna health plan is low margin, and the healthhub retail clinic is higher margin. The aetna member gets directed to get care at the healthhub and picks up their prescription and convenience store item. Those services will add up to a high margin business. I think it will be hard to execute but they’re so big it won’t matter.
    Also, good point about recruitment. CVS has been brutally effective at taking the protected, high wage pharmacy profession and constraining real wages. Young pharmacists have laid flat at chain employment or tried to get into clinical pharmacy. If you look at owner-operator, independent pharmacies, their older owners tend to earn about as much as the young pharmacists salary When you factor in the risk and costs of running a small business, you can see that the independent pharmacies are going to age out in the next couple decades. It’s sad that being a loss leader seems to be the only viable business model for the everyday healthcare delivered by your pharmacy or primary care physician.

  5. My local community health center currently has lots of openings for COVID vaccinations (and is taking walk ins on top of that), while the retail pharmacies are completely booked up. I don’t know if CVS will be successful with primary care, but seems indicative of where people are seeking out care around here.

  6. I dread going to my local CVS (and Walgreens for that matter).
    The experience is singularly dreary and depressing. Unflattering layout and lighting, unsmiling cashiers, and unwelcoming pharmacists. Nothing much has really changed since this standup routine from Jerry almost 30 years ago.
    https://www.youtube.com/watch?v=gOKaPeUHMGc







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