Minute Clinics Part II…
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As part of our efforts to keep in touch with practicing physicians, Harvard Pilgrim formed a group about ten years ago called the Harvard Pilgrim Physicians Association (HPPA). HPPA has a Board - made up about 12-15 practicing docs (to be on the Board, you have to be a practicing clinician - seeing patients, etc. - no administrative leaders) - and the Board meets with senior management about 5-6 times a year to discuss what’s up with the plan, and what’s up with health care generally. In my eight years with Harvard Pilgrim, I’ve missed one or two HPPA Board meetings, and most members of senior management have similar attendance records. The meetings are informative, constructive and helpful.
We had one a week or so ago in which we asked the folks from Minute Clinics to come present the Minute Clinic vision generally - and the plan for MA and New England - to this group of physicians. By the way, the group is about evenly split between primary care providers and specialists. Minute Clinic CEO Michael Howe made the presentation, which was quite informative and very well done - and the dialogue that followed was fascinating. I drew three conclusions from it. First, the Minute Clinic’s strength is in its simplicity. It really limits the tasks and the services it takes on, and by doing so, dramatically reduces its operating costs and simplifies its business model. Second, they really do have scale - and because it’s a fairly simple operating model, they can scale their work digitally, and operate with a very strong and powerful electronic clinical record. Third, some of the docs pointed out that the simple stuff is kind of the “break” in their day of seeing patients, and that having this business migrate to Minute Clinic-type venues would leave them with more complex patients with a larger set of issues and concerns. Now some would argue that’s a good thing - docs seeing patients who really need to see a doctor, instead of seeing patients who might not need that level of care. But it does raise some interesting issues about the nature of the office practice.
It reminded me, in some ways, of the debate about Ambulatory Surgical Centers (ASCs). Some general hospital folks argue - persuasively - that ASCs peel specific, high margin business out of general hospitals, and leave behind the emergency room, free care, and the complex task of managing a full service institution. Yes, the ASC model is simple and inexpensive, because it’s only trying to be/do one or two things, but that makes the math and operating model for the general service hospital that remains harder to solve. ASC folks argue - also persuasively - that they are removing very specific procedures that don’t need to be done in an inpatient setting, and because they specialize, they can do it for less, and do it better.
Outside of health care, the discussion sounds a lot like the debate that must have raged when Midas decided to focus on brakes and mufflers, thereby taking simple, scaleable business out of “full service” service stations in the 1980s. We’ve seen the same thing happen with BJ’s and Costco, too, whereby simple, scaleable durable goods selling found its way into mega-stores that specialize in bulk purchasing, thereby taking business away from full service supermarkets. And $2 glasses at CVS probably created some screaming from other, more specialized institutions that focused on eye care and eyewear.
Isn’t this the way it’s supposed to work? Better mousetraps that meet people’s needs and expectations replace “old ways” of doing something with newer, less expensive, more accessible opportunities? Minute Clinics represent an opportunity for people to use a relatively convenient, fairly simple, relatively inexpensive care delivery model to perform a lot of simple, uncomplicated health care services that don’t need to be in a high tech/high cost setting. This would seem to me to trump the arguments about “disruption” that are coming from the AMA and others against them.
As you say, the Minute Clinics can handle the simple cases for a lower cost than PCP’s can and provide more timely access as well. The ASC’s are more of a focused factory concept doing a few things well at, probably, 25%-30% lower cost than a full service hospital can do them. The question, I think, is: how should the PCP’s and full service hospitals respond?
For PCP’s, I think the real issue is what is the appropriate value of an hour of their time assuming every patient they see needs to see a doctor instead of an NP or PA? I think there is a general consensus that PCP’s are underpaid by Medicare, Medicaid, and private insurers as compared to specialists who perform procedures. To the extent that such spots exist, PCP’s and pediatricians might be better off working for a salary instead of on a fee for service basis.
There are two issues for hospitals if they lose a considerable amount of profitable business to ASC’s. One is whether or not they need to reduce capacity either individually or regionally. The other is (assuming capacity utilization is satisfactory) are they being paid adequately for the cases that they handle and is uncompensated care unduly burdensome?
If I were a payer, I would want the really simple primary care cases handled by an NP or PA. For hospitalizations, if an ASC can properly handle a case for 25%-30% less than a full service hospital would charge, that’s a good thing. If the patient’s issue can be competently handled by a community hospital instead of an AMC (at considerably lower cost), it should be. At the same time, we need to make sure that PCP’s are compensated fairly for the work that they do and that payers (including taxpayers) aren’t stuck paying billions of dollars annually for unneeded, excess hospital capacity.
Charlie, what is the standard model for reimbursing NPs and PAs who practice in PCP offices and ASCs? It seems to me, through experiences both professional and personal, that many patients are cared for by these providers when seeking minor care in a “traditional” setting. Are the facilities usually reimbursed as a whole to pay their providers as they see fit? If that be the case, I don’t think it would be a stretch to firmly conclude that the main gripe of the AMA is the “easy money” that will be leaving their practices, and seeking care at these clinics.