Hello and welcome to Careviser by Marie Loubiere. Years of research summarized in 5-minute emails. Spot emerging opportunities in healthcare.
Primary care is at the backbone of an efficient health system. It can help detect and prevent many diseases. So why is it stuck in a payment model that doesn’t work?
Reform of Payment for Primary Care — From Evolution to Revolution, Allan H. Goroll, M.D., Ann C. Greiner, M.C.P., and Stephen C. Schoenbaum, M.D., M.P.H., N Engl J Med 2021; 384:788-791
🗝️ Why it matters: This is an interesting perspective article about primary care. This article focuses on the US, but the key points could apply to Europe too. Up to 40% of primary care practices are considering closing shop, merging, or selling. The share of primary care in overall health expenditures keeps decreasing. Strengthening primary care is key to reducing overall health spending.
🔎 The article: The authors start by explaining how fee-for-service is bad for primary care. It puts a lot of pressure on physicians to reach a high volume of consultations and to reduce the length of each consultation.
Then the authors present a few initiatives to bring value-based payments in primary care. The overall idea is that practices receive a payment per patient for all primary care encounters within a set amount of time (called “capitation”), which can be supplemented by meeting quality metrics. Patients can also be incentivized of the overall savings generated. These measures were tested in the 90s and failed because practices did not receive the appropriate guidance or incentive to tackle the organizational and tech change involved with the new payment model.
New initiatives have been implemented more recently and are successful such as the Capital District Physicians’ Health Plan (CDPHP) of Albany, New York which has now enrolled 193 practices with an increase in quality of care and satisfaction, and a positive return on investment.
✅ Findings: Transforming primary care requires an investment in tech (for instance to be able to properly track and attribute patients to practices) but also in time. It takes a least a year for practice to adjust. Past experiences show that it’s better to completely adjust the payment model so that stakeholders have no choice but to adjust while supporting them.
🚀 Opportunities ahead: Primary care can be transformed but as usual it requires all stakeholders to be involved, especially primary payers.
Primary care has changed a lot in the past decade in the US with the emergence of players such as Carbon Health or OneMedical. These have won market shares among employers as they are patient-first and supposedly more efficient thanks to high investments in technology.
Interestingly enough, a similar change is at the very beginning in Europe. Europe is at the same time a harder and an easier market for vertically integrated healthcare providers:
Each country has different regulations and payers so you need to build domestically.
Regulation is pretty stringent in some countries to ensure providers remain independent from the pressure of traditional profit-making businesses.
At the same time, in many countries, there is a single primary payer. No need to contract with employers or private insurers, all patients can access your services as long as they are registered with statutory health insurance.
Avi Medical is an impressive integrated primary care provider in Germany. Launched in 2019 by a time of repeat entrepreneurs, they have already built 5 GP practices in Munich. They have raised a whopping €38.5m so far.
Ipso Santé is a French integrated primary care provider. They have been around for longer with 4 practices, and 20 in the making. They have launched a value-based reimbursement scheme with the French statutory health insurer. They get a fixed yearly fee for all primary care services provided for patients who register in the program. Each patient gets at least one lengthy consultation each year where the GP performs a full checkup. Patients can also get access to additional services (e.g., dieteticians) for free. They raised a round this year with impact fund Citizen Capital.
That’s a wrap for today! Don’t hesitate to reply to this email with comments, I read and answer all emails :)