Retail Health

Are $59 Virtual Visits at CVS Health a Play for Women?

By M2|2018-08-23T13:49:46+00:00August 22nd, 2018|Health Care Trends, Innovation, Retail Health, telehealth, Uncategorized|

Are $59 Virtual Visits at CVS Health a Play for Women?

Last week we wrote about how CVS Health offering $59 telehealth video visits through the company’s retail medical clinic, MinuteClinic, would significantly change the health insurance market. This week, we are going a step further to consider the specific effects of the CVS Health offering for women.

As covered previously, CVS Health is looking to serve people with routine health needs who are shopping for lower costs. Who is doing that shopping? Primarily women. Women make “80% of the health care decisions for their families.” If the woman is a mother, surveys show more than 75% of the time, she is responsible for choosing a child’s health care provider and taking the child to health care appointments. Women who aren’t mothers are also often caregivers – nearly 50% of women without kids make health care decisions for a family member.

The combination of increasing deductibles – more than half of cost-sharing payments were in the form of a deductible for the first time in 2016 – and increasing need for health care at convenient times has already driven women to be the most likely users of retail clinics.

According to FAIR Health, in 2016, women accounted for a higher percentage of retail visits covered by insurance than men in nearly every age group. For people between the ages of 19 and 30 who visited a retail clinic, nearly 70% of visits were by women, as the chart below shows.

CVS Health, no doubt, already knows women are the primary users of their in-person MinuteClinics. Converting women MinuteClinic visitors to $59 telehealth visits shouldn’t be too difficult since women are the primary health care decision makers, and the virtual visits are cheaper and more convenient than going in-person to a CVS store.

Will other health care organizations follow CVS Health’s lead and start to cater more to women as health care consumers? Theirs seems like a data-driven strategy that other entities might be wise to emulate. Just as the $59 virtual visit will disrupt the health insurance market, the new CVS Health offering could also change the way the health care system meets the needs of the primary health care decision-maker in the U.S. – women.

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CVS Health Just Upended the U.S. Health Insurance Market

By M2|2018-08-15T13:38:07+00:00August 14th, 2018|Health care spending, Health Care Trends, Health Plans, Health Reform, Innovation, Insurance, Out-of-pocket spending, Retail Health, telehealth, Uncategorized|

CVS Health Just Upended the U.S. Health Insurance Market

For $59, CVS Health will now offer telehealth video visits through the company’s retail medical clinic, MinuteClinic. The video visits will be available through the CVS Pharmacy App to anyone interested who lives in Arizona, California, Florida, Idaho, Maine, Maryland, Mississippi, New Hampshire, and Virginia – and Washington D.C.

This move will significantly change the health insurance market, and CVS’s merger with giant insurer Aetna isn’t even final, though reportedly, the “Justice Department’s antitrust division hasn’t turned up vertical competition concerns from the merger,” increasing the odds significantly that the deal closes before the end of the year.

What does CVS Health see that is driving this strategy? A shifting private health insurance market that requires people to pay up front for routine care, making consumers more sensitive to costs and less obligated to use a provider that is “in-network.” In the olden days (2006!), as the chart below shows, patients paid the majority of their cost-sharing payments in the form of copayments or coinsurance, that is, payments to providers who had an agreement with a health insurer. In 2016, for the first time, more than half of cost-sharing payments were in the form of a deductible, as the chart below from the Peterson-Kaiser Health System Tracker shows.

MinuteClinic video visits for $59 (paid for directly by the consumer) capitalize on three ongoing trends: 1) Patients have to pay more, before insurance starts to pay for claims, making consumers more sensitive to cost; 2) Patients want more convenience and CVS can deliver it more cheaply, in no small part because there are no insurance forms or administrative costs; and 3) Payers are reluctant to pay for virtual visits.

First, CVS Health is looking to serve people with routine health needs who are shopping for lower costs.

According to FAIR Health, the median charge for a new patient office visit at a retail clinic in 2016 was $109, compared to $294 in an office setting. The average charges and allowed amounts for the most typical retail clinic visits are shown in the chart below from the FH Healthcare Indicators™ and FH Medical Price Index.™

Simply put, the video visits will be cheaper than retail clinic visits. And, even if a patient is referred from the MinuteClinic video visit to one of the 1,100 MinuteClinic physical locations, that patient is likely to save more than $100 for the visit compared to going to a physician visit.

Second, CVS is looking to leverage the steep rise of people seeking care in retail clinics, by offering a clear value proposition to use a MinuteClinic virtually because it’s cheaper and more convenient. As the chart from FH Healthcare Indicators™ and FH Medical Price Index™ below shows, retail clinic visits increased by 847% from 2011 to 2016 with growth in rural areas increasing by 704% and in urban areas by 865%.

Clearly, CVS Health knows their potential customer well. A survey of 5,000 virtual visit users published by the Advisory Board in April shows more than 33% of people who had a virtual visit lived in a city, compared to 9% who lived in the suburbs or rural areas. Virtual visit users are also high earners – 52% “make more than $71,000 a year,” and are more likely to have private insurance.

Third, CVS Health sees that getting insurance companies to pay for virtual visits is hard. Forbes recently touted telehealth in article titled, “Lower Cost Higher Quality Health Care Is Right At Our Fingertips“ but the author was blunt in his explanation of what is holding telehealth back:

“The biggest obstacles? Government. Insurance companies. Employers. They pay the bills. Not only have they been slow to take advantage of telemedicine, they are refusing to pay for most of it…”

Getting a virtual visit via the free CVS/pharmacy app for just $59 means a person can go around his or her insurance company – and CVS avoids that hassle, too. Here are just a few ways that CVS Health’s approach differs from regular health insurance: You don’t need a referral. You don’t need to wait days for an appointment. You probably don’t have to take time off work because the virtual visits are available 24 hours a day, 7 days a week.

If you are one of the 40% of people who has employer-sponsored insurance but is enrolled in a high deductible health plan (HDHP), you probably love the idea of a cheaper alternative to a retail clinic since you are accustomed to paying out-of-pocket for your basic care now. Even if you have insurance, it doesn’t matter, because the virtual visits can only be paid for with a credit or debit card (CVS Health said they will add insurance coverage and national coverage by the end of the year).

Insurers have been offering limited products, in limited geographies, with limited providers, their “network,” for years. The launch of MinuteClinic video visits will be trumpeted as a huge value for consumers. That is only half the story. How will health care providers convince people who are mostly healthy that they have to wait for appointments between 10am and 3pm at a complex, integrated health system where they have to pay to park? How will insurers convince people to continue to buy the expensive, comprehensive coverage on offer today? This move will start to change the way people think about what insurance is even for. Now THAT is disruptive.

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Right Care at the Right Time in the Right Way – The Case of Antibiotics

By M2|2018-07-26T19:36:55+00:00July 26th, 2018|Evidence-Based Medicine, Health Care Trends, Retail Health, Uncategorized|

Right Care at the Right Time in the Right Way – The Case of Antibiotics

One of the most difficult problems to address in the U.S. health care system is treatment recommendations that are out-of-date, inaccurate, or based on an incorrect diagnosis. We write about this topic frequently () and Dr. Atul Gawande (who was recently named as the CEO of the new company being formed by Amazon.com Inc., Berkshire Hathaway Inc. and JPMorgan Chase & Co.) highlighted it most recently in a conversation with reporter Judy Woodruff at the Aspen Ideas Festival. Gawande argued there are three sources of waste that require different work but the biggest bucket is misutilization, “meaning the wrong care, at the wrong time, in the wrong way.”

A perfect example is antibiotic use. According to the Centers for Disease Control and Prevention (CDC) about 30% of antibiotics prescribed in physician’s offices and other outpatient settings are unnecessary. Further, says the CDC, “even when antibiotics are needed, prescribers often favor drugs that may be less effective and carry more risk over more targeted first-line drugs recommended by national guidelines.” In other words, clinical recommendations are often out-of-date or simply not following guidelines.

In urgent care centers, an increasingly popular site of care, the problem is even worse. According to a brief published this month by The Pew Charitable Trusts, “46% of all urgent care visits for non-antibiotic recommended diagnoses resulted in an antibiotic prescription,” compared to 14% of the time in retail clinics, 25% of the time in emergency departments, and 17% in office-based clinics. Acute respiratory conditions, for example, asthma and allergy, bronchitis, flu, and pneumonia are common reasons for a visit to a physician’s office or clinic, but in urgent care centers, it is fairly likely an antibiotic will be prescribed for these conditions, when they shouldn’t be, as shown in the table from Pew below.

Considering urgent care usage has skyrocketed in recent years, increasing by 1,675% (that is not a typo!) in rural areas and 2,308% in urban areas between 2007 and 2016, the higher rate of inappropriate antibiotic use is an even bigger problem than just comparing prescribing rates across site of care might indicate.

Inappropriate antibiotic prescription use plus skyrocketing urgent care visits equals a perfect case of “wrong care, at the wrong time, in the wrong way.”

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Consumerism: “Activity in Search of Strategy”

By M2|2018-07-17T19:59:47+00:00July 17th, 2018|Health Care Trends, Health Reform, Hospitals, Providers, Retail Health, Uncategorized|

Consumerism: “Activity in Search of Strategy”

Consumerism is a hot topic in health care. Whether you define it as (a) improved personalization (as Robert Sahadevan, Senior Vice President of Consumer Marketing & Analytics at Humana and formerly the VP of United Airlines’ Mileage Plus frequent-flier program does), or (b) understanding and meeting/exceeding customer expectations, or (c) encouraging patients to act like consumers by actively choosing where to spend their health care dollars, consumerism is a focus in practically every health care business across the country.

The trouble is, while consumerism is a focus, it seems much of this work in health systems and hospitals at least, is “activity in search of strategy,” according to KaufmanHall, a strategic, financial, and operational performance advisory firm.

The KaufmanHall 2018 Healthcare Consumerism Survey included more than 425 respondents across 200 health systems, stand-alone hospitals, children’s hospitals, and specialty hospitals. “Improving customer experience” was a top strategic priority for 90% of the respondents. Still, the survey found “these efforts need to be more strategic, more effective, and more rapidly implemented if legacy healthcare organizations are to grow and compete in an increasingly consumer-focused world.”

Where is the disconnect? Why is there so much activity that isn’t strategic or likely to be effective? Seemingly, it’s because these health care organizations are focused on the ways they would like to improve customer service, not necessarily on the ways consumers would like to see access and care changed.

Example 1: Consumer Access

The KaufmanHall 2018 survey respondents ranked high on access to bricks and mortar health care facilities. More than half said their organization had an urgent care center, 40% said they offered access to freestanding imaging sites, and outpatient centers were widely available.

More innovative care options, that some studies show are preferred by consumers, were not as common. Video visits were only available at 14% of the respondent facilities, and retail clinics were only available at 27% of health systems or hospitals surveyed.

Example 2: Consumer Convenience

Consumers who are accustomed to clicking a button and receiving a shipment later that day, or horrors, the following day, don’t want to wait a week or a month for an appointment to see a health care provider. Conveniences such as same-day scheduling of appointments, online scheduling, and extended hours are expected by consumers, but few organizations are delivering. The chart below shows only about a third of the KaufmanHall respondents offer same-day appointments or extended hours for primary care. Only 20% have fully implemented online self-scheduling.

Example 3: Consumer Frustration

Notably, interactions with the health care system that patients and consumers find frustrating are not typically much of a focus for health care organizations. One example is reducing office wait times. Just 17% of the KaufmanHall respondents have a full implemented initiative to address wait times. Another example is billing. It isn’t for lack of understanding billing as a customer pain point that organizations aren’t prioritizing it: “Billing is confusing and frustrating and stressful, and it is their last interaction with us,” one executive explained in the survey, yet only 28% of respondents had fully implemented customer-friendly billing statements. Organizations instead seem focused on changes easy for them to make, such as ensuring phone numbers are easy to find and providing customer service training for staff (see chart below).

Example 4: Pricing

“Of all the key areas related to consumerism in healthcare, pricing strategy provides the most room for improvement for the nation’s hospitals and health systems,” according to KaufmanHall. Asking any person who has interacted with the system, and indeed, most policymakers, you will get the same answer. Consumers need more information about the prices of the services or products they have been told to buy by their health care provider – whether a surgical intervention or prescription medication. Only 5% of the KaufmanHall respondents are “aggressively pursuing” consumer initiatives related to pricing strategy and/or price transparency. Only 10% list prices online and less than half can provide a consumer-requested price quote in a defined period of time.

Design Thinking Opportunity in Consumerism

We have written a book chapter titled, Using Small Step Service Design Thinking to Create and Implement Services that Improve Patient Care, for the upcoming book, “Service Design and Service Thinking in Healthcare and Hospital Management” from Springer Publishing (due out this fall). The chapter is about using design thinking in health care services and provides two case studies about organizations that have done it well. As the KaufmanHall 2018 State of Consumerism in Healthcare showed, many organizations are involved in activities that address the consumer experience, but most of these activities are not strategic aligned with what consumers actually want. Better understanding the customer – for example, by using the five-step design process – would likely improve these organizations’ efforts to exceed customer expectations. Until health care organizations can look outside their own experience, improving consumerism is likely to be very slow going.

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ICYMI: The CVS-Aetna Proposed Merger Could be Public Health Rocket Fuel

By M2|2017-12-07T01:22:04+00:00December 6th, 2017|Health Care Trends, Health Disparities, Insurance, Public Health, Retail Health, Social Determinants of Health, Uncategorized|

ICYMI: The CVS-Aetna Proposed Merger Could be Public Health Rocket Fuel

Sunday, December 3, CVS Health announced it will acquire health insurer Aetna for $69 billion. Lowering the cost of care by enabling a broader range of treatment in retail clinic settings, of which CVS Health has more than 1,100 in 33 states, is one of the obvious rationales of the combination. But what struck me in the comments of the merging companies’ CEOs was how much they sound like public health professors. Social determinants of health? Health as a path to fulfillment? What have they done with the business people? In case you missed it…

Mark Bertolini Really Cares About the Whole Person

Aetna Chairman and CEO Mark T. Bertolini has been talking publicly for quite some time about the importance of thinking about people not as patients, but more holistically. In September, in an interview with Dennis Berman, the Wall Street Journal financial editor, he said, “We believe the only way to truly disrupt the cost of health care … is to go into the homes and meet the social determinants that are now driving as much as 60 percent of life expectancy of Americans.”

What Bertolini has had to say now that the merger is official is straight-up public health speak. On CNBC Monday morning, when explaining the vision of the merger, Bertolini sounded like a philosopher: “Most people,” he explained, “find their health is a barrier to the life they want to live.” Indeed.

Larry Merlo is Fixated on Unmet Need

Larry J. Merlo, President and CEO of CVS Health, reminded anyone who was paying attention something that we in public health have known for a long time, but surprised the CNBC reporters, “You look at chronic disease in this country today, about half of all Americans have at least one of those chronic diseases. It’s accounting for 80% of the health care costs.”

Merlo further explains, “there’s billions of dollars every year on unnecessary and avoidable spending because people are not following…care plans.” Merlo’s solution, to be executed in part with the announced merger, is to address the unmet need the traditional health care system is creating, but CVS Health knows first-hand because patients come through its doors with health care needs that aren’t being met.

We “lack the element of convenience and coordination…that is the unmet need we are talking about,” says Merlo.

We Are All Public Health

As a public health student, educator and professional, I am public health. This merger discussion shows we are all public health. Georges C. Benjamin, M.D. Executive Director, American Public Health Association wrote in 2015, “Today, the biggest threats to the health and longevity of Americans are preventable diseases. These are the diseases that are burying us in preventable suffering, as well as crippling our communities with mountains of avoidable medical bills. The root causes of many of these health threats are inextricably linked to the social determinants of health and the conditions that shape a person’s opportunity to attain good health and adopt healthy behaviors. These social determinants include access to safe housing, good jobs with living wages, quality education, affordable health care, nutritious foods, and safe places to be physically active. They also include racism, discrimination, and bias.”

To see such similar language from Mark Bertolini and Larry Merlo in the CVS-Aetna merger discussion to date shows that the leaders of what could become the largest health care company in the U.S. are thinking differently about the broken U.S. health care system. Near the end of the investor call about the merger, an analyst asked whether the combined entity planned to be a person’s primary care physician. Bertolini answered: “The real important part here is that you have to understand that almost 60% of Americans don’t have a regular doctor.”

When you connect these dots, you can really see the big picture come together. The CVS-AET vision is bigger than managing the pharmacy benefit.

Will it work? Hard to say at this early stage. Should consumers want it to work? Absolutely. A health care company with a public health lens that focuses on health well before a person shows up at the doctor and prioritizes convenience, coordination, and social determinants of health would be a welcome change for individuals, families, and employers. Score one for public health.

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Everything is Getting Faster, Including Health Care

By M2|2017-10-09T02:06:12+00:00November 15th, 2016|Health Care Trends, Retail Health, Uncategorized|

Everything is Getting Faster, Including Health Care

In Robert Colville’s book released this summer, The Great Acceleration, he explains a variety of ways in which the world is getting faster and faster. It is a worthwhile read and certainly aligns with current demands across the health care system that service times accelerate.

Additionally, the election of Donald J. Trump as 45^th President of the United States on November 9, 2016, and the alignment of Republican majorities or control in Congress with more than half of state legislatures and governorships, is likely to mean rapid changes to health care policy – striking while the iron is hot, so to speak.

Health care corporations are already focused on this trend of acceleration. For example, CVS Health (NYSE: CVS), the large pharmacy chain and pharmacy benefit manager, explained two very interesting acceleration trends in its 2016 third-quarter earnings. The first relates to its retail clinic business. CVS now operates more than 1,100 clinics in 33 states and Washington, D.C., including the retail clinics inside Target (NYSE: TGT) stores. Most news coverage about CVS Health’s earnings focused on the fact that they recently lost their position as a preferred pharmacy provider for some federal government clients. Also of note was that revenues are up nearly 25% for the retail clinic business from last year, and the “Hold My Place in Line” online queuing tool is used by 33% of CVS Health patients.

People might be sick, but they don’t have time to wait in line.

Second, CVS also mentioned the (so far) great customer ratings of its new Curbside Pickup service which was launched in 40 markets and 4,000 stores in September. The graphic below explains the effort.

Source: CVS Health Curbside Pickup

Hopefully people aren’t using the Curbside Pickup app while they drive, but this is certainly meeting the customer where she or he is. If you don’t have time to park, CVS has got you covered.

Walgreens (NYSE: WBA) also made a big foray into speed this summer, announcing a partnership with Mental Health America and MDLive to improve access to mental health services via telehealth. Part of the effort is to help visitors to Walgreens’ website use free screening tools and surveys to determine their mental health status and whether they need additional help. Patients are able to use the online tools then receive referrals to the Mental Health Association website or click to an MDLive telehealth resource called Breakthrough that delivers therapy wherever you are.

The tagline? “Mental Health Therapy From Your Couch.” Or what New York Times bestselling author, Susan Shapiro, has called “Speed Shrinking.” (Shapiro’s Twitter description starts with “Instant-gratification-takes-too-long…”) Health care organizations that don’t keep up will lose customers, lose revenue, lose relevance.

Faster care. More convenience. Accelerated times to serve the (im)patient/customer. Everything is getting faster, including health care. Are you ready?

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