Retail Clinics for Chronic Conditions Like Asthma, Hypertension, Lipids and Diabetes Mellitus: A Look At the Value Proposition

Is there a business model in there?

To the delight of skeptics, pundits and bloggers everywhere, U.S. health reform continues to follow its predicted trajectory: fiscal shortfalls are now biting the nominally "wealthy," the Feds aren't about to admit that they're in over their head on implementing their health insurance exchanges, opportunities for cronyism are increasing and the DMCB spouse is wondering why her supposedly expert-husband can't find health insurance for less than a thousand a month.

In the meantime, there's no sign that Washington DC will ease up on the "accomodative" money-printing presses that are feeding "QE Infinity."  That's no problem, though, because Europe is reminding us that once the paper currency is undermined, selling gold is a handy way to quell grumpy voters and prop up the welfare state.

Yet, Clayton Christensen tells us a fix is at hand: much of health care's quality and costs travails, he says, can be solved by embracing the disruptive innovation of non-physician treatment of acute and chronic conditions.  His supporters are undoubtedly cheering Walgreens' recent decision to to have its 330 Take Care Clinics add hypertension, diabetes, high cholesterol and asthma care to its portfolio of nurse practitioner services.

After reading the usual retail clinic policy tomes both for ("access to care") and against ("health care balkanization" plus "missed diagnoses"), the Disease Management Care Blog isn't convinced that Walgreens' decision is such a slam dunk.

That's because these clinics' business proposition is less about innovation and more about being a loss leader that increases retail pharmacy foot-traffic. In fact, offering free retail clinic services has been tried. The premise is that the retail customer-patients will stop by the pharmacy window for new drugs and, while they're at it, renew those other high margin prescriptions.  If they pick up some diapers and nail polish while making their way to the front of the store, all the better.

While that certainly sounds good, retail clinics are not a build-it-and-they-will-come cash machine.  Recall that CVS had to pull the plug on its retail clinics several years ago.  Foot traffic didn't materialize and the supposed loss leader turned into a money pit. 

The good news for Walgreens is that they have Jeffrey Kang in their corner.  Prior to this, he led health insurer CIGNA's disease management initiatives. He undoubtedly understands retail, population-based outcomes and care coordination. If anyone can pull this off, he can.

The DMCB's conclusions?

It won't be easy. While Walgreens' we-accept-all-insurance plans-VISA-Mastercard-and-American Express foray into primary care might work, it could also fail. Large health care systems use their primary care providers to feed their high margin and still-profitable specialty care services.  On the other side, small physician-owned practices are learning that hustling, high service standards, attention to overhead, accurate billing, patient mix and ancillaries can be profitable. Walgreens has neither. It remains to be seen whether this publicly owned company's bottom line will be aided by salaried NPs chasing pharmaceuticals' narrowing margins.

Speaking of margins, the DMCB wonders if Walgreens will use its clinics to steer patients toward favored formularies or aid rebate and market share agreements. Could they also use and eventually monetize the Big Data like Target to further the company's business interests? If any one knows, please contact the DMCB.

Commoditization?  The DMCB thinks so and it's not alone. Over time, the professionals staffing these clinics may find primary care is more complex and that they and their patients deserve better.

Ease of Exit? For who? Given that this is ultimately a business, it would be corporate malfeasance if Walgreens didn't have an exit strategy. Unfortunately, one company's exit could be another patient's abandonment. That's a real risk for the patients who come to count on Walgreens for their longitudinal care.

Patient Centered Medical Home Threat... or Friend?  The DMCB doesn't think so. If the medical home offers the value that its advocates say, savvy health care consumers will be able to vote with their feet. If the PCMH falters, it won't be because of Walgreens; in fact, the threat of competition may force help medical homes be more efficient.  In the meantime, medical homes should treat retail clinics like a community resource and refer (or outsource) appropriate patients for routine health care. Why not?

The Sunshine Act Will Cost Pharma and Medical Device Manufacturers Hundreds of Millions of Dollars

The regulators go to work....

Fed up by pharmceutical, biotech and medical device manufacturers' vulgar use of "honoraria," "consulting fees" cozy "investment" relationships and other financial sweeteners to buy physician loyalty, Congress included the "Physician Payment Sunshine Act" as part of the Affordable Care Act.

The initial proposed set of regulations appeared in the Federal Register on December 19, 2011.  Comments were invited and CMS' reponse i.e., the"Final Rule," has just been released.  It can be found here.  This sample of the mainsteam news media reporting indicates generally positive reviews.

Case closed? 

Not quite.  That's why you read the Disease Management Care Blog.

As the DMCB understands it, the idea is to notify patients and the public about potential physician conflicts of interest, especially if they are recommending one treatment versus another. The financial relationship data from August through December of this year has to be reported to CMS by March 31, 2014. CMS will, in turn, post the information on the web in September of 2014.

While the DMCB agrees with the intent, it also took the time to scroll through the Final Rule and found some interesting information on page 226. 

CMS estimates the manufacturers will each need to hire a compliance officer and bookkeeping personnel.  Based on prevailing hourly salary rates (page 228) for approximately 1,150 companies, the total cost in year 1 of the Sunshine Program will be $193,037,104.  After some systems automation kicks in and start-up costs are eliminated, the cost will decrease to $144,777,828 "annually thereafter" (p. 229).  There will also be "infrastructure costs" to the tune of just over $12 million in year one and just over $1 million for each subsequent year.

The DMCB thinks that's worthy of some sticker shock, especially when we're all agreeing that the health care system is already too expensive. Ultimately, it remains to be seen if patients will use the internet as advocate-consumers and blunt their physicians' conflicts of interest.  Based on data like these (the impact on consumer behavior) and these (on hospitals) we don't know if patients will vote with their feet or if physicians' bad behavior will lessen. 

It could work, but once again, finding out is going to cost American health care consumers hundreds of millions of dollars.

Stay tuned!

Mixing Social Media and Health Care: Concocting a Worst Case Scenario Using Big Pharma and Manipulated Web 2.0 Writers

Are there any downsides to the mixing of social media and health care? An interesting "Perspective" article by Boston academicians Jeremy Greene and Aaron Kesselheim in the latest New England Journal (not online yet, but check back for the link) says "yes" by taking the worst of both worlds: misinformed and manipulated Web 2.0 writers on one side and the misbehaving pharmaceutical industry on the other.

They point out that the pharmaceutical industry's marketing has generally been under very tight control by the Food and Drug Administration (FDA). Ironically, however, it was the FDA's guidelines surrounding direct to consumer (DTC) advertising that ultimately unleashed the glut of dry eye, erectile dysfunction and when diet 'n exercise-are-not-enough high cholesterol TV commercials. Well, following a November 2009 hearing on the matter, the FDA is now gearing up to issue guidance on the use of social media in pharmaceutical advertising. Once that happens, we can expect a considerable portion of the pharmaceutical industry's annual $4 billion budget to be spent on product-promoting bloggery, tweets and friending.

Which worries Drs. Greene and Kesselheim. They fear that authors of blogs, Facebook accounts and Twitter feeds that have only nice things to say about drugs or their manufacturers may be paid, biased, not credible or have hidden conflicts of interest. To deal with this, the authors suggest holding both the pharmaceutical industry and the FDA "responsible" for any significant misinformation and raise the possibility of creating a Web 2.0 FDA "seal of approval" to promote accurate content.

While worst case scenarios can be instructive, the DMCB isn't convinced that even the pharmaceutical industry's billions are up to the task of bending a truly massive and hyper-distributed social media global network to their will. What's more, pharma's tarnished reputation has already attracted the attention of legions of simultaneously smart and hostile bloggers, who seem more than ready to counter any product claims - including the credible ones. Last but not least, the DMCB is coming to doubt any laughably "responsible" Federal agency's ability to do anything quickly, cheaply or effectively. Better to let the bloggers establish their own reputations for transparency and pursue their own seals of journalistic/scientific excellence, perhaps through resources like this.

Last but not least, the DMCB is a believer in open and democratic discourse. Trying to influence the free flow of information, even if the filters are contrived by well-meaning do-gooders in some windowless room at the FDA, just seems to have too many downsides. If anything, the FDA should be working to promote an independent, skeptical and vibrant Web 2.0 scientific community. After that, they should get out of their way.

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The Backlash Against Pharma and The Role of Disease Management

Readers may recall that several physician-leaders have recently authored an article in JAMA recommending that all professional medical associations gradually reduce pharmaceutical and device support funding - except meeting hall exhibits and journal advertising – to zero.

From time to time in the near and distant past, The Disease Management Care Blog has done business with the pharmaceutical industry. It has found the exchange to be honorable for both parties. On the other hand, while serving on Pharmacy and Therapeutics Committees and while in clinical practice, it has witnessed some troubling marketing activities. The DMCB has no easy answers on what the relationship between medicine and pharma should be, but thinks the proposed funding ban described in JAMA won’t be the final word on the matter. It thinks there’s a backlash underway. Once passions cool, a new equilibrium should emerge.

In the meantime, the DMCB was unsurprised that the proposal described above exempts the medical journals. That’s because physicians ‘can easily distinguish these marketing activities from education presentations and are free to ignore them.’ In other words, leafing through the drug ads to get to the JAMA opinion piece should have little impact on the reader.

The DMCB appreciates the irony and sympathizes with the journals’ wish to reduce their readers’ subscription costs with advertising income. On the other hand, it doubts the sponsors of these ads agree that they have little impact on the very readers that the physician-leaders are working so hard to protect from the pharmaceutical and device industry. While it could be argued that the ad content is regulated, the agency charged with that oversight has a spotty tract record. What’s more, there is evidence that journal ads that pass regulatory muster still fall short.

So the DMCB has a suggestion of its own. Since journal editors know how to edit, perhaps they should apply their skill set to developing a higher standard of truth in print advertising that they accept – such as the prominent display of vetted ‘number needed to treat’ data. Alternatively, they could also consider getting in line and falling on the sword as the professional medical organizations.

The DMCB doubts either will happen. In the meantime, the disease management organizations and Pharmacy Benefit Managers have a continuing role to play in objective, ethical and conflict-free coaching of patients and providers about the risks, benefits and alternatives to the use of medications and devices. Given all the atmospherics, however, perhaps it’s time for the industry to think about developing its own set of standards that are reasonable and free of backlash politics. Given its pedigree, the DMCB thinks it could develop a more balanced approach that could help the rest of health care out of this morass.