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Retail Health Clinic Congress: The Massachusetts Experience and Lessons Learned

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Retail Health Clinic Congress: The Massachusetts Experience and Lessons Learned

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Retail clinic experience in Massachusetts: the regulatory landscape, market challenges and opportunities, and thoughts on the way forward. David Harlow, The Harlow Group LLC.

Retail clinic experience in Massachusetts: the regulatory landscape, market challenges and opportunities, and thoughts on the way forward. David Harlow, The Harlow Group LLC.

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  • As detailed in the PPT, this is a quick-and-dirty est. --

    $2.2T (total spend) x 75% (% of all care that is for chronic condx) x 67% (1/3 of all care is unnecessary) x 2% (assumption re: % of chronic care mkt to be captured by retail clinics) x 25% (discounted rates in retail clinics vs. traditional settings) / $650K (annual gross needed to turn profit per site) = 8500 retail clinic sites.

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  • 1. Operating retail based clinics in a heavily-regulated environment Retail Based Health Clinics Congress January 26, 2009 Las Vegas, NV David Harlow JD MPH THE HARLOW GROUP LLC
  • 2. Retail clinics in a highly-regulated environment - Massachusetts
    • Local perspective on a national phenomenon
    • Development of the regulatory scheme
    • Development of retail clinics after regulatory delays
    • Outlook based on current climate
    • Threats and opportunities
    • Old Blue Eyes: “If you can make it here,
    • you’ll make it anywhere.”
    THE HARLOW GROUP LLC
  • 3. Massachusetts environment (1)
    • Frustration, as elsewhere, with access issues
      • Exacerbated by MA health insurance mandate + PCP shortage
    • Higher proportion of population than elsewhere gets health care at academic medical centers and affiliates
      • Ex: Partners, PCHI, NEQA and Atrius include ~10,000 MDs (~1/3 of MA MDs)
    • Highly regulated: e.g., a Certificate of Need state, though most ambulatory care is exempt
    THE HARLOW GROUP LLC
  • 4. Massachusetts environment (2)
    • Organized medicine opposed the initial MinuteClinic license application
      • Quality of care / Continuity of care
      • Infection control
    • General public eager for alternative to overloaded system – but has deep-seated brand-name (AMC) bias
    THE HARLOW GROUP LLC
  • 5. Massachusetts environment (3)
    • State Commissioner of Public Health John Auerbach committed to improving access to care generally (not all Commissioners would have been so open)
      • Consider historical precedents in MA of bringing new provider types into the big tent: assisted living (not licensed as health care facilities), “nurse’s clinics”
    • Support for experimentation with model
      • Patient advocacy community (Health Care For All)
      • Some providers, e.g. BIDMC CEO & blogger Paul Levy
    THE HARLOW GROUP LLC
  • 6. Limited Service Clinic chronology (1)
    • MinuteClinic filed first license application in May 2007, as a standard clinic with many waiver requests (staffing, physical plant, etc.)
      • Organized medicine registered strong opposition
      • DPH Commissioner: concerned about siphoning off desirable patients from community health centers
      • Boston mayor opposed as well
    • Dept. of Public Health released draft regulations in August 2007
    THE HARLOW GROUP LLC
  • 7. Limited Service Clinic chronology (2)
    • Public hearing September 2007, comments accepted for a couple months
    • Final regulations adopted January 2008
    • License applications filed under new rules
    • First MinuteClinic site opened September 2008 in Medway (I-495, 30 mi. from Boston)
    • Twelve now open, another 22 surveyed and ready to open . . . (but stay tuned)
    • No other provider operational in MA (Walgreens Take Care Clinic has application in)
    THE HARLOW GROUP LLC
  • 8. Massachusetts model (1)
    • Nurse Practitioner staffing (with off-site supervising physician – NP licensure requirement)
    • Licensed as “limited service clinic” for specific services
      • Standard MinuteClinic menu of services, but no childhood immunizations other than flu, and no services to children < 24 months
    • Requirements adjusted to accommodate small footprint, limited services
      • Physical plant
      • Medical records
    THE HARLOW GROUP LLC
  • 9. Massachusetts model (2)
    • Communication with patient’s physician required (fax record)
    • Information re: local PCPs available to patients without PCP
      • Initial proposal was to limit patients to 4 visits a year
    • Each provider has a “main” site; all other sites are licensed as satellites
    • Transfer agreement with hospital required
    THE HARLOW GROUP LLC
  • 10. MA definition of “Limited Services”
    • A prescribed set of pre-identified diagnostic and treatment services that
      • require only a focused history and physical examination that does not require venipuncture;
      • may make use of only CLIA-waived tests;
      • are of a nature that may be provided within the projected duration of patient encounters, using available facilities and equipment;
      • are for episodic, urgent care related to an illness or for immunizations; and
      • are included in the site-specific list submitted to and approved by the Department.
    • Limited Services shall not mean surgical, dental, physical rehabilitation, mental health, substance abuse, or birth center services.
    THE HARLOW GROUP LLC
  • 11. Massachusetts experience to date
    • Start-up mode; first site open September 2008
      • Averaging 10 visits/day
      • Targeting 18 visits/day in next year or two
    • Difficulty in attracting nurse practitioners
    • Plateau in national retail clinic growth mirrored in Massachusetts
    THE HARLOW GROUP LLC
  • 12. Current state and future outlook: in Massachusetts and beyond
    • Threats
    • Opportunities
    • NP shortage
    • Soft demand
    • On-line MD visits
      • Ultimately, inadequate volume
    • Alliances with health care systems
    • Chronic care
    THE HARLOW GROUP LLC
  • 13. Threats – NP shortage
    • MA has 5000 NPs total, but only Family NPs are qualified to staff clinics
      • Other classifications: geriatric, adult, pediatric, psych, nurse-midwives
    • Most Family NPs, who have a broad scope of practice, don’t want to move to “isolated, limiting” setting
    THE HARLOW GROUP LLC
  • 14. Threats – Soft demand
    • Brand-name medicine bias
      • Efforts afoot to address this for other policy reasons
    • Market saturation
      • Urgent care options in medical practices
        • Longstanding availability in large practices
        • Available as a reactive stance by small practices in retail clinics’ service areas
    • Compact geography
      • Keys back in to brand-name bias: Many residents consider MGH to be the “local” provider of first resort, not last resort
    THE HARLOW GROUP LLC
  • 15. Threats – This Year’s Model – Health 2.0
    • The next disruptive innovation: American Well
      • On-line MD visits
        • Hawaii BCBS affiliate just rolled out service for all residents (not just subscribers; non-subscribers have higher copay) to be a good citizen in geographic access-challenged state
        • If driven by access/convenience, many visits may be rerouted from limited service clinics to on-line encounters
        • Many uninsured have broadband service . . .
    THE HARLOW GROUP LLC
  • 16. Threats – inadequate volume
    • Deloitte paper says 11,000 visits/year needed to turn a profit ($650,000 gross, assuming $59/visit) without using the clinic as a loss leader
    • If the near-term target is no better than 18 visits/day (~6,600 running 365 days/year) it isn’t self-supporting
    THE HARLOW GROUP LLC
  • 17. Opportunities - Alliances with health care systems (1)
    • Co-branding
      • Already happening with some providers, in some markets
    THE HARLOW GROUP LLC
    • Real benefit: partnering with health systems to fill a need in the broader health care system in each local market
  • 18. Opportunities - Alliances with health care systems (2)
    • Beyond co-branding
    • Joint strategic planning regarding a broad service area / service line
    • All parties can benefit through collaboration vs. competition
    • Can gain buy-in from physicians by solving some of their problems
    THE HARLOW GROUP LLC
  • 19. Opportunities - Chronic care
    • 44% of U.S. population has a chronic condition
    • 75% of U.S. health care spend is on chronic care
    • 2007 total spend = $2.2 trillion
    • 1/3 of all care is unnecessary
    • Assume retail clinics could capture 2% of the chronic market (e.g., certain monitoring visits for diabetics), and charge 1/4 as much
    • All this translates to over 8,500 fully-utilized sites
    • Another angle: Disease Management (one piece of this market) is est. to be $30 billion by 2013
    THE HARLOW GROUP LLC
  • 20. Opportunities – Chronic care through alliances with health systems
    • Joslin Diabetes Center – Walgreens partnership re: diabetes information
    • Health information rather than service
    • Not yet making full use of the model to alleviate pressure on PCPs
    • Widen the range of NP-provided services in close collaboration with health systems to serve populations with chronic conditions
    THE HARLOW GROUP LLC
  • 21. Bottom line
    • Challenging times ahead in MA and elsewhere
    • Real opportunities for business development include
      • Health care system affiliations
      • Chronic care market
    • Need to thread the needle with “limited service” clinic definition (take out “urgent”) and NP scope of practice
    • Need to be cognizant of Anti-Kickback and Fraud and Abuse laws
    THE HARLOW GROUP LLC
  • 22. Resources
    • Massachusetts Dept. of Public Health website with limited service clinic regulations, staff memoranda and public comments
    • Deloitte report (2008)
    • Commonwealth Fund report (2008)
    • California Health Care Foundation report (2007)
    THE HARLOW GROUP LLC
  • 23. Questions / Discussion
    • David Harlow JD MPH
    • THE HARLOW GROUP LLC
    • www.harlowgroup.net
    • www.healthblawg.typepad.com
    • www.twitter.com/healthblawg
    • [email_address]
    • 617.965.9732
    THE HARLOW GROUP LLC