Retail Health Clinic Summit 2009 - The Massachusetts Experience and Lessons Learned

Operating retail health clinics in a heavily-regulated environment Retail Health Clinic Summit May 28-29, 2009 Orlando, FL David Harlow JD MPH THE HARLOW GROUP LLC

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
Is future success a fantasy?
THE HARLOW GROUP LLC

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

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

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

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

Limited Service Clinic chronology (2)
Public hearing September 2007
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)
Sixteen now open, five more surveyed and ready to open . . . (but stay tuned)
No other provider operational in MA
Walgreens Take Care Clinic has application in for thirteen sites

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
But cf. Board of State Examiners of Plumbers and Gas-Fitters
Medical records

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

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.

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
Seeking third party payors including MassHealth (Medicaid); some on board already
As elsewhere in country, step back from cash-on-barrelhead model

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

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

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

Threats – This Year’s Model – Health 2.0
The next disruptive innovation: American Well
On-line MD visits
Hawaii BCBS affiliate rolled out service for all residents (not just subscribers; non-subscribers have higher copay) to be a good citizen in geographic access-challenged state
Minnesota too . . .
If driven by access/convenience, many visits may be rerouted from limited service clinics to on-line encounters
Many uninsured have broadband service . . .

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
MinuteClinic turned 90 sites “seasonal” in March

Opportunities - Alliances with health care systems (1)
Co-branding
Starting to happen with some providers, in some markets
Real benefit: partnering with health systems to fill a need in the broader health care system in each local market

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
Examples: Cleveland Clinic, others

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

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

Bottom line
Challenging times ahead in MA and elsewhere
Real opportunities for business development include
Health care system affiliations
Beyond co-branding
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

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)

Questions / Discussion
David Harlow JD MPH
www.harlowgroup.net
www.healthblawg.typepad.com
www.twitter.com/healthblawg
[email_address]
617.965.9732

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Retail Health Clinic Summit 2009 - The Massachusetts Experience and Lessons Learned

by David Harlow on May 27, 2009

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Retail Health Clinic Summit 2009 - The Massachusetts Experience and Lessons Learned — Presentation Transcript