In Lessons Blog

Less than 24 hours after publishing my Forbes article on the rise and fall of Turntable Health – the disruptive primary care practice founded by Zubin Damania (aka ZDoggMD) – I received scores of emails from patients, medical groups and healthcare professionals.

Most went like this: “In response to your article, there’s another primary care company you need to know.”

I was eager to learn more while remaining skeptical that primary care approaches alone can chip away at an estimated $750 billion in wasted healthcare spending each year. After digging through the data and reaching out to several CEOs, I uncovered more than a few examples of primary care providers altering the traditionally fragmented, fee-for-service model. Three companies, however, stood apart as the kind of disruptive, mission-driven examples all of us “need to know.”

Each specializes in serving the underserved, with results that showcase primary care’s potential for lowering healthcare costs and improving quality outcomes, particularly among patients living with chronic diseases.

ChenMed: How High-Touch Care Improves Outcomes, Reduces Costs  

About a decade ago, Dr. James Chen, a Taiwanese immigrant, was diagnosed with cancer. Throughout his treatment he experienced the fragmented, low-tech care that too many American patients accept as normal. After his recovery, Chen set out to create a new primary care system.

Today, Dr. Christopher Chen carries forth his father’s mission, providing underserved patients (primarily low-income seniors managing multiple chronic conditions) with a level of concierge-style care typically reserved for the very wealthy.

A look inside the JenCare Senior Medical Center in Chicago, Illinois. JenCare is a subsidiary of ChenMed.

To lower the cost of high-priced hospital care, ChenMed focuses on increasing its patients’ access to doctors and improving their quality of life. That’s why physicians at ChenMed spend, on average, 189 minutes of face-to-face time with each patient per year. This is made possible through added clinical support and smaller panels of just 450 patients per doctor, appropriate given the severity of patient illnesses.

Operationally, ChenMed is grounded in a prepaid (capitated) reimbursement model, focusing on Medicare Advantage. As such, ChenMed assumes the full financial risk for the care of its patients.

Dr. Christoper Chen

The company’s results are encouraging when compared to historic patient utilization in the traditional fee-for-service Medicare system. Based on internal electronic health record (EHR) data, rates of ER visits among ChenMed patients are 33.6% lower than local averages among Medicare beneficiaries with 28% fewer hospital admissions. Combining these results, the company estimates annual savings of $2.8 million for a hypothetical ChenMed practice of five doctors, each with a panel of 450 patients.

“Primary care physicians are undervalued in an American healthcare system that rewards volume and heroic, high-intensity interventions,” said Dr. Chen. “We believe investing in more primary care and prevention is exactly what our healthcare system needs.”

Based in Miami, ChenMed underwent rapid northern expansion starting in 2010. It now operates more than 40 senior medical centers across six states, including Louisiana, Georgia, Virginia, Kentucky and Illinois.

Oak Street Health: A Value-Based Care Model For Seniors

Oak Street Health CEO and co-founder Mike Pykosz.

From its beginnings in 2013, Oak Street Health has focused on opening clinics where patients typically struggle to find a doctor, including Chicago’s south and west sides. Now with 24 centers throughout the Midwest (and with plans to open centers in Philadelphia next year), Oak Street Health’s primary care network specializes in serving what its CEO and co-founder Mike Pykosz calls “healthcare deserts.”

Oak Street Health, like ChenMed, focuses on patients who are sicker than average but whose Medicare coverage offers much higher than average reimbursements.

Although it serves an extremely challenging population, Oak Street Health has achieved a five-star HEDIS rating for managed-care patients while reducing hospitalizations by more than 40% among peer Medicare cohorts. The company also assumes full risk for patient outcomes and total costs, giving its physicians incentive to focus on disease prevention and avoiding complications from chronic illnesses.

“Oak Street Health has successfully confronted the status quo and is rebuilding healthcare as it should be, and in communities that don’t expect it,” Pykosz told me. “We have shown that we can make today’s dollars work better and provide great healthcare for adults on Medicare throughout our country.”

ConcertoHealth: Bridging Gaps In Primary Care  

Through agreements with many of the biggest payers, ConcertoHealth, like the others, takes on some of the country’s costliest patients, including the frail, elderly and dual-eligible, 74% of whom have multiple chronic conditions. Many are covered by both Medicaid and Medicare. Nationwide, this so-called “duel eligible” population totals 11.4 million and costs the U.S. healthcare system over $306 billion annually, nearly $30,000 per person.

To better serve these vulnerable patients, ConcertoHealth created an integrated care-delivery model that offers rapid intervention, coordinated care and alternatives to costly Emergency Room visits. With centers in Michigan and Washington, ConcertoHealth offers 24/7 support, playing the role of quarterback for patients, doctors and health plans.

Opened in June 2017, ConcertoHealth’s Kalamazoo, Michigan, location serves as the clinical hub for the company’s Primary Care Support Services in Southwest Michigan.

By operating exclusively in value-based agreements, the company integrates clinical care with social services to provide intense, individualized primary and preventive services. Thanks to its care model, ConcertoHealth reported a 30.3% year-over-year reduction in its rate of hospital admissions and a 17% drop in readmissions since December 2015.

Of interest, ConcertoHealth has also sought to address one of the major limitations in traditional primary care. That is, with most physician offices closed after normal business hours and on weekends, sick patients are typically told to go to the Emergency Department. Recognizing such visits are extremely costly and often lead to unnecessary hospital admission, ConcertoHealth implemented a unique “ED intervention program” in which medical directors partner with ED clinicians to determine the most appropriate course of action for each patient. This effort has helped divert 24% of would-be hospital admissions to skilled nursing facilities and 45% of them to observational stays.

Important Steps Taken But Watchful Waiting Required

All three of these organizations have made significant progress in addressing the needs of at-risk patient populations. By investing in primary care and multidisciplinary medicine, ChenMed, Oak Street Health and ConcertoHealth have improved patient access, communications and support.

As a result, these companies report reduced hospital admissions and costs through value-based care models. However, we would expect patients enrolled in these types of programs to experience better outcomes and lower utilization than those seen by community doctors under traditional Medicare, a fee-for-service program. What remains unclear is how their results (in terms of both quality and cost) stack up to fully integrated care organizations. Finding out will require a more detailed calculation of risk and disease prevalence. Furthermore, only time will tell if innovative primary care practices alone can reduce the high cost of specialty and hospital services. If not, will these companies be able to pivot quickly enough to become more vertically integrated across primary, specialty and diagnostic care?

Without a doubt, these companies are taking important steps toward achieving the four pillars of healthcare transformation outlined in my book “Mistreated.” I applaud all three for their courage and results in this competitive healthcare environment. Most important, I look forward to following their progress and learning more from their experiences.

Next, visit https://www.forbes.com/sites/robertpearl/ on Tuesday, Nov. 14 at 8 a.m. ET, for the final installment of my Forbes series on transforming care delivery. And if you know of another disruptive healthcare company or service I should investigate, click the envelope icon at the bottom of your screen and drop me a line.  

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