Should health policymakers be concerned about the massive investment being made by corporate interests in primary care in the US? A team of health policy researchers think they should be. registered mail The New England Journal of Medicine online January 7 in a Perspectives guest article entitled “Corporate Investors in Primary Care—Profits, Progress, and Pitfalls,” Soleil Shah, M.Sc., Hayden Rooke-Ley and Erin C. Fuse Brown, JD, MPH , argue that although Medicare beneficiaries who are either enrolled in Medicare Advantage plans or assigned to Medicare ACOs (Accountable Care Organizations) could benefit from certain aspects of the trend toward corporate investment in primary care, the pattern of associated investment is potentially negative impact on equity and access to health. The researchers are affiliated with Stanford University School of Medicine and Stanford Law School and the Georgia State University College of Law’s Center for Law, Health, and Society.
The authors of the article write: “On July 21, 2022, Amazon announced plans to acquire One Medical — a primary care practice with nearly 200 locations serving more than 700,000 patients — for $3.9 billion. The deal, if approved, would represent Amazon’s largest payment to a healthcare company to date. On September 5, 2022, CVS Health confirmed the acquisition of Signify Health, which provides home and traditional primary care, for approximately $8 billion. These deals,” they write, “reflect a broader trend in the United States for corporate investment in primary care, driven by an increasing focus on “total cost value-based care” — a model in which healthcare providers are paid to manage the die Total cost of care for their patients and the amount of each patient’s capitalized budget may be increased based on the patient’s health risks and the provider’s performance on quality metrics. Although potentially beneficial for certain well-insured patients, the trend towards corporate investment in primary care could jeopardize equitable access to care, increase healthcare costs and limit physicians’ clinical autonomy,” they argue. “Physicians, patients and policymakers should understand what is driving these investments, their potential benefits and risks, and possible policy levers to mitigate those risks.”
The researchers emphasize that while “corporate interest in primary care practices is not new,” they are deeply concerned that “[T]The pace of recent investment is remarkable. Between 2010 and 2021, the total capital raised for private investment in basic services in the United States increased by a factor of more than 1,000 — from $15 million to $16 billion.” And they write that both retail-owned and corporate-owned ” Proprietary Primary Care Practices (PCPs) involve complexities that one needs to be aware of. They write that “corporate-owned primary care practices (CPCPs) can be divided into three categories: retail-owned (e.g., Amazon, CVS, Walmart), insurance-owned (e.g., UnitedHealth Optum, Humana), and investor-owned supported (B. Agilon Health, Oak Street Health). Many CPCPs fit into more than one category; For example, Oak Street’s early investors included Humana and private equity firms, and it has partnered with Walmart since going public. CPCP organizational structures vary depending on the market segment or payment model they target (e.g., Medicare Advantage, Medicare, or commercial accountable care organizations). [ACOs]or direct contract under the new ACO Realizing Equity, Access, and Community Health [REACH] model), but they all benefit from the increase in risk-adjusted payments they receive by engaging more deeply and strategically with risk coding, and they have market incentives to do so. CPCPs may also have resources that enable intensive coding practices—including proprietary coding software, robust patient records, and additional administrative staff—that are less available to independent primary care physicians.”
Importantly, the article’s authors write, the continued growth of the Medicare Advantage market, which already accounts for nearly half of Medicare spending, is attracting corporate investors to primary care practices “because such practices can aggressively influence beneficiary diagnoses in order to drive higher payments.” to achieve.”
The researchers write: “We believe that policymakers and regulators must consider these risks to patients, physicians and healthcare costs and vigorously apply their available oversight tools. State and federal law enforcement agencies may extend antitrust scrutiny to these transactions to identify competitive threats. The Federal Trade Commission is reviewing deals with Amazon and CVS, but may also evaluate smaller, incremental acquisitions of medical practices and transactions that span multiple geographic and product markets.” Significantly, they argue, “The centers for Medicare and Medicaid services could limit the ability to play the risk-coding system that governs Medicare Advantage payments to prevent excess public money from being spent on coding efforts rather than improvements in care.” Ultimately, they say, the risks associated with business investment in basic services needs to be carefully considered by policymakers to ensure outcomes that are consistent with improved equity and access, and not the other way around.