Insurer-owned clinics bid to offer more patient care
■ Major health plans are expanding direct care to control costs and put their names in front of potential individual insurance shoppers.
It's easy to see why the Food City grocery store in west Phoenix would be an attractive location for an in-store clinic. The store, serving a largely Hispanic population, markets itself as a community gathering place, attracting the large walk-in audience such a clinic needs. In the parking lot, street vendors sell homemade tamales out of their carts. On weekends, a mariachi band plays in front of the CareToday clinic.
The company that found Food City so attractive isn't a typical retail clinic operator. It's Cigna, one of many health plans moving aggressively to expand its operations into treating patients -- not just paying their insurance claims.
Like Cigna, many insurers, dating back to the traditional HMO days, have owned and operated patient clinics through subsidiaries, while some hospitals have run their own health plans.
Recently, many of those insurers have expanded that branch of business, with a focus on care provided by nurse practitioners or physician assistants. Some are targeting plan members within a specific demographic, such as Medicare or chronically ill patients. Others are targeting communities where they believe members have few options, outside of emergency departments, for urgent care.
What's in it for the plans? Analysts say insurers believe they can get more direct control of medical costs by actually providing care. Also, they have an opportunity to market their names to the millions who will be shopping for individual insurance, required under the Patient Protection and Affordable Care Act by 2014. And the insurers can keep for themselves some of the 80% to 85% (depending on the health plan) they are required to spend on patient care.
"It's a tangled web of reasons why it's happening," said John Gorman, CEO of Gorman Health Group, a managed care consultant who recently advised several insurers that opened clinics. Right now, Gorman said, plans are worrying not so much about making money but about controlling the spending of money.
"This is almost two-to-one driven by the cost side of the equation and not the revenue side." He said the cost issue isn't just about current spending on care. It's also about where millions of newly insured patients go in an environment in which primary care physicians are already considered to be in short supply. Namely, the plans don't want those patients to go to emergency departments.
Recent examples of plans entering or expanding patient-care operations:
- Bravo Health, a subsidiary of HealthSpring, a Medicare Advantage administrator, opened three walk-in urgent care and preventive health clinics for its members in Philadelphia and Baltimore.
- Humana has launched Humana HomeCare Solutions, a concierge-type service for people with chronic diseases, with four locations in Florida and one in Cleveland. In 2010 Humana acquired Concentra, a chain of occupational health clinics that operates more than 300 on-site workplace clinics, urgent care centers, physical therapy centers and wellness services.
- UnitedHealth Group's OptumHealth division acquired two HMOs from WellMed, which operates 38 clinics in Texas and Florida that provide care to seniors.
Gorman said the insurers are following a similar philosophy to that of hospitals, which recently stepped up their purchases of clinics and primary care practices.
"When you own the facility and you own the people who work there, it's a lot easier to shape it in a way that conforms to the economic necessities of the local market," he said.
Cigna goes to the grocery store
Cigna Medical Group, a chain of medical practices owned by Cigna for more than 40 years, started exploring the convenient care business three years ago with its CareToday brand.
While the business model was technically the same as a retail clinic, it had yet to operate one inside a retail store until it opened in Food City in April. Cigna plans to open more in-store clinics, though it wouldn't say how many or when they would open.
Cigna has 10 other CareToday clinics, operating in strip malls.
Kurt Weimer, president of Cigna Medical Group, said the retail clinics help it control costs, which is why so many plans are covering care provided by them. Cigna's motivation for steering members to nurse practitioner-staffed clinics is not purely cost-related, he said. It's about steering members "to the right level of care."
It's also not just existing Cigna members Weimer hopes to attract. He said the Hispanic population served at Food City tends not to have insurance but does put aside money for health care expenses. Cigna hopes word of mouth will help the clinic reach the break-even point of 24 visits per day, with profits to follow.
The CareToday clinic is occupying a space that was vacated in 2009 by MediMin, a retail clinic chain that declared bankruptcy after only three years in business. Weimer said Cigna and CareToday's prominence should give it an advantage MediMin did not have. "I think it will just be a matter of time before people begin to understand it's easier to go this route for their initial health care" than to a primary care physician.
Also, Weimer said, "We hope once they've used CareToday, maybe they will want to try Cigna" insurance.
Gorman said he has seen physicians unhappy with insurers that have expanded clinics in their markets. "I wouldn't call it a backlash, but there have been concerns," he said. "PCPs are always going to be worried about someone else putting their hands on their patients."
Nathan Laufer, MD, board president of the Maricopa County Medical Society in Arizona, said physicians aren't as concerned about clinics, such as CareToday, that have physician oversight. But in other models in which the nurse practitioners answer to administrators, either from the health plan or a pharmacy, "that's where we have concerns," Dr. Laufer said. "There are tremendous conflicts of interest. The thrust of our main concern has to be who is advocating for the patient."