What’s the matter with corporate primary care?

Common Sense Family Doctor blog by Dr. Kennylin on Friday, May 19, 2023

I’ve been meaning to write about this topic for a while, but Dr. Josh Freeman at Medicine and Social Justice beat me to it last week. Josh is a fellow blogger, retired family physician, and Chair emeritus of the Department of Family Medicine at the University of Kansas. His latest post, “Private equity, private profit, Medicare and your health: They are incompatible,” explored in depth the negative effects of private equity and for-profit corporations buying up subspecialty and primary care practices, also discussed in a KFF Health News article and in the New York Times. Put simply, the goal of those purchases is to turn a quick profit – often by “upcoding” to charge more for visits and procedures and slashing critical support staff – rather than to serve the best interests of patients and clinicians. Part of the corporate rush to invest aggressively in primary care is the unintended consequence of privatizing Medicare and moving away from the fee-for-service payment model; private health insurers now receive a lump sum “value based care” payment for every enrolled Medicare beneficiary based on their medical complexity and health risks, a process that Paul Branstad and Claude Maechling observed can easily be gamed:

Value-based contracts with full-risk capitation payments, mostly Medicare Advantage (MA), but also variants of accountable care organization (ACO) models, have grown rapidly to become the majority payment model for Medicare beneficiaries. However, there is no demonstrated proof that these payment arrangements improve the health of beneficiaries more than fee-for-service arrangements. We also fear that, in their current forms, such contracts reward ever-increasing scale and will evolve into a competition that only the very largest consumer companies can win. Once these winners emerge, their vested interests will focus on preserving their oligopoly at an additional cost to US taxpayers of $75 billion a year. Too late will we realize we have lost our last best chance to reinvent a health care system centered around the large-scale provision of high-quality primary care—even though this is what value-based contracts started out trying to do.

Another reason that retail giants such as Amazon and CVS Health have recently invested billions of dollars in primary care companies (One Medical and Oak Street Health) is that they anticipate steering thousands of patients to their pharmacy and disease management products. CVS Health’s CEO is confidently projecting that investors will realize “double-digit returns on invested capital over time as clinics mature and synergies are realized.”

Although private investment has infiltrated nearly every sector of health care, including oncology clinics, neonatology practices, and the gastroenterology practice where I refer most of my patients for procedures or challenging gastrointestinal problems, the profit motive may do the most damage in primary care, which improves population health when it is treated as a common good rather than as a loss leader for more profitable procedural subspecialties and hospital-based services. As Soleil Shah and colleagues wrote in the New England Journal of Medicine: “Though potentially beneficial for certain well-insured patients, the trend of corporate investment in primary care could threaten equitable access to care, raise health care costs, and reduce physicians’ clinical autonomy.”

Sounding the alarm about the “existential threat of greed” in a JAMA Viewpoint and his Institute for Healthcare Improvement 2022 National Forum keynote address, Don Berwick made these stark observations about the wrong direction that the excessive pursuit of financial profit has been taking the U.S. health care system, and now corporate primary care:

Profit may have its place in motivating innovation and higher quality in health care, as in any industry. But kleptocapitalist behaviors that raise prices, salaries, market power, and government payment to extreme levels hurt patients and families, vulnerable institutions, governmental programs, small and large businesses, and workforce morale. Those behaviors, mostly legal but nonetheless wrong, have now accumulated to a level that poses an existential threat to a sustainable, equitable, and compassionate health care system. … US health care costs nearly twice as much as care in any other developed nation, whereas US health status, equity, and longevity lag far behind. Unchecked greed is not the only driver of that failure, but it is a major one. Few, if any, other developed nations tolerate the levels of avarice, manipulation, and profiteering in health care that the US does. Salve lucrum [Hail, Profit!] is the wrong answer.

Common sense thoughts on public health and conservative medicine from a family doctor in Lancaster, PA.

Dr. Kennylin is a board-certified Family Physician and Public Health consultant practicing in Lancaster, PA. I am also Deputy Editor of the journal American Family Physician and teach residents and medical students at Lancaster General Health / Penn Medicine Family Medicine Residency program. I am paid to provide independent editorial and medical consulting services to the American Academy of Family Physicians, WebMD, and others. However, the content of this blog reflects my personal views only and does not represent the views of any medical institution, publisher, or the AAFP.