Consumer Power Report #472
“Jiffy” health care clinics represent one of the fastest-growing sectors of the health care industry, providing quick, convenient, and affordable primary care services without the long waits and higher costs of traditional family practices.
In-and-out health clinics exist in states across the country and are often located inside pharmacies, such as CVS and Walgreens, as well as in grocery stores and large retail stores. Clinics are often led by a nurse practitioner or a single primary care physician. Staffing is kept low and facilities have limited testing capabilities and expensive machinery, keeping costs down.
The Philadelphia Inquirer reports the Convenient Care Association says there are more than 1,600 retail health clinics nationwide, with many more planned. In some states where costs and patient wait times are particularly high, retail clinics are growing at a rapid rate. There are more than 350 retail health clinics in Pennsylvania, many of which are in Philadelphia, where the average wait time to see a primary care doctor is roughly three weeks, according to the American Hospital Association.
The growing number of retail health clinics can be attributed in large part to expanding wait times and the growing number of Americans enrolling in Medicaid, both of which have come as a result of reforms mandated by the Affordable Care Act (ACA).
Since ACA-established health insurance marketplaces opened in 2014, patient wait times in numerous specialties, but especially in family health care, have increased in highly regulated markets, such as Massachusetts, according to a study by Merritt Hawkins and Associates.
Also, Medicaid enrollment has exploded under Obamacare. In Colorado, 477,000 additional Americans were enrolled in Medicaid or the Children’s Health Insurance Program (CHIP) from 2013 to 2015, an increase of 60 percent. In California, more than 3.4 million people were added to Medicaid or CHIP rolls over the same period.
Even more problematic, the growing Medicaid population is having an increasingly difficult time finding doctors who will take them on as patients, adding further to the number of people looking for alternative health care options.
The Merritt Hawkins study shows the number of doctors accepting new Medicaid patients has fallen significantly since 2009. The 2014 survey results show, for instance, 38.6 percent of Dallas physicians accepted Medicaid in 2009, but only 23 percent accept Medicaid today. In 2009, the metro market with the highest percentage of doctors accepting Medicaid was Minneapolis, where more than 80 percent of its doctors welcomed Medicaid patients. In 2014, the market with the highest percentage was Boston, which had accepted only 73 percent of patients.
Nationally, only 45 percent of doctors across a range of specialties now accept Medicaid, a decline of roughly 10 percentage points from 2009.
The combination of growing wait times for patients, a ballooning Medicaid population, and a shrinking number of doctors willing to accept Medicaid patients has created a perfect environment for economic growth for the retail health clinic industry. Now, more than ever, patients are looking for convenient and inexpensive ways to receive care, and the model utilized by in-and-out health facilities offers a seemingly perfect solution.
However, the framers of ACA created the Obamacare system with a different model in mind, and virtually all of their projects, cost analyses, and programs failed to account for the possibility the retail health clinic market could take off.
Obamacare’s chief stated goal was to add the roughly 30 million Americans who were said to live without health insurance in 2009 to the health insurance marketplace, even though many of these people could not afford to pay for health insurance on their own. Obamacare’s designers sought to offset the increased costs that would come from adding millions of lower-income people to the marketplace by mandating all people buy health insurance, including the many young healthy Americans who didn’t previously purchase health insurance; heavily regulating the health insurance marketplace; and establishing policies that would push people into primary care facilities instead of emergency rooms.
The theory was that if more young people and lower-income people, demographics that haven’t traditionally seen primary care doctors on a regular basis, started frequently seeing a local family health care physician, primary care doctors would be able to offset the lower reimbursement rates received for Medicaid patients with new income from insured young people and families who used federal subsidies to purchase private insurance.
Further, health care costs would be reduced because people would theoretically be much healthier over time since they would now be under the regular care and guidance of a family physician. The expectation was that the prevalence of many preventative diseases, especially those related to obesity, could be reduced, saving the health insurance market billions.
Since Obamacare was fully implemented, however, the market has reacted in a radically different way. Many young people have chosen to pay the health insurance fine (or is it a tax?) rather than buy expensive Obamacare health insurance; far more people than previously expected have enrolled in Medicaid rather than purchase subsidized Obamacare health insurance policies; family practitioners are turning away Medicaid patients in droves; and a growing number of Americans are heading to emergency rooms for care. All of this indicates the expected infusion of cash into the primary care marketplace has not occurred.
Additionally, the growing success of retail health care facilities means more patients are seeing doctors only when they are sick, which the American Academy of Family Physicians says will likely lead to more “missed [opportunities] to address more complex patient needs.”
If patients aren’t receiving consistent preventative care from primary care physicians, costs will continue to explode at rates Obamacare’s creators never anticipated, making the system even less sustainable in the future than it already appears to be today.
— Justin Haskins
IN THIS ISSUE:
MOST AMERICANS NOW VIEW ACCESS TO HEALTH CARE AS A MORAL ISSUE
An overwhelming majority of Americans believes that access to health care is a moral issue, and that the United States should be able to afford universal health care if other developed nations can do the same.
But after that, Americans are still deeply divided over many provisions of the Affordable Care Act (ACA), more than five years after President Barack Obama signed the controversial health-reform legislation into law, a new HealthDay/Harris Poll found.
“Many supporters of the ACA believed that it would become more popular – like Medicare and Medicaid – when it enabled many more people who previously did not have health insurance to get it. That has not happened,” said Humphrey Taylor, chairman emeritus of The Harris Poll.
SOURCE: Dennis Thompson, HealthDay News
CBO SAYS PHARMACEUTICAL PATENT LAW CHANGE COULD COST TAXPAYERS $1.3 BILLION
A patent law change sought by the pharmaceutical industry could cost federal health-care programs $1.3 billion over a decade by delaying new generic medicines, an analysis by the Congressional Budget Office found this summer, according to people familiar with the matter.
Pharmaceutical trade groups are asking Congress to exempt drug patents from being challenged through an administrative process that is cheaper and faster than the federal courts. The procedure has become popular with generic-drug companies looking to sell copies of brand-name products. …
The Pharmaceutical Research and Manufacturers of America, also known as PhRMA, and the Biotechnology Industry Organization, or BIO, say brand-name pharmaceutical patents should be excluded from the procedure, called Inter Partes Review, or IPR, through patent legislation that Congress is considering.
The potential for such an exemption to increase drug spending has intensified opposition from some lawmakers, health insurers, and consumer advocates alarmed by rising drug costs. …
Individual drug companies, including Amgen Inc., AbbVie Inc. and Biogen, have lobbied lawmakers about changes to the IPR system, according to federal disclosure documents. Companies say IPR challenges have created new uncertainty as they evaluate which experimental drugs to invest in. …
But opponents of the exemption, such as the health insurance industry, say drug makers often use the slow pace of the federal courts to delay generic launches.
SOURCE: Joseph Walker, The Wall Street Journal
LARGE HEALTH INSURANCE COMPANY REPORTS IT LOST $300 MILLION ON OBAMACARE INSURANCE PLANS
Highmark Health reported an operating loss of $171 million during the first six months of the year as losses soared for health plans sold in Affordable Care Act exchanges.
Pittsburgh-based Highmark Health lost $318 million on health plans sold to exchange consumers, which Highmark executives credited to demand for medical care that greatly exceeded expectations. Those who bought Highmark exchange plans likely had “no healthcare or intermittent healthcare” before the ACA expanded coverage in 2014, said David Holmberg, president and CEO of Highmark Health. Many are grappling with chronic illness, he said. Losses for health plans sold through the exchanges totaled $76 million during the first six months of 2014.
SOURCE: Melanie Evans, Modern Healthcare
RISING DRUG COSTS IS CONSUMERS’ LARGEST HEALTH CARE COST CONCERN
The emerging issue in health care is drug costs – despite the fact that most people say they can afford their drugs and greatly value the role drugs can play in making their lives better. One likely reason this is the case: Drug costs are the first thing people think of when they think of the growing out of pocket costs they are paying for health care, at a time when their wages have been relatively flat.
In our Kaiser Family Foundation polling in April, surprisingly, “making sure that high-cost drugs for chronic conditions are affordable to those who need them” emerged as the public’s No. 1 priority for President Barack Obama and Congress, with 75% of the public saying it should be a top priority, far ahead of various other Affordable Care Act issues. “Government action to lower drug prices” was No. 2, picked by 60 % of the public and by 51% of republicans. (Respondents could choose multiple top priorities.)
Then, in our August polling, we asked which health costs people with health coverage find to be the greatest burden. As the chart below shows, deductibles led a closely bunched list, followed by premium payments, drug costs and doctor visits. Deductibles have been rising steadily each year, especially for people who work for smaller employers, as insurance has gradually been moving from more to less comprehensive, with more “skin in the game” for consumers.
SOURCE: Drew Altman, The Wall Street Journal
TELEHEALTH SERVICES INDUSTRY IS RAPIDLY EXPANDING, PROVIDING INNOVATIVE TECHNOLOGY
I do not usually cover healthcare, but as someone who now lives 40 minutes away from my primary care physician, I got interested in how companies are working to increase remote access to healthcare (while decreasing the carbon footprint of our healthcare system).
The Health Resources and Services Administration defines Telehealth as “the use of electronic information and telecommunications technologies to support long-distance clinical health care, patient and professional health-related education, public health and health administration.” …
Dr Andrey Ostrovsky, CEO of telehealth company Care at Hand, notes the growth in digital health. “Investment and adoption of digital health continues to grow rapidly. More than $6.9 billion was poured in to digital health technologies in 2014 and we’re on track to match or exceed that number in 2015 with $2.8 billion investment as of Q2. In my opinion, in the next 5 years, telehealth will become as routine as vaccinations and x-rays.”
SOURCE: Kate Harrison, Forbes
Justin Haskins is the director of the Socialism Research Center and editorial director at The Heartland Institute.
