19 April 2019
Dear Interested Readers,
Troy Brennan And CVS Are Betting on Medicare For All and Risk
This week I traveled to Boston for the annual meeting of the combined boards that serve the Boston Medical Center. There is a hospital board. There is a physician board. The physician group staffs the hospital, its connected clinics, and provides the faculty that teaches in the Boston University Medical School. The professional organization is a 501c3 and has recently been renamed the Boston University Medical Group. And then there is the board of the insurance company, BMC HealthNet. All of these entities participate in BACO, the new Boston ACO which includes BMC as well as hospitals and practices in Springfield, Brockton, and on the South Coast of Massachusetts to form a large ACO that accepts patients from MassHealth, which is the Massachusetts Medicaid program that now pays for all care for Massachusetts Medicaid recipients through ACOs.
The event occurs once a year, and is a great chance for dozens of board members and executive staff associated with the care at BMC and BACO to review how our collaboration and collective efforts are coming together to provide services to some of the most vulnerable people in Massachusetts. I am in my third year as a member of the physician group board which employs more than a thousand doctors and mid level professionals who provide care across the BMC community. The meeting is a great opportunity for me to get a sense about the progress in the shift from fee for service to ACO payment for Medicaid services within BMC and its affiliated practices. As one would predict, the transition is creating a transformation in care delivery. I am certain that most clinicians and executives would have preferred a more gradual transition, which I do not think was possible. FFS revenue does continue from Medicare and commercial insurance, but the deep change needed for success in risk based products was always going to be tomorrow’s work until it was the only way to get paid for a substantial portion of the care that was provided.
The combined board meeting last year was all about the enormous challenge ahead. The board meeting this year was a review of progress that has been made. From my perspective being forced to develop the infrastructure and make the changes in practice orientation that is required to provide care in an ACO environment seems to be something that most health systems choose to avoid or delay until they have no other alternative. The decision by Mass Health to put all of its patients into ACOs was the sort of external pressure that created the need to quickly do the work of “adaptive” change. I was delighted to hear about all the changes that are underway, and the shifts in perspective that are occurring. BMC is the largest safety net hospital in Massachusetts. The success or failure of risk based finance at BMC will have a profound effect on the future of practice in Massachusetts.
Practices across the country have been “nudged” toward risk contracts by Medicare through MACRA and by commercial insurers like Aetna, but there has not been a stampede away from the preference of volume based reimbursement. The majority of health systems, hospitals, and multispecialty medical practices still build their annual budgets, and make their strategic plans, including the expansion of their costly infrastructures, for the explicit purpose of raising revenue from doing more volume. Troy Brennan was the keynote speaker of the day, and he had a lot to say about the future of healthcare in America and the cost of care that is primarily driven by FFS payment. Dr. Brennan is the CMO of CVS and he thinks everything is about to change. He should know because he has been building a resource which will lead the way into a radical new era of practice evolution.
I have known Dr. Brennan since he was the President and CEO of the Brigham Physicians Group many years ago. He is a remarkable man who grew up in East St. Louis, attended SMU, became a Rhodes Scholar, earned his MD, MPH, and JD degrees at Yale, and then did his internship and residency at the MGH before becoming a professor at Harvard Medical School and publishing over 200 papers. He surprised many people when he became the CMO of Aetna in 2006. People were even more surprised a few years later when Dr. Brennan became the Executive Vice President and CMO of CVS. For the past eight plus years under Dr. Brennan’s leadership, CVS has been transformed into a new type of medical provider. They have gone from filling prescriptions to treating acute minor illness and giving vaccinations to being able to manage chronic diseases through their thousands of stores across the country staffed by thousands of nurse practitioners and pharmacists. Now CVS has purchased Aetna for $69 billion dollars. CVS is a huge, rich company that has bet billions of dollars on what it thinks is going to happen in healthcare. I was interested in hearing Dr. Brennan give us his view of the future. I had heard him talk about the future of the ACA in 2010 when we were speakers on the same program, and he gave a pretty accurate forecast. My guess was that he would have a lot to say that I wanted to hear.
He started off with a convincing analysis of why CVS was betting on the likelihood that after the next election we would be moving to Medicare For All, delivered primarily as Medicaid Advantage. Things could be somewhat different, but the core concept was that the cost of care is too high and change is inevitable. It’s all about price and utilization, and a major part of price is the cost of drugs, hospitals charges, and professional compensation. Brennan quoted the late healthcare economist from Princeton, Uwe Reinhardt, several times. Reinhardt’s focus was on prices and transparency, and he was an advocate for value based finance.
Brennan implied that the dramatic transition would be driven by the tax and infrastructure concerns of big business. They would rather preserve the goodies that they got from the Trump tax law than preserve the smaller deductions they get from providing employer based healthcare. There is also a palpable shift in attitude among voters. Did you see that even on a Fox News town meeting with Bernie Sanders the whole audience said they were ready for Medicare For All? That is not nearly as great a force as a majority of CEOs saying that they are ready for the government to finance what has become a headache for them.
Dr Brennan began his high level revelations of the CVS strategic initiatives by showing slides that buttressed his view that the next step in healthcare reform would be some form of Medicare For All. Fee for service abuse has created costs that are unsustainable, and something that can’t go on forever will end some time. Whatever happens after the next election, CVS is planning on being the future “front door” to healthcare.
I was always fearful of what the CVS Minute Clinics might do to our cost structure at Harvard Vanguard and Atrius Health. In 2008 we had a brief conversation about collaboration. Those low intensity visits that CVS was planning on capturing were real revenue for us, and although we had a large risk population, we also had hundreds of thousands of FFS patients and our staffing and physical plants were constructed to deal with the expectation of taking care of routine problems, as well as the complicated and complex patients. As a clinician, I knew that those visits were also valuable in building relationships. If I never saw a patient with a routine minor problem, and did not have the knowledge of the patient that I gained from those visits, and if the patient had not gotten to know and trust me when the problems were small, we were both at a relative disadvantage when bigger and more complex issues arose.
Dr. Brennan is in the process of constructing or renovating and staffing more than 1000 of the 10,000 CVS stores across the country as “Health Hubs,” and he had the pictures to prove that he is far beyond just a concept. These sites are an evolving reality. One is coming soon to your neighborhood, or it is already up and running. CVS is the world’s largest Epic user, and has as built IT connections from Epic to the EMRs of Cerner, Nextgen, Athena, Allscripts, and eClinicalWorks. His idea is that CVS will do your chronic disease management for you. He is convinced that he can do it better, do it less expensively, and with higher satisfaction than you can do it. The target population is anyone with diabetes, hypertension, hyperlipidemia, asthma, or depression. CVS wins big time with this strategy. They are also planning to do point of service testing, and soon will do other routine lab tests. They have already bought a company, and the infrastructure for that. He did not mention it, but it is true that they will also be selling the meds that are used to treat those disorders. What is also nice for CVS is that your patient can pick up some shampoo, a magazine, and even some chips on the same visit.
We are not done with the vision and the innovation. Dr. Brennan thinks they are equipped to do outreach to your fragile patients, and that he can provide better transitions to emergency care, and he is sure they can do a better job in managing the transition of your patient from the hospital to home. CVS will see your patient as they head home and the pharmacist will rationalize the discharge meds with the admissions meds, and by the way, all of these services are offered on demand. That is the way patients like it. They get the care when it is convenient for them, and not when you get around to meeting their needs. He plans to use home monitoring with “enhanced digital and telemedicine outreach.” He will be connected to you as well. You will be informed of your patient’s visits with CVS, just as your ACO will be receiving invoices that he thinks the finance people will like because he can do the same work you do for less because he is better engineered than you are, and expects to have a better relationship with your patient built on convenience and service, than you do. At a minimum, he understands what customers like, and he knows the value of providing value that they can appreciate. Did I say that he was also hiring some doctors? All this gets summed up on a slide that proclaims: “We will shrink the distance between the patient’s everyday life and our care engagement.” Is that an objective you have established for your practice? Most practices that I have experienced are focused on increasing revenue and managing the workload of providing care. Dr. Brennan has the resources to look at it from the patient’s point of view, and he knows that if he gives customers the convenience and services they need at a site where they can just walk in and get what they want, CVS will adds billions more to its market value.
Dr. Brennan thinks that if CVS does well, the nation will do well. He has numbers that tell it all. If they lower HbA1C 1%, $30 billion is saved. If they optimally control blood pressure, we save $100 billion. If we adequately treat hyperlipidemia with 95% adherence we save $60 billion. Controlling severe asthma saves $20 billion. Treating untreated depression saves $83 billion. That sums to $293 billion saved while enabling healthier patients and creating a path to healthier communities. Dr. Brennan’s initial savings goals are $20 million dollars for every 100,000 commercial patients and $40 million for every 100,000 Medicare members.
Now that CVS owns Aetna, Dr. Brennan is ready to bring the benefits of AI to the management of fragile patients and believes that CVS can make a difference in the care of the 5% of the population that drives 50% of the cost of care by providing convenient evaluation and intervention “with connectivity” to the PCP. He point out that despite our efforts 25% of EW visits are still unnecessary, and that the average expense of an EW visit is $1,200. He is ready to save another $38 billion which puts his projected benefit to the total cost of care well over $300 billion. That’s not all, he thinks that he can save at least $17 billion on readmissions. That’s the benefit of “unmatched connections.” He knows that 4.5 million people already visit CVS Pharmacy every day, and that a third of Americans go to CVS at least once a year. He already has connections to over 400 health plans. He knows that he is connected to 69 million patients through text messaging. He sums it up by saying, “Data and analytics from CVS and Aetna enable “next best health action.” At the end of the talk Dr. Brennan emphasized that the goal of CVS was to complement and not compete with primary care which is different than the strategic plans of other large insurers, think United, who are “buying or building” primary care practices, urgent care, ambulatory surgery, and narrow network hospital systems. His objective is to “develop new programs to provide preventive and primary care, and work closely with integrated systems…” He said that CVS calls it complementary primary care. (His bolding, not mine.)
“Complementary primary care integrates with the medical home and the accountable care organization. We share responsibility for better health and lower costs for patients.”
Dr. Brennan’s last slide was a summary of his big ideas.
Summary: A New Approach to Care Management
- Take advantage of the fusion of digital engagement with convenient, focused one on one care
- Target is reduction of costs through better quality, better coordinated care
- Supports the accountable care organization and the medical home
- Infrastructure is equal parts integrated, AI- evaluated data, and physical space at convenient locations
That sounds reassuring, but I think that if I was still leading an ACO I would have some apprehensions. I couldn’t help but think, “Troy has usually been right in past, and a lot of this is going to happen. It will be interesting to see if it really lowers the cost of care while advancing the other two legs of the Triple Aim. This is an announcement of intent veiled as an invitation for participation.” Sitting next to me was a dynamic CEO of one of the large BACO affiliated groups who is 50. He turned to me and smiled as the last slide flashed on the screen and said, “I guess it’s time for me to retire!”
I reflected a moment, then nodded and smiled as I thought to myself, “I am happy to be retired already. This will be interesting to watch to see what happens. If I was still a CEO, I would be thinking about the distribution of CVS stores near my patients, and then get my team together to try to decide if we were going to compete or partner. I think we are moving toward a whole new ballgame.”
We have been saying for some time that innovation would be necessary to lower the cost of care while maintaining access and quality. It’s my impression that most organizations that I hear talking about success through innovation are doing more talking than doing. Innovation is a part of their strategic plan, and sooner of later they will get started. Perhaps they have already waited too long, and will find themselves either accepting a partnership with CVS, or find themselves scrambling to compete with a very developed and well financed disruptive innovator. It’s happened before. When was the last time you chose a dirty taxi over a nice clean Uber ride, or paid more while you waited for the bookstore in town to order the title that you wanted to read?
Spring Has Sprung
One sure sign of spring is the appearance of little lambs, foals, and calves. Down the road and around the corner from my home there is a pasture that lies between the Interstate and the road I walk that follows the shoreline of the lake. My neighbor operates a B and B which is called the Maple Hill Farm B&B Country Inn. You should click on the link and do his virtual visit. Like a lot of people I meet in these parts, he is a refugee from finance in New York City who gave up the rat race years ago and now enjoys offering nice meals and accommodations to those who want to enjoy the nearby skiing in the winter, and the pleasures of the lake as well as hiking and biking in the summer. He offers a great breakfast featuring his own eggs and bacon, and he also produces beef as you can see in today’s header.
The bovine couple pictured in the header is Sir Loin and his partner in procreation, Beeftrice. If you look closely you can see that they have ushered in the spring with the product of their collaboration, a young heifer who the innkeeper has named “Patty.” I think her name suggests that when she gets a little older and a little bigger, she will follow some of her siblings whom she will never meet into the freezer at the Maple Hill Farm Inn, and eventually become part of a very tasty hamburger served up at a lakeside barbecue probably not long before the 2020 election. Between now and then I will get to enjoy watching her grow as I try not to contemplate her destiny which is totally out of my control. If I play my cards right, I may be invited to participate in her destiny. Anything is possible, but in the interim I will just enjoy watching her as she explores the length and breadth of the small world she will enjoy until the day my neighbor decides that her time has come. Spring is all about renewal and the cycle of life. Patty’s “destiny” is a reminder of what we were told on Ash Wednesday about dust to dust, although her version of the eternal reality is likely to be from hay to hamburger.
Whether you are celebrating Passover, Easter, or just enjoying your personal survival of yet another winter realizing that there is one less spring in your future, I hope that this will be a special weekend. I wish that I had something more profound to say about the fire at Notre Dame, or the redacted version of Robert Mueller’s report. The best I can do is say that surprises come and go and add up to a linear history, but spring is a reminder that underneath it all there is a very reliable cycle of life that can give us all the courage we need to face what surprises us. This to shall pass, all things pass, but spring comes again and again. It has come again with new calves, new lambs, and new chicks since before the beginning of our time, and will continue to come again and again until long after the last person who has any memory of us has experienced their destiny It’s. nice to realize that, like Patty, we have a destiny, and unlike Patty we can connect it to what came before us and what will be here after we are gone.
I hope that during the weekend you will be out and about trying to see what Spring has to offer for you. I am hoping that by Monday I will be fishing. There are now patches of water here and there among the ice floats that still cover most of the lake.
Be well, take good care of yourself, let me hear from you often, and don’t let anything keep you from doing the good that you can do every day,
Gene
