THIS WEEK IN HEALTHCARE
What happened in healthcare this week—and what we think about it.
- Former patient kills his surgeon and three others at a Tulsa On Wednesday afternoon, an aggrieved patient shot and killed four people, including his orthopedic surgeon and another doctor, at a Saint Francis Hospital outpatient clinic, before killing himself. The gunman, who blamed his surgeon for ongoing pain after a recent back surgery, reportedly purchased his AR-15-style rifle only hours before the mass shooting, which also injured 10 others. The same day as this horrific attack, an inmate receiving care at Miami Valley Hospital in Dayton, OH shot and killed a security guard, and then himself.
The Gist: On the heels of the horrendous mass shootings in Buffalo and Uvalde, we find ourselves grappling with yet more senseless gun violence. Last week, we called on health system leaders to play a greater role in calling for gun law reforms. This week’s events show they must also ensure that their providers, team members, and patients are safe. Of course, that’s a tall order, as hospital campuses are open for public access, and strive to be convenient and welcoming to patients. Most health systems already staff armed security guards or police officers, have a limited number of unlocked entrances, and provide active shooter training for staff. This week’s events remind us that our healthcare workers are not just on the front lines of dealing with the horrific outcomes of gun violence, but may find themselves in the crosshairs—adding to already rising levels of workplace violence sparked by the pandemic. Something must change.
- CVS Health to launch a virtual-first primary care platform. The digital platform is designed to provide consumers with a coordinated healthcare experience across care settings. It’s being sold to Aetna’s fully insured and self-insured plan sponsors, as well as CVS Caremark clients, and is due to go live next year. According to CVS Health, the new offering “enables consumers to choose care when and where they want,” whether that’s virtually, in a retail setting (including at a MinuteClinic or HealthHUB) or through at-home services. Patients will have access to primary care, on-demand care, medication management, chronic condition management, and mental health services, as well as help in identifying other in-network care providers.
The Gist: CVS Health has been working to integrate its retail clinics, care delivery assets, and health insurance business. This new virtual-first care platform is aimed at coordinating care and experience across the portfolio, and streamlining how individuals access the range of services available to them. CVS is not alone in focusing here: UnitedHealth Group, Cigna, and others have announced virtual-first health plans with a similar value proposition. Any payer or provider who aims to own the consumer relationship must field a similar digital care platform that streamlines and coordinates service offerings, lest they find themselves in a market where many patients turn first to CVS and other disruptors for their care needs.
- Steward Health Care sells its Medicare value-based care business to CareMax.The for-profit, 39-hospital Steward system manages 171K lives across the Medicare Advantage, Medicare shared savings, and Medicare direct contracting programs. This deal will allow Miami-based CareMax, a publicly-traded, value-based care company with 42 senior centers (mostly in Florida) and 34K lives under management, to expand across Steward’s footprint, which includes Texas and Arizona, states with rapidly growing Medicare populations.
The Gist: This deal is an example of the rise of venture-funded MSO (medical services organization) services that aim to subsume and scale value-based care functions from hospitals and medical groups. Steward wagers it can find greater success in managing risk in partnership with CareMax, moving a greater share of its Medicare population into risk, and outsourcing care management and patient engagement functions. Many health systems have spent substantial resources building out accountable care organizations and risk-based Medicare businesses over the last decade. While selling these assets to a company like CareMax may be one way to generate a return, particularly for those frustrated by lower-than-anticipated gains from moving to value-based care, it also requires relinquishing control of functions likely central to the future health system business model.
Plus—what we’ve been reading.
- Surprise billing ban leads to cuts at PE-backed staffing firms. When Congress passed the “No Surprises Act” in 2021, credit rating agencies like Moody’s warned that the bill would hurt physician staffing firms, especially those that provide emergency department (ED) services, which result in a surprise bill in roughly one in five visits. A piece from investigative outlet The Lever highlights how one private equity-backed physician staffing firm, Nashville-based American Physician Partners, is responding to the resultant cash flow challenges by cutting ED physician pay, after already reducing staffing levels. As the article describes, this is possible in an otherwise tight labor market because, unlike many other specialties, there’s an oversupply of ED physicians, due to the rapid growth in emergency medicine residency programs over the last decade.
The Gist: With two-thirds of hospitals outsourcing at least some ED physician labor, the potential insolvency of large physician staffing firms could bring a crisis in access and coverage. In addition to revenue cuts tied to the surprise billing ban, rising interest rates also mean that PE firms may soon find it more difficult to fund their aggressive growth strategies. Health systems should proactively evaluate their partnerships with PE-backed physician staffing groups, with an eye toward anticipating potential staffing problems and service quality shortfalls.