Innovation and Disruption

How CVS Plans to Change Its Provider Role

December 20, 2018 8:25 am

The company plans to use its nurses and pharmacists to offer much more chronic care management, which some industry watchers doubt is realistic.

Dec. 19—Among the potential healthcare disruptors that providers are closely watching is CVS Health, which recently completed a historic acquisition of a national insurer.

CVS Health, which operates 9,800 retail locations as well as about 1,100 walk-in medical clinics, and serves as a pharmacy benefits manager for about 93 million beneficiaries, issued a statement in late November that it had completed its $78 billion acquisition of Aetna (the deal still faces potential legal challenges). Aetna has 22 million enrollees across all 50 states, and it contracts with networks of physicians, hospitals, and other healthcare organizations to provide services to its members.

One of the proposed merger’s goals is to steadily provide more healthcare services in CVS’s retail clinics, shifting care away from more costly settings, including hospital emergency departments (EDs), noted a Moody’s analysis.

“We don’t expect this shift to be sudden or substantial because the retail clinics are generally not staffed by physicians. Instead, the shift would continue a trend that has already been ongoing among healthcare providers,” Moody’s analysts wrote. “CVS also aims to shift lab services to preferred sites, and infusion services away from outpatient hospital settings.”

But one CVS Health executive said the company aims for its army of in-house providers to serve as an adjunct—not as a replacement—for existing providers.

“We have a fundamental belief that the healthcare system can’t necessarily be reformed from outside. Reform has to come from within, and with the players that are there now—and changing what we know, and using data to drive that change,” said Thomas Moriarty, JD, executive vice president, chief policy and external affairs officer, and general counsel for CVS Health. However, he described the care from existing providers as “fragmented, complex, episodic, and obviously very, very wasteful.”

More of a Provider Role

At a recent Washington, D.C., health policy event, Moriarty described the company’s goal to become the “new front door to health care.”

“It takes a number of contacts to really address the issues at the patient level, at the consumer level,” Moriarty said.

CVS aims to make the healthcare system more consumer-centric by providing access “where they need it, when they need it, and how they want it.”

Nearly half of consumers using CVS Minute Clinics do not have primary care providers. Additionally, half use those clinics on nights and weekends, when primary care offices usually are closed.

“We need to extend access to these alternative sites of care,” Moriarty said, noting such locations can be more responsive to time-sensitive care needs and cheaper than hospitals.

However, Moriarty emphasized that the company’s provider initiatives aim to offer “an extension of primary care” rather than replace primary care providers. As an example, he noted that diabetes patients make an average of four annual visits to their primary care providers. In comparison, such patients see and talk to their pharmacists 18 to 20 times annually.

Moriarty said the company aims to use information from electronic health records (EHRs) to help with “maximizing those points of engagement” when patients are at their pharmacies.

“It’s not the phone call at night at dinnertime, it’s not the letter, it’s that face-to-face contact with a care provider,” Moriarty said in reference to the 4.5 million daily visits to his company’s pharmacies.

A related goal of the new, larger company is establishing a larger role in improving the care management of chronically ill older patients.

Matthew Borsch, a financial advisor with BMO Capital Markets, said CVS plans to shift some of its retail locations to become “neighborhood health centers,” which also will provide primary care delivery for Medicaid enrollees.

“Something that would build out from the relatively limited and low acuity level of services provided by the Minute Clinics,” Borsch said at a recent Washington, D.C., roundtable. “If it works, it has the potential to be a lower-cost site of care delivery, particularly with the non-physician personnel.”

But the lack of physicians makes some industry watchers doubtful that CVS could take on a significant provider role for patients with chronic health conditions.

For example, Ana Gupte, PhD, a managing partner for Leerink Partners, doubted that busy pharmacists or Minute Clinic nurses used to addressing sore throats could have either the expertise or time to longitudinally manage chronically ill populations.

“Where is the capacity to do something like that?” Gupte said at the same event.

One way that CVS is moving beyond the limits of the Minute Clinic is through a partnership with telehealth company Teladoc.

“We have a partnership with CVS where we are being white-labeled and providing basically the telemedicine back-end services for the virtual aspects of the Minute Clinic,” Lewis Levy, MD, chief medical officer for Teladoc, said at the event. “But I think that relationship can really accelerate and grow with just much more of a fueling.”

Gupte similarly doubted that CVS’s target population of seniors with chronic health conditions would want to use in-store telehealth over either telehealth at home (among younger seniors) or visits to physician offices (among older seniors).

For CVS to take on more of a provider orientation, Moriarty said, needed policy changes include more-uniform state laws that expand the scope of practice of pharmacists and nurse practitioners, of which CVS employs large numbers.

The acquisition also gives CVS access to 45,000 physicians who are affiliated with Aetna. But Moriarty said the most important component is CVS’s relationships with other insurers across the country.

The company plans to push for federal and commercial payers to move to multiyear contracts that will offer better incentives to provide extensive preventive care, especially for those with chronic health conditions that worsen over many years.

A “one-year term, which is the insurance word for the length of the contract, is insane, especially if you are dealing with chronic diseases,” Regina Herzlinger, PhD, a professor at the Harvard Business School, said at the event. “It’s like buying a house with a one-year mortgage.”

Other CVS Initiatives

Among the price transparency innovations the company touts are its EHR tools (in partnership with Epic), which provide patient out-of-pocket costs—based on the patient’s specific insurance coverage—to providers at the point of care.

“And if it is not done at the doctor’s office, it can be done at the pharmacy counter,” Moriarty said.

Such price transparency is key to improving drug compliance, the lack of which leads to an estimated $300 billion annually in additional healthcare costs from ED visits and other care, he said.

Another initiative aims to provide medication reconciliation for patients discharged from the hospital, to prevent readmissions.

“A big percentage of readmissions [stems from] drug-to-drug interactions because that reconciliation is not being done,” Moriarty said.

The company also sees a role in helping to move various therapies, such as infusion services, into non-hospital settings.

“The better managed that transition is, the lower the rates of readmission, the cost savings are huge, but most importantly the patient experience improves an incredible amount,” Moriarty said.

Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare


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