Doctor giving patient a shot

Can Primary Care Be a Shot in the Arm for Corporate Profits?

ByBob Teague, MD

Good old primary care seems to be all the rage with large retail corporations these days.

Just in the past year,

  • Amazon has bought primary care practices in One Medical.
  • CVS bought Signify Health and later Carbon Health.
  • Walgreens invested in VillageMD and assisted with the acquisition of Summit Health both primary care practices.
  • Optum has been gobbling up practices to fuel its growth.
  • Walmart is accelerating its opening of primary care clinics.

According to the New England Journal between 2010 and 2021, the total capital raised for private investment in primary care when from $15 Million to $15 Billion, a factor of 100.

The current excitement and focus on primary care seem to be an extension of the retail medicine movement begun around 2006 exemplified by Minute Clinic integrated into CVS pharmacies and RediClinic with Rite Aid. The original intent was to make it convenient to get attention for minor, acute conditions. In the same timeframe, Walmart and other large retailers began experimenting with similar ideas and integration with pharmacy services.

Need and Profits

So what’s driving all this interest in basic day-to-day healthcare given by a healthcare provider?

Clearly need, but profits aren’t too far behind.  Despite that Fierce healthcare estimates primary care is a $260 billion market, there is a history of decades of under investment in primary care in the US. Access to care has remained difficult for many, while quality outcomes remain uncertain and uneven.

Opportunities: The opportunity is to transform primary care, provide capital to a capital-starved portion of the healthcare system and catalyze the migration from fee-for-service payments to value-based payments. Medicare Advantage plans have been extremely lucrative for providers.

Challenges Do Remain: Now that the stampede is on, one risk is that once the market is predominantly value base payment, unit payment may be more tightly controlled by CMS. There is also a prior experience with consolidation and management of health providers that ended poorly for the public companies who participated.

Possibly the two approaches together – virtual first care with highly automated supported decision making and self-treatment by individuals who have the conditions and convenient but more conventional in person primary care being funded by mega-corps – will finally bring access, cost, quality and experience to a new level for individuals who need care and prevention.

Large retail presence in both provider practice management and direct care delivery has a checkered past for success. Maybe this time is different. It seems very hopeful.

The wildcard is the friction from conventional systems and resistance to the final transition away from fee for services payments.

Primary Care Part II — Look for my take on how technology is impacting primary care in an upcoming blog.