Jun
29, 2018 | Jon Stone
While consolidation is a common trend across
many sectors—including anatomic pathology groups and hospital
systems—UnitedHealth Group is the latest example of the payer-provider
consolidation trend impacting medical laboratories nationwide
Pending the successful completion of a $4.9-billion acquisition
of DaVita Medical Group, UnitedHealth Group (UNH) will be poised to become
the largest single employer of doctors in the U.S., according to numbers
reported by leading sources.
Clinical laboratories, anatomic pathology groups,
and other service providers that service those doctors should already be taking
a serious look at their revenue flows and efficiencies to maintain margins and
weather the shift into a model of value-based reimbursement.
Controlling Costs with Direct Care
According to a press release,
UnitedHealth Group’s (NYSE:UNH) direct-to-patient healthcare subsidiary, OptumCare,
currently employs or is affiliated with 30,000 physicians. And, DaVita Medical
Group, a subsidiary of DaVita Inc. (NYSA:DVA), lists 13,000 affiliated
physicians on their website. Should acquisition of DaVita Medical Group go
forward, OptumCare would have approximately 43,000 affiliated or employed
physicians—roughly 5,000 more physicians than HCA Healthcareand nearly double Kaiser Permanente’s 22,080
physicians—thus, making OptumCare’s parent company UNH the largest individual
employer of physicians in the U.S. The acquisition is reportedly to reinforce
UNH’s ability to control costs and manage the care experience by acquiring
office-based physicians to provide services.
OptumCare has seen significant growth over the
past decade. OptumHealth, one of three segments of UNH’s overall Optum healthcare
subsidiary, includes OptumCare medical groups and IPAs, MedExpress urgent care,
Surgical Care Affiliates ambulatory surgery centers, HouseCalls home visits,
behavioral health, care management, and Rally Health wellness and digital
consumer engagement.
Acquisitions of Doctors on the Rise;
Clinical Lab Revenues Threatened
Independent physicians and practices have been a hot commodity
in recent years. A March 2018 study from Avalere Health in
collaboration with the Physicians Advocacy Institute (PAI) showed that
the number of physicians employed by hospitals rose from 26% in July 2012 to
42% in 2016—a rise of 16% over four years.
By acquiring physicians of their own, insurance companies like
UnitedHealth Group believe they can offset the cost and shifts in service of
these prior trends. “We’re in an arms race with hospital systems,” John Gorman of Gorman Health Grouptold Bloomberg. “The goal is to better control the means of
production in their key markets.”
According to Modern Healthcare, the acquisition of DaVita Medical Group
is UnitedHealth’s third such acquisition in 2017. Other acquisitions include:
·
Surgical Care Affiliates for $1.3-billion in
January; and,
·
Advisory
Board, a healthcare consulting firm, for $2.3-billion in November.
Along with Surgical Care Affiliates came a chain of surgery
centers that, according to The New York Times (NYT), OptumCare
plans to use to perform approximately one million surgeries and other
outpatient procedures this year alone, while reducing expenses for outpatient
surgeries by more than 50%.
NYT also noted that
acquisition of DaVita Medical Group doesn’t bring just physicians under the
OptumCare umbrella, but also nearly 250 MedExpress urgent
care locations across the country.
By having physicians, clinical laboratories, outpatient surgery
centers, and urgent care centers within their own networks, insurance providers
then can steer patients toward the lowest-cost options within their networks
and away from more expensive hospitals. This could mean less demand on
independent clinical laboratories and hospitals and, with that, reduced cash
flows.
According to NYT, Optum currently
works with more than 80 health plans. However, mergers such these—including
those between CVS Health (NYSE:CVS) and Aetna (NYSE:AET),
and the proposed agreement between Humana (NYSE:HUM)
and Walmart (NYSE:WMT) to deliver healthcare in the retailers’ stores—indicate
that insurers are seeking ways to offer care in locations consumers find most
accessible, while also working to exert influence on who patients seek out, to
generate cost advantages for the insurers.
This consolidation should concern hospitals as payers
increasingly draw physicians from them, potentially also taking away their
patients. The impact, however, may also reach independent medical
laboratories, medical imaging centers,
anatomic pathology groups, and other healthcare service providers that provide
diagnoses and treatments in today’s complex healthcare system.
Deep Payer Pockets Mean Fewer Patients for
Clinical Labs and Medical Groups
As this trend continues, it could gain momentum and potentially
funnel more patients toward similar setups. Major corporations have deeper
pockets to advertise their physicians, medical laboratories,
and other service providers—or to raise public awareness and improve
reputations. Such support might be harder to justify for independent healthcare
providers and medical facilities with shrinking budgets and margins in the face
of healthcare reform.
Shawn Purifoy, MD, a family medicine practitioner in
Malvern, Ark., expressed his concern succinctly in The New York Times.“I can’t advertise
on NBC [but] CVS can,” he noted.
While further consolidation within independent clinical
laboratories and hospitals might help to fend off this latest trend, it remains
essential that medical laboratories and other service providers continue to
optimize efficiency and educate both physicians and payers on the value of
their services—particularly those services offered at higher margins or common
to menus across a range of service providers.
No comments:
Post a Comment