Susan Ladika

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At certain times and in certain parts of the country, the COVID-19 pandemic stretched hospitals and other sorts of providers to the limit this year. But the pandemic has also had the opposite effect. Concern about receiving in-person healthcare, along with worry about the country’s economic future despite the bull stock market, means that millions of Americans have put off healthcare. The follow-up visit, the screening test, the annual checkup — the pandemic has had a chilling effect on all of them. “We’re going to have a population health issue on our hands” as a result of deferred care, undetected diseases such as cancer and an increase in chronic conditions, predicts Arielle Trzcinski, a senior analyst with Forrester Research and co-author of the research firm’s “Predictions 2021: Healthcare” report.

One of the questions facing American healthcare going into 2021 is how much telehealth and other forms of remote care delivery can replace what now seems almost old-fashioned: going to see the doctor in person instead of seeing them on your phone, tablet or laptop. There’s still plenty of apprehension about remote care, but it is ebbing — and some small studies have been producing evidence that it could have certain decided advantages over the pre-pandemic ways of delivering healthcare.

, by the end of June, about 40% of American adults had delayed or avoided medical care, and a sizable proportion — 12% — had put off urgent or emergency care. Those most likely to avoid urgent care had underlying health conditions, were Black or Hispanic, were young, had disabilities, or served as unpaid caregivers.

As the number of COVID-19 cases and deaths decreased in many parts of the country during the summer months, the provision of medical services bounced back to a certain extent. It is too soon to tell what impact the escalating number of cases and deaths in November will have.

Although the economic indicators this year are a mixed bag, the economic disruptions caused by the pandemic have factored into many people’s decision to skip medical care, observes Trzcinski: “Many can’t afford an unexpected medical bill.” And millions of people have lost their jobs, along with their health insurance, as a result of the pandemic. “People are making hard decisions — paying for health insurance or paying for rent,” she says.

Of course, the decline in in-person care has been accompanied by the much-talked-about surge in telehealth, especially for behavioral health problems. The Forrester researchers estimate that American consumers will make roughly
480 million telehealth visits this year, with almost 40% of those visits for behavioral health care. The research firm predicts a slight drop next year to about 440 million visits.

But the evidence of the shift to telehealth is overwhelming. Research results reported in 

 in October showed that in 2018 and 2019, between
122 million and 130 million primary care visits occurred each quarter and that only 1% of those visits were conducted virtually. During the second quarter of this year, the number of primary care visits dipped to fewer than 100 million, but 35% of those visits were conducted virtually.

“It’s anybody’s guess how long the pandemic will significantly pressure patients and clinicians to use telemedicine in settings where they might otherwise engage face- to-face,” says lead author G. Caleb Alexander, M.D., M.S., a professor of epidemiology and medicine at the Johns Hopkins Bloomberg School of Public Health. Alexander believes that telehealth can be used successfully when patients have an ongoing relationship with a primary care provider. He has qualms, though, about depending on a telehealth visit when a clinician is seeing a patient for the first time or dealing with a new complaint. It can be “very hard to evaluate them properly using telemedicine,” says Alexander.

During a recent webinar on 2021 healthcare predictions, Sam Glick, an Oliver Wyman partner and leader of the consulting firm’s innovation center, said telehealth usage represented 70% to 80% of care during the height of the pandemic and is expected to account for 30% to 50% of care going forward. Primary care physicians are using telehealth to improve the continuity of care, Glick observed, but he said the change was in its infancy. Glick’s prediction: Virtual visits that are not integrated into someone’s healthcare record, such as care provided through Teladoc or a similar service, “will be commoditized and compete with urgent care.”

Andrew J. P. Carroll, M.D., FAAFP, a family physician in Chandler, Arizona, and member of the board of directors of the American Academy of Family Physicians, says his office pivoted to virtual care “really out of necessity” and as a way to maintain continuity care for patients with chronic conditions and for those with COVID-19. Carroll says that in some cases, patients who have skipped routine care during the pandemic ended up having to receive costly emergency care.

Even before the pandemic began, consumers were forgoing visits to primary care physicians, according to Forrester’s research. A study published in the 

 in February found that from 2008 to 2016, visits to primary care physicians dropped by about 25% for adults under the age of 65, and the proportion of adults making no visits to their primary care provider in a year jumped from 38% to 46%. “I don’t think telemedicine is going to solve our historic problem of underutilization of primary care,” says Alexander. And as primary care visits fell, visits to urgent care clinics, retail clinics and emergency departments climbed 47%. Trzcinski at Forrester says that healthcare clinics at retail locations such as Walmart and CVS have benefited because of their price transparency and convenience.

The primary care visit isn’t the only type of care that has declined since the pandemic began. A drop in hospital usage is projected to cost health systems $350 billion this year, according to Forrester. According the research firm’s predictions report, emergency department visits have fallen by 42%, outpatient visits by 35%, and in-patient care by 22%.

Hospitals have responded, in part, by providing hospital-level care to patients in their homes. Results of what appears to be the first randomized controlled trial looking at the effectiveness of hospital-at-home care were reported last year in the 

. Lead author David M. Levine, M.D., M.P.H., M.A., of Brigham and Women’s Hospital in Boston, and his colleagues found that the average cost of an acute care episode was almost 40% lower for patients receiving hospital-at-home care compared with those who were traditional inpatients. The hospital-at-home patients had fewer lab tests, imaging studies and consultations. They were less sedentary, and their 30-day readmission rate was 7% compared with 23% for those receiving care in the hospital.

Levine says that hospital-at-home care is common in many industrialized countries: “We are pretty far behind.” Levine is doing his part to change that and expects to have two more studies published in the next month or so. One challenge has been the number of patients who declined to receive care at home. “We’ve spent 100 years telling people the best care is at the hospital,” Levine says. “We need to prove they can get high-quality, safe care at home.” Another one has been reimbursement, says Levine. “There is no easy payment mechanism,” he notes. “That’s one of the reasons why it hasn’t taken off in the U.S.” 

Susan Ladika is a health and business writer in Tampa, Florida.

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The decrease in in-person healthcare this year because of the COVID-19 pandemic could be a good thing for telehealth and programs that deliver hospital-level care at home.

The Pandemic Opens a Window of Opportunity for Telehealth

Reading is a struggling small city (population 88,000) in southeastern Pennsylvania with a poverty rate of about 35%. If healthcare providers and providers are to travel “upstream” to address the social determinants of health (SDOH), communities like Reading might be where those efforts would have the biggest effect — or falter because the determinants are deep-seated and intertwined.

Three years ago, Reading Hospital, the 714-bed flagship hospital of Tower Health, a regional nonprofit health system in southeastern Pennsylvania, received a $4.5 million grant from CMS to start a program that teams up community organizations with the hospital. Medicare and Medicaid patients who receive medical treatment at the hospital are asked about their social service needs and care navigators and community health workers help link them with services. Addressing these social needs has helped decrease emergency department visits, saving the hospital $1 million, according to a case study by Reading Hospital released in July. 

“Working together has a much more powerful impact,” says Desha Dickson, the hospital’s associate vice president for community wellness.

SDOH is a hot ticket in American healthcare these days and the COVID-19 pandemic has made it even more so because of the health and healthcare disparities the pandemic has revealed. The appeal of dealing with the root causes of disease is strong and easy to grasp. But there are also some misgivings. Can the healthcare system realistically take on such big problems? Are the programs longer on public relations than on substance?

Brian Castrucci, president and of CEO of the de Beaumont Foundation in Bethesda, Maryland, which focuses on community health, said that while establishing a community food pantry, for example, may be greatly needed, “It only meets the individual patient’s needs for the moment.” Helping an individual address their social service needs by helping them obtain a job or secure housing “extends the treatment of the symptoms, not the treatment of the causes,” he says. “There’s not enough money in healthcare to mitigate these societal-level problems,” Castrucci says “Instead, American healthcare could be more effective using its power to push policymakers to address the social and economic conditions that impact the health of a community.”

Castrucci and the skeptics and critics may have a point. But it also seems reasonable when Dickson and others say SDOH programs take time to bear fruit because the problems they’re addressing — housing, employment, nutrition — are not minor. Besides, even if a program skims the surface or homes in on a fairly narrow problem, it could make a big difference in people’s health status. Granted, the numbers are a little squishy, but by some calculations, up to 80% of a person’s health is influenced by SDOH.

Insurers and providers now have enough experience with SDOH programs that they are beginning to amass data measuring the effects of their efforts. Starting in 2018, Humana launched pilot programs in several cities with Papa, a platform that provides “grandchildren on demand” by recruiting college students to spend time with lonely seniors. The students, who earn up to $15 an hour, help the seniors with such things as baking cookies or doing chores. 

“There’s a laser focus on social isolation and loneliness,” says Caraline Coats, MHAS, vice president of Humana’s Bold Goal and Population Health Strategy programs. Using the CDC’s Healthy Days metric, which measures an individual’s physical and mental health, participants in Humana’s program with Papa reported they were physically healthy three more days per month and mentally healthy five more days per month, Coats said.

When the COVID-19 pandemic struck, Papa’s college students shifted to virtual visits with seniors, says Andrew Renda, M.D., associate vice president of population health at Humana.

Humana also used Papa to help address other social determinants of health when COVID-19 flared, Renda says. The students delivered groceries to those who had food insecurity, which allowed for brief social connections with the seniors.

“Social determinants existed before COVID-19, and they’ve been exacerbated by COVID-19,” Renda says. When the insurer surveyed 100,000 Medicare Advantage members after the pandemic began, it found that 40% were feeling a financial strain, about 30% were lonely, more than 25% were food insecure, and almost 10%t had insecure housing, Renda says.

In some cases, people who didn’t struggle with social determinants of health before the pandemic are grappling with them now, Renda says. Humana is working with the National Quality Forum, a nonprofit focused on improving healthcare, to develop qualitative measures of food insecurity. 

“We’re trying to put solid study designs around it,” Renda says. That can help Humana measure outcomes, such as improving patient health and saving money on care. Humana also has started awarding value-based healthcare contracts, adding incentives for insurers to screen for social determinants of health, Coats says “They have a massive impact on health and health outcomes,” notes Renda.

Elizabeth Baca, M.D., MPA, a specialist leader at the consultancy Deloitte, says value-based care “changes the equation about how we think about health more holistically.” Baca, a physician who practiced medicine and taught at Stanford University, says healthcare traditionally does not have a way for physicians to bill for care that would address SDOH.

She recalls dealing with one immigrant family who lived in a garage. Their son had severe allergies and asthma and had been repeatedly admitted to the intensive care unit. Baca eventually called the California Health and Human Services Agency for help getting the family into a home in order to improve the son’s health. By addressing social determinants, “There’s so much potential to have a real impact for the patient,” Baca says.

More data are getting collected on SDOH. Onlife Health, which is part of GuideWell, the umbrella organization that owns and operates several Florida health insurers, is about to launch the Social Determinants of Health Community-Based Index, a mapping tool that identifies every community’s SDOH vulnerabilities. 

The tool can be used by certain Blues health plans, such as Florida Blue, Health Care Service Corp., and BlueCross BlueShield of Tennessee, so they can “understand at community levels the vulnerabilities of that community,” says Catherine Bass, Ph.D., M.S., director of informatics at Onlife Health, which is headquartered in Brentwood, Tennessee. After collecting input from its health plan members on topics such as how stress affects their lives or on their eating habits, Onlife can pass the information on to the insurers. If an individual is dealing with food insecurity, for example, the insurer could help link the person to resources in their community that could help them access healthy food or provide them with information on how to eat healthy on a budget, Bass says.

Taking such an approach can help improve members’ health and help an insurer attract and retain members because it creates loyalty, as the insurers “know you in a way that feels very personal,” says Bass.

Susan Ladika is an independent journalist in Tampa, Florida, who writes about healthcare and business.

There’s some skepticism as programs to address social determinants of health proliferate. Some data are being collected.

SDOH Is a Hot Ticket. But Are the Programs Mainly for Show?

The pharmacy benefit management (PBM) industry used to occupy a rather small, obscure corner in the back offices of the American healthcare system. PBMs were just prescription claims processors. But over the past 20 years or so, the industry consolidated and the remaining companies became powerful middlemen in the complex pharmaceutical supply chain. Now the industry has an increasingly high profile (not always for favorable reasons) and has consolidated even further, with its large players owned by or partnering with even larger companies.

Yet plenty of smaller players have survived and even thrived by finding a niche, such as workers’ compensation, specialty drugs or certain types of diseases. They offer an alternative to dominant companies and the traditional marketplace, which can be layered and complicated, notes Daniel Jordon, managing director at the Graham Company, an insurance broker and consultant business in Philadelphia. They can be more aggressive and have more programs with cost containment as the goal, he says: “Many of them are not rebate driven. Many just want to be completely clinically driven.”

The niche players “keep the big folks on their toes,” says Joseph Paduda, president of CompPharma, a consultant to workers’ compensation PBMs.

Still, there is no question that the PBM industry is now a land where giants roam. Caremark, which is part of CVS Health; Express Scripts, which was acquired by Cigna in 2018; and OptumRx, part of UnitedHealth Group, accounted for about three-quarters of the market in 2018 as measured by prescription claims managed, according to Adam Fein’s Drug Channels website. Add in the next three biggest players — Humana Pharmacy Solutions, MedImpact Healthcare Systems and Prime Therapeutics — and those six companies control 95% of the PBM market, according to Fein.

Size gives the larger PBMs an obvious advantage when it comes to buying power. “If you don’t have really significant buying power, it’s really tough to compete,” Paduda says. The large PBMs have the means to negotiate rebates and discounts from drug manufacturers. The arguments about the role of large PBMs, rebates and discounts follow some well-trodden paths. The large PBMs contend that they use their buying power to negotiate lower drug prices and that employers and other payers receive a large chunk of those rebates. A report on PBMs by the Pew Charitable Trusts said that a survey of health plan and PBM executives found that the proportion of rebates from manufacturers to PBMs that gets passed on to health plans increased from 78% in 2012 to 91% in 2016. Critics of the industry say that the PBMs still pocket huge sums of rebate money and keep the amounts a secret. The Pew report says manufacturer rebates more than doubled between 2012, when they were just under $40 billion, and 2016, when they were reached $90 billion.

Because the smaller PBMs have less leverage with prices, “they have to compete on the basis of something else,” such as focusing on certain diseases or niche business, such as workers’ compensation, Paduda says.

“It’s a David and Goliath scenario,” with the small players competing against the large PBMs, says David Fields, president and CEO of Navitus Health Solutions, a midmarket PBM in Madison, Wisconsin. Navitus, which is a division of SSM Health, the Catholic integrated health system headquartered in St. Louis, and Costco, says it passes on all the rebates and discounts it receives and that its revenues come from a set administrative fee. In 2019, Navitus passed on $650 million in rebates back to its clients and expects to return $750 million to $800 million this year, according to Fields. “Rebate-chasing formularies tend to drive up the overall cost” of drugs, he says. “We believe they (rebates) are not the do all and end all.” Instead, Field says, Navitus looks to design the best formularies for its patients’ health.

Mesfin Tegenu, M.S., president of PerformRx, a midmarket PBM in Philadelphia and a division of AmeriHealth Caritas, a Medicaid managed care plan, acknowledged in an email interview the difficulties of being a smaller player in an industry dominated by companies with annual revenues in the billions. “Today’s midsize PBMs are navigating a business environment in a consolidated market. This inhibits competition by midsize PBMs, which may make innovation both in program development and technology more challenging,” he said.

Tegenu also mentioned the nimbleness that others say is an asset of the bantamweights. “Smaller PBMs bring significant flexibility and customization tailored to local market needs. They also adopt innovation faster to improve patient pharmaceutical expense at point of sale, while not causing inflation in brand drugs,” he adds.

Although smaller PBMs tend to do a good job for the employers and members they serve, they may be viewed as a little risky by clients because they typically don’t have a long history, according to Jordon at The Graham Company. He says that COVID-19 has made businesses even more cautious. They don’t want to rock the boat right now by switching to a smaller PBM, according to Jordon: “Everything feels a little unstable.”

SSM Health announced in March that Costco was purchasing a minority stake in the PBM for an undisclosed amount. Fields says the cultures of the two companies are in sync because both support keeping costs low for their customers: “It’s incumbent to provide value to the customers we serve.”

Navitus isn’t the only PBM experiencing changes. In 2019, Anthem launched its own PBM, IngenioRx, to serve its health plan members and those of other plans.

Ironically, the success of the smaller PBMs may make them attractive acquisition targets, consolidating the industry even further. Paduda says larger PBMs may buy up their smaller competitors that focus on specialty medications because the cost of those drugs is so high.

In a report on PBMs earlier this year, S&P Global said that “large vertically integrated PBMs should continue to leverage their scale and vast services to maintain market share. … We continue to expect subscale PBMs are at greater risk of losing clients to larger competitors.” The financial analytics firm also said that it expects more consolidation among midmarket PBMs.

High drug prices are one of the main reasons the PBM industry has found itself in the spotlight and the subject of criticism, particularly withrespect to rebates. Early last year, the Trump administration proposed changing anti-kickback rules so rebates would go directly to consumers rather than PBMs; later in theplan was abandoned. But “it’s much more complicated than they think,” says Jordon. “How would we possibly unwind all this?” Instead, he says, “I think the market will solve itself.”

Paduda believes there will be significant pressure on Joe Biden to lower drug prices if he wins the presidency. Drug manufacturers are more likely to be affected by Biden policies, but PBMrebates and transparency may also come into play, in Paduda’s opinion.

““Irrespective of which party is in power, there will be a continued focus on transparency,” says Fields. “There’s not enough transparency going on, especially in the pharmaceutical world.”

In the consolidated PBM industry, smaller companies say they can be nimble and not driven by rebates. But are they acquisition targets? 

In Land of Giants, Smaller PBMs Find a Niche

As consumers avoid hospitals and doctor’s offices because of the COVID-19 pandemic, it’s propelling demand for virtual care and in-home care. The trend is predicted to grow in 2021, according to Forrester Research.

The decrease in hospital utilization is expected to cost health systems $350 billion this year, and consumers will instead demand more hospital-level care at home, Forrester said in its “Predictions 2021:Healthcare” report released Tuesday.

Emergency department visits have dropped 42%, outpatient visits have declined 35%, and in-patient care is down 22%, according to Forrester.In response, hospitals will likely turn to offering more care at home, which can make hospital care more affordable and reduce readmission rates, according to the research firm.

People are skipping primary care visits because COVID-19, the report says, trading traditional doctor’s offices for new care models such as virtual visits and health clinics inside retailers. That means health insurers need to expand coverage for these alternative models, according to the Forrester report.

“Primary care as we know it today stands in the crosshairs, with new entrants vying for the hearts of consumers who legacy healthcare ignored for too long,” said a company blog post summarizing the report.

The big beneficiary from the COVID-19 pandemic has been telehealth as virtual visits have soared, particularly those for behavioral health. Forrester expects consumers to make around 480 million virtual visits in 2020 with almost 38% for mental health care as concerns about the COVID-19 pandemic and the economic and job instability it drive demand for behavioral health services. For those who seek behavioral healthcare, “consumers face a litany of barriers to care, including in-network coverage, provider availability, and the cost of care. Health insurers must make it easy for consumers to get connected to the mental health support they need in the form they want,” Forrester writes.

While in-person healthcare is expected to gradually increase, telehealth will still account for 440 million visits in 2021.

"Primary care as we know it today stands in the crosshairs, with new entrants vying for the hearts of consumers," says Forrester Research report. Telehealth and retail health clinics are among the suitors.

Susan Ladika

Articles

The Pandemic Opens a Window of Opportunity for Telehealth

SDOH Is a Hot Ticket. But Are the Programs Mainly for Show?

In Land of Giants, Smaller PBMs Find a Niche

Forrester's 2021 Prediction: Watch Out In-Person Care, the Telehealth Surge Will Continue