Tuesday Nov 20, 2018
The Votes Were Cast. What Does It Mean for Family Medicine?
The 2018 midterm elections have, for the most part, concluded. There are still key House and Senate races outstanding, most notably the Mississippi seat in the Senate that will go to a runoff election next week, but the overall composition of the 116th Congress has been determined.
The AAFP will host a postelection webinar on Nov. 27 at 3 p.m. ET featuring national political and health policy experts who will summarize the elections and discuss what we can expect during the upcoming Congress. You will not want to miss this exclusive insider's view, so register today.(register.gotowebinar.com)
Here's the bottom line: Republicans held onto their majority in the Senate and Democrats secured control of the House of Representatives. When Congress convenes on Jan. 3, 2019, we will have a divided government. The following shows party division of the U.S. Congress and state governorships next year, as of this writing:
- House of Representatives: 198 Republicans, 232 Democrats (+38), no independents, five races undecided
- Senate: 52 Republicans (+1), 45 Democrats, two independents, one race undecided
- Governors: 26 Republicans, 24 Democrats (+8), no independents, all races decided
FamMedPAC played an important role in the election of more than 100 members of Congress from both parties with its contribution of $509,500 to 114 candidates. To those who supported FamMedPAC during the past two years, thank you! You enabled us to engage in meaningful ways that will have long-term positive impacts on our advocacy efforts for you -- our members -- and the health care system.
Wall Street Takes on Primary Care
As an active observer of health care trends, I have become interested in what I see as the rapidly increasing level of investment by private equity and venture capital firms in physician practices, specifically primary care practices.
According to an April 2018 report(www.bain.com) from Bain & Co., the value of private equity agreements in health care increased 17 percent from $36.4 billion in 2016 to $42.6 billion in 2017. Additionally, the number of deals between private equity firms and health care firms increased about 29 percent from 206 in 2016 to 265 in 2017. The Bain & Co. report sheds light on the overall activity among private equity and venture capital firms, but it was an Aug. 23, 2018, article(www.bloomberg.com) from Bloomberg that really brought to the forefront just how active investors have become in the primary care "space."
Although the article notes that primary care physicians aren't compensated fairly, the value proposition of primary care it espouses is real. It is true that primary care is uniquely positioned to improve quality and reduce the overall spend on health care -- if it is appropriately supported and financed. It appears that this value proposition is now attracting the attention of investors. Here are a few examples from the Bloomberg article:
- "A group of investors is putting up $165 million to fuel an expansion of Paladina Health."
- "The private equity firm Carlyle Group LP is investing up to $350 million in One Medical."
- "Iora Health, which operates primary care sites for elderly patients in the U.S. Medicare program, raised $100 million earlier this year."
This is just a small sample of recent activity. Investment in physician services has been growing for much of the past decade, but it has largely been associated with so-called staffing models such as emergency medicine, anesthesiology and physical therapy. However, with health care cost continuing to increase, it appears that Wall Street is ready to take on the system more aggressively and is betting that primary care is the key to achieving improved quality and lower cost. A smart bet on their part, but very, very concerning, in my opinion.
The passage of the Patient Protection and Affordable Care Act and the creation of accountable care organizations (ACOs) spurred new thinking among investors, and several venture capital-backed ACO models like Aledade (primary care-based) and Evolent Health (health system-based) hit the market quickly and have grown significantly in recent years. There also is a fair amount of investment in direct contracting models such as direct primary care and worksite clinics and, although they are not primary care, urgent care and retail-based clinics have seen an inflow of investment in recent years. Despite these investment activities, there really hasn't been a lot of interest in ambulatory, community-based primary care -- until recently.
So, what does this all mean? It is hard to say at this point, but I think there are three key questions we should be debating:
- Will the infusion of capital reduce the financial strains on primary care practices, enabling a more comprehensive practice model for family physicians and a better experience for patients?
- Who is in charge of patient care, the physician or the ownership group?
- What is the ultimate mission of investor-backed primary care? Will these models be focused on increasing access to high-quality patient care and reducing the cost of care for individuals and families, or will they focus on maximizing returns on a per-patient basis for investors?
Much, much more to come on this issue. I think 2019 will bring more investment in primary care as individuals and families start to revolt against high-deductible health plans.
On Nov. 1, CMS published the final rule for the 2019 Medicare physician fee schedule. The AAFP has written a summary(4 page PDF) of the final rule and its impact on family medicine, and AAFP News has a great overview. You also can learn more via an FPM Getting Paid blog post.
The final rule reflects numerous recommendations that the AAFP provided to CMS, including suggestions for reducing the documentation burden associated with office visits. The Academy summarized its view of the final rule in a public statement that calls it "a step forward in easing administrative burden and improving patient access to care."
Posted at 08:05AM Nov 20, 2018 by Shawn Martin