UC Berkeley Haas School of Business | Groups

Confronting the Primary Care Physician Shortage: Primary Care Expansion – How Retail Clinics Will Help Us Leverage Reform Incentives

Health reform offers a significant step forward for preventative care, as long as the system can meet increased capacity demands. With higher reimbursement and subsidized primary care coverage for patients, the government is actively incentivizing patients to seek preventative health measures and medical students to consider family medicine over higher-paying specialty practices. However, physician shortages and capacity-constrained infrastructure pose a risk to expansive primary care in the US.

Fortunately, the Affordable Care Act offers cost sharing measures, such as waivers of coinsurance and deductibles, for eligible patients seeking primary care and prevention services, starting for all new plans initiated after September 2010.

Unfortunately, in 2010, the Association of American Medical Colleges forecasted a need for a 12 percent increase in family medicine physicians to meet the growing demand for services, despite declining rates of medical students choosing primary care. Understanding the need for this carrot, health reform authors built incentive structures to attract physicians to family medicine, including a 10 percent Medicare boost in primary care payments. Still, the network of physicians is significantly lacking and poses a risk to the emphasis on expanded prevention services.

Existing infrastructure, or the lack thereof, also threatens the reform’s emphasis on more widespread preventative care. According to an American Hospital Association survey, 80 percent of urban hospitals reported their emergency departments as “at” or “over” capacity, and the study found that a key to relieve bottlenecks lies with expansion of non-urgent care capacity. With more profitable specialty center options, hospitals aren’t racing to build more family medicine clinics.

We’re facing a pivotal point in healthcare, with the opportunity to leverage reform incentives to reduce cost and improve patient outcomes through prevention and primary care. With capacity constraints and physician shortages, there’s hope in the convenient care clinic industry. Companies like CVS’s MinuteClinic, Walgreens’ Take Care Clinic, and Target Clinics are positioned well to handle the growing demand for convenient, affordable and accessible primary care. They use nurse practitioners with physician oversight and technological advancements to execute a low cost and high volume business model, while working with patients’ other physicians to coordinate the quality of care. Gone may be the days of four-hour urgent care visits for an ear infection or skipped annual exams because a patient doesn’t have the time, money or physician relationship to make an appointment.

We have reasons to be optimistic about primary care expansion, thanks in part to the growth in private, low cost retail clinic chains. The hope is that, someday, it will be as convenient, affordable and common to get a physical examination as it is to get your car’s oil changed.

Leia Kelly

Leia is a former Revenue Cycle provider consultant from Stockamp, Huron Healthcare and is currently pursuing her MBA at UC Berkeley’s Haas School of Business.

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