Primary care through CVS? Financial incentives pose a serious concern

Lucia Ryll shares her opinion in MedPage Today on the risks posed by CVS’ latest move into primary care. Ryll recognizes the obstacles many people face accessing primary care, including delays that can result in poor health outcomes. She questions whether CVS Health offers a solution in the form of primary care doctors at its clinics, given CVS’ financial incentive to maximize profits.

CVS Health now has nearly 10,000 retail stores. It also operates just over 1,000 MinuteClinics. Caremark, its Pharmacy Benefit Manager (PBM) serves 105 million people. It sells 6,000 CVS-branded medical products. And, it provides health insurance to 34 million Americans. Enlisting a large team of primary care doctors to deliver primary care at CVS clinics is its latest business initiative.

CVS’ expansion into primary care will be through its MinuteClinics renamed HealthHUBs. With this expansion, CVS will engage primary care doctors to provide care to individuals, sell these individuals medicines through its pharmacies, cover medicines through its insurance plans and build its formulary (list of covered drugs) through its PBM. What does that mean for individuals who rely on CVS for these services?

No question that it could mean easier access to primary care for people, as most people live close to a CVS.  But, financial incentives could get in the way of CVS providing people with high-quality care.

CVS as insurer should have an incentive to keep people out of the hospital, to keep its spending down. But, will it deny access to hospital care inappropriately, because hospital care is expensive, in order to maximize profits? CVS could do so through prior authorization requirements and mandates for people to receive less costly treatments, perhaps requiring a telehealth visit or a visit to a HealthHUB before going to the hospital.

And, who knows what incentives CVS will give the primary care doctors at the HealthHUBs. These primary care doctors might be financially disincentivized to refer patients out of network even if they need out-of-network care. They also might be financially incentivized to prescribe patients drugs on the CVS Caremark formulary rather than lower-cost drugs. Physicians are human and subject to the same financial incentives as everyone else.

What’s most concerning is what we are seeing throughout Medicare Advantage–a financial incentive to keep people in poor health from enrolling. The CVS Health plan might find that it maximizes profits by avoiding enrolling people with complex and costly conditions.

Yes, it’s fair to think that CVS has the leverage to bring down health care costs and improve quality in our health care system. But, there is no sign that it’s willing to do so. In fact, a whistleblower lawsuit that Just Care reported last week indicates that CVS is in it for CVS, failing to include generic drugs on its formulary or to stock them in its pharmacies when brand-name drugs generate greater profits for CVS. With these brand-name drugs, CVS profits at the expense of its enrollees who are forced to pay more out of pocket for their drugs.

Bottom line: CVS’ for-profit vertical integration easily could undermine access to quality care, lead to poor health outcomes and drive up healthcare costs for enrollees in its health plan. There’s virtually no transparency into what CVS is doing. Who will ensure that CVS is held accountable for bad acts?

Lyll suggests that global payment models, through which a healthcare system is paid a flat rate could be helpful. But, with little transparency as to how CVS operates, there’s cause for serious concern. No data, there’s no way to know whether there’s value. And, a fixed payment to a healthcare system leaves it up to the system to decide what to pocket for itself and what to pay for. That’s a scary situation, as we have seen over and over again, with chain nursing homes among other health care businesses.

I’m with Susan Rogers, MD,  “[CVS] is not a system designed to improve healthcare while saving money. There is no way that a system with middlemen whose mission is to make money can do so with providers whose mission is to deliver healthcare that is needed and not deny that care to increase profits. This is a system that will destroy the core of patient physician relationships when decisions are made driven by making profit, not by what doctors feel is indicated.”

Here’s more from Just Care:

• Questions for your primary care doctor if you have Medicare
• Six reasons you need a primary care doctor in this age of specialization
• CVS charged with healthcare fraud
• Government is not warning people about Medicare Advantage plans that could endanger their lives
• Will Medicare continue to cover telehealth mental health services?