News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

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News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel
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Aetna’s New Health Plan for Individuals in Kansas City Allows CVS Health Services at MinuteClinics, HealthHUBs and Pharmacies to Be Network Providers

What is not clear is how Aetna might engage independent clinical laboratories as in-network providers for this health insurance plan

For years, Dark Daily and its sister publication The Dark Report have regularly predicted that the traditional fee-for-service reimbursement model of indemnity health insurance that requires beneficiaries to pay a co-pay is on the way out. What is not known is how the nation’s biggest health insurers plan to reinvent themselves, as value-based reimbursement for providers becomes more common.

That may be clearer now, at least for one insurance giant. Aetna recently announced it was incorporating CVS Health services provided at CVS-owned pharmacies and retail clinics into a healthcare plan for individuals in the greater Kansas City, Mo., area. 

The Aetna Connected Plan “combines CVS Health services—including free one to two-day prescription delivery and 20% discounts on thousands of health-related items—with Aetna’s cost-saving I-35 Performance Network to deliver a more convenient and connected member experience, along with up to 20% premium savings compared to comparable PPO products in the market,” states a CVS Health press release.

Members can schedule appointments at CVS Health MinuteClinics, request consultations at CVS HealthHUBs for no copay, and access other services, including telehealth visits, through CVS pharmacies. Essentially, Aetna made network providers for this range of CVS-owned health services.

CVS Health services, according to the press release, include:

  • $0 copay at local HealthHUB and MinuteClinic locations,
  • Free one to two-day prescription delivery,
  • 20% discounts on thousands of health-related items in-store and online,
  • 24/7 pharmacist helpline, and
  • Access to the CVS managed pharmacy network, specialty pharmacy network, and Coram home infusion services.

The Aetna I-35 Performance Network includes:

  • 1,247 primary care doctors,
  • 8,300 specialists,
  • 13 hospitals, and
  • 32 urgent care facilities

The Aetna health plan will be made available next year to employers with 101 or more workers in three counties in Missouri (Clay, Jackson, and Platte) and two counties in Kansas (Johnson and Wyandotte). Aetna claims the premiums for their new plan are 20% less expensive than other similar plans for the region, MedCity News reported.

Jim Boyman VP, Market President-Heartland at Aetna
“It’s all about meeting our members where they are to increase engagement, improve outcomes, and reduce healthcare costs,” said Jim Boyman (above), VP, Market President-Heartland at Aetna, in the press release. “This plan is just one example of how Aetna and CVS Health are combining forces to help people live healthier lives,” he added. “We’re providing a better member experience by reducing costs and simplifying their healthcare journey.” (Photo copyright: LinkedIn.)

AMA Expressed Concerns over CVS Purchase of Aetna

CVS acquired Aetna for $70 billion in late 2018 and the two companies have been working to integrate their businesses ever since. 

There are currently more than 1,000 CVS MinuteClinics located throughout 33 states and the District of Columbia. CVS began opening HealthHUB clinics in the Houston area last year and plans to open more than 1,500 HealthHUBs by the end of 2021, the Houston Chronicle reported.

Critics of the 2018 purchase of Aetna by CVS were concerned that CVS would somehow use Aetna’s 40 million members to drive revenue for its stores. Many groups, including the American Medical Association (AMA), Consumers Union, and pharmacy organizations were opposed to the merger due to anticompetitive concerns.

The AMA felt the merger would reduce competition in some pharmaceutical markets, which could lead to higher premiums and lower the quality of some insurance products. The organization also believed that the merger “faced enormous implementation challenges and was unlikely to realize efficiencies that benefit patients,” the AMA noted in a statement.

“We are very concerned about the consolidation in healthcare because we know that as healthcare systems consolidate, prices tend to go up,” AMA President Barbara McAneny, MD said in the statement. “And we are very concerned that with the CVS purchase of Aetna that drug prices will continue to rise and that is a major pain point of patients all across the country.”

The AMA also stressed concerns regarding how the lack of competition could have negative impacts on the pharmaceutical industry.

“It’s also causing harm to a lot of the parts of the industry,” McAneny added. “Independent pharmacies are going out of business and this consolidation makes them (CVS) just such a stronger player in that market that competition is really difficult.”

Despite the opposition, the CVS and Aetna merger received final approved from regulators last year. Before the merger was approved, the two companies had to convince state attorneys general, antitrust regulators, and Congress that the consolidation would not result in anticompetitive practices and impair independent drugstores and other national chains. 

Will Aetna Engage Independent Clinical Laboratories?

Aetna’s new health plan is another example of how the nation’s biggest health insurers are adapting away from fee-for-service and to value-based reimbursement for healthcare providers. Clinical laboratory managers will want to watch how CVS and Aetna do or do not work with independent laboratory companies to collect lab specimens at the pharmacies and provide testing.

—JP Schlingman

Related Information:

Connecting the Dots in Health Care: Combining CVS Health Services with Aetna’s Cost-Saving Performance Network

Aetna Unveils Plan Nudging Members to CVS Clinics, Pharmacies

Aetna Launches New Plan Design That Puts Focus on CVS’ Health Services

Aetna Rolls out New Plan Built around CVS Pharmacies, Retail Clinics

New Aetna Health Plan Leverages CVS’ Retail Reach

CVS Launches HealthHUB as Part of Health Care Expansion

CVS-Aetna Merger

CVS Announces Plans to Add More Clinical Services to Its Minute Clinic Locations, Including Certain Medical Laboratory Tests

Consumer Trend to Use Walk-In and Urgent Care Clinics Instead of Traditional Primary Care Offices Could Impact Clinical Laboratory Test Ordering/Revenue

Latest AMA Benchmark Survey Shows Number of Physicians Employed by Health Networks Now Exceeds Those in Independent Practice

As physicians continue to re-evaluate their career strategies, clinical laboratories must closely monitor changes to test ordering from formerly self-employed doctors

For the first time, more doctors are employed by health networks than are in private practice. That’s according to a recent report from the American Medical Association (AMA). In a press release, the AMA describes the event as “the continuation of a long-term trend that has slowly shifted the distribution of physicians away from ownership of private practices.”

This trend impacts independent clinical laboratories and anatomic pathology groups because hospital-based physicians have reasons to order tests from in-house medical laboratories. Thus, a reduction in independent self-employed doctors could also mean reductions in test orders from those physicians.

To make its conclusions, the AMA drew on six years’ worth of Physician Practice Benchmark Survey data, gathered from 2012-2018. In its published Policy Research Perspectives report, the AMA describes the findings as “one of the more dramatic changes over this six-year span.”

Independence versus Employment

According to the new release, employed physicians made up 47.4% of all patient care doctors in 2018—an increase of 6% since 2012. Meanwhile, self-employed doctors represented 45.9% of physicians in patient care—down 7% (from 53.2%) since 2012. 

“Due to this swing, for the first time in 2018, there were fewer physician owners than employed physicians,” the AMA researchers wrote in their report.

The AMA has conducted its benchmark surveys every other year since 2012. They are nationally representative surveys of doctors to record employment status, practice size, specialties, and ownership.

“Change continues in the delivery of healthcare and physicians are responding by re-evaluating their practice arrangements. Physicians must assess many factors and carefully determine settings they find professionally rewarding when considering independence or employment,” said Barbara L. McAneny, MD, FASCO, MACP (above), in the AMA news release. McAneny is a board-certified medical oncologist/hematologist, President of the American Medical Association, and CEO/co-founder of New Mexico Cancer Center. (Photo copyright: HMP.)

Who Employs Doctors?

Physicians can be employed by other doctors in physician-owned practices, by hospitals directly, and by hospital-owned medical practices. 

Most, however, work for other doctors, reported Fierce Healthcare. In a summary of the latest AMA survey data, Fierce noted that:

  • 54% of doctors are owners, employees, or contractors in practices owned by physicians—compared to 60% in 2012;
  • 8% of doctors work directly for a hospital—up from 5.6% in 2012;
  • 26.7% of doctors are employed by hospital-owned practices—up from 23.4% in 2012; and
  • 34.7% of doctors work for a hospital or a practice partly owned by a hospital in 2018—up from 29% in 2012.

The AMA partly attributed the increase in employed physicians to age: 70% of doctors under the age of 40 reported as employees in 2018, compared to 38.2% of doctors 55 and over who reported as employed.

Family Practice Physicians Most Likely to Become Employed by Hospitals

Other intriguing data points include the percentages of practice ownership among medical specialties.  

Pathology was not broken out. However, the AMA’s report did state that, “surgical subspecialties had the highest share of owners (64.5%) followed by obstetrics/gynecology (53.8%) and internal medicine subspecialties (51.7%).

“Emergency medicine had the lowest share of owners (26.2%) and the highest share of independent contractors (27.3%). Family practice was the specialty with the highest share of employed physicians (57.4%),” the report concluded.

The AMA researchers also noted that the number of doctors seeking employment in healthcare networks may be decreasing. “The trend away from physician-owned practices and toward working directly for a hospital or for a hospital-owned practice appears to be slowing—more than half of that shift occurred in the first two years of [the benchmark survey] period [2012 to 2018].”

The AMA also noted that the success or failure of accountable care organizations (ACOs) could have an effect on hospital acquisition of private practices. “Should evolving models of care not deliver on their theoretical savings or improvements, that might put a break on consolidation,” the researchers wrote.

It’s critical that clinical laboratories continue to improve the quality and efficiency of outreach services to retain and grow medical laboratory testing business that increasingly may come from health networks versus physician-owned private medical practices.    

—Donna Marie Pocius

Related Information:

2018 Benchmark Survey and Policy Research Perspective (PDF): Updated Data on Physician Practice Arrangements: For the First Time, Fewer Physicians Are Owners Than Employees

Employed Physicians Outnumber Self-Employed

For the First Time, Employed Physicians Outnumber Self-Employed Doctors, AMA Study FindsEmployed Physicians Now Outnumber Self-Employed Doctors