BUSINESS DEVELOPMENT

Partnering With a 'Disruptor' is an Effective Ambulatory Care Strategy

As health care continues to shift toward commoditization, new entrants are stepping into almost every market to provide their own spin on the consumer experience. Craig Allan Ahrens, managing director for Ankura, an international strategic consulting firm, said ambulatory care is typically their focus. “Disruption is becoming something of a cliché in health care, but that doesn’t make it any less of a reality.” He said health system strategists need to consider how their organizations can provide care in a speedier, more convenient and affordable fashion — or partner with someone who can. Otherwise, he believes they risk becoming irrelevant.

But, if the market is trending toward commoditization, how can health systems differentiate themselves? “In this environment, the key lynchpin is primary care,” said Ahrens. “With all of the disruption taking place, that’s what will make a difference. Our position is that if you don’t start doing something now and testing ideas — regardless of the economic model present — you’re way behind in most markets.”

Case in Point

ChenMed is a primary care disruptor that provides ambulatory services for seniors in a scalable way that gives patients substantively more time with their primary care physicians, who coordinate their care and offer walk-in appointments. The Miami-based provider focuses on improving health outcomes for diverse populations of low-income older adults. Most are living with major and multiple chronic conditions that require a high level of care. ChenMed emphasizes the early detection and comprehensive management of diseases. 

The company currently operates 59 primary care clinics in eight states, all of which take on full risk for patients on Medicare Advantage plans, including those who are dual-eligible for Medicare and Medicaid.

Gaurov Dayal, M.D., ChenMed’s chief growth officer and president of new markets, said patients are able to spend more time with their primary care physicians compared to many conventional medical practices. “They are encouraged to walk-in for appointments whenever they’re not feeling well, and they have their doctor’s cell phone number for round-the-clock access. ChenMed has a 450:1 primary care physician to patient ratio, compared to a national average of 2,300:1, according to Dayal.

The company  supplements its primary care model with a range of services for seniors, including door-to-doctor transportation, on-site diagnostics, medication delivery and even such options as cooking programs, senior aerobics and acupuncture.

The investment in high-touch care pays off in terms of better patient outcomes and lower costs, noted Dayal, who says ChenMed’s approach has resulted in 50 percent fewer hospitalizations compared to the standard primary care practice, and 28 percent lower per member costs.

“This is an example of an ambulatory model that’s disrupting health care by segmenting the market,” said Ahrens. “It’s real, it’s practical and it’s happening.

Gaurov compared ChenMed to Chick-fil-A in that it’s doing one thing (chicken sandwiches), extremely well. “That’s our view. We want to be the Chick-Fil-A of the healthcare market.”

 Ohio Health Partnership

OhioHealth — a large, diversified health system based in Columbus — launched a strategic partnership with ChenMed in December 2018 to jointly open three new geriatric-dedicated primary care practices in underserved neighborhoods around Ohio’s capital city, servicing upward of 8,000 seniors.

The third of those clinics just opened in October, staffed by clinicians from both health care organizations. This was the first partnership with a hospital system for ChenMed, and the two parties are considering further joint expansion to serve as many as 20,000 seniors in Central Ohio.

“Our goal is to clinically integrate the company’s model into our health system, where our 2,100 specialty doctors can help ChenMed’s primary care physicians achieve an even higher level of personalized care to benefit Columbus area seniors,” said Carrie Harris-Muller, senior vice president of population health at OhioHealth.

ChenMed has had similar conversations with other large health care organizations with the same line of thinking. “Opening one of these clinics is probably not going to be a huge revenue generator initially, but the investment is modest — about $3 million to launch one location — compared to the roughly $1 million it costs on average for a single hospital bed,” noted Gaurov.

He sees this as a “longer play” that will take several years to pay off. “It should result in significantly reduced hospital readmissions down the line, and greater control for health systems over what happens on the post-acute side of care.”

 

This article features interviews with: 

Gaurov Dayal, M.D.
President, New Markets, and Chief Growth Officer
ChenMed
Miami, Florida

Craig Allan Ahrens
Managing Director
Ankura
Chicago, Illinois