Medical clinics that cater to chronically ill seniors are expanding rapidly across the country as they vie for patients in the lucrative, fast-growing Medicare Advantage market.
Clinic operators ChenMed, Oak Street Health and Partners in Primary Care are among companies that have recently unveiled plans to bring senior-focused medical centers to new communities.
Meanwhile, some hospital systems are attempting to get in on the action with their own senior clinics.
“We’re trying to actually push more care outside the hospital into the clinic, into the communities, and this is a huge vehicle by which we do that,” said Dr. Jaewon Ryu, CEO of Danville, Pa.-based Geisinger Health, which created two 65 Forward senior clinics and is adding four more this year. It aims to build another six clinics in 2021.
It may seem counterintuitive to build a business around caring for the oldest, sickest, most-expensive patients in the country. But the clinic operators say that’s where they find the greatest opportunity to save and pocket those costs. Venture capital firms and Medicare Advantage insurers are betting they will succeed.
“Where you have the biggest opportunity for improvement is where the biggest problem in healthcare is, which is around chronic illness and adverse social determinants,” said Dr. Griffin Myers, Oak Street’s chief medical officer. “If you can do it well, it’s a really remarkable opportunity to have an impact and have rewarding economics. If you don’t do it well, you lose your shirt, but we’re really good at it.”
The companies have similar care and payment models. They contract with Medicare Advantage plans to provide primary care “on steroids” to older patients with multiple chronic illnesses, as one executive put it. Because they typically take full financial risk from the Advantage plans, which pay them fixed monthly fees for each patient, the clinics make money by keeping patients out of the hospital.
They do that by providing preventive and behavioral health care along with managing chronic diseases and addressing social needs. Working with a team of clinicians and coordinators, doctors see about a fifth as many patients as they normally would so they can see them more frequently and in longer appointments.
Chicago-based Oak Street serves about 85,000 patients at 66 centers across nine states. It completed an initial public offering in August, which will help it stand up another 10 facilities by year-end. Those don’t include the handful of smaller clinics it is creating inside Walmart stores in Texas.
ChenMed, a decades-old chain based in Miami that only really started expanding in 2011, boasts 76 medical centers in poor, underserved communities in 10 states. It’s planning to open 25 to 35 centers next year and another 40 to 50 in 2022.
Partners in Primary Care, owned by Humana, is also in the midst of a rapid expansion, with plans to double its 50 clinics in the next three years.
Iora Health announced new funding in February that will help it grow its footprint of 48 clinics.