Rae Woods: From Advisory Board, we're bringing you a Radio Advisory, your weekly download on how to untangle healthcare's most pressing challenges. My name is Rachel Woods, you can call me Rae. Enrollment in Medicare Advantage is expected to surpass 50% of eligible Medicare population this year, which means there is a lot of focus and a lot to say about senior care right now. And that's why today we're kicking off a two-part series that will dive into the innovations and the challenges in delivering senior care. In part one of our senior care series, I've invited experts, Sebastian Beckmann and Elysia Culver to talk about the rising demand for senior focused primary care. Hey Sebastian, hey, Elysia, welcome to Radio Advisory. Sebastian Beckmann: Hi, Rae. Elysia Culver: Hi. Sebastian Beckmann: Thanks for having us. Rae Woods: All right. Be honest with me, has your latest research changed the way that you think about care for your parents? Have you gotten that awkward question of, help me sign up, which Medicare should I pick, help me sign up for my health benefits? Elysia Culver: For me, it's a little different because I had younger parents, so I actually haven't had this thought, but I briefly thought about it for my grandparents. Sebastian Beckmann: My grandparents are in Germany, so they have different problems [inaudible] in healthcare. Rae Woods: My in-laws are all Danish, so the problems do not compare. Well, tell me this, why does it feel, at least to me, like everyone in the industry is talking about senior focused primary care right now? This isn't actually a new idea, but it feels like that. Elysia Culver: I don't think it is a new idea at all. Historically, senior focused primary care has been looked at as a bit niche. It's been looked at that way because it's a little bit hard to scale and typically it's something that we've only seen disruptors do. But now, I think we're seeing so much interest in senior focused primary care because of the huge market shifts that we're seeing. So the demographic shift of more seniors, and I think tangential to this is the growing enrollment in Medicare Advantage. So we've been hearing everywhere in the news that enrollment in Medicare Advantage this year is going to reach upwards of 50%. Rae Woods: That's right. Elysia Culver: And I think it's these huge shifts that are really creating this interest and also a pressure around how we innovate care for our older adults. Rae Woods: I should also probably stop us here. What exactly do we mean when we say senior focused primary care? That means something specific. Elysia Culver: Senior focused primary care is a care model that focuses in serving older adults in a team-based approach, and it considers the senior's physical, psychological, and social needs, you'll see a lot of definitions call this holistic care. And the goal of senior focused primary care, I would say, is to really use this team-based approach to lower cost, improve outcomes, and also improve the care coordination of older adults. Sebastian Beckmann: I think it's helpful to compare it to more traditional primary care. So the things that I think are really different to Elysia's point, it's team based so you have a primary care physician who is quarterbacking, but you have a lot of different care team members who are actually providing the care in the moment. So that's care navigators, NPs, PAs, the whole suite of staff who are doing things for that patient, nutritionists, taking that more holistic approach. The second thing that's different, is that the panel sizes are a lot smaller. So each physician is serving a smaller number of patients, which means that they and their care team can spend more time actually caring for those individuals, and as a result, are able to do that holistic care. Rae Woods: And that's because this care is targeted, not just at any person over the age of 65, it tends to be focused on folks that are sicker, that have multiple chronic conditions that need this holistic team-based care approach. Sebastian Beckmann: Yeah. And I think it's helpful here to maybe talk through an example. So this is almost a cliche, but one of the things we keep hearing about is this patient in Alabama who has multiple chronic conditions and doesn't have an air conditioning unit. That's clearly a health risk for that patient, but a traditional primary care won't pick up on that because there's no one doing a health visit. If instead, they're in a senior focused primary care model, the very first visit they'll have is with a nurse who's coming to see them at their home, who will look for those social determinants of health, identify that they don't have an air conditioning unit, set them up with an air conditioning unit, and then actually make that happen. So that's not something that can happen in traditional primary care, but it does happen in these senior focus models. Rae Woods: In what other ways would it feel different to be a patient receiving this specialized form of primary care? You pointed out this perfect example of meeting your nonclinical needs, not having an AC unit, but how else will it feel different from traditional Medicare? Elysia Culver: Typically, it'll feel different for the patient in senior focused primary care because the model's basically focusing on everything that older adults are asking for. So they're asking for more time with their doctor, they're asking for a better relationship with their doctor, they're asking for better health and wellness benefits, and this is something that this is going to be able to provide with them. And because of this too, I think that it increases the communication and navigation that the patient needs in navigating their sickness, their chronic health conditions, the complex healthcare environment, things like that. Rae Woods: It's obvious to me why patients would want this. My parents are clearly a little bit older than your parents, why they might love a model like this. But tell me why other stakeholders in healthcare are interested in senior focused primary care? Elysia Culver: In general, when we think of stakeholders, in this situation, I think of physician groups, health systems and startups as the predominant ones here. And I think that they're really showing increased interest in senior focused primary care programs, partly because of the growing population and the Medicare Advantage enrollment, which I mentioned earlier. But also, I think that they see a real opportunity here to manage this population of older adults and to provide them better care. Rae Woods: We've been talking in this industry for a long time about baby boomers aging into Medicare, this growing senior population. Tell me why now we are seeing such a change in the level of interest in senior focused primary care from seemingly everyone? Sebastian Beckmann: There are two trends. The first, let's come back to Medicare Advantage growth. That example of the patient in Alabama who needs an air conditioning unit, a fee for service primary care is getting paid $0 for that, so there's no financial incentive for them to participate in it. As a result, this only really works if you have patients covered by Medicare Advantage and who are in those value-based or capitated models. So Medicare Advantage expansion is one of the reasons that you see so much growth here. The second trend is, there's a lot of interest from outside groups like private equity, like big disruptors like Amazon who are trying to figure out how do they get a part of the healthcare spend. And they see an opportunity in value-based care, which means they have to control primary care because that's where they see the opportunity to inflect downstream spending, which is where they think they can really make a difference on dollars. And it means that they're competing in an area that incumbents like health systems haven't been willing to play because health systems have a vested interest in keeping hospitalizations and post-acute utilization and so on. Rae Woods: I don't mean to be pessimistic in this moment, but I'm trying to understand what the downside is. Because what I'm hearing you say, is that there is a business opportunity for a lot of different stakeholders in healthcare, and this is a healthcare business podcast. I am also hearing that this is a great option and a great model for seniors who aren't turning 65, they're turning 75 and they have multiple chronic conditions. Be honest with me, what is the downside? Elysia Culver: I think that the biggest downside is probably the ability to scale this model and ability to scale the model given the size of the demographic shift. But I think when we talk about scale, it's important to talk about what we mean by that. And in this case, it means increasing membership to existing or new markets, increasing network partnerships, expanded services, or care delivery channels, and it also could mean increased margins or volumes. All of these things though, it's going to be hard to do. Rae Woods: Because there's so many seniors that are going to be aging into the potential population that could be using senior focused primary care. Sebastian Beckmann: We actually ran the numbers on that and we estimate that there's just shy of 10 million Medicare advantage beneficiaries who could benefit from these kinds of models. Rae Woods: My god, so is part of the scale problem not having enough doctors, enough actual physicians to deliver this care? Elysia Culver: We mentioned this at the beginning, but senior focused primary care takes an interdisciplinary team-based approach, meaning that doctors aren't the only piece of the puzzle here. We have advanced practice providers, we have nurses, we have social workers, pharmacists, behavioral health therapists, all of these are really going to be needed in order to make this model work. Sebastian Beckmann: We also thought that the problem here is going to be physician shortage. Now, I've been on here before to talk about physician shortage, there's a lot of reasons that I'm skeptical about that concept in general, but we did think that was going to be the limiter. When we actually ran the numbers based on the lower panel size for senior focused primary care, we got to about 10,000 primary care physicians you need full-time working in senior focused primary care in order to support that entire 10 million patients. That's a small minority of the total PCP supply. So we actually don't think that physicians are going to prevent scale. But to Elysia's point, it's a care team model. And when we did that same math on APPs and outpatient care managers, we found that you'd need about a quarter of all of the APPs currently in primary care to shift over, and by the way, almost 100,000 outpatient care managers. Rae Woods: My gosh. Sebastian Beckmann: I don't know how many outpatient care managers there are because that's the kind of job that goes to Amazon. Those people can shift careers, and a lot of them leave healthcare when they leave their jobs, so it's hard for us to say what proportion of the workforce that even is. Rae Woods: These are the roles that we always struggled to recruit and retain because they tend to be the lowest paid in healthcare that's why they leave for Amazon or Starbucks or wherever it might be. How is the crisis that we are feeling across the country, around the workforce, around staffing affecting this? Elysia Culver: This means that this is going to be a constraint and that we're not going to reach all of these patients. Rae Woods: I think our hypothesis is that it's only going to get harder unless we can solve the workforce crisis. Sebastian Beckmann: I think we're taking the workforce crisis as a given, the workforce crisis is one of the reasons that this won't scale to 100% of patients who could benefit. Even without the workforce crisis, it would still be hard to reach all those patients. So I would just take it as a given that we're not going to get 100% coverage just based on the number of staff it takes to run these models, even though that would be probably beneficial for patients. Rae Woods: Staffing is clearly a huge constraint. What other constraints should we be worried about that prevent us from meeting the needs of all seniors? Elysia Culver: I think two of the other biggest constraints that we found in this research were, one, the geography of where patients are located. And then two, the capital needed to set up these programs. When I talk about geography, I want to tone in on the point that senior focused primary care programs are mostly located in urban and suburban areas. They need that dense group of patients in order to scale, so you're missing out on everybody who's living in rural areas. Rae Woods: Who are potentially the people who need senior focused primary care, this holistic care team base focusing on the air conditioning unit even more so than folks necessarily in suburban or urban areas. Elysia Culver: Exactly. And then when I talk about capital, I would say that a lot of the times, there's a lot of upfront costs in order to get this rolling, especially because these models are trying to prove outcomes over time and they don't necessarily see a profit right away. So you need that capital in order to set up your program sometimes at the beginning, and a lot of the times it's used for technology. Capital used for technology in order to identify the patients that would be best suited for these models, and you see a lot of programs out there that are doing that. But these are just two of the biggest problems besides the shortage that we were talking about with workforce. There are also even smaller problems with patients not wanting to switch doctors, for example, they might have loyalty to who they're seeing at the moment. So there's big and small problems that go into some of the things that constrain how many people this will reach. Sebastian Beckmann: Which isn't even necessarily a problem, if patients don't want to switch, nobody should be forcing them to change into these models, it's probably good reason that they have that relationship with their existing physician. Anecdotally, what we heard on calls is that, if you can get about a third of physicians who are eligible to switch into a new senior focused primary care practice, that's a real success. Rae Woods: How many patients can we serve given all these constraints in senior focused primary care models? Sebastian Beckmann: What we anchored on is about that third, that's assuming that we can get about a third of the APPs that you'd need to serve the whole patient population. A third of the care managers and also a third of the patients to switch over, that would bring you to about 3 million patients or beneficiaries who could benefit from this model at scale. Rae Woods: But wait, you told me that there were 10 million eligible patients that could be served in these models, so what do we do with the other 7 million? Elysia Culver: Senior focused primary care is one of the many ways that stakeholders right now are innovating around how we care for older adults. There's a lot of opportunities outside of senior focused primary care to reach these people and focus on experiments under Medicare Advantage. For example, when I say that I think I am thinking about a few things here, so there's the coven for hospice under Medicare Advantage, there's the opportunities that dual eligible special needs plans provide, there's home-based care. And I think a lot of these things you're seeing too are working together, but I think that they're still distinct enough for a senior focused primary care to really make a difference for these patients. Rae Woods: And there's this problem of serving the number of patients, but Elysia, you started to go down this path of, where do those people live? So if we can only meet the needs of about a third of seniors in the current model that we have in healthcare, how do we make sure that those 3 million aren't just the ones in those urban suburban areas? Elysia Culver: Like I mentioned, these programs are mostly located in those city areas, but there are a lot of opportunities to reach those rural folks. And we did some research on this and we found a few things that I think could be really helpful here. One of which is utilizing technology, we've talked a lot on the podcast about digital inequities, but I think there's still opportunities to use things like telehealth to reach those in rural areas. We also can talk about how MA plans can help identify eligible patients, and then I think one of the other big things is utilizing workforce solutions. Often, in these rural areas, there's opportunities for senior focused primary care providers to train members of the community, peers to address social determinants of health and help navigate these older adults to different resources. And then I think the last one too is, there's an opportunity for them to use community-based resources. So there's existing relationships in the community, like maybe civic or faith-based groups that can help expand the scope of care for senior focused primary care. So I think those are some opportunities that we see in terms of reaching more of those older adults in rural areas. Rae Woods: I know I said I was a pessimist earlier, but let me be an optimist for a second. If we can meet the needs of a third of this huge population of seniors with this holistic really differentiated primary care, that's a good thing. That's a third more than would be served through traditional fee for service Medicare. Elysia Culver: Yeah. Rae Woods: That said, it does also create a reality where some are going to benefit, and I don't even mean some seniors are going to benefit, some parts of healthcare are going to benefit and some aren't. Help me understand how the industry is going to be impacted by senior focused primary care, who's a winner and maybe who's on the losing side? Elysia Culver: I want to point out what you mentioned there at the beginning, and that's this overall picture that this is something that we all intensively want. We want better outcomes, we want lower spending for patients, and we're probably going to be able to do that for those 3 million patients. But you are right that there are going to be some winners and losers. I think in terms of who's benefiting, it's going to be those at risk six seniors in urban areas. It's going to be the plans and the senior focused primary care operators. And then potentially, workforce can benefit in this situation only because it's an opportunity for them to work in a care model that might be different in kind from what they're currently working in. So on the losing side, it's likely going to be hospitals and skilled nursing facilities. Sebastian Beckmann: To put some numbers on that, if we get to a third of eligible patients in these models, then you end up with about $2 billion less in hospital revenue, about $800 million less in skilled nursing revenue. Rae Woods: Which is not good given the place that most hospitals find themselves in today, and especially the fact that most of their payments are still wrapped up in fee for service, let's be honest. Elysia Culver: Yes, but there's a silver lining here because it's probably not the patients that they want. So most of these admissions are going to be lower margin preventable admissions, which are exactly the admissions you'd want to avoid in order to create capacity for higher margin work. Rae Woods: Let me come back to where we started this conversation. We started this conversation by talking about how everyone seems to be interested in senior focused primary care. Are you actually saying that while there is interest that senior focused primary care is actually not something that all stakeholders should be jumping and throwing their hat into the ring of actually doing, maybe those hospitals that you were just talking about? Elysia Culver: Yeah. Sebastian Beckmann: I don't know if they will have a choice. So what I mean by that is, if senior focused primary care is something that is happening in your market, then I think you as a health system leader need to decide if this is something you're going to partner with. So you're going to become the preferred referral partner knowing that you're going to get lower utilization on things like COPD heart failure, ED admissions, or are you going to try to build something like this yourself? So Geisinger actually runs one, which makes sense in that integrated delivery model. But that's going to be a hard sell for hospitals or health systems that are still mostly fee for service. Rae Woods: And then ones that do not have the benefit like Geisinger does of having a health plan. Sebastian Beckmann: Exactly. Rae Woods: Well then, when it comes to senior focused primary care, what is the one thing that you want health leaders to know? Sebastian Beckmann: I would keep in mind that this is one example of innovation coming out of the MA environment. So what's the cumulative impact of all of the different innovations that are coming out of that space, going to be on hospitals, health systems, post-acute payers, everyone across the healthcare ecosystem? Elysia Culver: And I think for what I would want everyone to keep in mind, it would be the ripple effects of senior focused primary care. We might see some real changes in better connections to community-based services. There's the changes to downstream utilization, which we talked about here at the end, and there's also a potential partnership and competition opportunities as well. Rae Woods: Well, Elysia, Sebastian, thanks for coming on Radio Advisory. Elysia Culver: Thank you. Sebastian Beckmann: Thanks, Rae. Rae Woods: One more thing, I'm sure you all saw last week's news that the Biden administration officially announced that the pandemic related public health emergency will end on May 11th, 2023. The PHE has been in place for nearly three years offering flexibilities and protections that many of you enjoyed. Of course, this emergency declaration was always going to end, and I know that many of you have been preparing for this change for months, if not years. But still, the official announcement of the PHE's ending has caused some anxiety, not to mention countless news articles about the disruption that this will add to leaders' plates. It's important to do an assessment of which flexibilities and waivers you might be utilizing right now. And as you do this, remember that many of those flexibilities have already been decoupled from the PHE declaration itself. For example, the omnibus spending package that was passed at the end of 2022 extended a large number of telehealth flexibilities through the end of 2024. Same thing goes for the hospital at home waiver program. But the biggest source of anxiety, and frankly where I'm seeing the most headlines is about coverage. Where reports estimate anywhere between 15 and 18 million people will no longer be eligible for Medicaid. Now, there are two things I want you to keep in mind about that. First of all, Medicaid determinations are one of those things that were decoupled from the PHE back in December. States are able to redetermine Medicaid eligibility right now as of February 1st, and they can actually start terminating coverage on April 1st. For those keeping score, that is more than a month before the PHE is set to end. The second thing I want you to remember is this, there are some alternatives for coverage. There are exchange plans, there's employer sponsored insurance, which means we won't necessarily see 18 million people lose their insurance entirely. How much of a coverage gap will we actually see? Well, that depends on you. Look, I don't want to hide the ball, this is going to be a huge challenge. The operational burden alone is going to be massive, and some states are going to be hit harder than others. The key will be ensuring that users aren't dis-enrolled when they're actually still entitled to Medicaid coverage, and proactively connecting those consumers to other sources of insurance. The responsibility to ensure that there's not a so-called coverage cliff rests on the shoulders of nearly every stakeholder in healthcare. The question I want you to answer is, what role will you be playing? And remember, as always, we are here to help. To learn more about the future of senior care, I want you to go back and listen to episode 109, which looks at why the next 10 years are critical for senior care. And be sure to check out next week's episode where we take a deeper dive into Medicare Advantage and its impact on the future of healthcare. If you like Radio Advisory, please share it with your networks, subscribe wherever you get your podcasts, and leave a rating and a review. Radio Advisory is a production of Advisory Board. This episode was produced by me, Rae Woods, as well as Katy Anderson and Kristin Myers. The episode was edited by Dan Tayak with technical support by Chris Phelps and Joe Shrum. Additional support was provided by Carson Sisk and Leanne Elston. Thanks for listening.