Value-based care is a linchpin of healthcare transformation because there is simply no way to bend the cost curve without curtailing fee-for-service payment arrangements.
While some traditional providers continue to struggle with the transition to value-based payments, national organizations like VillageMD clearly believe they have “cracked the code” for offering profitable primary care.
VillageMD cares for 1.6 million patients in 200 clinics offering same-day visits, extended hours, relationship management, and other aspects of Primary Care Done Right. The company is also serious about expanding value-based care: VillageMD is the largest participant in the Global and Professional Direct Contracting Model, which CMS calls “the next evolution of risk-sharing arrangements to produce value and high quality health care.”
Walgreens is investing more than $5 billion in VillageMD with the target of opening 1,000 co-branded primary care clinics nationwide. So far the partners have 80 clinics in five states, and VillageMD is planning a separate IPO this year to raise even more cash.
This is a trend that traditional healthcare providers can’t afford to ignore. Primary care clinics backed by big corporations are clearly on the rise – Walmart and CVS have their own variations – and that will almost certainly mean added pressure on independent hospitals and smaller systems. Specifically, we’re watching for:
VillageMD brings added momentum to healthcare transformation. With a focus on preventive care, value-based payment models, and underserved communities, VillageMD has the potential to change healthcare for the better – and certainly it’s 1,000% percent better than the countervailing trend of private equity buying up physician practices.
Still, I do worry about hospitals and health systems that have been slow to embrace value-based payment models and slow to implement the principles of Primary Care Done Right. If VillageMD succeeds at growing its footprint by 5x over the next five years, intense new competition is likely just around the corner.
The time to start planning is now.
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