Primary care in the United States is on the brink of a significant transformation, driven by an evolving mix of traditional and nontraditional providers. By 2030, nontraditional providers are expected to capture around 30% of the primary care market, fundamentally altering how primary care is delivered. This transformation is anchored in various models and players: value-based care enablers, retailer-driven primary care initiatives, payer-owned primary care, and advanced primary care (APC) providers. The journey of primary care towards 2030 is marked by strategic repositioning, increasing involvement of payers, and regulatory dynamics that create both opportunities and challenges for stakeholders.
Historical Impact and Evolving Providers
Decades of research solidify the crucial role of primary care in improving health outcomes, patient satisfaction, and health equity while significantly reducing the total cost of healthcare. Historically, traditional pure fee-for-service providers have dominated this landscape. However, the past decade has shown a marked shift towards value-based care models that emphasize overall health outcomes over service volume.
Two years ago, Bain & Company predicted notable changes in reimbursement, ownership, and care models, projecting a substantial market share shift towards nontraditional care providers such as retailers, payers, APC providers, and others who would capture 30% of the primary care market by 2030. This prediction remains robust today, driven by greater investment in value-based care, a shift towards nontraditional ownership of primary care practices, and an emphasis on population-specific care models that thrive under risk-based payment structures. Moreover, increased regulatory pressure, particularly on Medicare, impacts population-focused providers and those enabling such models.
Current Landscape: Nontraditional Providers and Strategic Shifts
By 2030, nontraditional providers are poised to hold approximately 30% of the primary care market share, with a rapid decline in fee-for-service models. Significant contributions from payer-owned providers and those enabled by payer investments and value-based care enablers are pivotal in this shift. Retailer-driven primary care models are an example where companies like Walmart, Walgreens, CVS Health, and Amazon have ventured into the healthcare space through clinics, partnerships, and acquisitions. Yet, they face substantial challenges balancing retail and healthcare business models. For instance, Walmart exited after initial attempts, and Walgreens is reducing its stake in VillageMD.
Retailers must focus on building models that align with their broad consumer base and can take on risk for profitability. This requires organizational alignment on healthcare purposes, clinical and business model crafting, and thorough evaluation of financial and nonfinancial goals before committing. Branding and customer engagement demand significant investments, as retail stores are not yet strongly associated with comprehensive care beyond services like vaccinations. Delivering healthcare under value-based models needs deep clinical, administrative, and regulatory expertise, potentially requiring acquisitions or partnerships to provide effective primary care.
Healthcare Payers
Payer-owned primary care is forecasted to represent 20% of the market by 2030, with companies like UnitedHealth Group’s Optum and Humana’s CenterWell having invested long-term in care delivery. Their capabilities in managing complex primary care delivery, care management, navigation, and coordination position these payer-owned practices to excel in value-based care models. Achieving required quality and cost outcomes allows them to provide an effective alternative to traditional primary care providers, further shifting the market dynamics.
These payer-owned practices have the advantage of integrated data and resources, aiding in proactive care management and reducing overall healthcare costs. Their investments ensure that primary care delivery is both efficient and patient-centered. With a focus on value-based care, these payers align their business models with improved health outcomes and cost efficiencies, reinforcing their position in the market.
Advanced Primary Care (APC) and Value-Based Care Enablers
Advanced Primary Care (APC) providers, particularly those focusing on seniors, are set for expansion but face economic and regulatory hurdles, especially with Medicare Advantage plan changes like updated CMS risk adjustment models and star rating shifts. Anticipated reimbursement decreases compel APCs to manage care costs meticulously while upholding quality outcomes. This market segment must innovate and stay agile to adapt to evolving payment structures and maintain competitiveness amidst regulatory adjustments.
Value-based care enablers play a crucial role in supporting traditional independent primary care providers under pressure from value-based care requirements. Providers often seek partnerships with enablers to transition effectively to these models. Rising venture capital and private equity investments in enablers indicate significant growth potential. By 2030, enablers partnering with primary care providers are expected to cover about 10% of market lives, a noteworthy increase from previous estimates. Examples like Privia Health and Aledade demonstrate these enablers’ capacity to lower total care costs and achieve high-quality outcomes.
Health Systems: Strategic Adaptation and Choices
Primary care in the United States is on the cusp of a major transformation, driven by a blend of traditional and nontraditional providers. By 2030, it’s anticipated that nontraditional providers will capture about 30% of the primary care market, fundamentally changing how primary care is delivered. This shift is supported by various models and players, such as value-based care enablers, retailer-driven primary care initiatives, payer-owned primary care, and advanced primary care (APC) providers.
These new models signify a strategic repositioning within the healthcare landscape, increasing the involvement of payers and bringing about a range of regulatory dynamics. This evolving scenario presents both opportunities and challenges for stakeholders. Value-based care enablers focus on improving patient outcomes while reducing costs. Retail-driven initiatives involve companies like Walmart and CVS entering the primary care space, making healthcare more accessible. Payer-owned primary care providers are insurance companies that directly offer healthcare services, aiming to streamline patient care. APC providers integrate advanced technology and comprehensive care models to enhance patient experiences.
The journey to 2030 will likely be marked by continued innovation and adaptation, as stakeholders navigate these new dynamics and strive to improve the overall quality and accessibility of primary care in the United States.
