A new report from Bain & Company highlights the evolving landscape of primary care in the United States, revealing challenges faced by traditional retail providers and outlining growth prospects for nontraditional care entities. The analysis suggests that despite earlier optimistic forecasts, retailers are struggling to expand their foothold in the primary care sector, which could see a significant shift in market dynamics by the year 2030.
The report indicates that nontraditional providers, including payer-owned firms and advanced primary care specialists, are projected to control a substantial portion of the market, with predictions estimating they will hold approximately one-third by 2030. This growth is largely attributed to the emergence of providers focusing on niche areas, such as senior care.
Bain's analysis outlines specific trends affecting the primary care marketplace. Notably, the report forecasts that retail providers, previously expected to capture 7% of the primary care market, will now only account for 2% by the end of the decade. This sharp decline follows recent setbacks, including the closure of all Walmart clinics in June and Walgreens' potential divestiture from VillageMD, where it owns a majority stake.
Dr. Erin Ney, an author of the Bain report and expert within the firm's healthcare and life sciences practice, commented on the challenges retailers face while attempting to carve out a significant presence in primary care. She articulated that in order for retail providers to thrive, they will need to prioritise their care delivery models, enhance consumer engagement, and incorporate insights from healthcare professionals during their operational design. Furthermore, Dr. Ney suggested that retailers may benefit from adopting strategies seen in successful advanced primary care firms, particularly by targeting specific patient populations.
The report also indicates a strong growth trajectory for insurer-owned primary care providers, which are expected to increase their market share from 15% in 2022 to an estimated 20% by 2030. Key players in this sector include UnitedHealth's Optum and Humana's CenterWell, along with emerging ventures such as the primary care company announced by Elevance Health and private equity firm Clayton, Dubilier & Rice. "You're going to continue to see increased interest in investment by payers in primary care," Ney stated. "It largely comes down to [recognising] how important primary care is to delivering on high-quality outcomes and managing cost of care."
Furthermore, the report highlights an anticipated growth in companies that provide technological and administrative support for value-based care models, which aim to improve patient outcomes while managing healthcare costs. Dr. Ney noted that the expansion of value-based care is likely to compel more physicians to engage in these arrangements, despite the operational and financial challenges they may encounter. Such supportive services are viewed as crucial for independent practices, particularly those lacking the resources to navigate the complexities inherent in assuming financial risk associated with value-based arrangements.
The insights from this report reflect significant shifts in the healthcare landscape, emphasising the growing prowess of nontraditional primary care providers and the challenges facing traditional retail entrants into this domain. The dynamics of the market are evolving, with implications for various stakeholders including patients, providers, and insurers as they seek to navigate the complexities of modern healthcare delivery.
Source: Noah Wire Services