In a 2022 report, Bain & Company, the global management consultancy firm, projected a significant transformation of the U.S. primary care market by 2030. Their analysis emphasised the expected evolution in reimbursement, care, and ownership models, predicting a notable market shift towards nontraditional care providers, which encompass retailers, payers, and advanced primary care (APC) providers. The firm anticipated that by 2030, these nontraditional entities would capture an estimated 30% of the primary care market.
In an updated brief released on 4 December 2024, Bain & Company reaffirmed their previous projections while updating their forecasts in light of recent industry developments. They noted that the changes made by major retailers and APC providers, alongside the accelerated investments by payers in primary care capabilities, have shaped their revised outlook. The report indicates a more rapid decline in the share of primary care patients receiving services from traditional fee-for-service providers than previously estimated.
Notably, Bain's revised forecast indicates an anticipated leading role for payer-owned primary care, which is expected to account for 20% of the market by 2030. The consultancy finds that payers have a strategic advantage in managing the complexities of primary care delivery, primarily due to advantageous past investments in care delivery infrastructures.
The report also highlighted certain strategic movements in the retail sector, particularly the withdrawal of major retailers like Walmart and Walgreens from the primary care space in recent years. Such exits reflect the challenges associated with establishing successful comprehensive primary care practices amid varying business models. Bain asserts that for retailers aiming to succeed in primary care, focusing on three essential objectives will be critical: developing an appropriate care model, investing to enhance their brand, and ensuring the presence of requisite healthcare expertise.
Additionally, Bain & Company predicts significant scaling within APC providers, particularly those targeting senior citizens. However, industry pressures such as stricter economic conditions and regulatory changes are expected to present challenges, notably for Medicare Advantage plans. Adjustments to the risk adjustment models by the Centers for Medicare & Medicaid Services (CMS), particularly the transition from Version 24 to Version 28, are projected to decrease revenues by 2% to 4%, thereby impacting profitability. Success in this environment will depend significantly on the ability of APC providers to manage total care costs while ensuring high-quality outcomes.
Moreover, Bain's projections indicate that independent providers who wish to remain viable will increasingly seek partnerships with enablers to facilitate their transition to value-based payment models. As investment in value-based care (VBC) enablers continues to rise, these entities may manage up to 10% of primary care patients by 2030, an increase from the previous estimate of 4%.
Traditional health systems are anticipated to face intensified competition from these population-focused disruptors and nontraditional providers. Depending on local market dynamics, health systems might adopt various strategies to sustain their relevance, including becoming preferred partners for specialty and tertiary care within risk-taking primary care models. Innovations in primary care delivery and the development of direct-to-employer models could also emerge as strategies for health systems seeking to mitigate financial risk.
The report stresses the importance of health systems investing in areas such as improved patient experience, advanced digital tools, and enhanced care management to navigate the evolving landscape. It also notes that partnerships with VBC enablers may aid in implementing these innovative practices.
As the primary care sector undergoes this transformation, Bain & Company foresees a complex future characterised by ongoing innovation, with traditional ownership structures being challenged. The projected shift towards nontraditional providers and population-focused models signifies a pivotal moment in the primary care market, demanding adaptability from all stakeholders involved as they strategise for the coming decade.
Source: Noah Wire Services