Wall Street Transcript‘s media release for its new 50+ page analysis of consumer health services sector, takes the form of a mini-interview with the author of the report’s concluding section on consumer health trends, Senior Research Analyst Ann Hynes. Here’s a link to the release, published by Yahoo! Finance Monday, March 22: Big Chain Pharmacies Investing In Health Clinics: Senior Analyst Weighs In On This New Trend
The interview unfortunately begins with a fairly conventional observation by Hynes that investment in PBMs is the sector’s standout story right now, “mainly because of the tools the companies utilize to promote generics and mail.” There’s no mention in the interview of the relative maturity of those tools, their resultant diminishing impact on the overall health costs of big payers like self-funded employers, and emerging evidence that substitution strategies driven by copay tiering may in some important instances actually increase plan costs by deterring treatment adherence.
However, the interview quickly turns to the specific subject of retail clinics, where Hynes is on firmer ground. She says
I think what we’re going to evolve into is employers asking insurance companies to add clauses to health plans that if employees go to a CVS or retail pharmacy for a flu shot or basic ailments, they would have no copayments. And if an employee instead chooses to go to a primary care physician for simple matters, the copayment is going to be $30. I think that’s what the model is going to evolve into….I think it’s going to be driven by the employer markets looking for more ways to bring down their health care costs.
While she focuses on the transactional aspect of employer efforts to manage costs -by changing health plan designs to drive covered employees & dependents to less expensive settings – she again fails to note that the employers leading the way in this regard are generally doing so for strategic reasons: enabling their health plan participants to get the “right” care at the “right” time in the “right” setting. It’s an important distinction, for the strategic objective is to flatten cost trend by improving care quality, rather than merely reducing unit costs of transactions by pennies.
Hynes is right about employer concerns for cost management, and that that concern will drive plan design changes and market responses. Still, observers (who may include investors, but of course we are not providing anyone any investment advice whatsoever here: do we even need to say that?) will not want to miss that, for pharmacy chains and retail clinics to succeed, they will need to be attuned to the strategic goals of the leading employers who seek to optimize their workforce populations’ use of alternative care settings like clinics – not merely to their pricing advantages vis a vis favorable copay designs.
We can tell you that you can purchase individual sections as well as the entirety of the referenced report here, and that ordering the Trends section of the report will set non-Transcript subscribers back a thrifty $75.