BOSTON—July 27, 2022—Bain & Company’s study, Primary Care 2030: Innovative Models Transform the Landscape, shows that new primary care models from nontraditional players—such as retailers, payer-owned providers, advanced primary care disrupters and concierge providers —could capture as much as a third of the US primary care market by 2030. This would be a far cry from today’s market, which remains dominated by traditional providers in fee-for-service arrangements.
“As the industry continues to shift toward value-based reimbursement, there has been an increase of nontraditional players and models in primary care,” said Dr. Erin Ney, an expert associate partner at Bain & Company. “As we look ahead, rising costs, physician shortages, consumerism and digital disruption will continue putting pressure on traditional healthcare models, paving the way for additional growth of models that promote more efficient care, improved outcomes and reduced total cost.”
Changing reimbursement models
The shift from fee-for-service to fee-for-value reimbursement models has been one of the most significant sources of innovation in primary care, a trend Bain expects will only accelerate. Both independent and payer-owned advanced primary care providers (APCs) will continue playing a major role here. Although APC disrupters make up just a fraction of the total market, they are following the profit pools and spearheading population-specific models that aim to operate in full capitation. What’s more, they are already demonstrating better clinical outcomes, lower total cost of care and higher upside potential.
New care models
Looking ahead, Bain & Company expects new care models with a heightened focus on specific populations, broader adoption of multidisciplinary care teams, and growth of alternative sites and channels of care to redefine the primary care space. This includes the growth of population-specific scopes, which allow providers to invest in resources and capabilities tailored to a defined patient population for more coordinated and comprehensive care delivery.
Another major driving force for change in care models will be the pending physician shortage; the US is expected to be short 45,000 physicians by 2030. Today, more than 70% of physicians don’t work alongside other specialists, and more than 45% don’t work alongside advanced practice providers (APPs). That won’t be sustainable by 2030, when Bain expects leading primary care providers to function in multidisciplinary care teams with an integrated approach to medical, behavioral and social determinants of health.
To effectively deliver care amid the physician shortage, organizations will have to rely more on APPs, especially in alternative sites and channels, such as retail health or virtual care. APPs will likely continue to focus on routine and urgent care while physicians take the lead on care for the most complex cases.
Sites of care are moving from clinics to homes, retailers and digital platforms. During the pandemic, 18% of primary care visits were virtual— soaring from a mere 1% in 2018. Although the share of virtual primary care settled around 12% at the end of 2021, it has earned patients’ and physicians’ trust, becoming a permanent fixture in the healthcare landscape. At the same time, patients still prefer to see their own doctor, and the need for physical examinations will always prevail. Given these considerations, Bain expects primary care providers with an omnichannel presence to excel over pure-play virtual providers. That bodes well for many retailers, as they look to build comprehensive, omnichannel primary care.
Shifting ownership models
Bain expects payers to continue to grow their market share over the next decade. Entering primary care in 2011, payers and payer-owned services companies already hold around 5% of the market, care for approximately 13 million lives, and employ around 12,000 physicians. That trajectory is set to continue. Payers will increasingly acquire well-coordinated, high-functioning practices, as well as the technological and digital capabilities required to scale risk-bearing models. Private equity will also claim a larger share of the primary care space as investor interest holds steady. Bain anticipates increased consolidation of private equity– and venture capital–backed market disrupters throughout the next decade.
Five major competitive dynamics will redefine market share in primary care
- Risk-bearing, population-specific models will scale. Fully capitated APCs, led by disrupters and payers, will grow nationally. They will add value by mitigating administrative complexity for clinicians and improving patient outcomes through tailored offerings and enhanced care coordination.
- Payers and payer-owned services companies will become one of the largest models. With expected continued vertical integration over the next decade, these models could capture up to 15% of primary care market.
- Retailers will grab market share with full-scope primary care. Retail behemoths could account for 5-10% of total primary care by 2030. They will likely outperform traditional primary care providers on the patient experience, attracting customers through increased access and convenience, particularly in geographically underserved areas.
- Alternative models will squeeze traditional models. Traditional fee-for-service will still be the largest model in 2030, but it stands to lose 15-20% of market share as alternative models often provide enhanced patient experiences, better physician experiences and more collaborative team-based care.
- Virtual channels will endure. The pandemic showed the success of virtual health channels, a model that will likely be embraced by young healthy patients. Virtual health could climb to 20% of market penetration by 2030.
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