Health Highlights

Building a Culture of Health: The Value Proposition of Retail Clinics

Authors: Deborah Bachrach, Partner, Healthcare | Jonah Frohlich, Managing Director | Allison Garcimonde, Manager | Keith Nevitt, Senior Analyst

Editor’s Note: Since first emerging on the healthcare landscape more than 15 years ago, retail clinics have seen significant growth. There are now 10.5 million patient visits occurring annually at 1,800 retail clinics.1,2 As the nation’s healthcare system enters a period of profound change, retail clinics offer an important locus of patient access within large retail establishments. In a new report for the Robert Wood Johnson Foundation, Manatt Health examines the potential value proposition of retail clinics in building a Culture of Health. The report reviews evidence of the impact retail clinics have had on expanding access to lower-cost, routine primary care services, the quality of those services, and opportunities for better supporting disease prevention and chronic care management. It also considers how retail clinics can serve as a platform for offering services not traditionally delivered in retail settings. Finally, it proposes a set of strategic recommendations to optimize the value proposition of retail clinics. Below is an executive summary capturing key highlights. Click here to download a free copy of the full report.


Retail clinics offer convenient, low-cost basic primary care treatment, screening and diagnostic services in a variety of settings. Increasingly, these clinics are an integral part of a U.S. healthcare system in the throes of massive change as payers and providers migrate toward the Triple Aim goals of improved patient care, population health and reduced costs.

Many retail clinics are adapting their offerings to provide basic chronic care management services and forming partnerships with area health systems to become better integrated with other community providers. Some retailers are leveraging other assets within their stores, including pharmacies and healthy foods, to create a package of enhanced services for customers and payers. A few have gone a step beyond and are exploiting the enormous foot traffic they generate to offer additional services not traditionally found in their stores, including enrollment assistance and access to public nutrition programs.

As the role of retail clinics evolves, they face a series of challenges and opportunities to integrate this business model into a healthcare system reconfiguring to advance Triple Aim goals and contribute more broadly to a Culture of Health.

The Retail Clinic Landscape

Retail clinics typically employ nurse practitioners (NPs) and physician assistants (PAs) to handle most patient interactions. Like many primary care providers, retail clinics are more prevalent in higher-income, urban and suburban areas, though they also can be found in rural and underserved communities. The majority of retail clinics accept commercial, Medicare and Medicaid coverage and all accept cash payment regardless of insurance status.

The cost of providing care and treating patients has been found to be lower at retail clinics when compared to other settings. However, it remains unclear if retail clinics reduce the total cost of care by replacing other primary care encounters. In addition, while some performance measures indicate that the quality of care offered at retail clinics is comparable to other settings, there is less evidence of how clinics impact clinical outcomes.

To date, more than 100 partnerships between retail clinics and health systems have been formed, linking care between retail sites and primary care medical homes, expanding after-hours care options and enabling health systems to provide patients with alternatives to emergency departments (EDs). In fact, one study estimated that up to 27% of ED visits would be handled appropriately at retail clinics and urgent care centers, offering cost savings of $4.4 billion per year. The full benefits of these partnerships can only be realized when care is coordinated, protocols are adopted and information systems are effectively linked.

The reach and effectiveness of retail clinics can be constrained by varying and restrictive state scope-of-practice rules that increase the administrative costs of retail clinic operators and limit their practitioners’ scope of services. Health system partners have helped resolve some of these issues by providing physician oversight, though that can add to overhead and cost.

Increasingly, retailers are bundling clinic services with pharmacy, nutrition, lifestyle and obesity management programs to deliver more comprehensive offerings. The business cases for providing those services can be compelling, especially when they are aligned with incentives from payers. Finally, the astonishing foot traffic that these retailers generate can serve as a platform for offering services not traditionally delivered in a retail setting, such as enrollment assistance for public or private coverage and housing support.

Retail clinics have demonstrated that their value proposition in a Culture of Health is convenient, low-cost, transparent and accessible primary care. To the extent they are able to coordinate care with health system partners, their value will be further enhanced.

Additional research is warranted to examine the expanded role retail clinics can play in supporting public health initiatives, the benefits of tightly coupling and bundling services that better leverage retailer assets, and the ways stronger ties to a range of services not widely accessible through retailers that address underlying social determinants of healthcare can be created and sustained.

Recommendations for Optimizing Value and Advancing a Culture of Health

The following are strategic, interdependent recommendations for optimizing the value of retail clinics in delivering healthcare to individuals and enabling the health of communities:

  • Integrating into the delivery system, through better linkages between retail clinics and health system partners.
  • Measuring and reporting the quality of care using a more complete set of clinical outcome measures that assesses performance against other primary care providers.
  • Improving access in underserved communities through partnerships between municipalities and state governments to open new retail stores with clinics in disadvantaged areas.
  • Providing services to young children by removing obstacles preventing the appropriate administration of vaccines and provision of routine primary care in retail clinics to children over 18 months.
  • Standardizing scope of practice rules for NPs and PAs and removing restrictions that prevent NPs and PAs from practicing to the full extent of their license and training.
  • Requiring Medicare and all other payers to reimburse retail clinics for appropriate telehealth services.
  • Examining more expansive roles that retail clinics can play in supporting public health and emergency response efforts.
  • Making the business caseto payers to broaden and bundle services.
  • Researching the business case for a broader range of services, including insurance enrollment assistance and access to nutrition, housing and other programs.


Retail clinics are now a part of the healthcare landscape in every state. There are two key determinants of their long-term impact: their ability to integrate with the healthcare system at large and economics.

Retail clinics’ ability to coordinate care effectively with other health system partners and engage payers to reimburse for a more expansive set of integrated services will largely determine the greater role retail clinics play in our healthcare systems. Retail clinics operate on thin margins and, like any other low-margin business, they must pay close attention to reimbursement for the services they provide and the direct and indirect revenue they generate for the retailer. In addition, while retailers, health systems and payers recognize the impact of social determinants on health outcomes, most have not yet embraced initiatives that help improve population access to in-store offerings and public programs that address their nonclinical needs.

These are weighty challenges. If retail clinics overcome them, they have the potential to become a much more powerful enabler of the Culture of Health.

1Thygeson M. Vorst KAV, Maciosek MV, Solberg L. Use and Costs of Care in Retail Clinics Versus Traditional Care Sites. Health Aff. 2008 Sep 1; 27(5):1283-92.

2Retail Clinics & Urgent Care Centers Poised for Strong Growth—Market Worth $10 Billion. PRWeb [cited 2014 Dec 4]. Available from:

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Innovation Waivers: An Opportunity for States to Pursue Their Own Brand of Health Reform

Authors: Deborah Bachrach, Partner, Healthcare | Joel Ario, Managing Director | Hailey Davis, Manager

Editor’s Note: States have long been the testing ground for new models of healthcare and coverage. Section 1332 of the Affordable Care Act (ACA), which takes effect in less than two years, throws open the door to innovation by authorizing states to rethink the law’s coverage designs. Through State Innovation Waivers, states can modify the rules regarding benefits, subsidies, insurance marketplaces, and individual and employer mandates. In a new issue brief for the Commonwealth Fund and the Robert Wood Johnson Foundation, summarized below, Manatt Health describes how states may use State Innovation Waivers to reallocate subsidies, expand or streamline their marketplaces, replace or modify the mandates and otherwise pursue their own brand of health reform tailored to local market conditions and political preferences. Click here to download a free copy of the full brief.


The ACA establishes a new national paradigm for health coverage while leaving room for considerable experimentation by the states. The door to innovation will open even further in 2017, when Section 1332 of the ACA invites states to find alternative ways to meet the coverage goals of the law while staying within its fiscal constraints.

Section 1332, known as State Innovation Waivers, authorizes states to request five-year renewable waivers from the U.S. Department of Health and Human Services (HHS) and the Treasury of the ACA’s key coverage provisions, including those related to benefits and subsidies, the exchanges (also known as the marketplaces) and the individual and employer mandates.1 States may propose broad alternatives or targeted fixes. All waivers must demonstrate, however, that coverage will remain as accessible, comprehensive and affordable as before the waiver and that the changes will not add to the federal deficit.

What May Be Waived?

States may propose alternatives to the four pillars of the ACA:

  • Benefits and Subsidies. States may modify the rules governing covered benefits, as well as the subsidies available through the marketplaces. States seeking to reallocate premium tax credits and cost-sharing reductions may receive the aggregate value of those subsidies to implement their alternative approaches.
  • Marketplaces and Qualified Health Plans. States may replace their marketplaces or supplant the plan certification process with alternative ways to provide health plan choice, determine eligibility for subsidies and enroll consumers in coverage.
  • The Individual Mandate. States may modify or eliminate the requirement that individuals maintain minimum essential coverage.
  • The Employer Mandate. States may modify or eliminate the requirement that large employers offer affordable coverage to their full-time employees.

States may not waive the ACA’s:

  • Nondiscrimination policies, prohibiting carriers from denying coverage or increasing premiums based on medical history.
  • Fair play rules, guaranteeing equal access at fair prices for all enrollees.

Waiver Guardrails

State Innovation Waivers must satisfy four criteria:

  • Comprehensive Coverage. States must provide coverage that is “at least as comprehensive” as coverage absent the waiver.
  • Affordable Coverage. States may provide “coverage and cost sharing protections against excessive out-of-pocket spending that are at least as affordable” as coverage absent the waiver.
  • Scope of Coverage. States must provide coverage to “at least a comparable number of residents” as would have been covered without the waiver.
  • Federal Deficit. The waiver must not increase the federal deficit.

Coordination with Other Waivers

HHS is required to coordinate and consolidate the 1332 waiver process with waiver processes for Medicaid, Medicare, the Children’s Health Insurance Program and other federal laws relating to the provision of healthcare services. Consolidating the waivers allows for better alignment of coverage programs and may create some flexibility in how waiver packages are assessed.

Possible Waiver Strategies

The waivers present far-reaching possibilities, but all are subject to the coverage and fiscal guardrails discussed above. The most compelling ideas may emerge after state officials and key stakeholders come together and—through the public and transparent process required under Section 1332—forge consensus. Interviews with policy experts and state officials suggest the following areas of interest:

1. Rethinking subsidies for marketplace plans

The ACA seeks to make coverage affordable for those above Medicaid income-eligibility levels through a combination of subsidies that includes premium tax credits and cost-sharing reductions. Some state officials are concerned that cost-sharing levels are too high and will impede access to care. Others would welcome plans with greater cost-sharing and lower premiums to attract younger, healthier populations. Both approaches seek to minimize “subsidy cliffs” (dramatic drops in subsidy amounts as income rises) and establish more graduated subsidies. Whatever waiver approach a state chooses, it needs to address how benefits to some consumers would be balanced against increased costs to others. States also must be mindful that current spending on subsidies will influence the amount available through a 1332 waiver.

2. Reforming the marketplaces

Some states have done little to support the marketplaces, ceding control to the federal government, while others are broadening their role. Section 1332 allows for either approach, although states using the federal marketplace may be limited in their ability to modify its provisions unless and until the federal marketplace can accommodate more state-specific policies. These states may eliminate the federal marketplace entirely, however, as long as their waiver applications address the law’s coverage and fiscal goals.

Eliminating the marketplaces may be an especially attractive option in small states where only limited numbers use them. States may choose to:

  • Replace them with a system offering vouchers for eligible individuals to purchase coverage from any lawful seller of ACA-compliant coverage.
  • Leverage the rapid growth of Web brokers and private exchanges to outsource marketplace functions.

Other states may want to enhance their marketplaces’ scale by using a 1332 waiver to offer coverage options for additional populations or even serve as the sole coverage provider.

States focused on reforming their marketplaces should be mindful of how changes affect access to coverage across populations.

3. Replacing or modifying the individual and employer mandates

Arguably the least popular provisions in the ACA, the individual and employer mandates may be prominently featured in states’ 1332 waiver applications. Possible alternatives to the individual mandates include:

  • Implementing penalties for late enrollment,
  • Reducing opportunities for enrollment (i.e., multiyear waiting periods, if open enrollment is missed), and
  • Establishing automatic enrollment.

States seeking an alternative to the employer mandate may implement a “pay or play” requirement in which employers must pay a flat percentage of payroll in benefits or taxes. Waivers of the employer mandate could have a significant fiscal impact, reducing the penalty revenue to the federal government.

Targeted Fixes

Targeted approaches focus on a narrow slice of the law, such as undoing the ACA requirement that small-group rating rules apply to businesses with 5–100 employees. Other targeted reforms might include:

  • Filling coverage gaps, such as the “family glitch” that makes dependents ineligible for tax credits if they are offered employer coverage, even if that coverage is unaffordable.
  • Providing incentives for healthcare quality improvement by reallocating subsidies to favor plans with higher quality ratings.
  • Replacing the ACA’s three-month grace periods for nonpayment with the one-month grace periods common for plans outside the marketplace.
  • Altering rules, such as the definition and verification of income to align exchange, Medicaid and other program rules.
  • Replacing complex federal recordkeeping rules, while still preserving federal reforms.


State Innovation Waivers involve a delicate balancing act: providing states with considerable latitude to experiment with alternative coverage mechanisms while also requiring that they continue to meet the coverage and affordability goals of the ACA. If policymakers agree on the value of having accessible, affordable and meaningful health coverage for all, then 1332 waivers offer a way to achieve these goals while reinforcing states’ leadership in regulating their insurance markets and serving as the laboratories of health reform.

1Patient Protection and Affordable Care Act, Pub. L. No. 111-148 (2010).

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Key Themes from Delivery System Reform Incentive Payment (DSRIP) Waivers in Four States

Authors: Jocelyn Guyer, Director | Naomi Shine, Analyst | Robin Rudowitz, Associate Director, Kaiser Family Foundation’s Commission on Medicaid and the Uninsured | Alexandra Gates, Policy Analyst, Kaiser Family Foundation’s Commission on Medicaid and the Uninsured

Editor’s Note: Increasingly, a number of states are using Medicaid waivers, referred to as Delivery System Reform Incentive Payment or DSRIP waivers, to transform the way they provide care to Medicaid beneficiaries. Authorized under Section 1115 of the Social Security Act, these initiatives are generally part of broader reform waivers and allow a state to make payments to eligible providers supporting the state’s Medicaid delivery system reform agenda.

In a new issue brief for the Kaiser Family Foundation’s Commission on Medicaid and the Uninsured, Manatt Health takes an early look at the impact of DSRIP waivers on Medicaid payment and delivery systems. Building on an earlier brief that provides an overview of DSRIP waivers, it relies on interviews with stakeholders to identify emerging trends and themes. Manatt conducted interviews with state officials, providers and advocates in three states that have adopted Medicaid expansion (California, Massachusetts and New York) and one state that has not (Texas). While each of the four programs is different, major themes emerged across all four states that highlight DSRIP’s challenges and opportunities. A summary of key findings and insights appears below. Click here to download a free copy of the full brief.


Introduced originally in California and followed by Texas, Massachusetts, New Jersey, Kansas and New York, DSRIP programs are a key feature of the dynamic and evolving Medicaid delivery system reform landscape. DSRIP initiatives are part of broader Section 1115 waivers and provide states with significant funding that can be used to support hospitals and other providers in changing how they provide care to Medicaid beneficiaries. Funds can be used to strengthen the infrastructure needed for delivery reform, promote new and innovative partnerships among healthcare providers, and build stronger connections between providers and social services agencies.

Originally, DSRIP initiatives were more narrowly focused on maintaining supplemental funding for safety net hospitals. Today, DSRIP waivers are spurring major changes in relationships among providers. They are allowing providers to launch new initiatives aimed at improving care and reducing costs, as well as fostering a stronger focus on the social service needs of Medicaid beneficiaries. Reflecting a growing emphasis at the Centers for Medicare and Medicaid Services (CMS) on strengthening accountability for Medicaid waiver dollars, a defining feature of DSRIP waivers is that they require providers—and recently states—to meet benchmarks as a condition of receiving Medicaid funds.

With DSRIP implementation moving at a rapid pace, stakeholders, including consumer advocates, are finding they are hard-pressed to keep up with tracking and responding to the DSRIP-driven changes that are fundamentally transforming the way care is delivered to Medicaid beneficiaries. Looking ahead, as DSRIP implementation continues and waivers come up for renewal, there will be an increasing focus on the need to ensure long-term sustainability of the DSRIP improvements, including in states, such as Texas, where the challenge may be even greater, given the decision not to expand Medicaid.

Common Themes Across All Four States

While DSRIP waivers vary based on how long they have been in effect; specific goals and objectives; eligible providers, projects and organizations; and financing, a number of common themes and early “lessons learned” have emerged from our stakeholder interviews in all four states: California, Massachusetts, New York and Texas:

DSRIP initiatives are promoting collaboration, supporting innovation and bringing renewed attention to social services. DSRIP initiatives are sparking new collaboration among providers, such as urban teaching hospitals and rural healthcare providers or primary care and mental health providers. With the funds DSRIP programs make available, providers are pursuing innovative approaches to improving care. In addition, DSRIP waivers are increasing the focus on the role that social services—including stable housing, jobs, transportation, food and other nonmedical resources—play in the health of Medicaid beneficiaries. At the same time, providers are struggling with the scope and complexity of the organizational, financial and cultural change needed to implement DSRIP initiatives in some states.

It is critical but challenging to design appropriate DSRIP measures. With significant federal funding on the line, it is vital to design DSRIP measures that capture whether providers are using DSRIP funds to  improve care for beneficiaries. The effort is complicated by the vast number of DSRIP projects in some states, as well as by the inherent tension between providers wanting the flexibility to design projects that address community-specific needs and those seeking standardization of projects and metrics. States and other stakeholders also face many of the classic issues that confront most measurement efforts, including the burden they can impose on providers to gather and report standardized data. There is also the risk that measures will overincentivize providers to focus too heavily on specialized activities and populations and that providers will employ problematic strategies to meet performance benchmarks.    

DSRIP’s role in broader delivery system reform and its relationship to Medicaid managed care remain unclear. A major issue in all four states is how DSRIP fits into other efforts to transform the Medicaid delivery system. In particular, DSRIP waivers often share many of the same goals as Medicaid managed care programs—slowing the rate of growth in spending, improving care and offering greater accountability. DSRIP offers providers—rather than health plans—the opportunity to change the way they provide care, but, even so, the relative roles of DSRIP-funded provider networks and managed care plans remain unclear in many instances.

The financing structure behind DSRIP waivers can dramatically affect how they are implemented. States typically rely on contributions from state and local public hospitals to finance their share of DSRIP payments. Not surprisingly, this has an effect on the role that providers are expected to play in DSRIP payments. For example, California currently reserves its DSRIP funds for the state’s 21 public hospital systems, because they finance the nonfederal share of DSRIP payment, as well as some of the state’s other Medicaid spending. In Texas, large public hospitals finance the bulk of the state’s share of DSRIP expenses. A number of other public entities, however, including community-based mental health centers, also contribute, and some stakeholders believe it has increased their influence over DSRIP implementation.

The complexity and rapid pace of DSRIP implementation pose challenges to providers, advocates and state officials. It often takes an extended period—two years for New York—to negotiate a DSRIP waiver with CMS. Once approval is secured, states typically want to implement rapidly to jump-start delivery system reform and allow providers to begin earning DSRIP payments. At the same time, the work is complex, often requiring providers to build relationships with new partners and make fundamental changes in their organizational culture and approach to the delivery of care. The complexity and pace of change create challenges for all stakeholders, but have proven particularly difficult for consumer advocates. Consumer advocates generally are enthusiastic about the role that DSRIP can play in improving care for Medicaid beneficiaries, but they already have numerous ACA issues to address with limited resources. As a result, they struggle to keep track of and actively participate in DSRIP implementation.


Based on the four states investigated for this analysis, it is clear that DSRIP waivers are becoming an increasingly important tool for driving Medicaid delivery reform. They have spurred major change, often surprising even the state officials who designed them in the extent to which they have broken down silos among providers and unleashed new initiatives.

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Safeguarding the Privacy of Health Information Collected Through Employee Wellness Programs

Author: Susan Ingargiola, Counsel, Healthcare

Interest continues to grow in employee wellness programs, which many argue can improve employee health and increase productivity. Workplace wellness programs involve the collection of individually identifiable health information from and about employees participating in them. Consequently, privacy and security are among the legal issues that arise with respect to these programs. The Equal Employment Opportunity Commission (EEOC) and the Office for Civil Rights (OCR) in the U.S. Department of Health and Human Services (HHS) recently addressed this issue, releasing a Notice of Proposed Rulemaking (NPRM) and an FAQ, respectively, that address how  employees’ health information must be safeguarded when it is collected as part of an employee wellness program. A full description of the NPRM can be found in Manatt’s Employment Law Newsletter.

I. Health Information Laws and Employers

Employers are already regulated with regard to the collection of health information from employees. For example, employers offering “group health plans” (an employee welfare benefit plan under the Employee Retirement Income Security Act or ERISA that has 50 or more participants) are considered to be “health plans” under the Health Insurance Portability and Accountability Act (HIPAA) and must abide by HIPAA’s privacy and security regulations when they collect health information as part of administering those plans. Employers are restricted by the Americans with Disabilities Act (ADA) with respect to health information collected from employees for purposes of determining the terms and conditions of employment. Employers are covered by the Genetic Information Non-Discrimination Act (GINA) when they collect genetic information, either in their capacity as a group health plan administrator or in their capacity as an employer.

The EEOC’s NPRM proposes privacy provisions that largely address the application of the ADA to the collection of information by workplace wellness programs. But employers will need to consider how they are structuring their programs in determining the extent to which these laws—HIPAA, ADA and/or GINA—apply.

II. HIPAA’s Protections

Employers offering “group health plans” are permitted to collect individually identifiable information for purposes of administering the plan, but they are prohibited by HIPAA’s privacy regulations from using this information to make employment-related decisions. The employer is required to create firewalls that prevent this data from being accessed or used for employment decisions.  

HHS OCR’s FAQ, released on April 16, clarifies the application of these HIPAA provisions to wellness programs. According to the FAQ, where an employer’s workplace wellness program is offered as part of its group health plan, the individually identifiable health information collected from or created about participants in the wellness program is “protected health information” (PHI) and is protected by the HIPAA regulations. Consequently, employers offering wellness programs through their group health plans may treat information collected from the program in the same way they treat other group health plan information. For example, the FAQ also makes clear that disclosures of PHI from wellness programs may be made only in accordance with HIPAA’s privacy regulations. Therefore, certain disclosures that would otherwise be permitted under the ADA’s confidentiality requirements for employee health programs generally may not be permissible under the Privacy Rule for wellness programs that are part of a group health plan without the written authorization of the individual.

III. Privacy Requirements Under the EEOC’s NPRM

If an employer offers its workplace wellness program outside of its ERISA group health plan (either because the employer does not sponsor such a plan or because it decides to offer the wellness program directly as an employer instead of through the plan), the ADA governs how the employer collects information through the program.  In terms of health information privacy, the NPRM clarifies that medical information collected through a wellness program may only be provided to an employer subject to the ADA in aggregate terms that do not disclose and are not reasonably likely to disclose the identity of specific individuals, except as otherwise permitted under EEOC rules for necessary work restrictions or accommodations.

According to the NPRM, employers and wellness program providers should have clear privacy policies and procedures related to the collection, storage, and disclosure of medical information. Online systems and other technology should guard against unauthorized access, such as through use of encryption for medical information stored electronically. The NPRM also proposes that, as a best practice, individuals who handle medical information that is part of an employee wellness program should not be responsible for making decisions related to employment, such as hiring, termination or discipline. If individuals who handle medical information obtained through a wellness program also act as decision makers (which may be the case for a small employer that administers its own wellness program), they may not use the information to discriminate on the basis of disability in violation of the ADA.

The NPRM proposes that if an employer uses a third-party vendor, it should be familiar with the vendor’s privacy policies for ensuring the confidentiality of medical information. Employers that administer their own wellness programs need adequate firewalls in place to prevent unintended disclosure. Breaches of confidentiality should be reported to affected employees immediately and should be thoroughly investigated. Employers should make clear that individuals responsible for disclosures of confidential medical information will be disciplined and should consider discontinuing relationships with vendors responsible for breaches of confidentiality.

As noted above, where a wellness program is offered by an employer directly and not as part of a group health plan, the health information that is collected from the employees by the employer is not protected by the HIPAA rules. However, other federal or state laws may apply and regulate the collection and/or use of the information.


Employers and health plans offering employee wellness plans should ensure that they are familiar with the rules for protecting health information collected under these programs. While the EEOC NPRM is subject to change based on public comments, which are due by June 19, 2015, the OCR FAQ is effective immediately.

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How Mobile Apps Will Empower Healthcare Consumers

Authors: Joel Ario, Managing Director | Stuart R. Butler, Senior Fellow, Brookings

Editor’s Note:  According to MobiHealthNews, the number of health-centric apps has quadrupled since 2010—and Frost and Sullivan predicts that the mobile health market will exceed $390 million this year. Pew research shows that almost two-thirds of Americans now own smartphones—and 62% have used them to look up health information. In a new post for Health360, the Brookings Institution blog, summarized below, Joel Ario of Manatt Health and Stuart Butler of Brookings examine how the explosion in smartphone usage and mobile apps is empowering healthcare consumers as they make decisions around their healthcare coverage. Click here to read the full post.


Choosing a health plan on one of the new public or private exchanges is no easy task. That’s especially true for those with medical conditions who want to be very sure the plan they enroll in will provide the services they need.

Of course, it’s always hard for consumers to buy complex and technical services or products. Health insurance can be particularly daunting, however, with so many factors to consider. Even the terminology can be confusing.

Consumers will have many questions—from what the price is to if their doctor is in the plan’s network to whether the drugs they take are on a formulary. There are so many choices that the decision process can result in what some call “choice anxiety.” Technology, however, can reduce choice anxiety in healthcare, as it has for other complicated searches.

Technology’s Dramatic Impact on Healthcare Coverage

Expect technology to have a dramatic impact on buying healthcare in the near future. There are several reasons for this:

  • The presentation of consumer information will get better. When large new markets for products and services are created and demand for buyers’ information rises sharply, the incentive for entrepreneurs—both for-profit and nonprofit—to provide customer-friendly information also rises.
  • Navigation technology will make searches quick and simple. We expect plan navigation to improve the shopping experience in ways that will help customers search a large inventory and still make choices easily.  Expect increasing collaboration between public exchanges and private vendors with a surge of apps and gadgets to make navigation in health exchanges increasingly easy.
  • Technology will allow choices to be tailored to medical history. Advances in technology will enable Americans to base their choices on their likely medical needs. New forms of choice technology are beginning to utilize questions about medical history to guide buyers to the plans most suited to their conditions.

Consumers’ ability to enter more detailed health histories and get more sophisticated assistance will only continue to improve as exchanges publish more data in machine readable formats. Expect more and increasingly sophisticated customized navigators, especially as patients get more access to their electronic medical records. In addition, expect sellers to respond with products that bundle services to meet the new demand.


Health insurance marketplaces will continue to present thorny regulatory challenges. Insurance regulators will need to guard against unfair practices, privacy concerns will be raised when apps ask for medical history, and new forms of provider integration will test antitrust doctrine. But one thing is clear: Improving technology will soon make picking the right health plan a far more precise and simple process.

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New, Free Webinar Series, “Medicaid Trends to Watch: Driving Transformation in 2015 and Beyond.”


Medicaid is the single largest payer for healthcare services in every state. With nearly 10 million people enrolling in 2014 alone, total enrollment now tops 68 million. But Medicaid is not just undergoing soaring growth. It’s also experiencing unprecedented change, fueled by its expanding ranks of participants, as well as new federal dollars available to encourage innovation.

What are the top trends shaping Medicaid’s reinvention? How are they contributing to achieving health reform’s goals of improving quality and access while cutting costs? What can you expect over the coming year—and into the future? Learn the answers at Manatt’s new two-part webinar series, “Medicaid Trends to Watch: Driving Transformation in 2015 and Beyond.” Join us to explore Medicaid’s critical role in connecting millions of Americans to healthcare:

  • Reforming Medicaid’s Long-Term Care (LTC) System:  Bridging the Gap Between Aspirations and Reality (June 10 from 1:00 – 2:00 p.m. ET). With long-term services and supports (LTSS) representing more than a third of annual Medicaid expenditures, hear how states are beginning to think about LTC reform. Learn how far states have come in adopting new care delivery models for LTC populations and linking Medicaid payments for these populations to performance, outcomes and cost containment. Find out why managed LTSS, though still small, is likely to proliferate in 2015. Discover the opportunities and challenges around dual-eligible demonstrations—and the reasons they are expected to grow, even though existing demonstrations have not met enrollment targets. Explore initiatives, such as Money Follows the Person, that seek to rebalance utilization and spending toward home- and community-based care rather than institutions. Click here to register free.
  • Medicaid Growth and Marketplace Convergence:  Surging and Merging to Optimize the Coverage Continuum (June 17 from 1:00 – 2:00 p.m. ET). With the clock ticking down on full federal funding, more states are expanding Medicaid through “alternative expansion models” under 1115 Waivers. States are tailoring expansions to state policy priorities and political imperatives, and CMS is demonstrating significant flexibility in accommodating state-specific models. A consistent theme in recently approved waivers is states integrating Medicaid into the broader insurance market through strategies ranging from aligning Medicaid and Marketplace plans and provider networks to leveraging employer-based and private insurance to cover Medicaid-eligible residents. With 1332 State Innovation Waivers on the horizon as another vehicle for state coverage innovation, further convergence—across 1115 and 1332 Waivers and Medicaid and the private market—is certainly on the way. Discover how the surge in Medicaid enrollment and the continued trend of integration across public and private insurance will impact states, providers, plans and consumers. Click here to register free.

With one in five Americans now enrolled in Medicaid, it’s critical to understand its central role in redefining our payment and delivery systems. Make sure you don’t miss this in-depth look at the trends to watch in 2015 and the years ahead. Even if you can’t make the dates of the original airings, register now, and we’ll send you a link to view the sessions on demand.


Deborah Bachrach, Partner, Healthcare
Patricia Boozang, Senior Managing Director
James Lytle, Partner, Government and Healthcare
Carol Raphael, Senior Advisor
Stephanie Anthony, Director

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Antitrust Update: Who Should Regulate Healthcare Competition? The New York COPA Dispute

Author: Lisl Dunlop, Partner, Litigation

In last month’s Antitrust Update, we reported on the conflict between Georgia’s Certificate of Need laws and the Federal Trade Commission’s (FTC’s) desire to seek divestitures as a remedy in the Phoebe Putney case. A further conflict of state healthcare policy and the federal antitrust regulators emerged in April in relation to applications under New York’s Certificate of Public Advantage (COPA) rules, with the FTC submitting a public comment arguing against the grant of COPAs to three performing provider systems (PPS) newly formed under the New York Delivery System Reform Incentive Payment (DSRIP) program.

The FTC’s comment expresses concern that the grant of COPAs to the three entities would shield potentially anticompetitive conduct, and implies that competition protections in the New York system would be ineffective. The comment also provides some insights into the FTC’s position on the conduct of DSRIP provider systems that do not have COPAs that may violate antitrust laws.

New York’s DSRIP and COPA System

New York’s DSRIP program encourages collaborations among New York healthcare providers aimed at achieving system reform, quality improvements and cost reductions. The purpose of DSRIP is to restructure the New York healthcare delivery system by reinvesting in the Medicaid program, with the primary goal of reducing avoidable hospital use by 25% over five years. The New York state government has allocated up to $6.42 billion to the DSRIP program, with payouts based on provider systems achieving predefined results in system transformation, clinical management and population health.

A COPA is issued by the New York Department of Health signifying the approval of a Cooperative Agreement or planning process—which can include DSRIP project plan applications—subject to certain conditions being satisfied. The COPA regulation was designed to establish a mechanism for active state supervision of collaborative arrangements between healthcare competitors, with the purpose of securing “state action immunity.” The state action immunity doctrine provides immunity from federal government or private antitrust challenges for certain transactions that may otherwise have a potential anticompetitive effect.

Under the New York COPA regulation, parties that have received a COPA may collectively negotiate, enter into, and conduct business covered by the COPA without the threat of enforcement action by the federal antitrust authorities or private lawsuits. COPA regulations do not, however, shield blatantly anticompetitive collaborations. In granting a COPA, the Department of Health must work in consultation with the New York Attorney General’s (NYAG’s) office and conduct a detailed competitive analysis of the market, as well as of the potential benefits and anticompetitive effects of the proposed collaborative arrangement. Further, even after a COPA has been granted, there are annual reporting requirements and continual oversight. The NYAG may seek relief under state antitrust laws if it believes that the parties have engaged in conduct outside the scope of the COPA, or if the anticompetitive effects outweigh the benefits of the collaboration.

Although around 28 DSRIP performing provider systems have been established, only three—Adirondack Health Institute Performing Provider System, Advocate Community Partners Performing Provider System and Staten Island Performing Provider System—have applied for a COPA. It is these applications that the FTC opposes.

The FTC’s Concerns

In its comment, the FTC asserts strongly that the federal antitrust laws do not prohibit procompetitive collaboration among competitors. Therefore, the FTC believes, the need for a COPA must imply that the conduct proposed to be undertaken by the three DSRIP provider systems will be anticompetitive.

In general, the federal antitrust laws prohibit competitors from engaging in conduct that would restrict competition. As outlined in the FTC’s comment, the laws are founded on the premise that competition among sellers in an open marketplace gives consumers the benefits of lower prices, higher-quality goods and services, greater access to goods and services, and innovation. At one end of the spectrum, the laws summarily prohibit obviously anticompetitive activities, such as price-fixing or market-allocation agreements between competitors. More complex, however, is the treatment of restrictions in the context of activities that otherwise increase efficiency and benefit consumers, such as collaborations of healthcare providers.

The FTC cites the history of federal antitrust enforcement in the healthcare arena, which has resulted in very few challenges among thousands of arrangements reviewed. The FTC’s focus in challenging consolidations or collaborations in the healthcare area has principally been on conduct that may result in collective negotiation of reimbursement rates with commercial providers. The FTC firmly believes that such collective negotiation—particularly where the collaborating providers represent a substantial portion of competing providers of a particular service or specialty—is likely to result in increased provider bargaining leverage, increased reimbursement rates, and eventually higher premium and out-of-pocket costs to consumers.

State vs. Federal Oversight

The FTC’s comments assume that the COPA will shield anticompetitive conduct, and expressly do not address the question of whether state antitrust oversight will be sufficient to maintain competition in New York healthcare markets. But oversight by the NYAG’s office under the state antitrust laws—which closely track the federal antitrust laws—is at the root of the COPA regulation. This is consistent with a growing trend in state healthcare regulation. Several states, including New York, Massachusetts and Connecticut, have created new state regulatory bodies and established review systems designed to give the states more control over the competitive dynamics in the healthcare system, often to the exclusion of the federal antitrust agencies. The FTC has submitted comments objecting to these and other state initiatives on the basis that they are often based on improper characterization of the limitations of the federal antitrust laws.

In deliberately avoiding the question of whether state antitrust oversight will be sufficient to protect competition in the New York health system and New York consumers, while insisting on a continued role for itself, the FTC implies that such enforcement must somehow be inadequate. It is unclear why this should be.

The NYAG’s office, like many other state attorneys general, has a designated antitrust bureau staffed and led by sophisticated, experienced counsel with a track record of successfully bringing enforcement actions in a variety of industries. In the case of healthcare, the NYAG has particular expertise, having reviewed many provider consolidations and other developments, often working closely with the FTC and Department of Justice (DOJ) Antitrust Division.

Possibly the answer lies in the FTC’s concern that the New York Legislature believes that the antitrust laws are inconsistent with the goals of healthcare reform. The comment cites—and strongly disagrees with—the legislative findings in relation to the New York Senate Bill that underlies COPA to the effect that the antitrust laws prohibit collaboration among healthcare providers that otherwise could be beneficial to New York residents. In such a political climate, can the NYAG freely exercise its judgment as to whether conduct under its purview by virtue of a COPA violates the antitrust laws, and implement the enforcement action envisaged by the COPA regulations?

Collaboration Within DSRIP Provider Systems

The FTC comment also raises specific concerns about collaborations among healthcare providers who are members of DSRIP performing provider systems. Although the FTC’s concerns focus on conduct in a provider system with a COPA—which would be immune from federal antitrust enforcement—they offer a useful guide for all DSRIP provider systems about conduct that may be problematic under the antitrust laws.

The FTC’s comment notes that healthcare providers with a COPA may be encouraged to share competitively sensitive information and engage in joint negotiations with payers “in ways that will not yield efficiencies or benefit consumers.” In this regard, the FTC’s focus is primarily on collective negotiations with payers or agreements on the prices healthcare providers will accept from payers (which could be implied from detailed information exchanges about payer contracts and prices). The FTC is firmly of the view that such collaborations or agreements eliminate or reduce competition, leading to higher prices—which are passed on to consumers in the form of higher premiums and out-of-pocket payments—and lower-quality care.

The FTC further notes that antitrust concerns are implicated where such collaborations or agreements are between competing providers representing a substantial portion of any particular service or specialty, which will often be the case with DSRIP provider systems. Accordingly, DSRIP provider system members need to ensure that information exchanges are carefully tailored to the purposes of the collaboration and any exchanges relating to payer rates or existing agreements with payers are carefully controlled. In addition, collaborations on rate negotiations are likely to be a no-go area unless special circumstances exist.

The FTC also raised the concern that even though the DSRIP program is limited to Medicaid, the potential anticompetitive effects of information-sharing or joint negotiation may spill over into commercial and Medicare aspects of providers’ businesses. This could occur through the need to share information about all the participating providers’ patient populations—including commercial, Medicare, and Medicaid patients—to implement properly the value-based payment models contemplated under the DSRIP program. Arguably, such information exchanges and negotiations would also be covered by a COPA for a DSRIP PPS that applies for one. Other DSRIP provider systems, however, will need to establish clear parameters for information-sharing to avoid such spillover effects, which could be a potential violation of the antitrust laws.


Whether or not the New York Department of Health and NYAG take the FTC’s comments to heart in considering the COPA applications of the three DSRIP provider systems, the trend toward individual state management of competition in healthcare markets is likely to continue, as states grapple with the enormous changes in the operation of healthcare systems and the delivery of health services to their consumers. But the FTC will continue to advocate for broad and consistent application of the federal antitrust laws and seek aggressively to investigate and enforce those laws in healthcare markets.

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