ChenMed: Preventative, Capitated Care to fight COVID-19

Corona virus has impacted the lives of many but is especially risky for seniors. As the COVID-19 pandemic impacts the US, primary care physician offices need to overhaul their fee for service models. ChenMed is a leader in the market. Their capitation model already supports their high risk patients but they can further benefit seniors by leveraging their high tough telephonic “love calls” to inform predictive analytics around the healthcare and lifestyle needs of their patients.


ChenMed is a family owned, physician run organization that was created to better serve low-moderate income elderly patients. Starting in 1985, Dr. James Chen created ChenMed as a one stop shop where physicians are held accountable for their patients; now ChenMed operates over 65 senior health centers across the US. Their customer based focus meant primary care physicians had panels of 400 instead of the national average of 2,300 patients. This high touch model meant that patients were seen at a minimum of once per month; in comparison, Medicare patients see physicians 2-3 times per year. Physicians were on fixed salary with bonuses as a reflection of performance metrics such as quality and efficiency. Physician pay structure reflects the full-risk, capitation model of ChenMed where preventative value based care is the foundational framework.

ChenMed has its own EHR system and leverages other hardware and software as educational resources for their patients and tools for their clinical and non-clinical staff. Data is stored on a cloud server hosted by AWS and falls in line with HIPPA requirements. Importantly, the internal IT team acts as a partner to physicians. This means that custom builds and product resources are continually tailored and developed with physicians. These digital technologies help support a healthcare worker’s ability to engage patients. Before COVID-19, a patient’s primary clinical experience with ChenMed mostly took the form of in person meetings (again, at least monthly) and ancillary services to support patient needs. These services included automated prescription delivery, dental services, door-to-door transportation, and alternative therapies to name a few. Because of ChenMed’s focus on patient health outcomes, about 97% of patient care with physicians happened in ChenMed sites while 3% of care was delivered at home through telephonic services.


ChenMed in the wake of COVID-19

With the Corona virus pandemic that has plagued the globe, ChenMed, like the rest of the world had to adapt. ChenMed put into place an H3 initiative within the company- Happy and Healthy at Home.  Management reached out to providers and allowed them to expense items that would normally fall outside of traditional, fee for service payment models. As ChenMed receives payment through a capitated model, ChenMed is financially poised to be COVID-19 resistant. Preventative care and patient engagement is part of ChenMed’s history and foundation. That being said, ChenMed’s population is that of highest risk given the data we have thus far.

ChenMed’s patient population

  • 75% have five or more chronic diseases
  • 70% are racial minorities
  • Average age of patients is 73 years old
  • 95% of patients within 300% of the Federal Poverty Level
  • Patients use hospital emergency rooms at a rate 34% below the national average


What this amounts to for operations is a pivot from the high touch in person visits to more reliance on telephonic services. ChenMed forecasted the change in care need and made a hard pivot so that about 95% of patient touches are telephonic while in person appointments are limited. Management believes that these touch points with patients must be more frequent than in person calls because of the difference in how patients perceive a phone conversation and also because COVID-19 has increased feelings of isolation for many individuals with stay at home orders and social distancing guidelines. Increases in “love

calls”, as ChenMed calls them, helps seniors feel connected to their care team and their community. It also helps ChenMed identify areas of need that fall outside of the traditional clinical scope.

This is an opportunity for ChenMed to leverage digital technology in multiple different ways. While it may be tempting to quickly transition to telehealth solutions that teledoc and other telehealth platforms, telephonic outreach and care makes sense for ChenMed’s existing population- many of whom cannot afford high cellphone data plans, smartphones, laptops, do not have consistent access to wifi, and/or prefer communicating through the phone.

If ChenMed were to invest in video calls and other telehealth services, it would be important to make sure seniors enjoy the experience and that its creation or use as a platform integrates into ChenMed’s existing EHR and products so that their core patients are not disrupted. Telehealth (video services and connected medical devices) create a potential to open services to a new market. This could still be focused towards seniors but perhaps those in the higher income brackets where the initial capital investment for hardware is already met, lowering the barriers to adoption and engagement in telehealth services.

An area where ChenMed can leverage their high touches with patients (especially with 1.5-2x increase in engagements from in person to telephonic) is in analyzing not just clinical needs of patients but also barriers to their overall health and lifestyle. Toilet paper flew off the shelves in the US and remains a high demand item for consumers but for ChenMed’s population, added trips to the grocery store can be fatal. This is an area when ChenMed’s ancillary services have come in to help protect these patients from high risk areas. Having predictive analytics around patient needs could prove helpful in maintaining not just the health of their patients and lowering healthcare costs overall, but also in maintaining the relationship care teams and physicians have with their patients. Ultimately this will help strengthen ChenMed’s brand and deliverables within its core market.

ChenMed’s success in caring for its patients is crucial not only for their existing patients, but also for others that no longer have clinics to go to. Primary care offices must change their models as non-urgent medical care has been largely shut down across the nation due to social distancing, stay at home orders, and other efforts towards limiting potential exposure to the virus. Even with Medicare reimbursing some telehealth services, about 60% of traditional PCPs are not using video visits and 87% are limiting well visits and chronic care visits.



Seniors are at high risk and with the COVID-19 pandemic, are afraid of emergency rooms (ERs) and many hospital settings; ChenMed has a proven record of keeping these individuals healthy and out of the ER (when it’s medical sound to do so). Their brand and goals remain the same- improving the healthcare of low-mid income seniors with high comorbidities. The patients who were part of traditional PCP practices now are turning to the market for alternatives. ChenMed is positioned to be an attractive option given its past technology and consumer facing track record as well as its ability to pivot its digital technologies and services to manage and reallocate resources in response to the current environment.




These changes are important in the short term but can be another layer in ChenMed’s foundational structure thinking about longer time horizons. Economies of scale and network effects can be captured with the patient population that ChenMed is targeting and the data that comes from high touch points with patients. Being able to capture, rapidly analyze, and execute upon this data in a meaningful way will be the steps needed to capture market share in the short term as well as retain these patients in the long term. Time will tell in how ChenMed supports their patients and communities through digital innovation, but if the past few decades and recent pivots in ChenMed’s operational structure are any indicator, they will continue to “honor Seniors with affordable VIP care that delivers better health”.




Nike: Overcoming the Coronavirus Crisis with Digital Ecosystem


COVID-19 Boosting Mercadolibre’s Growth

Student comments on ChenMed: Preventative, Capitated Care to fight COVID-19

  1. Interesting post and company, DJ!

    I had not heard of ChenMed before, but it was great to learn about its preventative, capitated care model. It is also impressive to me that PCPs working at ChenMed have a panel size of 400 instead of 2300. I can see how that might translate into more attentive and better care for individual patients. I have seen similar capitated care clinic models try to integrate across different patient touchpoints (e.g. by acquiring pharmacies and labs) in order to have more control over the patient journey. I wonder if that’s something ChenMed has already done or might look more into doing in the future. I also wonder if ChenMed might have data to show that patients under their care are able to get easier access to coronavirus testing and treatment during this pandemic — that would be a huge win for capitated care models!

Leave a comment