Becker's Hospital Review

80 CIO / HEALTH IT CVS, Amazon, UnitedHealth using primary care to remake healthcare By Naomi Diaz A mazon, CVS and UnitedHealth Group are utilizing upstart companies that provide primary care, virtual care and in-home care to try to buy their way into disrupting the healthcare industry, The Wall Street Journal reported Sept. 9. Because the U.S. health system rewards more expensive procedures, medical students prefer to become cardiologists or surgeons, causing a nationwide shortage of primary care physicians, according to the Journal. This has led many patients to abandon the relationship with their primary care physicians, leading to worse health outcomes. At the same time, the pandemic has made many patients more comfortable using telehealth and digital health startups. This is where Amazon, CVS and UnitedHealth see opportunity. UnitedHealth's medical provider arm, Optum Care, has been buying multispecialty physician practices, with a focus on managing patients through home, virtual and on- site care. The company also most recently announced that it will provide analytics to 15 Walmart Health centers in Florida and Georgia to deliver value-based care to Medicare patients. Amazon and CVS have a similar strategy. Investments in value-based care —like Amazon's planned acquisition of virtual and primary care company One Medical — can realign incentives as physicians at concierge- style primary care practices like One Medical can earn about double what other family physicians make, Brian Tanquilut, a financial analyst, told the Journal. CVS also reportedly looked at buying One Medical but ended up entering into an agreement to acquire home health company Signify Health for $8 billion. These moves are a testament that there is a lot of money to be made by trying to fix America's inefficient health system, according to the Journal. n "In the fragmented environment, data interoperability, data infra- structure and operating systems that power health systems is import- ant because they can create connectivity amid fragmentation," Ms. Vaezy said. "We've been preparing for this and started to build some of the tech platforms that enable us to become good partners in these types of environments. You can't slow down the natural wave of how the market evolves. We're not trying to slow down how disruption happens in the market; we're trying to respond to it and do what is best for the patients." Providence is spending a lot of time on enabling interoperability and building a connectivity framework for patients to glean value out of the technology deployed. Ms. Vaezy is also thinking about what could come next for the big disrupters. "Most of the companies are publicly traded and they have to go where the dollars are," she said. "ere are a few places where the healthcare dollars are: Medicare Advantage, pharmacy and insurance. ose are a couple of the areas where I think they will go. Insurance would be new for Amazon, but if it were me, that's what I would do." Amazon, CVS Health and other disruptors tend to saturate their tra- ditional core markets and then move into new domains where there are significant profit pools, including the provider space, which is less capital-intensive than hospitals where there is a lot of real estate in- volved. Hospitals are bound by real estate, which is a capital-heavy model for care compared to telehealth. "We haven't moved into a new economic model swily enough to make the economics work for us with our huge fixed cost base," Ms. Vaezy said. "We are still bound by traditional economic models and huge buildings. e disruptors have got the ability in retail to change prices so they can continue to make a margin. We cannot do that." e disruptors are also focused on applying technology to improve quality and lower the cost of care, which could be a big challenge for health systems as companies like Walmart refine their approach to centers of excellence and value-based care. "We need to be really good partners for these folks," Ms. Vaezy said. "e delivery of care is becoming more and more decentralized to all of these different market players to where folks are at home and work. Health systems, we are out of time. ere is this urgency that we need to adopt as health systems that we haven't fully leaned into for many years. Now the financial situation with the vast majority of health sys- tems being the way it is, there is no more room to entrench ourselves or dig our heels around the old models of doing things." Most health systems face big challenges to keep costs down in the in- flationary environment and remain strategic about their digital assets to stay competitive as healthcare becomes more decentralized and fragmented. Ms. Vaezy advised not pulling back on digital spend, but instead making strategic investments in digital technology to prepare for the future. "Digital will be a cornerstone of being a good partner to disruptors going forward," she said. "How you aggregate and capture demand is going to change, and you need to be progressive, especially as the environment gets more decentralized and competitive. Digital is how you do that." n

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