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 Today on Newsday.

(Intro) all of a sudden we move a couple of percentage points, on obesity, because There's been some movement around weight loss that's pretty exciting from a health care delivery standpoint

 My name is Bill Russell. I'm a former CIO for a 16 hospital system and creator of This Week Health. where we are dedicated to transforming healthcare, one connection at a time. Newstay discusses the breaking news in healthcare with industry experts and 📍 we want to give a big thanks to our Newstay partners,

Clearsense, Sure Test, Tausight, Order, Healthlink Advisors, Cedars Sinai, Rackspace, Crowdstrike, and Fortified Health .

Now, let's jump right in.

(Main)   all right, it's Newsday and Lindsey Gerald is in the house, CEO HealthLink Advisors. Lindsey, welcome back to the show.

Yeah, thanks Bill. Good to be here.

I'm looking forward to this. there's a lot of things going on in healthcare as always.

Love to get your take on some of these things and just go back and forth a little bit. There's been lot of talk about Walmart pulling out of healthcare and what that means. And they're not the only ones. we had Walgreens pull back significantly.

And I guess I'm just wondering when Amazon is going to pull back significantly. What are your thoughts on the Walmart pullout?

Yeah, it's fascinating to watch these big retail companies enter healthcare And then pull back. I think we've seen it over and over again.

Very close to where I live in the same little town I live in there's a Walmart Supercenter, and I saw them build probably 30, 000 square feet of dedicated clinic space their parking lot. And I think it opened maybe three months ago, and now I know that's for sale through some other connections I have.

That building on Walmart parking lot is for lease. They're looking to sell that clinic business since they've decided to shut down. And I just think they don't appreciate how complex health care is and the margins that we have to operate at, right? I know last year when the federal government released changes to the Medicare Advantage, the MA plans, which is a lot of what I think Walmart was dependent on took a lot of profit out of how people were making money.

So I think it's going to continue. The Walgreens, you mentioned that as well. We'd actually personally, we'd actually started using that Walgreens Village Medical for one of our family members, and then just got the letter and said, we're shutting it down. Move your medical records, right?

We're I think people deserve a lot better than that, and all of these companies entering space and exiting is not good, ultimately, for the patients, I don't think. Especially when they're, like, eroding away patients from the big care providers that stay here year in and year out. In our town, that's BayCare Health System and Tampa General and Adventist.

Those are the folks that are going to be here while these other ones come and go. So pretty disappointed by it and just wish it wouldn't be happening so much.

I remember having a conversation with the CFO once, and he said, we only make money, it is a large health system, we only make money in four areas.

I'm like, you're kidding me now. And I think it was imaging, surgery, cancer orthopedics. I forget I'm going to miss something there, but essentially that was essentially it. And I said what about primary care? He goes, Oh no. We don't make money on primary care.

that's what feeds those other things. And I was like, then when I see these retail strategies, I don't understand how they work unless you're a payer. I guess they work. Because you're getting that money up front. If you don't have those back end things, how do you make primary care work?

And will we be seeing Amazon make that same move, I guess?

And I remember another time when you and I were chatting, you mentioned the pharmaceutical angle to it, right? If Walmart captures the patients, they have that catchment area of primary care and bring them in, and they can direct all those patients to their pharmacy, Does that make enough of a difference to capture the margin to keep the business open?

Apparently not. Right? a wonder why they stay in that space. But of course, they're going to stay in the pharmaceutical space because there is real margin there. I think it's just in the care provision. I do know based on what we've been hearing here, again, locally, that these Walmart clinics are being offered up to payer organizations, as you mentioned the payers are getting in the primary care business.

Know the payers are looking actively to buy those primary care clinics. that makes sense to me, right? Because you, especially if you're controlling the back end of that at risk life and you're in the care delivery business. That's almost an unfair advantage to the big providers in some way.

it used to be, big tech and retail, and then there was the traditional providers and there's the payers. And now it seems to be becoming more and more of a two horse race. I remember So St. Joe's, we had, almost 35, 40 percent market share in Orange County, California.

And we CVS. So when you went into a CVS MinuteClinic, it was us. We were there. Our EHR was there. We were there. That's what we did. And then it seemed like CVS said no, we can do this ourselves. But from what I hear you saying, it seems like we're going back to the future where they're essentially saying, look, we have this space, there is value to bring these people in here, you get immediate fills of pharmacy, you get, unfortunately, get people buying bags of chips and soda and other things.

So there's still value. They may go back to the payers and providers to say, hey, can you put people in here?

I think those partnerships for the retail side is going to be the way it's going to go. That's what I see. And you're dead on with the chips, right? This is a bit of a tangent, but, Walgreens almost made their number last quarter because of a mango flavored candy that went viral on TikTok.

Not because people suddenly want to go to Walgreens. That was just their branded candy. And so that's where they're going to make their margin, right? And so I think those key partnerships are the way it's going to work. They need to stay out of the direct delivery business. Because I don't think they have the patient at heart, so.

It's interesting. And some of them are payers, right? So CVS is a payer now, we'll see how this plays out. We were talking earlier before we hit record, which always happens. And there's a couple of stories out here on these GLP ones these weight loss drugs that are out there.

And I, I wanted to touch on that a little bit with you. they're springing up everywhere. Does it, will this have an impact on healthcare providers long term?

I've been watching this space pretty closely. For a long time I've had a passion in what, over the last 20 years, why the advent of chronic disease, right?

And so when I get a little bit of time, I have a personal passion around what's causing that and I'll tread carefully here, but I think a lot of it has to do with our food production and quality of food that we introduce into our lives here from Big Agra and Big Food. But these GLP 1 meds are, can move that curve, right?

And cause people to just not eat as much. And so without talking too much about the med, I know they're exploding, right? There are telehealth companies popping up everywhere saying, we can get you on these weight loss meds. I actually nerded out a little bit and listened into quarterly earnings call the other day, a few weeks ago, right?

And when you look at their trail of what meds are in clinical trials coming up, it's all variations of those meds for different diagnoses and diseases. And they said 150, 000 new prescriptions are being written per week for their meds, and that's just with one pharmaceutical company. So when I look at that and think, let's assume the meds are safe they've been through all the trials.

When we look three years down the road, and all of a sudden we move a couple of percentage points, hopefully, on obesity, or on diabetes, or on heart disease, because There's been some movement around this weight loss at large scale numbers. That's pretty exciting from a health care delivery standpoint in terms of health of a population, I think.

I'm optimistic about it. I just wonder how much money that's going to take out of the system if people are healthier. Because right now, it's just going up and up when we think about the impact of diabetes and obesity and heart disease and chronic conditions that follow. I'm optimistic about it.

I'm fascinated by it. I'm watching it closely. I wonder what kind of impact that's going to make. on some of our healthcare providers.

This has been the age old problem. Are we healthcare or are we sick care? And when we become healthcare, when we really become health, and a lot of health systems went out and rebranded as blah blah blah health.

It's we are about health. but the reality is under Fever Service and some of these other models that exist, if we are successful on the health side, we do stuff on the other side. And the thing is, that money isn't coming into health care providers. That money's going to pharma. And so you could see a significant hit on the balance sheet side.

by the way, I agree with you a thousand percent, man, a couple of percentage points. I believe. The amount of sugar we intake is just astronomical. advertising business, it all works against you. You walk into a store, I remember reading a diet book once. It's just shop around the outside.

Cause if you shop on the inside, it's all stuff you shouldn't eat. I'm like, and it's every aisle is loaded with stuff. And you're like, wow. So it conspires against us. So let's assume everybody. It starts to, and it's not everybody, I'm going to touch on that in a minute. But I know that just going to dinner the other night, there's ten people at dinner and two of the people at the table were taking GLP 1s.

And I thought, I wonder if there's another one or two people that just isn't saying they're taking GLP 1s. And is that the percentage? Are we starting to see that kind of percentage? With that being said I think the lowest cost you can get a GLP 1 is like 500 a month. And on average, they're right around 1, 000 a month.

and a majority of the plans don't cover them today, which is another conversation to really look at as we move forward. That's an expensive proposition to get your weight under control and probably indicative of the fact that we haven't been able to get our weight under control.

Yeah right. Access is going to be a huge problem. I know different payers are approving the drugs for different conditions, right? So if you have uncontrolled blood sugar or different things and obesity, it's easier to get approved than otherwise. But a friend of mine is investing in a compound pharmacy.

And that's part of their business model because apparently compound pharmacies can make the drugs because they're on the FDA shortage list. And so it's actually part of the business model there. And with them, it's only 400 a month, but still, I know there's lots of people who can't afford 30 a month.

So there's definitely an unfair advantage there for folks who can afford it.

We'll see if that changes and we'll see what kind of Discussion or conversation we have, the pharmaceuticals try to target that lower price point, or will it just naturally, the way pharmaceuticals work is, essentially works down over time until it becomes a generic, I guess.

It'll take a long time, I'm afraid, though. They're making a lot of good margin at the upper end based on the quarterly numbers that are hitting the street,

yeah. All right, let me give you this one. So, Ascension. Becker's wrote an article. Ascension is praised for their response to this outage.

And really what they focused in on was the transparency. They are, they're putting things out on their website. They're communicating and all those other things. And, think most part, a lot of it is still down today. This has been the better part of a couple of weeks.

When you're looking at, if you were going to write an article about, Hey, their response was good. Is that the only metric you'd look at as transparency? I know it's a good metric from, we want them to be more transparent as change healthcare potentially wasn't as transparent and whatnot, but you know, is there something else we should be like, it feels like getting back online would be the metric did they respond well?

It's been two weeks and. People are still being turned away. not sure I would have written that article.

Yeah, and back online, with what systems, right? I think there's a lot of focus right now. And, I don't dare touch this too much without Drex in the room because I'm not an expert like he is.

But what systems? There's so much focus right now on we need to bring the systems we had back. And I think there's a lot of good business continuity planning that could be going on that says, how do we get back into a service mode, regardless of the system we were just on, so that we can recover and start to provide care.

said than done, but I think there's a lot of business continuity planning that needs to change in our industry and across industry for this ransomware cyber style attack. So I'm with you. I think it's how fast can we return to service? And what kind of plans do we have in place is a really good metric.

that article reminded me a little bit going way back. Remember the Tylenol and the cyanide, right? And they were praised for their transparency there and saving lives. It ultimately did have a big effect on safety and communication and how you communicate to consumers with safety recalls.

I was thinking about that when I was reading that article. I was wondering what will this change, right? So if the sentience pray is good for them, but what will it change about how these things are communicated out and what patterns will we see emerge? I don't know. It's going to be interesting to track that one.

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I'll let Drex handle those kinds of conversations. I'll get us back on. Large language models, ChatGPT-4o, as in O, the letter O came out last week and O meaning Omni. So it can now hear, it can now see, it's bringing all of those senses into the mix.

That's how they came up with 4. 0 came out. it's interesting from a marketing standpoint to watch because they came out with 4. 0 like the day before Google did, I don't know, like 50 announcements. And if you look at the news cycle I think they just completely swamped Google's announcements.

Not that they're not relevant, but from a marketing standpoint, it was pretty amazing. you're talking to healthcare leaders and you're exploring, what's going to have an impact on health care. I'm hearing more and more that there's a belief that, hey, short term, we're maybe overestimating this, but long term we're not giving this enough credence.

This is really going to change the game. I agree with that.

I don't know if most folks realize that yet but the ones who are thinking about it, that's what I'm hearing as well. Without saying specifics, In the ambient listing space, right, we're listing in on a visit and doing documentation, clinical documentation, and creating a note, right?

That felt like that was bleeding edge four or five years ago. I can remember watching the first demos of it. Now, a bunch of vendors are selling it. There's a couple of vendors who are selling it at a very high price. That's going to be commoditized in the next 24 to 36 months with the power of these large language models.

And when it's commoditized, the price is going to drop. So I think that's going to be better for safety. It's going to be more affordable for the provider. And that's just one simple example of where we've got, some vendors really trying to capitalize on that right now. So I think we're going to just see commoditization of different things where there's a lot of special IP around it right now, these models and are going to allow us to just commoditize more to drive costs out of the system.

As long as it's safe, I'm all for it. I think about the percentage of a healthcare systems budget that's spent on software maintenance and subscriptions today. Hey, and I'm ex CIO. I've made a living in this business. I'm pretty discouraged by it, because it's taken a whole lot of money out of care delivery, and I want us to have the ability to drive that cost down some more.

That is the one thing that is getting very little press at this point, but it's starting to get some press, which is we have this, mantra of go to platforms, which is great. I've heard recently from some CIOs that some of the platforms have really dramatically increased their pricing.

And it's not that they're not offering additional services. They're essentially saying, look, our platform can do all these things. Instead of piecemealing it now, you have to buy the whole platform. and therefore the price is X or Y. And so we're going to these platforms. These platforms are a lot harder to migrate from, so the transition cost is prohibitive.

It's almost like they know they've got you. there a better approach or a better solution? We've gone best of breed that has all sorts of issues with it. We've gone, platform and now we have lock in and those kinds of things. Is there something in between or is it just each case is unique?

Yeah, I don't know. There's a better answer right now, but I think, and we do a lot of system selection work there's two major vendors. I'll say not in the core EHR space, just trying to be fair, where we have literally side by side proposals. One vendor's increased their pricing 28 percent the last 20 months.

Another vendor's increased their pricing 31 percent over the last 24 months. Very clear examples, same scale, same product, same platform. And so they're taking advantage of the market, to drive margin. I think you got to be smart about that and use competition to try to drive that down as much as you can.

I don't know there's a better kind of best of breed or niche approach right now. Because some of the platforms in some of the areas do offer an advantage. We're seeing a lot of that in imaging right now. Imaging has very much been a best of breed environment outside your core packs for the last eight years.

Now there's big platform companies coming to play and you get better performance, better productivity, better diagnostic quality. So it's hard to argue against that, but you still got to be smart and use competition to drive the price down.

Are we building out good ROI models? And do we go back and measure those ROI models as CIOs and as health systems? No and no. That's it. that's what I feel like too. And It's one of those things, I don't know if it's an opportunity for someone to come in and help or if it's something that's a discipline that we just need to get better at.

It's like we're moving so fast, like once we get it done, we're not going to go back and look at it. It's we just use it for approval.

And we can take this conversation immediately to governance, right? To say, how do we build that? And and it didn't mean to be crass, but the answer is no.

We do a ton of TCO models. We've built a brand around that in the business. And just a good financial understanding of financial discipline and IT we need more of it. That's for sure.

Lindsey, always great to catch up. Stay cool. Thanks, Bill.

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