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Sachin Jain, whom I respect greatly posted an article on Forbes that stated that Big Tech should buy a health system or basically stop hogging the spotlight in healthcare. I get the frustration but disagree. I decided to put some thought as to what each of the big tech companies should do in healthcare.


Today in health, it, we take a look at Sachin Jane's recent call for big tech to buy a health system. My name is bill Russell. I'm a former CIO for a 16 hospital system and creator of this week health. I said to channels dedicated to keeping health it staff current. And engaged. We want to thank our show sponsors who are investing in developing the next generation of health leaders.

Gordian dynamics, Quill health house site. Nuance Canaan, medical and Kern health. Check them out at this week. All right. Hey, we have a webinar coming up. Just want to make you aware of it. You can find it on our website this week. Health. Dot com upcoming webinars about owning cloud in your organization. We talked to two different health systems.

And a partner who have taken their epic EHR to the cloud. Looking forward to the conversation. Love for you to be a part of it. It's February 24th, 2022. At 1:00 PM. And you can sign up on our website and we would love to have you there. All right. Let's get to today's article. It's really interesting. And I'm glad.

That such and Jean put this out there and I'm just going to get right to it. The title it's in Forbes. What big tech should actually do in healthcare? Let me give you some of the excerpts.

Is anyone else, a little tired of hearing about all the great things large tech companies are going to do in the healthcare space. , he then goes on next couple of paragraphs talks about great respect for these companies and what they've done. He goes on further. The truth is big. Tech has consistently failed to meet expectations when it comes to their investments in healthcare. And here are the four reasons why.

Number one, healthcare operates in a multi matrix environment. Where it is hard to achieve scale. So he gives the example last year, Haven the healthcare venture launched by Amazon Berkshire Hathaway and JP Morgan collapsed. A lot of the ideas that came out of the three-year initiative were enticing, but in the end,

Neither Haven nor its constituent companies. With 1.2 million employees spread across the United States had enough market share. To circumvent the existing payers in the healthcare industry and the incentives. By which they get paid. And then even if they had succeeded in building a new primary care offering or pharmaceutical.

Benefits manager PBM. These new offerings would still have to interface with legacy healthcare systems. Which is why almost every promise of large scale instant disruption is vastly overrated. All right. Number two, we live in a fee for service world and it's changing far slower than anyone anticipated. I think we all know what this is about.

Let me give you a little bit. , they want to improve health, but once you dive into the healthcare system, you discover that is dominated by a model that doesn't actually prioritize the improvement of health. It's a sick care model. , your new devices keep patients healthy and out of the hospital. How do you actually get rewarded for it? Right. So the payment model doesn't lend itself to keeping people healthy.

And the third item managing healthcare means you have to manage risk. And this talks about the insurance aspect of it. These initiatives certainly bring a fair degree talking about their businesses, but they don't involve risk management or insurance as it's better known in healthcare. On the other hand, risks determines costs.

That's what insurers do they negotiate rates on behalf of large swaths of patients to help manage costs, ensure the risk is calculated. On an enterprise level and then care can be provided to both the sickest patients and those who are relatively healthy for tech companies. This part of the healthcare system is a foreign concept and one, they have.

Yet to embrace. . And then finally margins are small apple recently announced 28% profit margin, Google 27% Amazon 10%. Meanwhile, healthcare services. , profit margins across the entire industry in 2021. We're just 4%.

Okay. I'm going to call foul on this one, because I just went to JP Morgan and the larger health systems. I has shown some of the largest profits I've seen in a long time. Well, over 10% in a lot of cases. And also this is not taking into account their large investment portfolios. So yeah, the profit margins across the entire industry might be just 4%.

I mean your county, a lot of places that don't have a good paramedics, so forth and so on. So, , , but I will agree that the margins are very different. Then they are in the big tech sector. So he talks about a path forward. So should big tech companies give up? Absolutely not. We encourage them to be a part of it.

, but they have to stop tinker around in the margins. And this is where it gets interesting. It's time for big tech companies to get serious about changing American healthcare. They need to show us the art of the possible by changing healthcare from within. Not as customers, but as owners. And the way they can do that is by acquiring a large health system and integrating advanced tech driven health solutions with solid risk management operations. Under this model, they could demonstrate how operations could get leaner, how whole patient care.

Can supplant fee for service care, how payers and providers can be integrated in how administrative burden can be lowered. There's precedent for this. He talks about Amazon dabbled in the grocery business, but it wasn't until Amazon purchase whole foods that the tech company truly showed. How it could all tie together, low cost home delivery, technology, and brand loyalty into a compelling business. Healthcare now accounts for 20% of the us GDP everyday millions of private equity dollars flow into a host of companies focused on tele-health risk management solutions and the treatment of various elements.

The result has largely been confusion. It's time for large wealthy tech companies to dive into the pool. , by a big health system and implant a coherent vision that will improve care while lowering costs. Until that happens. Spare me. The press release. All right, so there you have it.

He posted this on LinkedIn. I did comment on it. My comment was great. Respect. For Sasha and Jane, a true leader in the industry. , but I don't believe that it makes any sense. For a big tech company to buy a healthcare system. Because of that, I would say, look. It's missing the point. Amazon is in the rapid distribution business. Whole foods gave them that distribution at scale.

They want to be a supplier to healthcare, but that's what they want to be. They want to sell drugs to healthcare. They want to sell supplies to healthcare. , they want to sell food to keep people healthy and now they have Amazon care. But remember Amazon care came to being mostly because they wanted to care for their own employees that exists across

the region, the reason that Haven , came into existence was to address that problem. That those three companies had, well, when they broke apart, didn't solve the problem. Amazon care was born. It's now in 50 states and continues to, , gain attention of health systems.

Because of the services it provides, but clearly there's gaps. I mean, it's only going to provide a certain level of service. Apple wants to sell health devices to consumers. That's what they want to do. And that's what they are doing. Oracle and Microsoft get paid handsomely by healthcare for software, Google sells information, and that's what they do well.

, and at the end of the day, the business models don't align. There is almost no way that a big tech company should buy a healthcare provider. And if they do, I'm selling their stock tomorrow. , they're a partner and their press releases make us better by showing us the art of the possible. So the question becomes, what should they do? All right. So I'm going to rattle these off. What should apple do? Amazon Google, Microsoft.

, Facebook, Salesforce. And what should health systems do? Ready for this. What should apple do devices? Absolutely. They should continue to do devices. No one does it better love what they're doing. I love their ecosystem. , but they should strive to solve the interoperability problem in healthcare, specifically, patient centric, interoperability, they have the record, not epic, and it moves with me and my phone or whatever device I happen to be carrying, , from caravan you to health venue, back to care venue. That's what I'd like to see apple do.

What should Amazon do? I've often thought that Amazon is probably the best position to be a health company. , they have the biggest swath of data on every us citizen. , grabbed the health and claims data and they have what we have turned for a while. The whole patient profile. They can go in any direction from there, from insurance and risk, with negotiated contracts, to, , integration, with tools, to provide data in one direction and services in the other. , they can really go in a lot of different directions.

, buying a house with some though it makes no sense. That's what Amazon should do. They should continue down that path that they're doing. Amazon care. , we can talk about that on another podcast and where that fits into the whole scheme of things. What should Google do? Make Dr. Google the best doctor he or she can possibly be. We mocked Dr. Google, but, but she sees more patients every year than any health system.

Financially, integrate that into the intake process for health systems, help us to care for people before we know that they even need care and connect them to the right services. Okay. , what should Microsoft do? Absolutely nothing. They're doing exactly what they should do that. I've often called them an arms dealer and always have been, and they always will be in every industry they'll sell to anybody competition. They'll sell all their wares from their AI engine, all the way down to their Microsoft office products.

, sell your powerful tools to anyone that can afford them. What should Facebook do? Hopefully very little or nothing. If anything else just do philanthropy, right? Keep giving to hospitals. That's that's fantastic. I can't imagine given your history that I want you to do anything in healthcare. , what's your Salesforce to experience and CRM for healthcare, help us to increase our touch points at the right time and to greater effect. That is what you do in other industries, help us to do this better.

All right. Finally, what should health systems do? You know, stop hoping for big text failure in healthcare and partner with them towards a better future for the communities that we served, adopt technology that will improve healthcare quicker and be willing to take risks, stop making decisions that protect the status quo and jobs.

If someone can help let them help and root for them to succeed. All right. That's all for today. If you know someone that might benefit from our channel, please forward them a note. They can subscribe on our website this week, or wherever you listen to podcasts, apple, Google, overcast, Spotify, Stitcher.

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