I'm sure you already know this, but the news is reinforcing it, so I thought I'd do the same.
today in health, it we're going to talk about primary care. Is the battleground talk a little bit about economics in the process? My name is bill Russell. I'm a former CIO for a 16 hospital system and create, or this week health. Instead of channels dedicated to keeping health it staff current and engaged.
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Primary care deals. Okay. And it's going to go through and essentially say, Hey, New York times reported this and that. Everything else. Here's the, here's the net of the article. Several recent multi-billion dollar deals have seen more primary care physicians joined large corporate entities. Including United health groups, Optum CVS health, Walgreens boots Alliance, and Amazon.
Let me give you some of these deals. Optum acquired several physician groups in the last year and now employees, or is affiliated with more than 70,000 physicians, 70,000 physicians. More than any organization in the country. It also has spent a combined 13.2 billion to acquire change healthcare. Hey, healthcare data and analytics company, and L H C group a home health business.
So, if you're wondering what United healthcare thinks, the future of healthcare is there you go. 70,000 physicians, home health. Change healthcare and analytics. That's just part of their overall model. , CVS health acquired signify health. Four 7.8 billion in may of 2022 outputting United health group and Amazon among others. See United health group one did even more.
They added 10,000 clinicians to its network. And this month, it completed a $10.6 billion acquisition of Oak street health, which added more than 170 medical centers across 21 states. So CVS is ramping up primary care physicians as well as others. Amazon has also been making healthcare strives in February.
Acquired one medical. Virtual and in-person primary care company for 3.9 billion. That deal gives Amazon access. To more than 200 physicians offices and about 815,001 medical members. Okay. That's members. That's not physicians still. , 200 physician offices. So a lot of physicians. Going about their Phillips MD, which is a majority owner by Walgreens boots Alliance completed its estimated $8.9 billion acquisition.
, summit health city MD. In January the deal combines village practice management at summit health. The parent company is city MD urgent care centers and adds more than 2,800 providers to its network. Payer Cigna has also invested in a combined company and will serve as a minority owner in village MD.
, the primary care mark I'm completing, there are clear primary care market. Now flooded with competitors is expected to become a significant healthcare battleground, but some leaders on Capitol hill have called for the FTC to dive deeper into these deals for potential antitrust violations. Elizabeth Elizabeth Warren Democrat, Massachusetts told regulators in March.
That she fears the acquisition of thousands of independent providers by a few massive healthcare mega conglomerates could reduce competition on a local or national basis hurting patients and increasing healthcare costs. Okay. So, gosh, there's, first of all, the reason I cover this article. And we, we tend to stay at the intersection of technology and healthcare.
Is because there will be a shortage of primary care docs at the local hospital. If there isn't already. And there is already, I know there is already. But there will be an even more. Constrained resource of primary care docs. What are you going to do to address that you need to make the doctor currently have much more efficient and you need to be able to, ,
Tracked. , new docs, you need to be able to make them efficient in your model. So for the sewn, you get the picture. There that constraint will be there for the time being for a long time coming. Now we are, we're focused on nurses. We're focused on a lot of things right now. I never take your eye off the ball for primary care docs, primary care docs are the entry point into your house with some there, the referral pattern into your health system in a lot of cases.
So a lot of, a lot of care starts there and then moves out from there. So now you have the largest payers in the country acquiring primary care docs because they want to control that flow. The flow of the patient, where's the patient going? And they want to direct it because they're already getting paid. They want to direct it.
To low cost, high quality providers wherever possible. And so that's going to become more and more the driver. So again, quality, huge, , moving forward, but cost is going to be huge. Moving forward. We're being relegated into this, this path. Where essentially we have to be a, the lowest cost we possibly can be highest quality we possibly can be because we are not controlling the patient anymore.
The patient is going to be dictated by the primary care docs. Primary care docs are going to be bought up by all these, , other companies. And they're going to be directed. So. , you know, depending on who I'm talking to, if I'm talking to senior executives, I would say. Man get in the game here. I mean, this is, this is an area you have to really keep an eye on and make sure that your primary care docs are well taken care of. And there are not going to be moving out of your system. They're the lifeblood of any.
, , delivery network or hospital system. And once they go in another direction, then your, your referral patterns, your, your patterns, your flow, all changes. Okay. So take care of those. If I'm talking to it. Gosh, we've got to be thinking about. Massive amounts of efficiency. We've gotta be thinking about how do we make those primary care docs.
, their, their lives easier. What can we, , what tools can we give them? How can we make it more attractive to work within our facility? And so all the things that go around that are incredibly important.
All right. So let me talk to you for one second about economics. I remember when my son went to school, we, we went to school, I guess, 30 years apart, roughly. And so I went to school in the eighties. He went to school in 2010 ish timeframe. And we both studied economics and it was really interesting because it it's almost as if we studied.
Two completely different sciences. , Back when I was going to school, we really did study the basics of economics. And we looked at it from a lot of different perspectives thing I liked about economics is it's a advanced problem solving essentially. So. You have a set of variables, you just, those variables and you see how things turned out, but you can't. , you can't isolate all the variables, so you're constantly. Looking at models , that get tweaked and move in various directions. And I remember. Him coming home and we were discussing economics. As you would do at the Russell household. And, , he was sharing some things. He was learning in economics and I thought.
I have no idea what they're teaching him. , because economics has sort of been politicized and, there's some. People who have actually received Nobel prizes for their work and economics that I think are just absolute quacks , And at the end of the day, Here's what Elizabeth Warren says. I'll give you an example of this. Elizabeth Warren says.
, in March that she fears that the acquisition of thousands of independent providers by a few massive healthcare mega . Conglomerates. I could reduce competition on a local and national basis hurting patient and increasing healthcare costs. She was she's right, conceptually about the whole thing until she throws in the word could.
In economics. When you reduce the number of people that sell a service or a product, the price goes up. The competition goes down, the price goes up. Period. End of discussion. It's one of the reasons our drug costs are so high.
We have three major PBMs and therefore the cost of drugs is controlled by three major players. We're getting to the point where primary care is being controlled by fewer and fewer and fewer players. So naturally. That's going to reduce competition. On a local and national basis, and it's going to hurt patients by increasing healthcare costs. She threw the word could in there because that's what happens when you look at things through a political lens, she's worried about who am I going to offend? . It could be.
A company in Massachusetts that is whatever that she doesn't want to say something negative about at the end of the day. Less competition. Bad for the economy. Don't look at it through a political lens. It's just natural. There's only two people selling lemonade . The cost of lemonade is going to go up. If there's a hundred people selling lemonade, don't worry about it.
Go get your lemonade because you could always go across the street. Economics works on some basic fundamentals. Which is, , the more transparency you have in the system, the better the economic model is going to happen. So the free flow of information. Is fundamental for I highly working.
Capitalist market. So if you have the free flow of information, Then you have to insert in their choice. Free flow of information and people have choices. And obviously when they have fewer providers, they have fewer choices. If they have many providers, they have many choices and we have this problem in healthcare
and more and more. We are seeing it. There's a mass. We have. The number of payers has gone down significantly. So you essentially have 3, 4 major payers in the country. And we are, if it feels to me like we're well, on our way to this mass consolidation of healthcare providers in the name of economies of scale and those kinds of things, but at the end of the day, it's not economies of scale is fewer competitors. So when you have fewer competitors,
It isolates you from, , having to reduce your rates. And at the end of the day, this is not going to be good for patients. The cost of care is going to go up and what you're going to have at some point. The. Call for the FTC is right here. At some point, you're going to have a government and the healthcare.
, machine. Come head to head. And, you know, are we going to have a Teddy Roosevelt of this generation that looks at healthcare and says, you know what? This is not good for patients. The cost of care keeps going up. And quite frankly, I don't know who Teddy Roosevelt's going to be. I think a lot of people would think it's
elizabeth Warren and I would have agreed somewhat until she used the word. Good. , I think we definitely need somebody to start looking at. This consolidation of players with that being said, it's the world we live in. We have to prepare for this world. We have to be. , in front of this world, how do you make your primary care physicians?
, much more efficient. How can they see more patients? How can they be more effective within your health system? How can your health system be more attractive to those primary care docs? Because, quite frankly, once that's gone, then you just become , a low cost high quality provider, which is.
Not an easy. , calculus to pull off.
Well, I hope my parents are happy. I I'm using my economics degree. I know my dad always wondered if I was ever going to use that economics degree. And, , thanks for indulging me a little bit, going down that path.
All right. That's all for today.
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