This Week Health

Has there been disruptive innovation in healthcare? Not that I can remember. But we have experienced disruptive forces. What are those forces?

Transcript

Today in health, it CVS by signify health. We're going to take a look And figure out what it means for your health system. My name is bill Russell. I'm a former CIO for a 16 hospital system and creator this week health. Instead of 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, accordion dynamics, Quill health tau site nuance, Canon medical, and current health. Check them out at this week. health.com/today.

All right. Gosh, which article to pull this showed up in about 10 emails I got today. Uh, let's go to FierceHealthcare. Alright. How's how signify health fits into CVS. Their healthcare strategy. So CVS health has taken the first step in its bid to branch, further into healthcare services with its acquisition of signify health executives said on Tuesday, CVS announced late Monday. It's about an $8 billion deal in cash. The retail healthcare giant beat out a number of competitors.

Big names like Amazon and the United health group. To snap up signify. You know, it's not like United health group couldn't have beat them out or even Amazon for that matter for the 8 billion. The question is, was that a good valuation for signifying. Uh, time will tell. Bringing city to finding into the fold advances, the company further into both the home health and the managed services organization, markets.

Uh, this was one of their, their chief medical officer told for your, CVS is chief medical. Officer's told future healthcare. It also builds on the foundation. CVS has built in retail health, through its pharmacies and minute clinic locations. Our relationship with signify help health will help us meaningfully advance.

That strategy in two of the three verticals, MSO and home health. So we're really excited about that. He said, in addition to home health and value based care, CVS flag, primary care as a focus for its expansion efforts. On its second quarter earnings call executive said that the company was eyeing a major play in the primary care market by the end of this year.

Uh, okay. Is there anything else in this article I want to read on a call with investors Tuesday morning, CVS health CFO. Said that investors shouldn't read too deeply into the company's decision. Two first move forward with an acquisition in home health and value based care. He said that CVS has focused on finding potential acquisition targets.

That are the right fit is far more important for us to find the right asset. With the right scale and the right tech and the right team. Hmm. Uh, so you, as a scale and assets also put it in a strong position to support signify Own growth goals as the company. Has a long history of offering payer agnostic services.

Signifies planning to be. In two and a half million homes. That's a significant number. Signify is planning to be in two and a half million This year. Joining up with CVS enables it to accelerate the push. He said the CEO of signified a health. When the deal closes. Uh, let's see. He said that finding a place where the team could largely stay together was also key. We really view this accelerating our roadmap.

to close in the first half of:

I's that will need to be on this. So, uh, what's the, so what on this? Well, there's three pillars for CVS, a strategy. We've talked about that on the show before. And, um, you know, primary care MSO and home For CVS. That's what they're thinking. They are essentially going to disrupt the, what they're thinking about. Ah, let me see if I can find this quote.

This was a good one. Let's see. See the firehouse. The acquisition will enhance our connection to consumers in the home and enable providers to better address patient needs. As we work to redefine the healthcare experience. All right. If I had to wrap up CVS a strategy in one phrase, it would be redefine the healthcare experience. They're looking at the healthcare experience. This is the gap, same gap that Amazon sees, same gap that everybody sees, including health care providers. We see it as well. And we haven't figured out a way to, to fill this gap, but there's an experience gap.

People do not like how healthcare is delivered. It's to episodic. It's uh, it's too opaque. It's uh, uh, it's complex, it's convoluted and it's costly. Complex convoluted, costly, Merry go three CS. Illiteration Um, they want to redefine the healthcare experience and they're going to do that. They're going to look at the home. They're gonna look at, uh, uh, NSO and then they're gonna look at, uh,

The, uh, primary care market, if they're able to do what they're talking about doing. What you can expect from them is a single company that you go to. For health. Right. They'll. They will, at some point take on helping you to navigate the complex healthcare system. Because there are payer. There, they have pharmacies, they're building out the whole ecosystem so that you can go to them and trust them. You can put your trust in CVS, CVS, Aetna, and they will essentially make sure that your care experience is good. Why? Because you're paying them right upfront. If you're an Aetna customer, you're paying them right up front.

And because you're doing that, they're already getting money every month from you. And so they are. Incentive, if you will, this is why the payer makes the most sense as the organization that is going to step into this. Provider of health space because they're already getting paid. They're paid to keep you healthy. They're going to build out, uh, mechanisms to keep you healthy.

Right. Um, I, you know, another quote here, let's see signify house website. I pointed this out a little while back when this was in the running. Uh, or people were talking about this. They have four things, connecting a fragmented system, engaging people, wherever they are improving outcomes with insights. So there's an analytics aspect of it and that data aspect of it and expanding access to value-based care programs. All right. And let's see, where's it at in engaging people wherever they are, are reaching the home.

Uh, into the home community and cross sites of care enables holistic support of individuals, lessening dependence on facility centric care. And for preventing adverse events. So we're going to keep you out of the hospital. We're going to keep you off the hospital campus if you will, out of their buildings and facilities. And not only that, we're going to do it in a way that gives you better outcomes, right? So we're going to prevent as adverse events in doing that.

We're not going to be Willy nilly and just say, Hey, this is a better financial model. We're going to be looking at this from a metrics standpoint, from a. Uh, care standpoint. Uh, a quality of care standpoint and saying, Hey, we're going to, we're going to create a new experience So again, if I had to.

Yeah, boil this whole thing down the CVS strategy. It's that one phrase. It's really rethinking and redefining the, the care experience. And they're doing that by acquiring companies that are already doing that in specific areas. And the next acquisition from them will be in the primary care And that'll probably be somebody who has a.

It will be based on experience. So that's what you're gonna be looking for. Somebody who already The experience So, however that is, it could be a digital foundation technology focused. Um, it could be any number of things. But that's what they're going to be looking at, but they're also going to be looking at scale something that they can take and apply to their foundation that is CVS and scale that up quickly.

What does this mean for the healthcare provider? I said I was going to try to answer that in the beginning. And I'll try to answer it now. And I think what it means is we're losing this race. So there they are redefining what the care experience is going to look At least they have a vision for what the care experience is going to look like. They're not trying to hold on to revenue and they have a revenue model right now that supports.

Changing the way healthcare is delivered. If they're able to make this transition, if they're able to change the way that we approach we, the consumer, we, the, uh, the consumer yeah. Consumer of healthcare. He is looking at things and we, we decide, you know what, I'm going to put my faith in signify health, as opposed to I'm going to put my faith in the healthcare provider. That's across the street.

And, uh, I'm going to go down this new path where it's a relationship. It's an ongoing relationship with a healthcare provider. As opposed to an episodic relationship. With a healthcare provider that is more secure than well care, then. That's going to change the game completely. And that's what they're betting on. And that's what they're investing in. Not only them, Amazon's investing in it as well. United health care is investing in it as well.

And these are significantly large companies that are doing this. The question is, will it impact your market? I can't tell you that you have to look at their footprint in your market. And what they're doing in your market. Um, To a certain extent. I would say that, uh, the, you know, it's the larger markets that have to worry upfront.

The smaller markets, I think have to be worried about a Walmart. 'cause I think Walmart is going to make this same kind of play. A little slower, a little more methodical. Cause that's the way they But they're going to make this same kind of play over time. And eventually they're going to do what they always do, which is they're going to dominate everything.

In the rural markets. And, um, and then they're going to move it into the cities. Once they perfect the model and we will see how that plays Again, one man's opinion. If you have another opinion, drop me a note. Love to hear about That's all for today. If you know someone that might benefit from our channel, please forward them a note. They can subscribe.

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. Gordian dynamics, Quill health towel, site nuance, Canon medical, and 📍 current health. Check them out at this week. health.com/today. Thanks for listening. That's all for now.

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