Partners or Predators?

Casey Pratt: The Gary Bisbee Show engages with leaders in different sectors of the healthcare economy, with the aim of highlighting insights related to some of the most important challenges in healthcare. In this episode, we will consider the changes and opportunities that are being provoked by new private entrants into the field of healthcare. It is a question of considerable importance, and healthcare leaders are figuring out how to respond in real time. This is how Gary often poses the question to recent guests of the show:

Gary Bisbee: Looking at large cap companies like CVS and Walgreens, Walmart, now Amazon, that are elbowing their way into primary care. Does that concern you?

Casey Pratt: Today, we will hear replies from Pete McCanna, CEO, Baylor Scott & White Health, Steve Glass, President and CEO, Medical Mutual, and Richard Pollack, President and CEO of the American Hospital Association. First up, let’s listen as Pete McCanna provides a summary of the situation as he sees it in 2023:

Pete McCanna: the fact that they’re spending so much capital, elbowing their way into primary care, is an indication that there’s something wrong there that we’re not being responsive, you know, because they wouldn’t be able to do that unless the patients and customers they’re giving them some product that we’re not our service, we’re not giving to them. So that the convenience of that the date of that the integration of that with their their app and their data platforms is all attractive to those customers. So that’s, that’s one read we have from that. The other is related. And that is I really believe that this disruption will eventually coalesce into a partnership that health systems have with organizations like that, that, that patients don’t want all this fragmentation, right, that those health systems that are even able to develop, really an accessible, navigable ecosystem that provide you all the products and services you want, where and when you want it are going to be the winners and the winners in the customers are going to want those. So I think as much as we see some of these disruptors as competitors, we have to be mindful in the short term in the long term. Our orientation is how can we evaluate all these companies both large and small, and develop a partnership with what we believe are the winners and if we can do that will ultimately provide our customers what they want?

Casey Pratt: Mr. McCanna understands that institutions do not need to fear every disruption. Partnering with private companies might lead to improved care—a win/win, if it’s done the right way. Next, let’s hear from Steve Glass, as he describes the insurer’s perspective on the question:

Steve Glass: it’s a capitalist society. So we’ve got these companies are finding opportunities, they’re finding inefficiencies in the marketplace, and they’re trying to address those inefficiencies. You know, these private equity companies and for profit companies typically don’t look to put their money in a place unless they see inefficiencies in that marketplace. So I think from one perspective, it is an opportunity for providers to look at that same space and say, Look, we have to innovate in that space, we have to think about how we do that. And I think it’s the same thing with the insurers in the marketplace as well. You know, I think you have to look at that and say, if somebody’s coming into that piece of your marketplace, is because they see an opportunity, they’re looking to innovate in that space. And I think that is actually the beauty of, you know, a capitalist society that it brings that kind of innovation with it. So I look at from the perspective of that’s just means we have to step up and figure out how to compete. I do know, understand the worry of the disintermediation. on the provider side of that, you know, the segmenting of the healthcare component. There’s a lot of strong feelings about the inefficiency that can be created by that. But I think we have to address that and figure out if you want to keep that population together and manage it, you know, from, you know, birth to the grave, you got to figure out how to be as efficient as you can in each one of those segments.

Casey Pratt: Mr. Glass takes the practical and realistic view that the market will always favor efficiency. Hospitals and other traditional healthcare institutions will have to elevate their service if they hope to remain relevant. Now, let’s hear from Richard Pollack, who adds an important note of caution about the new entrants:

Richard Pollack: I’ll tell you where the reason is to be concerned, but I’ll just say also, I think what it’s important to recognize that, you know, for hospitals, you know, listen, we’re always going to be there to provide essential public services, as long as we can survive the financial and workforce challenges that we face. But you know, when it comes to providing Trauma Services, when it comes to provide, it’s just, it’s diagnostics and therapies, sophisticated surgeries, I don’t see that happening in the CVS, or Walgreens. So you know, we, we have a foundational role that we play in providing essential services that is going to need to be financed properly. And that involves an investment that involves, you know, the public, for sure. Now, you know, the question of how we view them. And I’ll tell you, some of these folks need to be viewed as partners. And we can work together as we build systems, and learn from them in terms of partnerships, whether it’s in digital care, whether it’s in making Campbell convenient, whether it is trying to, you know, find ways where we can both be productive together. The downside is a lot of them, while we move to our clinical integration of a lot of what they’re engaged is in this integration on you got to worry about the continuity of care to the people that they are engaged with. But even more fundamentally than that, while some of them are partners, some of them are also predators, you know, they have very, very deep pockets. They don’t take care of poor people, and only take care of people that are well insured. They don’t take Medicaid, in many cases, they’re not open 24/7. And are they don’t have nearly the same regulatory accountabilities that we have, and they don’t provide any benefit. So you know, they are in a different place. And in some cases, you know, they aren’t predators. I wish they were more partners.

Casey Pratt: Change is coming, and when it comes, it will happen faster than we thought it could. Each of these leaders help us to understand the nature of the crucial challenge posed by private companies to the existing order of things. Responses to this challenge may be determined locally in some cases, will vary according to sector, and will be evolving over the next decade. Wise action begins with clear perception, and this issue is one to keep your eye on.