With the news that CVS has agreed to acquire home healthcare provider Signify Health for $8 billion, the pharmacy giant has made it clear that it intends to disrupt the healthcare industry. The company hopes to make doctors making house calls as ubiquitous as its retail primary care clinics.
The move comes just weeks after fellow disruptor Amazon grabbed headlines with its $3.9 billion deal to buy primary care company One Medical (and subsequent closure of its Amazon Care service for employers).
With Signify Health being a company that relies so much on technology and data analytics, Becker's reached out to healthcare CIOs, chief digital officers and data officers to get their reactions to the CVS deal.
Tom Andriola. Co-Director of the Institute for Precision Health at University of California Irvine Health: I think the deal is very telling on a few fronts. First, it continues the trend we are seeing in healthcare where [mergers and acquisitions] have become more popular in the last 18 months as the companies that have demonstrated successful delivery models are now in demand from companies who want to augment their strategies.
Signify Health reached critical mass in size and scale and clearly became attractive to large players in the healthcare market. Second, if you look at the list of suitors, you see a clear path of everyone wanting to own the front door for the patient and to adopt an omnichannel strategy. Third, this deal reinforces analytics capability as being critical to business and delivery success and not just something that you need to have and be good at.
Scott Arnold. Executive Vice President and CIO of Tampa (Fla.) General Hospital: The track record with retailers making a go within healthcare hasn't been favorable, and it remains to be seen if CVS overpaid for Signify, but the acquisition is the easy part. Making it all work and making the economics work is the hard work and sweat ahead for CVS. I am encouraged by all of the innovation to improve healthcare in the United States and lower the cost of care. Anything that works toward that end and increases access for all people is positive.
Michael Hasselberg, PhD, RN. Chief Digital Health Officer at University of Rochester (N.Y.) Medical Center: The CVS Health acquisition of Signify Health is a huge win for patients and the push toward value-based care. Home care has been a loss leader that is typically underappreciated by health systems. It has been treated as an unsustainable financial drain to our expensive fee-for-service ecosystem that falls within the four walls of our hospitals and ambulatory specialty clinics. Since forming in December 2017, Signify Health has challenged the status quo by leveraging technology to push the boundaries of care delivery beyond our traditional walls and into the homes of patients across all 50 states, while the acquisition of Caravan Health in March set the stage for Signify to become one of the largest national provider networks engaged in value-based reimbursement.
Most health systems are talking about value-based care; forward-thinking organizations like CVS Health are acting. CVS just bet $8 billion that the future of healthcare will be value-based and gained a major competitive advantage by expanding their reach from their brick-and-mortar retail stores into the homes of our patients. Health systems across the country should be taking notes. Staying healthy longer in one's home is something all our patients want. As health system leaders we cannot afford to continue accepting home care as a loss leader, but we need to "fast follow" CVS Health by repositioning it as a core component to delivering cost-effective, high-quality care. We need to continue investing in technology to disrupt the status quo.
Philip Payne, PhD. Chief Data Scientist and Director of the Institute for Informatics at Washington University School of Medicine in St. Louis: I think it's a fascinating signal that there's a nearly tectonic change happening in the ambulatory care space, that the traditional way of delivering ambulatory care, especially primary care, is no longer scaling. And so the question is now, "If the current approach to delivering ambulatory care does not scale, what are the alternative sustainable business models?"
Is it care at home, as the model CVS is steering toward? Is it more advanced versions of virtual care? Is it more robust networks of primary care providers attached to large delivery systems? We see a lot of acquisition happening there. So my take is that CVS is placing a bet in terms of where they think the field is going. And I think there's going to be tremendous change there and we don't know what it looks like.
That's probably one of the most important things that will happen to healthcare in the next decade. Because as good as we are at delivering specialty care, if we can't provide the basics of primary care in the community and where people can access it, all we will be doing is treating people when they're sick, which is not a system that will actually deliver health. It's a remarkable price tag that leads you to believe how much value CVS has put on this space.
Nigam Shah, PhD. Chief Data Scientist of Stanford (Calif.) Health Care: As an individual, as a patient/consumer and a citizen of this country, I am thrilled that somebody is thinking about a service model where a physician or nurse can come to your house. Because there's information that is only available when you see the patient in their native setting. You need to know what their life situation is before offering suggestions and recommendations on what they need to do to get better. So as an individual, I'm super excited.
Putting on my professor hat and chief data scientist hat, this is tough. I don't know how they're going to make it work, but I would be cheering for them because as a healthcare system and as a people we need innovations like this. It makes no sense for you and I to be having to spend three hours to see a doctor for 15 minutes. My hope is that being able to move mundane stuff out from the brick-and-mortar facilities will alleviate some of the issues we face around access and availability. So the right kind of things can be done in a brick-and-mortar facility, because that's a high-cost care venue, instead of just using that to have, say, a 15-minute conversation about "how are you feeling?"
Jeffrey Sturman. Senior Vice President and Chief Digital Officer of Memorial Healthcare System (Hollywood, Fla.): I'm not surprised to see new entrants into the healthcare provider market. Those organizations that are rooted in innovation and have deep pockets, like Amazon and CVS, can and already have provided a level of disruption that can actually be quite positive for consumers. It is a ripe and fertile feeding ground to capitalize on a fragmented, complicated and expensive industry, like healthcare. Our strategic approach for some time now has been not to try to compete with such organizations, but rather look at opportunities to partner. We provide really exceptional care to our patients, have terrific hospital-based services, continue to innovate to meet consumers wherever and however they like, but we also know that many of these new entrants into the market can provide exceptional care and services as well. We look at where we do things best and where others can do things best — it is this collaboration that ultimately will benefit the communities we serve.
Richard Zane, MD. Chief Innovation Officer of UCHealth (Aurora, Colo.): As the advent and advancement of technology has made virtual care a reality, I think CVS' acquisition of Signify Health makes sense, just as it makes sense for Optum to acquire LHC Group. We've shown over the past few years that much of what happens in hospitals and doctor's offices can be done safely in the home, where it's more comfortable, affordable and, ultimately, the best thing for patients.