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Bill Russell: Today in Health IT, we're going to take a look at Walgreens, who is considering selling off their primary care chain, VillageMD.

And I'm joined with Sarah Richardson today. So we're going to talk about that in just a minute. My name is Bill Russell. I'm a former CIO for a 16 hospital system and creator of This Week Health. CIO A set of channels and events dedicated to transform healthcare, one connection at a time. Today's show is brought to you by Panda Health.

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They can subscribe wherever you listen to podcasts. Hey, Sarah, how are you doing?

Sarah Richardson : I'm great, Bill. How are you?

Bill Russell: Good. You selected this story, so set it up for us. We're talking about the Walgreens Village MD decision here.

Sarah Richardson : The reason I picked it, with Walgreens considering literally fully selling its stake in MD, it was a 6 billion investment for them, and they realized they just kept infusing cash, but not making profit off of their initial investment.

Here's what I find fascinating. When retail started to buy up a lot of the PCP functionality and all of us, the CIOs and practitioners, were worried about losing that pipeline, that they'd pick off all the easy stuff, we'd be left with a higher, more expensive cost of care and the more spaces that were specific to specialty care.

We pivoted to addressing that and now there's this influx of PCPs coming back because guess what? Retail figured out that healthcare isn't easy. Healthcare isn't the most profitable thing when you pick off the quote unquote easy pieces of it because it's all integrated. And so I chose it specifically because And conversations with CIOs and conversations I had as a CIO was like, hey, let's just divest ourselves of all of our PCP business and take stock in the specialty network.

And I'm like, we could, except that there's going to be this whole space of people who still want to be able to go to the doctor that they know in a office setting or the locations or the health system that they know about. So I never believed retail would take over all of our PCP needs and capabilities.

And we're finding that is true. And now there's going to be this space. Influx of PCPs back into the mix. And it's Hey, that's the time as a health system to go pick up all of those PCPs and build that network back up within your own organization.

Bill Russell: it's interesting.

This is the education of publicly traded companies. in healthcare. Healthcare , it's not a market. It's not a normal functioning supply and demand kind of market. And because we've inserted the person who's actually getting the services is not the person who's paying for the services.

So I go to see a doctor, I pay an insurance carrier, the insurance carrier negotiates, and it all comes down. And they experience this and they're like, oh my gosh, this is crazy. And then they get to the same conclusion. Now, granted, it's billions of dollars later and losses and whatever, they get the same conclusion, which is essentially, hey, you know what, it's really hard to make money in primary care.

It is really hard to make money in primary care if you don't have the other things like imaging and surgeries and oncology when you look at where health systems make their money, it's generally in three to four different areas, but it's, there's a whole bunch of things that just feed those things that themselves don't stand alone.

Walgreens has figured that out. CVS has backed off on it a little bit. The only one who hasn't figured it out yet is Amazon. They're still all in on it and I don't know. It feels to me like we will be seeing Amazon make this move as well moving forward. What's the so what? If you're in a health system, you were talking about this, the so what, why should a health system IT employee care about this?

What does this tell them about their business and their strategy?

Sarah Richardson : That's a couple of things. If you look, Amazon did break up the alliance that they had initially, and then they've reopened other aspects of it. So even the biggest organizations that have the ability to absorb the initial fail, if there's a better term for it, are having to retool their approach.

And it's important because, You can't always react to what's happening in the marketplace. You can be aware of it and be prepared for it, but reacting to things like, Oh my gosh, retail is going to take all of our PCP business. You're not going to, you're not going to solve the world's problems with flu shots and sore throats.

And that's what they're figuring out outside of that. The other piece of that is understanding that if the PCP is your primary. entry point into your health system and the one who likely has the most interaction with a patient, then getting that piece right first is really important. What is that physician experience?

What is that patient experience? Have you optimized the workflows inside of those clinics, whether it's in person or through telemedicine? The relationships with PCPs is still the primary entry point that becomes a stickiness factor. And knowing how they best function is important. And it may be slightly different per office based on population, based on what's happening in those neighborhoods, based on the type of reimbursement for certain areas.

It becomes this microcosm research into itself. And that's what I loved about being a CIO that had a big footprint in many of my Stents was when you knew how each neighborhood worked to a degree, you made a tremendous impact on the feeder and the pipeline into your health system because it's always local and it can be down to the neighborhood and zip code level.

Bill Russell: love a whole bunch of the things that you just said. think for IT professionals, we need to understand the business. the business that we're in and not focus on the competition and what the competition is doing. Aware. I love that. Be aware of what they're doing, but understand your business. And so the more that IT professionals can understand how we deliver care, where the inefficiencies are, where the efficiencies are how the money flows through that, where the reimbursements are for those things, the more valuable we become as IT professionals.

Because now we're not just the technology people. We're solutions. We're solution , true solution architects, not just technology solution architects, but people who are solving business problems by injecting technology at the right time, at the right place. And I love that perspective.

And also having gone through a few cycles of this now The number of times that somebody, something like this happens, big tech comes in or others come in and they make their move in healthcare and a whole bunch of people get all I don't know, excited, like the world's going to change, we're in trouble dah people who've gone through multiple cycles of this tend to look at it and go, yeah, it's just another cycle, but a lot of people do get worked up and, .

And. It's one of those things that we should try to understand when a majority of our people are receiving care and fewer people are paying for the care, that's gonna have a significant impact. It'll be interesting to watch. Here in

Sarah Richardson : Florida, it'll be super fascinating to watch because Florida will be impacted before other states.

with exactly what you just talked about.

Bill Russell: Absolutely. All right, Sarah, thanks for teeing this up. Appreciate it. That's all for today. Don't forget, share this podcast with a friend or colleague. Use it as a foundation for mentoring. We want to thank Panda Health for investing in our mission to develop the next generation of health leaders.

Check them out at ThisWeekHealth. com slash Panda. Thanks for listening. That's all for now.