Healthcare News of Note: CVS finalizes purchases of Signify Health, Oak Street Health, moving into home healthcare and primary care
- CVS Health has completed the acquisitions of Signify Health and Oak Street Health, expanding its efforts to implement a value-based payment ecosystem focused on holistic care.
- Chatbot responses to patient’s questions were preferred over physician responses, earning higher rankings from evaluators for both quality and empathy, according to a recent study.
- Increasing rates of depression, obesity, gun violence, and sexual and emotional abuse are among the multiple challenges to the mental and physical health of children in the nation.
Over the past few weeks, I have found these industry news stories that should be of interest to healthcare finance professionals.
1. Completed acquisitions put CVS Health in position to disrupt segments of healthcare
CVS Health in recent weeks has finalized the purchases of Signify Health and Oak Street Health for a combined $18.6 billion.
With the acquisitions, CVS Health gains a foothold in both the home healthcare space and primary care, adding to its retail care capacity, Aetna health plans and pharmacy benefit manager business.
The antitrust waiting period for each deal passed, allowing the transactions to close. In theory, however, regulators can still challenge the deals.
The Oak Street Health deal
The $10.6 billion purchase of Oak Street Health, completed on May 2, brings an asset that has developed a care model focused on promoting whole-person health, including by addressing social determinants as part of primary care encounters. The company has facilities serviced by 600 providers in 21 states.
In a blog post earlier this year, Oak Street noted that 42% of its patients are dually eligible for Medicare and Medicaid. The company reports reductions of 51% in inpatient admissions and 42% in 30-day readmissions for its patients, compared with Medicare benchmarks.
“Combining Oak Street Health’s platform with CVS Health’s unmatched reach will create the premier value-based primary care solution,” CVS Health President and CEO Karen Lynch said in a February news release announcing the purchase agreement. “Enhancing our value-based offerings is core to our strategy as we continue to redefine how people access and experience care that is more affordable, convenient and connected.”
The Signify buy
The $8 billion Signify deal closed in late March, giving CVS a major presence in home healthcare. Signify’s network of 10,000 clinicians across all 50 states visit customers in their homes “to identify chronic conditions, close gaps in care and address social determinants of health,” according to a news release.
“This transaction advances our value-based care strategy by enhancing our presence in the home,” Lynch said in the news release.
The release adds, “Signify clinicians can have an even greater impact by engaging with CVS Health’s unique collection of assets and connecting consumers to care how and when they need it.”
The big picture
Once all of the vertical integration is complete, CVS Health expects to become “the premier multi-payer Medicare value-based care platform,” Shawn Guertin, executive vice president and CFO, said during an investor call in February.
Although both Signify and Oak Street will operate as payer-agnostic companies, the new acquisitions clearly expand the managed care capabilities for Aetna in its Medicare Advantage (MA) business line. CVS Health is looking to shore up its MA operations after Aetna’s National PPO plan experienced a drop from 4.5 stars to 3.5 in CMS’s quality ratings for 2023. Patient survey data was a key factor in the decline, Lynch said at the J.P. Morgan Healthcare Conference in January.
— Nick Hut, HFMA senior editor
2. Chatbot answers to patient questions preferred over physician responses in nearly 79% of evaluations, study shows
Chatbot responses to patients’ questions asked on a public social media forum “were preferred over physician responses and rated significantly higher for both quality and empathy,” according to an April 28 article in JAMA Internal Medicine.
“In this cross-sectional study, a public and nonidentifiable database of questions from a public social media forum (Reddit’s r/AskDocs) was used to randomly draw 195 exchanges from October 2022 where a verified physician responded to a public question,” wrote the authors. “Responses were randomly ordered, stripped of revealing information, and labeled response 1 or response 2 to blind evaluators to the identity of the author.”
Evaluators preferred chatbot responses to physician responses in 78.6% of the 585 evaluations.
- Chatbot responses were rated of significantly higher quality than physician responses, with a 3.6 times higher prevalence of “good” or “very good” quality responses for the chatbot.
- Chatbot responses were also rated significantly more empathetic than physician responses, with a 9.8 times higher prevalence of “empathetic” or “very empathetic” responses for the chatbot.
“These results suggest that artificial intelligence assistants may be able to aid in drafting responses to patient questions,” wrote the authors.
Authors noted that further research into the use of AI assistants for answering patient questions “is necessary before any definitive conclusions can be made regarding their potential effect in clinical settings.”
For additional insight from HFMA on the use of AI in healthcare, see David W. Johnson’s column: “AI and the rise of human-machine collaboration in healthcare” published in the March 2023 issue of hfm.
3. Children in the United States face multiple challenges to their physical and mental health
Increasing rates of depression, obesity, gun violence and sexual and emotional abuse are among the “multiple challenges” to the mental and physical health of children in the nation, according to an infographic published April 17 by the NIHCM (National Institute for Health Care Management).
“The State of Children’s Well-being in the United States” infographic shares several statistics, including:
- 1 in 25 American five-year-olds today will not make it to their 40th birthday, with leading causes of death being “overwhelmingly by external causes” such as overdose, gun violence and dangerous driving.
- 20 million Americans ages 3 to 17 are estimated to currently have a mental health disorder.
- 42% of high schoolers had persistent feelings of sadness or hopelessness in 2021.
- 93%of children were immunized for all required vaccines during the 2021–22 school year; however, 95% is required for herd immunity.
Tips for promoting health and well-being
The infographic includes several ways to promote the health and well-being of children, including:
- Expand the mental health workforce and early mental health screening through schools and pediatricians.
- Improve messaging from trusted messengers to increase vaccinations.
- Expand access to health coverage for children and eliminate barriers to accessing coverage and care.
For additional information from HFMA on some of these issues:
- Read “Improved access and quality of care are keys to solving the nation’s mental illness crisis,” a Q&A with Thomas Young, MD, chief medical officer and founder of nView Health in Atlanta, and a long-time advocate for improving mental health in the United States.
- Read “Healthcare News of Note: How to prevent pediatric mental health revisits” published Jan. 13.
HFMA bonus content
Read the latest original content from the May issue of hfm, including:
- The cover story “How the CEO of Mark Cuban Cost Plus Drug Co. aims to upend the PBM model”
- HFMA President and CEO Joseph J. Fifer’s column “The courage to embrace change”
- “No Surprises Act — where things stand after 16 months” by Gail Wilensky, a senior fellow at Project HOPE