Hello, and welcome back to this week’s edition of the Gist Weekly. After taking off last week for Kaufman Hall’s Healthcare Leadership Conference, we’re back with two weeks of news to cover. As always, we appreciate your continued readership and invite you to forward this email to friends and colleagues—please encourage them to subscribe as well!
In the News
What happened in healthcare recently—and what we think about it.
- Amazon One Medical, Cleveland Clinic announce primary care collaboration. Last week, Cleveland Clinic and Amazon One Medical announced an affiliation to improve primary care services in Northeast Ohio. Amazon plans to open several One Medical locations in the Cleveland area that would coordinate care with Cleveland Clinic’s hospitals and specialists. No specific locations have been announced, but Northeast Ohio’s first One Medical office is expected to open in 2025. Amazon One Medical has now struck at least 20 partnerships with health systems in shared markets. Cleveland Clinic joins Advocate Aurora Health and Hackensack Meridian Health as recent systems to bring a brick-and-mortar One Medical location to their markets through this affiliation, planned for Milwaukee, WI, and northern New Jersey respectively.
- The Gist: At a time when other retail primary care chains are pulling back (see our graphic below), Amazon One Medical continues to expand its referral networks and announce new locations. There have been setbacks, such as Google, once One Medical’s largest customer, not renewing its contract for 2025, but One Medical’s pitch to employers appears sound. These partnerships with high-profile health systems offer employees access to convenient primary care services and specialist referrals, which in turn drives business through the health system. The success of this strategy, and One Medical’s eventual profitability, will depend on translating this promise of high-quality care into cost-savings for employers, but Amazon has proven to be patient about swallowing losses while scaling their platforms and services.
- Oracle Health rolling out new EHR in 2025. On Tuesday, the Oracle Health Summit featured a preview of Oracle’s new electronic health record (EHR), which will launch next year. Oracle Executive Vice President Seema Verma expressed that “this isn’t a refurbished Cerner EHR” and touted various AI-powered enhancements, such as Oracle’s proprietary integrated clinical AI agent. The new EHR will offer voice search and navigation, provide AI-supported summaries of patient information, and assist with data analytics on patient throughput and resource allocation. This week, Oracle also announced plans to become a Qualified Health Information Network under the recently launched Trusted Exchange Framework and Common Agreement, which is meant to promote health data interoperability at the federal level.
- The Gist: Since Oracle acquired Cerner for $28B in 2022, its EHR business has struggled, getting bogged down with the Department of Veteran Affairs’ EHR overhaul and losing hospital market share to its primary rival Epic. A redesigned, AI-forward EHR could potentially change the tide for Oracle, but Epic is likewise promising a flurry of AI-powered innovations. The competitive differentiator will not be which company offers the most AI, but rather which deploys AI most effectively. In addition to ease of use for providers, quality control will be a top concern, as a recent study found that 1% of clinical transcriptions made by Open AI’s Whisper speech recognition tool contained hallucinated information not present in the audio.
- Ozempic and Wegovy marked available on FDA shortages list. As of Wednesday, the Drug Shortages list maintained by the Food and Drug Administration (FDA) shows all doses of Novo Nordisk’s semaglutide injections, branded Ozempic and Wegovy, as available. Notably, the FDA clarified that “the criteria for moving a drug off the Drug Shortages list must still be met,” and that this is only a step toward that result. Since entering shortage in March 2022, compounding pharmacies have been allowed to make and market lower-cost, copycat semaglutide drugs. Earlier this month, the FDA reversed its recent decision to remove Eli Lilly’s tirzepatide injections, branded Mounjaro and Zepbound, from the Drug Shortages list. Compounders are permitted to continue production while the agency evaluates further evidence.
- The Gist: Both Novo Nordisk and Eli Lilly have invested heavily to ramp up production of their blockbuster drugs, and their efforts to meet their sky-high demand in the near term are showing signs of success. However, the American Society of Health-System Pharmacists’ drug shortages list, which relies on physician and pharmacist reports rather than drugmaker data, still indicates a shortage for semaglutide. The FDA is exercising caution by not yet removing semaglutide from its Drug Shortages list, as compounding pharmacies continue to fill unmet need for these wildly popular drugs. Their days, however, are likely numbered.
Plus—what we’ve been reading.
- Unpacking the sandwich generation. Published last month in the Wall Street Journal, this piece chronicles “the longer and tougher slog” experienced by middle-aged adults who are caring for their children as well as their parents. With younger adults having kids later and older adults living longer, more people are managing intensive parenting while also trying to support their elderly family members. These caregivers, dubbed the “sandwich generation,” are usually juggling these responsibilities during a critical part of their careers, which can set back their lifetime financial health. As home health aide costs continue to rise, the authors illustrate that the sandwich generation is finding it increasingly exhausting and costly “to manage the longevity that we’ve created.”
- The Gist: Although this caregiving conundrum is by no means a novel issue, it has earned enough of a national spotlight to be addressed by the presidential candidates. Medicare home health expansion, proposed by Democratic presidential nominee Kamala Harris in her campaign’s final weeks, is one of the few new healthcare policies to emerge in this race. In response, Republican nominee Donald Trump pledged support for new policies to improve care at home, albeit not as concretely or prominently as Harris has. Regardless of the election’s outcome, this is a policy problem that will demand greater attention by lawmakers as its challenge to our healthcare system grows. Many baby boomers have yet to reach the peak of their geriatric care needs, and most of them want to age in place, if given the option.
Graphic of the Week
A key insight illustrated in infographic form.
Reassessing retail health disruptors
One year after retail health expansion reached a fever pitch, this week’s graphic takes stock of disruptors’ care delivery strategies. After Walmart, Walgreens, CVS Health, and Amazon made significant retail health investments into 2023, their fortunes and strategies diverged significantly in 2024. Walmart announced in late April the shuttering of Walmart Health, just weeks after touting further expansion. Amid broader cost-cutting efforts, Walgreens reported plans to close VillageMD clinics and Walgreens pharmacies in recent months, and is even considering a sale of its stake in VillageMD in light of persistent pressure from investors. CVS is also struggling to leverage its care delivery assets amid cost constraints and a strategic reckoning. The future path CVS takes remains unclear, as it is reportedly both seeking a private equity partner to expand Oak Street Health and considering a breakup of key business units. Amazon is the last of these disruptors to be holding course by steadily increasing its retail health investments. One Medical’s footprint grew significantly in the first year after the Amazon acquisition, and its membership rolls were presumably given a boost by the Prime discount on memberships (although Amazon does not publicly disclose its enrollment). With Amazon and any other primary care retailer that stays in the game, health systems may find willing and able partners for their access strategies, as referral relationships could drive volumes and boost revenues for both parties.
This Week at Kaufman Hall
What our experts are saying about key issues in healthcare.
Why is it so hard to run a hospital? One area worth exploring is the interplay between the healthcare system and our nation’s changing demographics.
In a recent blog, Kaufman Hall Managing Director and Founder Ken Kaufman explores these changing demographics, with a particular focus on the significant increase in the percentage of Americans who are living solo. It’s long been true that the stronger the family system, the better off hospitals are. But as the concept of the American family shifts, and in this case, unwinds, healthcare leaders need to be attuned to new demands—and nimble enough to meet them.
On our Podcast
The Gist Healthcare Podcast—all the headlines in healthcare policy, business, and more, in ten minutes or less every other weekday morning.
Last Monday, we heard the conclusion of JC’s conversation with Kaufman Hall’s Joyjit Choudhury about what he sees as Medicare Advantage’s make-or-break moment. You can find the first part of their conversation here.
This Monday, JC speaks with Benjamin Hamar, MD, Director of the Maternity Center at UMass Memorial in Worcester, MA, about his system’s postpartum hospital-at-home program. UMass Memorial is piloting the program to allow people who have recently given birth the opportunity to leave the brick-and-mortar hospital and receive medical care at home.
To stay up to date, be sure to tune in every Monday, Wednesday, and Friday morning. Subscribe on Apple, Spotify, Google, or wherever fine podcasts are available.
Thanks for reading! We’ll see you next Friday with a new edition. In the meantime, check out our Gist Weekly archive if you’d like to peruse past editions. We also have all of our recent “Graphics of the Week” available here.
Best regards,
The Gist Weekly team at Kaufman Hall
