by bed size - despite reporting a $23 million operating gain in the first quarter of its fiscal year, the system ultimately had a $397 million net loss for the quarter ending on September 30. CommonSpirit Health: At An Inflection Point For Digital Healthįor CommonSpirit Health - the result of a 2019 merger between Catholic Health Initiatives and Dignity Health, and the fourth largest healthcare system in the U.S. While Steward continues to invest in innovation, including new technologies like AI, much of the health system’s investment is in support of value-based care and the tenet of “right care, right time, right place,” says de la Torre. The partnership, through a16z’s Bio+Health Fund, creates a formal process for getting a16z-backed offerings to Bassett for consideration. Also in November, VC firm Andreessen Horowitz announced its partnership with rural health system Bassett Healthcare Network. In November, VC firm General Catalyst announced a number of new health system partners, bringing its roster to 14 system collaborators. Says de la Torre, “That’s a patient and physician focused move that is a bet on the future of care – one we are most definitely a part of, but not in the same owned, four-walls way we had historically operated.”ĭe la Torre is also encouraged by the increase in venture capital (VC) and health system partnerships, whereby health systems become the “test beds” for VC firms’ digital health portfolio companies’ offerings. Regarding the latter point, de la Torre referenced Steward’s recent deal with CareMax, the now-exclusive value-based management services organization for Steward's Medicare network, which moves care from the hospital to a lower cost, more coordinated model. “Pressure on traditional health systems provides great opportunity for both digital health companies and organizations like Steward to digitize themselves, or in some cases, cannibalize themselves.” “The way I see it, this environment provides young health tech companies and digital health with tremendous opportunities,” said de la Torre. Having been at the helm of Steward as CEO since 2008, de la Torre has weathered tough times before, but sees a bright spot ahead for digital health and innovation within hospitals and health systems. Ralph de la Torre is the founding Chairman and CEO of Steward Health Care System Ralph de la Torre Based in Dallas, Steward provides care globally and nationally, including across Arizona, Arkansas, Florida, Louisiana, Massachusetts, Ohio, Pennsylvania, Texas, and Utah.ĭr. Steward is the largest physician-owned private for-profit healthcare network in the country, with more than 5,500 providers and 43,000 health care professionals caring for 12.3 million patients a year. Hospitals and health systems are no strangers to small margins, but the current economic climate means there is an even greater need to be efficient operators, regardless of any payer negotiated payment rate increases, says Steward Health Care System chairman and CEO Ralph de la Torre. With all of these factors at play, how are health systems considering future investments in digital health? Are health systems pulling back the throttle? And, what should digital health companies be doing to be the most attractive option? Steward Health Care System: Innovating around Challenges And as big tech and retailers continue wading into the care delivery waters, it puts even more pressure on hospitals and health systems to up the ante when it comes to digitizing healthcare delivery and investing in digital health capabilities. Moreover, many of these newer care entrants have the existing tech infrastructure and capabilities to provide patients with a more digital, consumer-friendly experience. “New entrants in the marketplace are disintermediating traditional care models, including high-tech companies such as Amazon, an explosion in street-corner retail converting to care centers, virtual-first companies such as AmWell, and finally, payers as providers,” said Marx. More Options, More Competitionīoth hospitals and health systems continue to face competition from burgeoning retail and ambulatory care centers as well, where even traditional players are exploring new models of care. Marx, a veteran health IT leader and former chief information officer (CIO) at Cleveland Clinic, sees the nursing shortage, “generally-modest reimbursement rates,” and the shift to outpatient and hospital-at-home models as adding to the “bearish reality” that hospitals and health systems have faced in recent years. “There are multiple forces at work colluding to erode profitability,” says Ed Marx, CEO of healthcare consulting firm Divurgent.
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