Health systems' 2021 was dominated by striking new technology partnerships with tech giants, startups and even each other.
UC Davis Health is opening a cloud innovation center in partnership with Amazon's cloud arm. Google opened an office in Rochester, Minnesota, to strengthen its relationship with Mayo Clinic. More than a dozen health systems came together to launch Truveta, a for-profit data company. And a trio of health systems founded Graphite Health to vet and certify digital health apps.
The year represented a shift in how technology companies are approaching the healthcare industry, said Stephanie Davis, a senior research analyst who covers healthcare technology at SVB Leerink—with an emphasis on supporting healthcare organizations in becoming more efficient and innovative with technology, rather than trying to disrupt the entire system.
"Originally, when big tech was looking at healthcare, they were looking at it as something they could disrupt," Davis said. "It wasn't the right mentality."
Davis said she expects to see more collaborations between traditional and non-traditional healthcare players in 2022.
The key to success for big tech and other industry outsiders will be partnering with traditional healthcare players like providers and payers, experts say.
"Health systems are probably going to play a larger role in this transformation than they've ever played before," said Dr. Denise Basow, who will serve as Ochsner Health's chief digital officer, beginning in January. She joins New Orleans-based Ochsner from Wolters Kluwer, where she was president and CEO of the clinical effectiveness business unit.
Hospitals not only have data that companies are interested in analyzing, she said, but can serve as a "test bed" for innovators to try out new technologies they're developing.
But industry incumbents and new entrants aren't all about joining hands together.
One area of competition to watch in 2022, experts say, will be primary care—as big tech, digital health startups, retail and hospitals all try to carve out a piece of the market.
Amazon Care, a medical care service Amazon is selling to employer health plans, signed its first customers this year. Walmart is acquiring telehealth company MeMD, while CVS Health and Walgreens continue to expand their virtual and in-person primary-care offerings. Then there's telehealth companies like Amwell, Doctor on Demand, MDLive and Teladoc Health rolling out virtual primary-care services, not to mention buzzy primary-care clinics like Oak Street Health.
The primary-care space "seems to be the competitive battleground for all the new entrants in healthcare," said Paddy Padmanabhan, CEO of Damo Consulting.
While tech giants like Amazon, Google and Microsoft have been talking about healthcare for years, in 2021 they took steps that made their presence feel less abstract than previous years—reshuffling their healthcare priorities and striking actual care delivery deals.
Historically, tech giants had been testing the waters in healthcare—"that's gone," Davis said.
Despite skepticism following Haven disbanding at the start of the year, Amazon has made serious inroads. The company signed its first handful of Amazon Care customers, ramped up work on Amazon Pharmacy—a delivery service it launched late last year—and consolidated its Pharmacy, Care and Diagnostics businesses into a combined healthcare arm.
That's on top of striking new deals to deploy the company's Alexa voice assistant and cloud services into hospitals.
Microsoft in April announced plans to acquire Nuance Communications, solidifying its focus on providing enterprise software for healthcare organizations as it strikes partnerships with healthcare companies like CVS Health to digitize operations and co-develop products and serving as the technology backbone of Truveta's data platform.
Google grabbed headlines in August when an internal memo leaked that the tech giant was planning to unwind its three-year-old Google Health division. Since then, it's sought to prove it's not abandoning its healthcare work as it redistributes health projects and teams to the company's research, search and device divisions—kicking off new partnerships to test AI and releasing an EHR search tool it had piloted with Ascension.
"They all have very different approaches to the market," Padmanabhan said of the technology companies.
Padmanabhan said in 2022 he expects to see tech companies pursue more acquisitions in healthcare, in addition to Microsoft's planned purchase of Nuance for $19.7 billion. Mergers and acquisitions of digital health companies had already ramped up in 2021, with 203 deals reported in the first three quarters, up from 132 and 125 in the first nine months of 2020 and 2019, respectively, according to Modern Healthcare's Digital Health Business & Technology.
