Speaker 0: This is where health insurance leadership comes together. Becker's fourth annual spring payer issues roundtable brings together over 400 payer and health plan executives and more than 100 speakers to Chicago April. This year's event includes keynote conversations with the industry's top leaders and former president George W. Bush. For the full agenda and event details, visit beckershospitalreview.com and click on the events tab in the upper right.

We're looking forward to hosting you here in Chicago. Hello, everyone. This is Jacob Emerson with the Becker's Healthcare Podcast. Thrilled today to be joined by Talak Mandati, who is the executive vice president of ventures and the chief experience and technology officer at CVS Health. Talak, thank you so much for taking the time to be with me on the podcast today.

Speaker 1: Thanks for having me, Jacob. How are you?

Speaker 0: I'm doing great, Tlaloc. I'm better now that I get to sit down with you and chat a little bit about everything going on at CVS Health. But before we dive into all that, can you first tell our audience a little bit about yourself, your career background, and then, give everybody an overview of your current role and what you do at CVS.

Speaker 1: I look after, CVS Health Ventures, which is our corporate ventures group. We have 40 plus companies, 2,000,000,000 assets under management. I also am the chief experience and technology officer for the company. So I my teams look after all things technology. So that's core IT functions, core technology platforms, digital, AI, data analytics, anything that's connected to all of that is looked after by my team.

And I look after the, creating and measuring customer experiences, both physical and digital, across the company as well. I was in other industries before. I was with, Disney, prior to coming to, CVS Health. And before that, I was at American Express. So I have seen other industries before coming to health care.

Speaker 0: Absolutely. And let's talk a little bit about that because it's always so interesting when we have senior health care executives coming from other industries. Like you mentioned, you you led digital transformation at Disney and then at American Express before CVS Health. So I wonder, is there a lesson from hospitality or from the entertainment industry that you would share with all the health care executives listening in, that they might miss or, not be as as aware about when it comes to customer experience?

Speaker 1: I think, the coming from Disney to serious health and learning health care experience, I was humbled by the complexity of the health care industry, Jacob, and I was also humbled by the dedication of the people that work in health care industry to do the right things. And what surprised me, though, is in all this complexity of healthcare industry, how the patient and the provider experience became an afterthought, especially the customer experience. And even worse, the customer engagement in their own health is very, very low. And it's clear that, the bad experience or the complexity of the experience is the is the issue in getting to better consumer engagement. And without getting to better consumer engagement, you are not gonna get to better health care outcomes.

And all of that requires the health care industry complexity to go down. So, that that's a that that's revelation to me on we gotta improve experience materially and get to much better engagement for the consumer in their own health.

Speaker 0: Absolutely. And I know those things have been a major focus for CVS over these last few years. That's certainly something that we've been covering a lot of here at Becker's. And and, obviously, as you know, Deluxe, the the company operates at massive scale. You have over 9,000 pharmacies, but you also oversee a venture arm that invests in start ups all over the country.

So I wonder how how do you think about balancing, building as a company versus buying innovation, especially when you're trying to move fast in in what is such a highly regulated industry?

Speaker 1: On the venture side, we are not a passive investor, Jacob. We take a very active role as an investor. What I mean by that is we we invest in companies, by and large, the companies that we want to use within the CVS health ecosystem. So, 70 so I think 75% of all CVS ventures companies have commercial agreements with, with serious health entities. And we also participate very actively, into the companies that we invested in in terms of roadmap development, prioritization, and exploring jointly, what what the art of the possible.

So when you ask me, what how do we decide when to when to, build internally, when to go to an external company? The approach we've been taking is we build internally anything that's highly value added, differentiating, and unique to us and helps us get to our customer experience goals and our operational efficiency goals. That's things that are unique to us, differentiating to us, we build internally. If we see, things that, that there are gaps that we need to fill and a startup can fill that gap quickly, we go there. We go invest with them, and we integrate with them.

And we actually help them get better, in in in their product road map. So it's a it's it's kind of a spectrum of things on on things we build internally and things we build with the, startups we invest in. We are also I we we talked about this at the investor day. We are well underway into becoming a technology products and services provider to the rest of the health care industry. So now we are not only building technology products for internal use, we are also building them and productizing them, that that the rest of the industry can adopt as well.

Speaker 0: And that's a really fascinating business strategy, Tilak, that you're you're pivoting towards becoming, like you said, a provider of tech to other health care companies, tech services. And, you know, CVS overall as as an organization, of course, you sit at such a unique intersection of of an insurer, a PBM, retail pharmacy, primary care. And we've been hearing for decades now about the promise of interoperability, and I think that goes along with this conversation of what you were just talking about. So I wonder, why do you think that patients or providers on the ground should believe that interoperability is finally working now.

Speaker 1: I think so. Hey, Jacob. I I I share some of the pessimism from the past on interoperability, having learned that in the last three years, some of the challenges. But I'm actually very optimistic. I think this is the time for that interoperability, challenges to be resolved.

The reason I feel quite optimistic is the following. One, I think, the administration, CMS, is very focused on addressing interoperability challenges. Second, the, AI transformation. Look. AI has incredible potential, and I think it's a leapfrog technology that health care has been waiting for.

But AI on its own would not be able to reimagine or transform health care. AI, for us to realize, for this industry to realize the full potential of AI, it needs to be AI plus interoperability. And I think, that understanding is now clear, across the industry. So I think there's momentum behind that. The, another reason I'm optimistic about interoperability is technology advanced quite well.

Right? So, not just the AI part of the technology, the communications technology, the, the the the digital technology advances now make electronic transfer of, records, API based access, tokenization. All of those things are now a lot easier to do. So the hurdles that used to remain in the path of interoperability from a technology perspective are a lot less. So I'm I am, I am bullish about interoperability.

I do think, there are certain, certain decisions need to be made. I think there is a lot of push towards interoperability on the provider side. So the provider's getting the data they need. There is a lot of push on the side of, the consumer, consumers having access to the data that they need and they desire to have. I think similar push needs to happen on the payer side.

I think payers having access to, the full health care record would be incredibly helpful for payers to, support their members in a much more consumer centric way than has been possible in the past.

Speaker 0: Sure. No. That makes a lot of sense, and I I think that's a good counter to maybe some of the pessimism that you mentioned around interoperability that we've seen over decades now. But interesting to hear you say that this this intersection of, government focus on its on the emergence of of better AI tools, and then some of the barriers that are coming down as tech advances all working together, to make this finally possible. And I I wanna stay on the I AI conversation, Talak, because, as you know, we've seen a lot of big announcements already this year with some of the largest companies in this space rolling out new health care features for consumers.

And so as somebody who's leading CVS's AI strategy across across pharmacy, PBM, care delivery, how do you think that more consumer AI entering health care is changing your technology road map. And any any broad thoughts on these announcements?

Speaker 1: Yeah. So I AI AI can do a lot of things really well, Jacob. There is no doubt about it. And I think as an augmentative technology, AI is already, really transforming healthcare. And the clinical AI is progressing quite well.

There is still a lot of ground to cover, in terms of triage, accuracy, and the ability to guide care, etcetera, and augmenting the human physician. I think I think that's that's the direction things are gonna go and and things are progressing well. But there is there is room to room to run still. On the services AI side, whether it's in the call center experiences or care management experiences, AI is really, really helping consumers navigate care and becoming a concierge for for consumers. And that's the underlying premise behind our, the open engagement platform we announced at our investor day in December.

But I wanna I wanna come come to the the very important question you asked. Look. AI is a technology, and it could do a lot of things. But, really, a company's ability to reimagine health care doesn't depend on AI. It depends on trust.

The companies that held a consumer trust and consumer engagement with trust, those are the companies that will be able to, reimagine health care. And you asked what impact does it have on my on our CVS Health technology road map. The good thing is we had a head start. We were actively developing with AI well before ChargeGPT made AI a mainstream topic. So we feel very confident with where we are with the, with using AI in improving both on the services side as well as on the clinical side.

But we also started out with extremely well defined principles of we will never compromise on human touch. We will never allow, AI to get in the in in in the middle of providing care to to our consumers and allowing consumers to have access to care. The the the principles are very important to us, and we structured our AI program around those principles. But we have a great advantage. We have the consumer trust that people trust CVS.

People come to CVS, 185,000,000 folks engage with CVS every year. And I think that's what gives us the leg up. Amongst all these announcements you hear, we have the same type the same or even more advanced technologies. But in addition, we have the consumer trust.

Speaker 0: Absolutely. I think what you just said overall is such an important point, Tala, for for all of our listeners. And and and you're right. CBS is such a trusted brand, for for people. And as you continue to double down on that customer experience overall, that that trust in AI is going to be so critical.

And I like I said, I think that's such an important message, for all of the organizations listening in as you you mentioned the consumer engagement platform that you announced at your at your last investor day. Can you fill our listeners in a little bit about that, what that is, and and why is it important overall for the company and then, of course, for for your customers?

Speaker 1: Yeah. I'll, I'll go through that in a quick detail, and, happy to answer any questions you have on that, Jacob. We believe consumer engagement in health care is the holy grail. If we get consumers to engage in their health care frequently, consistently, constantly, that will lead to trust. Trust leads to behavior change.

And behavior change by far has been shown to be the best predictor of healthcare outcomes. So we got into this wanting to how do we how do we inspire much stronger engagement in health care by the consumers? And we offer as part of the and and we also were very clear right at the beginning, this needs to be an open platform. So the platform needs to be able to connect to any payer, any provider, any PBM, and any pharmacy because those are all the health care stakeholders that a consumer touches. So we wanted to create a consumer centric platform.

It's for the consumer. It's driven by the consumer preferences and and needs. So So it's for the consumer's health end to end, and, hence, it's completely open. So whichever, health care, stakeholder the consumer is interacting with, that stakeholder can integrate into this platform to provide a consumer oriented end to end completely connected experience for health care to that consumer in the platform. And the platform offers three services.

I think that's that's why for the, for for potential stakeholders, the way to think about it is it offers three services. One is pharmacy as a service. So we are packaging the, pharmacy technologies that we have developed, which we believe are world class. And, any pharmacy in the country can use the, these pharmacy technologies and be a much better pharmacy, quite frankly. Second service is called engagement as service.

This is where, we allow the stakeholders to have direct relationship with the consumers to help consumers to get the most out of their healthcare. And third, is, insights as a service. So, based on the consumer engagement, are there things that our consumers want, that we can learn from them and make our products better, and many other types of insights? So that's why we think the stakeholders would be very interested in joining this platform in addition to wanting to provide a great consumer experience. On the consumer side, the value proposition is incredibly compelling.

We basically want to do all the homework, the healthcare homework, which is incredibly frustrating to consumers. We wanna do it for them so they can focus on their health. We want a essentially, a health concierge in the pocket of our consumers, helping them, informing them, supporting them, and and, and and, taking out the stress that is prevalent in health care today for the consumer. And and now we want consumers to own their health and their health care. They want to we want them to own their own decisions on health care by being better informed.

And so the consumer, value proposition is incredibly, powerful, especially because it's an open platform and it integrates all stakeholders that the consumer touches, well outside of the CVS Health ecosystem itself. So we are very bullish about it. We are well underway, and more and more details would come as the, as we go through the year.

Speaker 0: Understood. It's exciting times clearly to lock into your point earlier. Now is the time from a variety of factors for interoperability to become, tangible, and and CVS is clearly leading the forefront there. So appreciate you sharing details around that new platform with us, and with our listeners. In that vein, Tlac, what else are we missing for everybody listening in right now?

You've got the ears of a lot of other health care leaders from all over the country as we speak. What do you wanna share with them? Any wrap up thoughts or or final bits of advice?

Speaker 1: I'll, I'll you know, coming from our set of health care, Jacob, I I do wanna make one pitch to the entire health care industry. And I say this as me, a consumer of healthcare, not as a CVS Health executive. So it's just me saying, stop fighting with each other and help me. It's not it's pointless for the different stakeholders, pharmaceutical companies, PBMs, pharmacies, payers, providers. You all every one of you play an incredibly important role in an incredibly important function, health care, in this country.

I would like to see a world where each of the health care stakeholders actually work together, together in combination with the administration. Start up companies and incumbents, large incumbents that are willing to transform and wanting to transform health care like CUS Health, working together. All of us working together to make the consumer's health care and health outcomes better. That's what American people want, and that's what, as an industry, we need to deliver. And the only way to deliver is for us to collaborate, not fight.

That's that's the that's my thoughts as a consumer of health care.

Speaker 0: The wise message, and I appreciate you sharing that with us, Talak. And and, overall, appreciate you being here, with us, giving us your insights, and and telling us a little bit about all the important work happening under your leadership and with your teams at CVS Health. We we really appreciate you taking the time.

Speaker 1: Thank you, Jacob. Thanks for having me.

Speaker 0: Absolutely. And to our listeners, if you'd like to listen to more podcasts from Becker's Healthcare, you can visit beckershospitalreview.com.