This Week in Health IT News Day Bill Russell
July 14, 2020

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July 14, 2020:  Big news today. We discuss CommonSpirit’s new partnership plus a major industry first, Walmart and Village MD have big plans to open almost 700 full service doctor’s offices. We look at the Oliver Wyman paper on six future health system archetypes. And is digital health the leading future modality? Does that mean we all get our very own da Vinci in our homes? Tune in to find out as Bill breaks down each of the seven modalities, Urgent Care, Primary Care, Diagnostics and Pharmacy Specialty Care, Procedure and Surgeries, Acute Care, Post Acute Care and Navigation and Guidance.

Key Points:

  • CommonSpirit strikes partnership to offer direct-to-employer primary care [00:04:15] 
  • The most important aspect of your model should be technology agility [00:06:20] 
  • Why is Amazon feared in healthcare? [00:10:30] 
  • And why is Apple even in the conversation of healthcare? [00:10:35] 
  • Check out Bill’s List – the current rank order of how things get prioritized in healthcare. Do you agree with him? [00:13:55] 
  • Oliver Wyman’s paper about the six future health system archetypes [00:17:35] 
  • Is digital health the leading future modality? [00:23:45] 

News Day – The Disintermediation of Health Providers

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News Day – The Disintermediation of Health Providers

Episode 278: Transcript – July 14, 2020

This transcription is provided by artificial intelligence. We believe in technology but understand that even the smartest robots can sometimes get speech recognition wrong.

[00:00:00] Bill Russell: Welcome to This Week in Health IT. It’s Tuesday News Day, where we look at the news, which will impact health it today. Walmart, Walgreens and common spirit make moves. And is it time for a digital, only health system? My name is Bill Russell, healthcare, CIO, coach and creator  of This Week In Health It. A set of podcast videos and collaboration events dedicated to developing the next generation of health leaders.  This episode and every episode, since we started the COVID-19 series has been sponsored by [00:00:30] Sirius healthcare. Now that we are exiting the series Sirius has stepped up to be a weekly sponsor of the show through the end of the year. Special thanks to Sirius for supporting the show’s efforts during the crisis and beyond don’t forget, we’ve gone to three shows a week.

Tuesday. We cover the news, Tuesday News Day, which is today. And we have interviews with industry influencers on Wednesdays and Fridays. Sometimes you just have to stop and say, thank you. And I want to thank everyone for your support of the show. We’ve eclipsed, a hundred thousand podcast [00:01:00] downloads through the first six months of this year, and that’s an amazing accomplishment.

And I just want to thank everyone. Thanks for sharing it with your peers. And thanks for listening to make it easier to share with your peers. We’re launching clip notes and, and that is going to launch this Friday, but you can get signed up today.  What is Clip notes? Clip notes is  a subscription, 

right? So it’s a subscription to help  you to share the show with peers. See what happened during the COVID series where several CIO’s said, look, I’m really [00:01:30] busy. I really can’t listen to all your podcasts. Can you just send me like something where I can skim it? Where I can just see what the high points are for each one?

And when I heard the word skim, I immediately thought of cliff notes and sparked us, which helps me to get through high school. These are documents that would summarize books. I didn’t have to read them in their entirety, but could still get the key points from the book. That’s what we’re going to be doing with clip notes.

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If you haven’t signed up for 3xDrex yet you’re  missing out. Text DREX, D R E X two [00:03:00] four eight four eight four eight and receive three texts every week with the stories that will help you to stay current. This is a service of Drex DeFord a frequent contributor to the show, but not today. Today, it’s just me and we have a lot of stories to cover.

So, actually I have about 14 stories here. I’m going to get through five. I can almost tell you right now, I’m going to get through five, because  I’m going to talk, at fair length about some of these things. No telehealth stories today for the most part, but just a quick note. if you want the exceptions to continue in the [00:03:30] funding to be made permanent, you’re going to want to support Chime advocacy with stories and data.

They have to make the case to Congress who is the only one that can fund these programs permanently. So if you are passionate about this and a lot of you are reach out to Chime and to Mari and share the data and share the stories with them. I just wanted to make that clear. A lot of people are, you know, cheering and excited about the bipartisan things that are going on.

There’s still work to do to make that a reality. It’s not just going to [00:04:00] happen. It does require, all of us to really, to step up and provide that team with the information there they’re in DC doing the things we want them to do for us, but they need information from you to make that a reality.

All right. First story, CommonSpirit strikes partnership to offer direct to employer primary care. CommonSpirit announced June 24th, that it is partnered with Paladina Health to offer direct employer, primary care in region served by common spirit through the partnership Chicago-based [00:04:30] CommonSpirit, which owns 137 hospitals, 21 States.

You get the picture and Paladina will initially offer membership based. Primary care services through newly constructed clinics in Las Vegas, and then expand to other markets. Employers will pay a fee for each employee for primary care services. The employees can then access primary care without copays or out of pocket costs.

I did. And it goes on, has a quote from Rich Roth, who is a vice president of strategic innovation for common spirit, [00:05:00] who is yet to come on the show. And I’m trying to shame him into coming on the show cause I’d love to have a conversation with retro. Who’s a friend. I talk to him a fair amount. At conferences and whatno . He said, to keep our communities healthier, we need to increase access to care models, focus on prevention and primary care access. Working in partnership with Paladina Health CommonSpriti will support employers by developing direct to primary care options, focused on access, affordability, health, and wellness.

So what. this is a great move. I’m [00:05:30] looking at business models that will scale into other markets. the barriers are coming down. New models are gonna allow for growth into new markets. And I’m looking for the health systems and companies that are being aggressive coming out of the COVID crisis.

I realize when I say coming out of the COVID crisis, what I mean is we’re entering a new phase of COVID. And we’re really coming out of this financial crisis that is looming around healthcare. And I’m looking for the organizations that are going to fill the [00:06:00] spaces that are left open by the less opportunistic health organizations.

chaos always provides opportunity for someone. It may as well be your health system. you know, from a health IT perspective. What about this story? I, I’m going to keep coming back to, I think it’s going to be a recurring theme over the next year, which is agility. Technology agility is the most important aspect of your model.  The question becomes, can you go into a new market quickly, open up a new office, stand up new services  and actually we know you can. I mean, we’ve just [00:06:30] proven through COVID that you can, and you can do it very quickly, what we need to do now as healthcare it leaders, as we need to make that a way of life.

Right. We can’t go back to, Oh, that project is going to take a year, three years, this kind of funding. We need to operate with that same agility we just did  and that same focus we just did around a core set of projects. That’s going to propel our health system forward and deliver better care in our communities.

So that’s the, so what for tha  W. e’re going to continue on this theme. This primary care thing is [00:07:00] very interesting. So, Walmart has been. Busy. So Walmart, confirms a new avatar. I’m not exactly sure what that’s about, but it’s also, Walmart is also launching a health insurance agency, a Walmart also diverge plans, divulge plans about healthcare, super centers.

Walmart also, dove deeper into the pharmacy space with a partnership with a PBM startup. So let me give you a, Walmart’s been busy. Right. So Walmart quietly launched the new health insurance [00:07:30] business. The company called Walmart Insurance has filed with the Arkansas secretary of state. Last month.

Walmart is making it clear what an executive declared in the virtual conference that it is firmly in the healthcare business, not just retail healthcare. Okay. They are firmly in the healthcare business, not just retail healthcare. And it looks like the new subsidiary will be focused on selling. Oh, so they’re talking about the new insurance product that’s coming out.

They’re going to be focused on Medicare advantage plans though. The company [00:08:00] was mom when asked about additional details of spokes woman’s statement about the sale of insurance policies to our customers also leaves open the possibility of Walmart, expanding its services beyond senior shoppers in the future.

Okay, so they’re expanding into insurance. Second thing, separately on Tuesday, Walmart announced that it struck a partnership with PBM startup capital RX, which provides health plans, real time information on prescription drug prices. Walmart has been a big player in pharmacy space for several years, [00:08:30] and the company appears to be deepening.

That through this partnership everyday low price has been a guiding principle for Walmart. We take pride in providing affordable prices to more than 160 million customers who shop Walmart each week. Walmart health and wellness. Vice-president Luke Kleyn, K L E Y N said in a news release, working with capital RX will allow us to do say the same for prescription drugs.

And then finally, Walmart talks about their healthcare super centers. Okay, so this isn’t [00:09:00] just the little clinic as you walk in the front door, this is a much more extensive. We talked about this a little bit last year, but let me give you another, another glimpse into this. So the company says it’s looking at media beyond traditional retail clinics, as it seeks to create super centers with comprehensive healthcare services.

In the past few months, Walmart has been designing a different kind of super center, one focused on healthcare. The company rolled out to Walmart health clinics this month in Loganville, Georgia and Springdale, Arkansas. And before you [00:09:30] sort of look down your nose at that and say, Oh, those are real rural places.

That’s exactly how Walmart took over the world is they started rural and then they, moved into the, into the center of the cities. So not to be taken lightly. these aren’t your usual walk in clinics that might serve as a quick place to get vaccinated or get a cold checked out. Rather they’re more like a one stop shop for healthcare with primary care, urgent care diagnostics, x-rays behavioral health and dental care.

Walmart’s other big differentiator, a primary care appointment [00:10:00] costs just $40 and for children, $20. and then they, he goes, let’s see. Walmart, President of Health and Wellness, Sean Slovenski says we didn’t set out to disrupt healthcare. We set out to meet the needs of our customers at Walmart.

So what. Walmart didn’t set out to disrupt healthcare, but they are absolutely laying the groundwork for doing just that for health it, what does this have to do? you know, how does Walmart do it? This is the question you have to ask yourself. How does Walmart do it? [00:10:30] Why is Amazon feared in healthcare?

Why is Apple even in the conversation in healthcare? So in order to explain this, I’m going to go to another story about Walmart. So Walmart had this massive intranet. And they talked about the, a, the story I read was actually, it was a ad really for this Adobe marketplace. But for the most part, it talked about how Walmart took these disparate intranets and turned them into a single intranet.

Right? So today one Walmart serves as a global community for over 2 million people, whether at work or at [00:11:00] home, any employee can access what they need to feel supported, informed and armed to do their job effectively, and while having an intranet with a good reputation amongst the workforce.  is an important asset for any company.

It becomes a, it becomes vitals in times of crisis. One, Walmart was built with the same regard for customer experience as any external property. Let me say that again. One Walmart was built with the same regard for customer experience as any external [00:11:30] property. For starters, it was personalized based on the nature of an employee’s role.

Important for a company that employs, everyone from store associates and data scientists to mechanics and marketers, each of these people have a unique need when they log on and the internet has the ability to recognize that it can also shift the experience to, to fulfill a request that happens on the clock versus occurring at home.

You know, so what’s the, what’s the, so what are on this? [00:12:00] Build your services with the consumer in mind. Build loyalty build fans to do anything less is really wasting time. Eventually people will have a choice and when they do have a choice, they’re going to choose the brand. They’re going to choose the service based on their own self interest.

Right. And sometimes that’s going to be financially driven. I want the lowest cost. Sometimes it’s going to be convenience driven. I want somebody that’s going to be open on the hours where I need to be, you know, to have the service delivered. And sometimes it’s going to be based on quality, but always [00:12:30] through the lens of what does it do for me, the consumer.

No now, you know, these are really huge moves by Walmart, and that is really what we should expect in these times from well-funded customer centric organizations. They’re going to take the opportunity to move aggressively into healthcare. And if you think I’m kidding, next story, Walgreens and Village MD to open a 500 to 700 full service doctor’s offices within the next five years in a major industry first.

Businesswire article, [00:13:00] the expanded partnership will open five to 700 village medicals. village medical at Walgreens physician led primary care clinics and more than 30 US markets in the next five years with the intent to build hundreds more thereafter, the clinics will uniquely integrate the pharmacist as a critical member of the Village MDs multidisciplinary team to deliver the very best healthcare to patients and will be staffed by more than 3,600 primary care providers who will be recruited by Village MD.

What’s the, so what on this primary care is [00:13:30] under assault. Okay. I mean, you see that these stories are just, it’s under assault. Why is it under assault? It’s a classic disintermediation strategy. Those who control this consumer and their behaviors actually control the spend. So they’re trying to control the spend of healthcare.

This is why it’s imperative, that you are constantly upgrading your consumer experience. I was asked this week and I’ll throw this out. As an aside, I was asked this week, if I thought the consumer was a reason that a health system would [00:14:00] select a specific technology. And I placed it at number seven on my list of reasons they would select a technology and a I’m going to throw out my list.

And I want to see if you agree with me, here’s my rank order of how things get prioritized in healthcare, at least technology decisions, right? So the first is to avoid a public failure or revenue disruption. And there’s plenty of these stories. around anytime you see a health system on the front page of a newspaper with a public failure or revenue, [00:14:30] disruption, and EHR that went, you know, implementation that went bad, a breach.

So that’s number priority. Number one, avoid public failure or revenue, disruption. Number two, physicians are upset, right? Can’t tell you the number of times I’ve heard, Hey, this set of physicians, this community of physicians is upset. We need to take care of that. New functionality that drives some material revenue, right?

If you can drive material revenue with the implementation of technology, that’s going to be prioritized, not number one or two number three, [00:15:00] number four, you know, that avoiding, avoiding pain is more of a driver than actually, you know, then, then actually getting more revenue. It’s, it’s kind of interesting.

Number four, I said we can save money. Right. So if you have an ROI that’s less than a year, that’s going to be something that gets prioritized. the next is nurses and other clinicians are upset, different category than physicians. Unfortunately, it’s true. if there’s a group of physicians that are upset, they are more tied to the revenue [00:15:30] stream.

So we take care of them, but not to be minimized the nurses and the other clinicians are a group that you absolutely need to keep happy. And therefore that gets prioritized. What’s next. we can be more secure and reliable. That’s right. Security is one, two, three, four, five, is number six on the list. And number seven on list I put patient experience.

Okay. So that’s my, that’s my list. and that was off the cuff. I’m a little overworked right now. So I may be a little more cynical than usual [00:16:00] but I’m curious if you think the patient or consumer experience would rank above these six items. Okay. So the six items avoid public failure, physician groups that are upset, new functionality that drives material revenue, saving money for the health system, nurses and a group of nurses or clinicians that are upset about something  we, can be more secure and reliable. Do you think the patient experience ranks above any of those? And do you think there’s others that might even rank above that when you’re selecting technology? let me know, shoot me a note [00:16:30] [email protected] That was, that was a tangent. The, so what if just to focus the, so what is focused on your consumers or Walmart?

Walgreens and CVS are going to end up being your consumer. They’re going to send patients to you and you’re going to pay them  as is going to be the case with Walmart. They’re going to become a payer. So they’re going to have insurance and they’re going to start directing the care of their people and they’re going to direct them to the lowest cost, highest quality.

That’s what Walmart’s all about. So,  you know, I still remember I [00:17:00] had a consulting organization that I was a Vice President for. We had, we hadabout 2,800. engineers across the country and our largest clients, our three largest clients were essentially other consulting practices. Okay. So this is  essentially what’s going to happen is they’re going to be delivering care and your, some of your largest clients, some of your, some of these health systems that are listening to this right now, your largest clients are going to end up being those players.

It’s going [00:17:30] to be the Walmarts and others of the world. Alright, here’s a story. I think this is probably one of the most fascinating pieces that I’ve read in a while. Is it time for a digital, only health system? This is actually an Oliver Wyman article just on their website. And, this is a pretty long one.

So I’ll probably, I’ll probably end with this one. I could go. I might go into another story, but we’ll, we’ll see where we’re at when we get to the end. in 1989, a new type of [00:18:00] bank called First Direct launched in the United Kingdom. Okay. 1989, having no branches, tellers, or any customer facing physical presence while automatic teller machines have been in wide use since the early eighties, it was once common to call the bank’s call center for some everyday banking needs.

The idea of never setting foot in a physical branch was revolutionary for most customers. At the time most banks use telebanking to indicate a special way to interact with them outside of the normal flow [00:18:30] of physical interaction in the local branch. In fact, one of the first, fully functional direct banks in the U S was named Telebank.

Fast forward. Let me get some water fast forward to 2020. And the line between conventional and direct banks has blurred. And the term telebanking has fallen out of use today. A nonphysical access mode, be it phone, mobile, web is the first choice for most consumers when it comes to their banking needs, we don’t need Telebank because that is now the default. [00:19:00] So I’ve heard this story or a similar stories used over and over again, and I’ve heard it. I’ve heard clinicians and others sort of debunk this and say healthcare is very different. It’s a very physical activity. And while aspects of healthcare are very physical, it’s interesting to see what happened over the last four months.

So, two years ago, Oliver [00:19:30] Wyman wrote a paper about the six future health system archetypes, right? And the six archetypes are scale and efficiency leader, and that is they could create affordable regional and national health solutions with an innovative operating model in corporate center. Okay.

So that’s some of the stuff we just talked about with Walmart. That’s what they’re aiming to do. And Walgreens is also aiming to do that as are others, Experience and access leader, right? Offer personalized health experiences to meet unique patient needs. And, they [00:20:00] gave up because it’s organized around the experience they gave the example of a Delta or a Starbucks.

It’s a more personal experience, a specialized portfolio manager. These are portfolio asset managers deploying the most appropriate type. To each market and as their  example organizations, they gave Unilever and Procter and gamble. These are brands that you don’t see on the marquee, but they’re brands that control a lot of assets, move a lot assets around and deliver a lot of services. [00:20:30]

The next is clinical leader develop and monetize, innovative treatment technologies and training. You know, we talked about this a bunch  at the JP Morgan conference, that there’s a bunch of, especially academic medical centers, really starting to position themselves in these, in these areas where if you want this kind of treatment, this kind of special genetic treatment and those kinds of things, this is the place to go.

Just get on a plane and go there. That’s where you want to go for that kind of treatment. And we’re seeing, that sort of, take place. And [00:21:00] they, the clinical leader, they gave two companies, Tesla and Apple is sort of their example. I’m not sure I understand that one, population health manager own and manage risk for a total cost of care.

And they, they gave GE and Siemens as an example, I’m not sure about that one either. And then non hospital system. And this is the one we’re talking about here. Divested IP care. to focus on ambulatory digital and retail offerings. Right. And they talked about like Charles Schwab at being this one.

The last [00:21:30] concept, the non-hospital system was the one, it’s safe to say we considered at the time to be the least likely the bunch of, to come true yet as industries around the world from renowned coffee chains to major airlines, lay off workers file for bankruptcy and essentially collapsed under COVID-19 weight we now realize that the non-hospital system model is perhaps the last one of these six standing. Think about that. I mean, and we’ve seen it. Right. At [00:22:00] least during the peak of COVID, if you were, if you were designed more like a telebanking type model, you had ways to continue to deliver, on your, business model, much like Amazon does, but Macy’s does not, you get that picture.

So the, so, you know, why is that? Why is the non-hospital systems still standing? The first reason they give is the rapid acceleration of COVID-19 provided. to virtual care adoption in recent months. In the period of three to four months, we’ve seen digital care [00:22:30] adoption increase, mirror, a decades worth of innovation, which is really true. T he second reason and less visible than the above, but equally important is payers increased demand for full service integrated digital care solutions. Post COVID-19 more payers are looking into this space to address an expected surge in demand for low cost health coverage options by employers tightening their belts.

Or new unemployed consumers. So far though, there’s a dearth of comprehensive digital care solutions that [00:23:00] payers can use to create a robust delivery network. And we talked about this a couple of weeks ago, that what the payers are going to do is they’re going to start creating digital only solutions, digital only payer bundles. that you’re going to be able to buy, but in order to do that, me as the consumer, as a small business owner, I’m going to have to agree that the first visit is going to be a telehealth visit and [00:23:30] follow up visits are certain. They’re going to dictate what kind of, what kind of modality I actually am able to use, moving forward.

So that’s the second reason, you know, so. They go on to talk about. And I, again, this is a great article. If you get a chance to take a look at it, “Is digital health, the leading future modality?” And then they go through seven modalities. Okay. Urgent care, primary care, diagnostics and pharmacy specialty care, [00:24:00] procedure and surgeries, acute, post acute care, navigation and guidance.

And they talk about each one in the context of telehealth, give you an example, urgent care. this is perhaps the best known use case for digital care today. Popularized by innovations, such as Amwell, Teladoc and others. Urgent care includes the basic often transactional care designed to solve low level acute need with traditional challenges of remote diagnostics, falling away, the new connected devices, a digital modality for this use case [00:24:30] is becoming more prevalent.

We know that. Primary care in contrast to urgent cares are transactional  in nature. Primary care is about longitudinal provider, patient relationships and holistic health management. There are critical elements that would remain, would likely retain their importance, particularly for a subset of older sicker patient populations.

Still as recent experience has shown the vast majority of visits can be performed digitally in various synchronous phone, video or asynchronous  [00:25:00] modes, even for these high  need populations. Even for these high need populations, right? They talk about diagnostics and pharmacy while they use  case generates significant economic value for health systems today, there’s a limited need for a digital oriented health system to own these assets. Patients can be referred to and scheduled for local operators for imaging studies, specimen collection, and the light. Specialty care, another modality, the office based portion of non procedural surgical specialty care is another case [00:25:30] where most services can be and often have been delivered digitally.

A direct physical examination is needed prior to a decision for a surgical procedure and therefore a small physical. Footprint will be needed. However, the prescreening of patients for elective surgery, especially those cases such as back surgery, where a substantial number of patients may not wish to have surgery can be done remotely.

So they even talk about that modality and its digital possibilities. Procedures and [00:26:00] surgeries on the surface. This use case is the most challenging to deliver digitally. And I’m sure right now, what you’re thinking is, Oh yeah, we’re going to put a DaVinci in the home and a physician. Now we’re not going to do that.

While, while the care needs to be delivered, physically many services are technical procedural in nature, and thus lend themselves well to sub contracting with local operators in the same vein as imaging studies. This includes services where the specialist presence is not required such as infusion or even those where the procedure is [00:26:30] becoming a commodity and given a satisfactory level of quality and safety, keep in mind, they’re talking about, is it possible to have a digital, only health system, that outsources services? All right, so acute and post acute care. Despite the above, there will be times when acute care settings, whether emergent or postsurgical need will be required.

Absolutely. However, as large multi specialty physician groups have been demonstrating for years, it is possible to nurture longterm patient relationships, including the occasional [00:27:00] hospital stay without operating one. Okay. And then they go on to talk about where digital falls into that Navigation and guidance, a health system, not spending mind share and capital in managing vast and depreciating fiscal assets can devote attention to building a sophisticated and consumer-friendly care experience and actively support the patient along their care, their health journey. So navigation and guidance clearly can be digital. In summary, a digital health digital oriented [00:27:30] health system can meet the needs of its patients with limited to no own fiscal assets.

Can you imagine that? A Digital oriented health system can meet the needs of its patients with limited. To no owned physical assets. When physical care is required, it can be sourced locally from operators. The key deciding factor, whether to own any local talent in a market will be whether the system wants to be physically intense, episodes of care, where specialists are forming strong [00:28:00] patient relationships over a period of time with patients.

You know, if nothing else, this is really thought provoking. And if I were the CEO of a health system, I would probably be asking these people to come in, to speak with me. The, so what, and I’m going to take this back to a existing health system today. The, so what is the models for care are changing all around us and we should be reexamining our models for care and not sprinting back to the models of care that we had in December of [00:28:30] last year.

So what CIO, CMIO’s and CMOs should be in lock step right now. Around telehealth, telemedicine and virtual care  Collect the data, evaluate your system readiness, tear apart, existing workflows, and put them back together with the new lens, with a new reality in mind, telemedicine is here to stay. yes, the number of visits is going down right now.

And so that’s going to give you the indication that it’s not gonna, it’s not gonna stick, but it is going to stick and it’s going to go into a lot of [00:29:00] different models. You know, it’s the other thing to keep in mind that as these visits go down, that’s an indication that we have not given this intelligent design.

We responded to a problem, but we haven’t given it intelligent design. If you want to change a model, change the culture you have to do more than just provide the technology and the funding. You have to do the work of changing behavior. And that requires a plan. Build the case, tell the stories, move towards the future of health.

This is a great [00:29:30] read. I highly recommended the Oliver Wyman website. You could also hit our website. We’ll have a link to this story as well. A great story, very thought provoking. If nothing else, have your team, your leadership team, read it and then discuss it. See if you agree. See if there’s areas where your health system could potentially change or adapt and start to fill gaps, before someone else steps in and starts to fill those gaps.

You know, that’s all for this week. Don’t forget to sign up for Clip Notes, send an email, hit the [00:30:00] website. We want to make you and your system more productive, special. Thanks to our sponsors. VMware servers, StarBridge Advisors, Galen Healthcare, Health Lyrics, Sirius Healthcare and Pro Talent Advisors for choosing to invest in developing the next generation of health leaders.

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