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• This week’s Key Market Dive explores Amazon’s evolving strategy for One Medical and its referral partnerships with health systems.

  • While One Medical’s finances haven’t been publicly reported since the Amazon acquisition, health system partnerships accounted for 25% of the primary care chain’s revenue in 2022.

  • After a slow start in some markets, One Medical is now generating a growing volume of referrals for its health system partners.

  • One Medical is exploring deeper integrations with its health system partners, such as a new clinic located inside one of Montefiore Health System’s largest outpatient facilities.

    • The co-located clinic could facilitate joint and same-day appointments across specialties and might help Montefiore lock in its referral partnership with One Medical.

  • While One Medical has slowed expansion into new markets, Amazon is using the primary care business as a platform for a growing suite of pharmacy, AI, and telehealth offerings.

• This week’s featured graphic showcases a recent survey by Medscape exploring which medical specialties are the happiest and most sustainable.

  • Doctors in specialties with predictable schedules (like dermatology) are happier than doctors in fields with unpredictable schedules and higher acuity (like emergency medicine).

  • To improve retention, health systems need to rethink how work is structured and how tools like AI can be used to reduce tedious administrative work.

• HHS is delaying a proposed update to the HIPAA Security Rule that would tighten cybersecurity requirements.

  • The agency received nearly 5,000 comments—including many from health systems and provider advocates calling for the rule to be withdrawn, citing compliance burdens and unreasonable timelines.

  • The delay gives providers until July 2027 to prepare, but HHS is unlikely to abandon the rule altogether.

  • Health systems are caught between two competing priorities for HIPAA reform: making health information more shareable and accessible, and protecting it from cyberattacks.

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• In its annual update to the OPPS payment rule, CMS is proposing a significant reimbursement cut for 340B-acquired drugs. Because the changes are budget neutral, for-profit health systems and hospitals with low 340B uptake could see a boost to their payments.

  • Unlike a similar effort in 2018, this proposed cut might survive legal challenges because the Trump administration recently undertook a survey of hospital drug acquisition costs.

  • The proposed rule also includes site-neutral reform for imaging services.

• Sen. Bill Cassidy unveiled draft legislation that would reform the 340B drug discount program by letting drug manufacturers choose whether they want to offer providers upfront discounts or rebates. Providers can opt for a different payment mechanism if they voluntarily pass all 340B savings on to patients.

  • The draft is intended to solicit industry feedback and is not immediately headed through the committee markup process. The proposal’s chances to pass this year are somewhat limited with slim congressional majorities in a midterm election year.

  • Restrictions on eligible prescriptions, contract pharmacies, and out-of-pocket costs would reduce the savings that health systems realize under 340B, and new data reporting requirements could increase scrutiny by the media and policymakers.

• Optum is negotiating with several New York health systems to sell orthopedic, general surgery, and urology practices attached to Optum Medical Care and Crystal Run Healthcare.

  • Optum is effectively unbundling Crystal Run, not retreating from the market entirely.

  • Optum is keeping control of the primary care panels, and UnitedHealthcare controls benefit design above them. Once these specialty practices leave that ecosystem, United might steer these volumes to lower-priced providers.

• This week’s featured graphic comes from a new JAMA study showing that patient messages to providers have steadily continued to increase since the pandemic.

  • Female patients, patients between the ages of 40 to 64, and patients in affluent neighborhoods were the most likely to send messages to providers.

  • The trend is worth watching because inbox fatigue is a major driver of burnout and turnover among physicians.

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In this episode of The Strategy Catalyst Dispatch, Shoeb Sitafalwalla, Senior Executive Vice President and Chief Strategy Officer at Advocate Health, walks us through care model engineering, Advocate's approach to designing care models with a product lens across one of the largest health systems in the country. We cover how a post-merger discovery process led his team to rethink what a health system's core product actually is, what it looks like to run care models through a product pipeline with stage gates and a 100,000-patient pilot minimum, and how the reusable architecture they've built took them from a 10-month first product to launching every three to four weeks.