Dispensed: Hospital CIOs dish on the cloud, digital chiefs talk tech in healthcare, and how our editor picked his health plan

Hello,

Welcome to Dispensed, Business Insider's weekly healthcare newsletter that's officially been up and running for a year! Here's a look at our first-ever dispatch, if you're looking for a blast from the past.

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A quick housekeeping note: Healthcare is officially a $3.6 trillion industry in the US (up from $3.5 trillion). That's according to the Centers for Medicare and Medicaid Services, which came out with its annual National Health Expenditure data on Thursday.

That breaks down to $11,172 spent on healthcare per person in the US. Spending on retail prescription drugs increased 2.5% between 2017 and 2018, driven by new drugs used in the treatment of cancer and autoimmune conditions.

A figure that's sure to be cited as well by the Trump administration: Retail prescription drug prices fell 1%, driven by lower generic drug prices as well as relatively lower growth in prices for branded drugs, the report said.

With that in mind, let's get to the rest of this week's headlines.

To start out the week, I spoke with two chief information officers at health systems who have made the move to the cloud - Mayo Clinic and Providence St. Joseph Health.

They gave me some good insight on what it takes to make the move, and why they did it (at a time when there's skepticism about working with tech giants).

Tech chiefs at 2 top hospitals reveal 3 crucial elements to working with cloud giants like Microsoft and Google, and one reason not to do it

• Hospitals and tech giants are starting to work more closely together.
• In November, Google's work with the second-largest health system in the US came to light, raising questions about how Google will use the patient information that's being transferred to its cloud.
• We spoke to two tech chiefs at top health systems that have started the move to the cloud about why they made the jump.
• They shared three elements health systems should keep in mind when setting up relationships with tech companies to ensure patient information is handled appropriately - and one justification health systems shouldn't use to move to the cloud.

It was an interesting contrast to my past conversations with CIOs at health systems that haven't made the move to the cloud yet. If there's anything I've learned through my reporting and conversations with CIOs, it's that keeping up with technology and keeping patient data safe and private are no easy feat to do at the same time.

Somewhat related in CIO-land, Mayo this week hired on Dr. John Halamka, the former CIO at Beth Israel Deaconess Medical Center, to run its Mayo Clinic Platform.

It'll be interesting to see what comes out of that work. Halamka told me this week that there are three areas he's focusing on to start: helping to facilitate more hospital care done in the home via the platform, finding ways to use data for more preventive measures, and finding ways to make past patient data more useable by current patients looking to learn from those experiences.

Elsewhere at the intersection of technology and healthcare, over the past few months I've been trying to get a better grasp on what all the role of a chief digital officer entails. Here's what I learned from the CDOs of Pfizer, CVS Health, and Novartis.

We spoke with the execs tasked with bringing technology to some of the world's oldest healthcare companies. Here's how they're picking their spots.

• Healthcare giants are hiring chief digital officers to help the companies better use technology within their businesses.
• Each role carries its own priorities, from finding ways to enhance drug discovery and development to better connecting with consumers.
• We spoke with the chief digital officers at CVS Health, Novartis, and Pfizer about their priorities.

This week, Novartis also came out with a partnership working with Amazon Web Services. The two will work together to essentially digitize Novartis's manufacturing processes. Novartis CDO Bertrand Bodson told me the team comprised of Novartis and Amazon employees working together will adhere to Amazon CEO Jeff Bezos's two-pizza rule.

Lastly, I caught up with Michael Dixon, a 10-year vet of Sequoia Capital who just joined newly created Transformation Capital, spun out of SVB Leerink. We had a good chat about what's ahead for digital health after an eventful 2019.

A former Sequoia partner just joined a $313 million VC fund that's focused on digital health. He told us how he's planning to pick his next investments.

• Michael Dixon, who spent 10 years at Sequoia Capital, is joining a new venture fund focused on digital health.
• Dixon is joining up with the Sequoia alum Todd Cozzens and Dr. Jared Kesselheim at Transformation Capital, the recently spun-out digital-health venture arm of SVB Leerink. The fund, which initially got its start within the bank in 2016, manages $313 million.
• At Transformation Capital, Dixon is looking to invest in commercial-stage digital-health companies, especially those selling to organizations beyond hospitals.
• "The thing that excites me equally and more is the advent of new customers in the marketplace," Dixon said.

I'll leave you with a fun post that isn't on BI.

Our editor Zach Tracer wrote a post for the Boston Globe about his experience picking a health plan - definitely worth a read if you're still deciding for 2020 (or, if you're double checking your already-made decision like me).

I'm going to be in Boston on Tuesday at the Digital Health Innovation Summit. If you're around, I'd love to say hi and grab coffee! I'll be interviewing Livongo's Glen Tullman onstage, so if you have any burning questions for him, send them my way. You can find me at lramsey@businessinsider.com.

- Lydia

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