CVS Health CTO tries to smooth over complexity to propel his company’s big bet on healthcare

Over six decades, CVS Health went from operating a single store in Massachusetts to ranking sixth on the Fortune 500.

Along the way, the company opened thousands of stores and expanded into new businesses, acquiring pharmacy-benefits manager Caremark and insurer Aetna. More recently, it scooped up home-healthcare company Signify Health and primary care provider Oak Street Health.

When Tilak Mandadi joined CVS in 2022 as EVP of ventures and chief digital, data, analytics and technology officer at CVS, there were separate teams running data, analytics, IT, and other technology functions. One of his earliest projects was to combine all of those functions into an integrated organization. He also appointed chief digital technology officers to oversee each of the company’s divisions.

“We have seen the results almost immediately,” says Mandadi. “There’s a much faster execution and decision making, and much more standardization of technologies and the customer experience.”

It turns out that the business silos created due to M&A don't matter much to customers. They just want a positive healthcare experience, Mandadi says, regardless of the organizational structure at CVS. Today, technology projects are in two buckets—either for a specific business unit, such as Caremark or Aetna, or for the entire enterprise.

One ongoing project reflecting that thinking is a new CVS mobile app that is supposed to blend the company’s various healthcare offerings in one place. The goal is to let 60 million unique digital customers schedule a doctor appointment, plan a visit to a MinuteClinic, or arrange for a vaccine at a pharmacy. The new app is expected to be unveiled later this year, though CVS intends to retain standalone apps for customers who are connected to one part of the business.

“If you are a CVS Health customer, you don’t think in terms of Aetna or Caremark,” says Mandadi. “You think in terms of, 'I need to find the best pediatrician for my child.'”

When it comes to artificial intelligence, Mandadi says his philosophy is that technology is best when used to “enhance the human touch" while "minimizing human error.” He sees a lot of potential to use AI for administrative tasks, like transcribing conversations during a patient visit, but says that AI won’t be used for clinical diagnosis. That work will remain with a care provider.

CVS works with both Google and Microsoft as it explores AI, but Mandadi also sees value in vertically trained models, which are designed to address a specific problem or industry, like healthcare. “We are building our own vertical models,” says Mandadi. “It is a combination of the two.”

Another part of the business Mandadi oversees, fairly unique for a CTO, is CVS Health Ventures. Established in 2021 for investing in early-stage companies, it mostly focuses on consumer-facing startups, with its investments including cancer-care specialist Thyme Care and healthcare-focused wireless carrier Thrive Health Tech.

“Our philosophy with ventures is that we don’t want to be passive investors,” says Mandadi. “We become an anchor customer for them.”

We end the conversation on the topic of self-checkout in stores. Some retailers, including Target and Dollar General, have been rethinking their strategies related to the technology. Theft has been an issue, and some consumers haven’t been happy with the experience. As a result, some retailers are either removing the lanes completely or restricting when they can be accessed.

Mandadi ultimately sees an important role for self-checkout, but retailers must ensure the tech can handle complex transactions and smooth out pain points, like when a shopper wants to use coupons or redeem rewards. CVS is currently testing computer vision technology in its labs to make self-checkout smarter.

“Standing in line for checkout is awful,” says Mandadi. “If we don’t somehow figure out self-checkout in retail, we’ll lose more to online shopping.”

John Kell

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This story was originally featured on Fortune.com