Inside CVS’s Ambitious AI Healthcare Strategy—and the Tech Chief’s Unexpected Caution for the Industry

Whether to ease the administrative burden on physicians, serve as the first point of contact for patients, or rapidly integrate into medical research and diagnosis, AI has transformative potential for the health care field. According to the American Medical Association, two in every three physicians are using AI, an increase of 78% compared to in 2023. 

CVS Health, no.5 on the Fortune 500, is a major player in the health care industry with the largest pharmacy chains in the country. The corporation also provides clinical services through their subsidiaries CVS Caremark and MinuteClinic. 

For Tilak Mandadi, the executive vice president of ventures and the chief experience and technology officer at CVS Health, innovation is already underway to disrupt the health care industry. Before joining CVS Health in 2022, Mandadi held executive roles in experience, tech, and strategy across hospitality and finance, including at MGM Resorts International, Disney Parks, and American Express. 

In a conversation with Fortune, Mandadi discusses his most pressing agenda items and his predictions for the health care industry in the AI era. 

This interview has been edited for length and clarity. 

What inspired your interest in leveraging AI within the health care sector?

The health care industry has not been an enthusiastic or early adopter of technology. There was a time when the health care industry lagged behind industries, like finance and others, in the adoption of technology. That is pretty clearly reflected in the type of experience provided to consumers. 

My view is very similar to what happened in the developing world, where they lagged behind the developed world in the adoption of wire telecommunications. Then, when cellular came into the picture, they actually leapfrogged the developed world in how connected people became. 

In my view, AI is that leapfrog technology for health care. We are primed for it, the use cases are very crystal clear, and the technology is there. I think this is health care’s opportunity to really leapfrog. 

You mentioned that the use cases are crystal clear. Can you provide an example? 

We have care management, where we have nurse practitioners call people that are going through stressful times, getting treated for things like cancer. These nurse practitioners call them and help them navigate their health care and try to take the stress out of their lives. Forty percent of their time used to be spent preparing for the call. AI takes that down to 5%. So what happens with the other 35% of the time? They actually get to spend more time with the customers. 

Another example is that we have people who call patients and members, and the call itself typically takes X number of minutes. Then, twice that amount of time would be spent summarizing the call. We now have AI that actually records the call and summarizes it for them.

I hate to say this, but I use this all the time, so I’ll say it: AI allows us to take the stupid out of work and allows us to do the real value-added work. 

What is your number one agenda item as chief experience and technology officer at CVS Health?

The number one item is, how do we transform health care experience? Good experience leads to people engaging in their own health better and more. People engaging in their own health leads to trust in health care and doctors. Trust leads to behavioral change in how people view their lives, and this behavioral change is conclusively proven to lead to better health outcomes and longevity. 

I know it’s a long chain, but all of that starts with health care experience being better, and that’s our primary focus right now. How do we completely transform experience?

So, how does AI play a role in transforming experience and behavior change? 

Behavior change comes from a variety of things. It comes from, for example, drug adherence, so actually being disciplined about taking your drugs every day. If AI helps us to identify people who are not going to be disciplined based on their past behavior, we can proactively engage with them and give them the tools necessary to adhere to drugs better. 

We identify what would be the right thing for them to do next in their health journey. We want them to take control of their health journey, and AI makes that possible by simplifying health care. The reason people are not taking control of their health is not because they don’t want to, but because it’s so complex. It’s overwhelming.

There’s so much talk about the role AI is already playing in health. There are also concerns about how to democratize access and ensure the technology will protect people’s data. How are you addressing this? 

There’s a saying from my days working at Disney. It was from a science fiction writer who said, “The best technology is something that people don’t even know exists.” Technology in your face is not particularly productive. Technology that takes away human touch is not something we are interested in at all at CVS. We are known for our human touch. And anywhere we use technology, it needs to enhance the human touch, not in any way replace it.

We are one of the first signatories for responsible AI in the last administration. We are continuing that when we think about responsible AI. The principles we follow are really simple. There will be no bias whatsoever in our AI models. There will be no hallucinations in the way our AI works. The use cases we use AI for are clear, defined and enumerated. There will be no surprise about, are you using AI here or not? We know exactly what the model is doing.

The most important philosophy we have of AI is that AI will never make decisions. Period. So AI would help us collect the information. AI will help us take away the stupid work, the administrative work that we don’t want to do, but decisions that impact health outcomes would always be made by human beings who are qualified.

And what about the data piece? 

 If we give the ownership of health care data to the patient, to the member, to the consumer, nobody else should have control of it. I can give consent for use of my data to others, but I should have access. 

I mean, think about it. Do you have one place where you could go for your health records? It’s insane. We want to help people to own their health records, their health data. And then I want to create complete interoperability across the stakeholders, between PBMs, providers, a health system, and health plans. Data should flow with no hurdles, and that interoperability is going to make the experience a lot better.

Looking five to 10 years down the road, how would you define what success might look like at CVS, under your leadership, and specifically as we think about the implementation of AI? 

I believe AI and technology can drastically transform six dimensions of health care. 

One is, how do we improve access to health care? Why can’t our pharmacists provide more and more health care? How do I use technology to allow consumers to have better and broader access to health care? 

Second, how do we reduce the cost of health care? And technology is going to play an incredible role.

And it should be crystal clear what your benefits are in real-time when you’re with a doctor. Health care is probably the only industry that I could think of where you go buy something without knowing what it’s going to cost you. So you go for a surgery, but it’s not clear what my total cost is. I want technology and AI to take away that confusion. Before you go for a procedure, we will tell you exactly what your cost is going to be. 

You want to live longer and you want to live a quality life. I think technology is going to make a huge difference. 

What timeline are we talking about here to see this in action? 

I think in five years, health care is going to be unrecognizable. In 10 years, it will be completely different. 

You should be able to go on the CVS app to click a button and actually talk to an AI agent for the initial consultation. The AI agent will then connect you seamlessly to a human doctor, all in real-time. The biggest issue people have in health care is that they are forced to do all the homework and all the navigation across an extremely complex ecosystem. What customers want is somebody else to do all the homework and provide a one-stop shop.

What types of roles or skill sets are going to be emerging in the health care system with this major technological transformation? 

The absolute worst thing that companies can do is create a chief AI officer role. That is by far the worst thing that companies can do. Did we create a chief cellular phone officer for the company when the mobile phone became ubiquitous? That is mistaking a tool for a solution. I think companies should create the chief experience officer role. 

I think the existing roles are actually going to acquire new responsibilities. I think AI will become an integral part of the day-to-day life of the medical officers, the service representatives, and the customer support folks. Everybody will use AI in their day-to-day life to do their jobs better.