As part of Yahoo Finance's Healthcare Week, reporter Anjalee Khemlani speaks with Daryl Tol of General Catalyst about the transformation of healthcare, as non-traditional companies like Amazon (AMZN) and Walmart (WMT) enter the space. This has pressured established players to modernize outdated systems and provide more consumer-friendly care.

Tol says many new entrants are driven by "strategic alignment" versus truly transforming care. While they can successfully implement needed changes, he argues it's often limited to what benefits their strategic goals, leaving consumers with a complex system that doesn't fully address their needs. He notes value-based care is important, but more vital "connected care" often gets lost. Truly connected, lifetime care is difficult through strategic partnerships alone, and more likely to come from large integrated systems with a broad view, Tols says. Tol believes the ideal future state combines wide access and consumer-centered services with coordinated lifetime care. This requires both new thinking and organized care systems to evolve for modern needs.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live. Additionally, Yahoo Finance will be providing more analysis on the healthcare industry in its week-long special Healthcare: Industry Checkup.

Video Transcript

ANJALEE KHEMLANI: I want to start off with talking about these moves that you just heard me talk about. All these large companies getting into different parts of the health care space. We know that traditional players like CVS, we know as a retail pharmacy giant. But now, so much more than that. How is that disrupting what is the traditional health care routes that patients navigate?

DARYL TOL: Well, I think you see a lot of organizations entering the space because of strategic alignment on their part, which creates bounded transformation. I think they are addressing needed change and parts of the system that are associated with their strategies. But then, those changes will end when you hit the edge of their boundaries, their strategic objectives.

We like the learning-- the opportunity that comes out of those. But we're nervous about the fact that transformation across a system, across lifetimes, isn't going to happen based on these bounded strategic efforts, even if the players are unusual. What we're looking for is how do you create transformation of this many-headed monster called health care that has frankly become too complex, lost sight of the consumer, and left a lot of open space that is not yet being addressed for change. And that's something I think that still needs a lot of attention.

ANJALEE KHEMLANI: Well-- and that's where players like Amazon and Walmart come in. We see them sort of, if you will, eating around the edges of the traditional health care space, finding the sort of low-hanging fruit and low-cost patients that they then transfer, you know, by referral, or other methods, to these health care systems. I wonder in this day and age-- we know General Catalyst has been looking at, you know, running a health care system. I know you're not part of that team. But in the announcement for that, part of what was announced was the idea that this move would then help to create, quote, more profitable, more vibrant, and more innovative systems that serve these patients.

I wonder about that profitability part of it. You yourself know what it takes to run a health care system. Right now, we're looking at, like I mentioned, looking at these, you know, low-hanging fruit options. Does that sort of create an imbalance of our health ecosystem today that was very focused not too long ago on value-based care?

DARYL TOL: Value-based care is important. And if you think about value-based care, it's realigning incentives around proactive versus reactive models of care, as importantly is connected care. Connected care across all of the types and requirements of care and connected care across a lifetime. And as important as segmented efforts can be in experiments around ways to experience care differently, or maybe a more consumer-friendly approach to care, that longitudinal lifetime of care is most likely to happen in organized systems of care like regional health care systems. That's why General Catalyst has put our stake in the ground with health care systems to say yes, it's a difficult time.

But the future is bright. It has to be bright. The best options for connected care exist within really well-run, well-built transformed regional systems of care. And we want to be part of that.

So we're looking to build machinery beyond the core of General Catalyst's history. Storied history is venture capital, stage agnostic venture. And a growing health care practice there. But we're looking at building partnerships and ecosystem of change with some of the top health systems in the country.

We've started a not-for-profit. And you mentioned, of course, the health assurance transformation company that Marc Harrison, former CEO of Intermountain, has come in to run. All of these are pieces of a big vision coming together because health care is hard, and because health care requires a long-term effort that connects to health care systems.