Lessons from Dr. Ali Khan, Chief Medical Officer of CVS/Aetna Medicare, on scaling value-based Care
Dr. Ali Khan, Chief Medical Officer of CVS/Aetna Medicare, the leading health solutions company
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Today, we’re excited to get to know Dr. Ali Khan, Chief Medical Officer of Aetna Medicare, overseeing healthcare services for over 4 million members.
His career spans across some of the most impactful value-based care organizations, including Oak Street Health, CareMore, and Iora Health. He is also an adjunct lecturer at Northwestern University's Kellogg School of Management and serves on the clinical faculty of the Yale School of Medicine. Additionally, Dr. Khan is a director on the American Board of Internal Medicine. Also a trusted advisor on Pear’s Health Industry Council.
Before Aetna, Dr. Khan played a key role in Oak Street Health’s rapid expansion, scaling it from 21 to 200+ clinics, culminating in its acquisition by CVS Health. Prior to that, he was instrumental in CareMore Health’s growth and innovation in care delivery for vulnerable populations.
He holds an MD-MPP from Virginia Commonwealth University and Harvard Kennedy School, completed his residency at Yale, and has taught at institutions like Northwestern Kellogg and Yale School of Medicine.
As a leader in value-based care, he has firsthand experience in building, scaling, and optimizing healthcare startups—making his insights invaluable for founders, investors, and industry leaders navigating the complex world of healthcare innovation.
Here is the recording if you would like to listen!
From Clinician to Healthcare Executive: Dr. Khan’s Journey into Value-Based Care
Dr. Khan began his career as a practicing physician but quickly realized his passion for healthcare operations and policy. Early in his residency, he was drawn to opportunities that bridged clinical work with system-wide impact.
A defining moment came at an academic conference where a judge critiqued a leadership curriculum he had developed, suggesting it should be privatized. That judge later became his first boss—Dr. Andrew Schutzbank at Iora Health (also a Pear advisor!)
Iora Health’s innovative model, focused on delivering value-based care to underserved populations like casino workers in Las Vegas, was a game-changer for Dr. Khan. He saw firsthand the power of non-fee-for-service models and decided to dedicate his career to scaling these approaches.
Unlike traditional pathways in academic medicine, he found his calling in the operational side of healthcare—helping design and implement care models that improve patient outcomes while making financial sense.
His experience at Iora Health was foundational, teaching him how technology, clinical workflows, and payer relationships must align to drive meaningful change in healthcare.
Lessons in Scaling: From Iora Health to CareMore to Oak Street Health
At Iora Health, Dr. Khan learned the importance of cultural and technological rigor—creating an environment where clinicians and technology teams worked together to optimize care.
Moving to CareMore Health, he took on a leadership role that exposed him to integrated payer-provider models. This experience underscored the importance of aligning financial incentives with clinical goals.
CareMore’s hospital-at-home and post-acute care programs showed how alternative models could improve outcomes while reducing costs—providing a blueprint for startups looking to disrupt traditional care pathways.
At Oak Street Health, he witnessed the power of operational discipline in scaling a high-touch, value-based care model across 24 states. The organization’s rapid expansion demonstrated that great care delivery could be replicated at scale with the right systems and processes.
The acquisition of Oak Street by CVS Health reinforced the growing trend of large corporations investing in value-based care. For founders, this signals an opportunity: aligning with major players can provide both exit opportunities and pathways to scale.
The Reality of Building a Business from 0 to 1 in Healthcare
Healthcare is uniquely challenging for startups due to regulatory complexities, long sales cycles, and the fragmented nature of payers and providers. Unlike tech startups, where speed is a competitive advantage, healthcare startups must navigate a slower, more methodical path to scale.
Many founders underestimate the difficulty of securing payer contracts and the importance of aligning incentives. Dr. Khan emphasizes that startups must deeply understand reimbursement structures to succeed.
Early-stage healthcare companies must balance clinical credibility with business execution. Investors and customers alike look for strong clinical validation, but that alone is not enough—operational excellence is equally critical.
One of the biggest mistakes startups make is failing to test their assumptions early. Rapid iteration and adaptation are essential, as even the best-designed healthcare solutions often require pivots to align with market realities.
"If you haven't had to change your approach at least two or three times in the first year and a half of operations, you probably haven't tried hard enough, right?"
Building a strong network of industry insiders—whether experienced operators, payer executives, or clinical champions—can be a game-changer for startups looking to gain traction. Relationships matter more in healthcare than in almost any other industry
Business Model Insights: What Works (and What Doesn’t) in Value-Based Care
Full risk vs. shared risk models: Dr. Khan emphasizes that taking full risk is the ultimate goal, but many startups struggle to get there. Shared risk models can be a good starting point, but they require careful financial planning.
We haven't actually pushed hard enough or in the right ways to help major providers get to the critical mass of full risk necessary for them to change their operations, right? Said differently, I could give a capitated arrangement to a cardiology group paying millions of dollars to take care of cardiology needs for 100,000 members, but if that only represents 4% of their revenue, they're not going to really do anything. They might put a nurse practitioner in the office for risk adjustment, but they're not going to wall off cardiologists to do nothing but take care of the Aetna people."
Medicare Advantage as a growth channel: Many successful value-based care models have been built around Medicare Advantage due to its flexibility and reimbursement structure. However, new regulatory shifts are forcing players to focus more on clinical outcomes.
“Competition is going to happen based off of who can drive clinical outcomes. The last 15 years in value based care has seen a number of players who are thinking about how to reduce total cost of care. I think that pendulum is swinging towards care management. It's not about did we pick the cheapest cancer drug. But it's that we supported the patient through whatever they were taking to prevent them from going to the hospital with intractable nausea or vomiting.”
Payer-provider alignment: Companies that can integrate seamlessly with both payers and providers are at an advantage. The best models reduce administrative burdens while improving care coordination.
The importance of execution: Having a great idea isn’t enough—operational excellence is what sets successful companies apart. Startups must be able to deliver results reliably before scaling.
Regulatory headwinds and opportunities: With changing policies like V28 affecting Medicare Advantage, companies must stay agile and anticipate shifts in reimbursement models to remain competitive.
The Role of Technology in Transforming Healthcare
AI and automation have the potential to enhance care delivery, but reimbursement remains a major hurdle. Many innovations struggle to gain traction because they don’t fit neatly into existing billing codes.
The best AI applications in healthcare focus on augmenting clinician workflows rather than replacing human expertise. Tools that help with administrative tasks, care coordination, and decision support are seeing the most adoption.
Companies like UpDoc, Council, and Ansible are demonstrating how AI can drive efficiency in behavioral health, chronic disease management, and medication adherence.
Startups must be strategic in their go-to-market approach. Selling directly to payers is often difficult, while engaging providers through value-based partnerships can lead to faster adoption.
The future of healthcare technology lies in integrating AI with existing care delivery models—creating seamless, clinically validated tools that improve outcomes while reducing costs.
"We're still in use case collection mode right now. It's such an early stage with AI. What we haven't gotten to yet is a system that takes information, prioritizes it into an action list, makes an action plan, and then helps me do that action plan over the next five to seven days. That's the Holy Grail - how are we showing that we're actually doing stuff and we're doing stuff proactively?”
Future Trends: Where Healthcare is Headed
A shift toward clinical excellence: Medicare Advantage and other payer models are increasingly prioritizing clinical outcomes over cost savings alone. This is a major shift that will impact how startups position themselves.
Increased consolidation: Large payers and providers are acquiring innovative startups to integrate new capabilities. Founders should consider partnerships with major healthcare incumbents as part of their scaling strategy.
Omnichannel care models: The future of healthcare will be hybrid—blending in-person, virtual, and home-based care. Companies that can operate across these modalities will have a competitive edge.
More stringent quality measures: Healthcare organizations will be judged not just on cost savings but on tangible patient outcomes. Startups must build robust clinical validation into their models from day one.
The rise of proactive care management: Rather than reactive care, payers and providers are investing in solutions that prevent hospitalizations and improve long-term patient health. This is a key opportunity area for new startups.
Advice for Healthcare Founders: How to Succeed in a Complex Industry
Understand the problem deeply: The best founders are obsessed with the problem, not just the solution. A surface-level understanding won’t cut it in healthcare.
Build the right team: Success in healthcare requires expertise across clinical, operational, and financial domains. Founders should surround themselves with experienced advisors and operators.
Validate your model early: Start small, test assumptions, and iterate quickly. If a startup hasn’t made adjustments in the first 18 months, it’s likely not learning fast enough.
Be patient but persistent: Sales cycles in healthcare are long. Founders must be prepared for slow adoption and should focus on building strong, long-term relationships.
Think about scale from day one: The most successful healthcare startups don’t just solve a niche problem—they build models that can be scaled across geographies and patient populations.
Rapid fire questions:
Dr. Khan’s Favorite Interview Question: How Do You Handle Failure? When interviewing candidates, Dr. Khan often asks them to describe a time they “fell flat on their face” while leading a team—whether personally, professionally, or in sports.
Dr. Khan’s Book Recommendation: "The System" by David Broder and Haynes Johnson. Dr. Khan’s favorite book on healthcare policy is The System, which chronicles the political battle over healthcare reform in the early 1990s, particularly around Hillary Clinton’s healthcare plan. It provides a historical perspective on the intersection of policy, politics, and healthcare innovation, offering key lessons that are still relevant today. He recommends it for anyone looking to understand why healthcare reform is so difficult and how government, business, and public opinion shape the system. Founders and investors in healthcare can gain valuable insights into why certain policies succeed or fail—and how that impacts startups navigating the regulatory landscape
A Surprising Fact About Dr. Khan: He is obsessed with Washington, D.C. sports teams despite their often lackluster performance. While many see him as a highly analytical and strategic thinker, he can talk about DC sports all day, especially football and basketball. His love of sports and competition has shaped his mindset around team-building, resilience, and navigating challenges in healthcare.