LISTEN TO THE COIQ PODCAST:

  • Telemedicine is here to stay. What to expect the day after w/ Joe Kvedar

How Startups Can Create Value as They Navigate Healthcare's Shift to Risk-Based Models w/ David Johnson

 

There are record amounts of investment into healthcare and provider-based services – but to get your slice of the market, you’ve got to be better, faster, and smarter than the big, traditional players.

Successful innovators are zeroing in on the weaknesses of today’s healthcare industry and making them better. And by “better,” we mean working toward a model that caters to the demands of the changing landscape: better outcomes at a good value to all stakeholders, with a strong focus on the customer experience.

In this episode, 4Sight Health CEO and author of The Customer Revolution in Healthcare: Delivering Kinder, Smarter, Affordable Care for All, David Johnson shares his insights on:
 
  • How the market is shifting toward risk-based models that demand better value
  • How new innovators are adapting to the shift and changing the game
  • Tips for startups (and bootstrapped upstarts) to stay competitive, including a strong early adoption strategy

 

 

Guest Bio

David Johnson is a speaker, writer and CEO of 4Sight Health. He is the author of The Customer Revolution in Healthcare: Delivering Kinder, Smarter, Affordable Care for All.


For more information, visit https://www.4sighthealth.com/, and buy the book here.

 

Episode Transcript

 

00:00:01:04 --> 00:00:18:00

Speaker 1: Welcome back to the show, COIQ listeners on today's episode, we have Dave Johnson with us. He is the CEO for foresight health and he's authored a book called the customer revolution in healthcare. That just came out a couple of months ago. Welcome to the show Dave.

 

00:00:18:13 --> 00:00:24:04

Speaker 2: Well, thank you. Delighted to be here. Happy to meet all of your audience.

 

00:00:24:06 --> 00:00:30:04

Speaker 1: Yes. So, um, you know, before we get started, tell folks a little bit about who you are and what you do.

 

00:00:30:21 --> 00:01:05:06

Speaker 2: Sure. Um, well I, I'm, I've got a little bit of an unusual background. Roxy, I was an English literature major in college and a peace Corps volunteer in Africa and thought I wanted to do international development for a career and went back and got a degree in public policy at, at, at Harvard. And uh, one thing led to another and I ended up as a healthcare investment banker, which would surprised nobody more than my own 25 year old self. And I had very successful, uh, healthcare investment banking career working on behalf of, of large health systems.

 

00:01:05:12 --> 00:01:10:00

Speaker 1: I bet your parents were surprised from the peace Corps into that career, right?

 

00:01:10:10 --> 00:02:11:17

Speaker 2: Yeah, yeah, yeah. You know, when I was going into the peace Corps, my dad tried to, every way you could think of to talk me out of it. And so I on a business track, I think, uh, he was secretly grateful. Um, uh, and, uh, so I was very successful banking career, 30 billion in bond issues and, and so on. Um, but uh, you know, took 25 years. But what I realized, uh, was I think what I really am as a journalist and, um, I've served for the last five years. Uh, I've had my own company, foresight health, written two books and produce a lot of, um, thought leadership on market driven healthcare reform. Um, and in some ways this complex nuance industry that we work in, I think sometimes requires legit literary, uh, sensibility, cultural sensitivity, public policy acumen and market knowledge. And I use all of those prisons to, uh, to think about and, and reflect and hopefully comment intelligently on the industry.

 

00:02:12:04 --> 00:02:31:06

Speaker 1: Sure. Yeah, absolutely. It's a very diverse background. So I'm, I mean, I'm excited about today's conversation. Um, so how would you describe this rollercoaster of healthcare innovation these last few years? What's happening?

 

00:02:31:22 --> 00:03:39:10

Speaker 2: Um, innovation, uh, one way to, to look at it as there are record amounts of, of investment from both private equity and venture funding, uh, going not only into healthcare services but into provider-based services. And I think the smart money, um, believes there's enormous opportunity to deliver the right care, right time, right place at the right price, uh, by being better, faster and smarter than, um, the current, you know, providers in the system. Uh, one of the ways I look at it, Roxy is if you imagine a two by two grid, um, with um, duration of care on the X axis, going from episodic to ongoing and then care uncertainty going from low to high on the Y axis, uh, you end up with the four boxes and lower left is high degree, uh, low low risk, uh, episodic. So high degree of certainty of a good outcome.

 

00:03:39:14 --> 00:04:39:11

That to me is, is routine or commodity care. And probably 70% of healthcare falls into that bucket. If you go up, which is high risk, but episodics something like a heart transplant, um, uh, you know, that would be, and then, um, upper right would be, um, high risk and ongoing. That's the real solution shop kind of stuff, complex care, comorbidities, uh, and then lower right would be the non-acute, um, chronic care. And I think health systems and the industry overall, you know, sort of the traditional players are trying to be good at all of that and end up not necessarily being good at any of it. Um, you've got pockets of excellence, so they're trying to be all things to all patients. And I believe that what the marketplace is doing is picking spots where they believe they can outperform the current system. And it's a pretty low bar in many cases.

 

00:04:39:11 --> 00:05:33:19

So you're seeing, uh, the rise of these enhanced primary care companies, Virgin air companies that are really doing it better, faster, cheaper with, with, uh, with greater, uh, customer service. You kind of think about that specialty care, uh, the emergence of high volume focus factories, uh, taking volume out of hospitals, putting it into ambulatory centers with specialized expertise. Um, he's thinking of the lower right, which is the non acute chronic, and we're seeing all the big retail chains sort of moving in that direction. CVS, Walmart and so on. And then upper right is um, um, for the male clinics of the world. But the kind of the question I always have is how many of those do we really need? We have where I am in Chicago, we have six places that do heart transplants, only one, um, does more than 25, uh, most to single digits.

 

00:05:33:20 --> 00:06:20:22

I can't think of a less efficient way to do it with, with worse outcomes. So I think when you think about how the market's reacting, it's reorganizing itself to a sort of attack these buckets. And the more that we change the payment for care over to risk based models and ultimately full risk models, uh, the more important efficiency price outcomes will become. Uh, which will put some of the training, which as you know, what some of the ways, uh, traditional ways that, uh, providers deliver care today at risk. You, you know, you won't be able to get away with doing a crappy job and they're getting paid more to fix it. So, um, long answer. Yeah.

 

00:06:21:12 --> 00:06:47:08

Speaker 1: So one of the things that I talk about often is this statistic that 95% of innovations that are brought to market fail to reach any adequate level of customer acceptance or profitability. And that's really not in healthcare, that's just overall across industries. And then you think about the additional complexity that layers in healthcare. Why do you think some, you know, innovations fail and some succeed?

 

00:06:47:14 --> 00:07:53:14

Speaker 2: Yeah. Well, um, have you seen the, uh, you've probably seen the, the, the, the curve of, um, innovation. You've got the early adopters and, yeah, yeah. And they, they're willing to try everything. And, um, and the key is to get to about 20% market share with whatever the new innovation is. And what's, what's hard about that is that next group is, um, they're called pragmatists are early adopters and they have to have a business. They aren't going to just do it cause it's cool to do. They have to have a business reason to do it. And so most companies that fail tend to fail, uh, in what they call that trough of disillusionment. You know, we're crossing the chasm, so you just can't get there. Uh, so that's writ large in, in, you know, uh, society or, or, or cross industries. I think in healthcare, um, in some ways it's even tougher because, uh, we don't necessarily have companies that are purchasing based on value.

 

00:07:53:14 --> 00:08:57:14

They're purchasing based on how do I optimize revenues in a fee for service system. And so navigate, you know, coming up with a better solution. Uh, even if it's the best solution doesn't necessarily mean you'll gain, um, acceptance. And now, having said that, I did mention that record levels of, uh, private equity and venture money are flowing into the space and they're flowing. They're still flowing into device and pharma like they always have. But, uh, the services and provider side are disproportionately benefiting. Um, so I, I think the market beliefs, uh, there are all kinds of opportunities to improve. And one of the things I'm, you know, you, you look like you're a millennial. Um, uh, Oh, okay. Well I did have really, really good genes. You are going to live to 102, like your daughter's generation. Then you know, when you think about that group, half of them don't have primary care physicians.

 

00:08:57:14 --> 00:09:58:12

They think hospitals are only for really sick people. They only want care when they need it and only when they need it and they want it to be on demand and a click away and really convenient. Uh, so I think there are a number of sort of millennial entrepreneurs that are coming in to fill that space. And this is the generation that taught us to ride with strangers and to stand strangers houses. And I think they're going to reshape the way we do, uh, completely. Uh, so the digital natives, um, and so I, I think there's a chance that healthcare could become or could exceed those rates just because there's so much room for improvement. And, uh, the opportunity to take technologies that have worked in other industries for consumers and apply them to healthcare is so fast and people are doing it. So, um, and the current industry is not terribly good at it. So, so it's a disruptive moment.

 

00:09:59:07 --> 00:10:18:18

Speaker 1: So I th one of the things that I think is really interesting is you just talked about the, the technology adoption curve, the diffusion of innovation and is as common as it is. It's very rare that I come across a health innovator that is basing their targeting strategy

 

00:10:19:20 --> 00:11:06:21

on, on that market segmentation. So it's still usually more of the traditional sense that they might be segmenting users versus, you know, the buyer or the doctor versus the health plan or the payer. Um, but, but I, I just, I rarely see folks go that step deeper. That really becomes a game changer and foundational to their strategy going forward, of not looking at the early adopters. And so they spend so much time with the pragmatists that you just talked about trying to arm, twist them and convince them that they have a problem that they can solve for them. And it's just kind of a Mitch mismatch of, of problem and solution, um, or, or awareness and interest to, to solve that problem at that point in time.

 

00:11:07:03 --> 00:12:19:23

Speaker 2: Yeah, there are two things I love about capitalism. Um, the first is the ability to create something from nothing. So you're entrepreneurs, uh, it's probably one of the highest forms of human achievement and it's, you know, and people obviously gravitate to it. Um, so that's, that's, that's great. I mean, my company didn't exist six years ago and now it's, you know, a reasonably good little company. Uh, hopefully it gets bigger. Uh, and I'm, I that process of trying to figure out what the marketplace is, what customers want, how to deliver it, how to price it, uh, how to respond to setbacks, how to seize opportunity, how to not be overwhelmed by opportunity. All those things are, are, are remarkably, um, invigorating, but they're also hard. And I think that one of the biggest things that entrepreneurs fail to recognize, uh, and I see this a lot particularly with, um, uh, engineers and, and people on the tech side, the health tech side is it really doesn't matter how good your product or services, ultimately you've got to convince somebody to buy it.

 

00:12:20:16 --> 00:13:37:08

And I S I do a fair amount of advisory work for early stage companies. And when I'm looking at companies, I, I'm now evaluating the CEO not only on their ability to, you know, produce a great product. Uh, cause I think most technically proficient people are good at design and their instincts are to make it better. But it's, it's that marketing component, you know, can you put yourself in the chair of the person across the table, really understand the problem they're trying to solve, uh, figure out whether or not you can actually help solve that problem. And if you can get them to agree to roll up their sleeves and work with you on that. Um, you know, too many people just say, you know, look at my great widget and they haven't thought about how it fits into. So those that do, um, that can, can convince people to buy what they're selling, uh, have really crossed a big threshold. So, you know, all these, you know, pre money companies are, you know, uh, they're, they're gone at it, they're working hard. But, um, at some point you gotta turn, um, the potential into actual sales. And that's, that's a hard thing to do. And I think that discipline is part of what makes capitalism work.

 

00:13:37:22 --> 00:14:19:22

Speaker 1: Yeah. Yeah, absolutely. Um, you know, it's true. So many of the folks that we work with, um, you know, think that because their innovation is technically or functionally superior than what's in the market, right? It's, it's better. It's, it's faster, it's more efficient or it's cheaper. And, um, even, even if they have demonstrated outcomes that it's better, it still doesn't guarantee success right. Way, way too many times. So this kind of leads me to my next question. So how, what are some of the strategies that you recommend for health innovators to rise above the noise, especially with early adopters?

 

00:14:20:12 --> 00:15:13:07

Speaker 2: Yeah. Well, I mean, you just heard a dose of it, which is really try hard to put yourself in the position of the person across the other side of the table that you're trying to sell to and really understand, um, what problem it is they're trying to solve and whether you have a solution. So when, just I'll give you an example. When I was a banker, um, I would, uh, for my first meeting, and maybe this was an indication that ultimately I was going do turn more to journalism, but I would go to a first meeting with just a pad of paper and a, an a pencil. And I would interview the person. And if it was really important, uh, I would write down what I thought the current status was and what they're trying to do, why they're trying to do it with what the goals were, and then I would let that person read it.

 

00:15:14:03 --> 00:16:04:24

And I could usually get it 75 80% of the way. Right. Uh, and then get their input. And then at that point we had a shared document that accurately reflected exactly because they had contributed and signed off on it. Um, what it was they were trying to do in terms of capital formation or acquisition or whatever it was. And then I would go back and think hard about whether we could help and if we could, I'd say, well, here's what we've agreed on. Um, here's what I think we can help. I don't want to be adversarial. Why don't we get on the same side of the table and roll up our sleeves and go at it? And I, you know, Roxy, I could not get other bankers to do that. I mean, they always wanted to take their Pitchfork and well, you know, and I'd say, don't bring a pitch book. And they were reporting to me, right, don't we?

 

00:16:07:14 --> 00:17:08:20

That's where we're going to have a conversation. Well, just in case, you know, so I mean, I, I almost can't overemphasize that part enough. I think the other thing is, is appreciate, um, particularly if you're trying to sell into a health system or not, but even if he got a great point solution, um, somehow it's got to integrate into everything else that's going on. I believe ultimately we're going to move toward a platforming in the same way Amazon does that, uh, these companies will be somewhat agnostic about what they own and where they partner and where they outsource. But what they'll have in common is the ability to mix and match attributes so that you can, they can design products that meet customer needs built around brand and customer experience. Um, so, you know, having that narrow conversation without having a sense of how this could integrate into, uh, a broader a service platform I think is also a mistake that many fall into.

 

00:17:09:15 --> 00:17:50:01

Speaker 1: Yeah, I think so. Especially for the latter part of the market when the market is a little bit more mature, that that whole product configuration and, and I didn't, you know, you don't have to be the one to deliver the whole thing, but being able to have those partners and making sure that it's going to be able to be fully integrated is really, really critical. Um, so it sounds like you've worked with large institutions that are trying to innovate within and then with some early stage startups that are innovating externally, um, how would you describe the differences between those in the challenges that they face and how they overcome them? Well, I,

 

00:17:50:01 --> 00:18:48:11

Speaker 2: I called the, uh, the smaller ones, the upstarts, right. And then you've got, uh, and, and I liked the, the title of the book is the customer revolution, so, right. So we've got upstart revolutionaries and, uh, incumbent revolutionaries. And the, the challenge for the upstarts are what we've been talking about, which is, uh, getting access and sometimes resources. Uh, the incumbents, you know, are already market leaders. Uh, they have a whole different set of problems, uh, usually related to the fact that what they're getting paid to do is different than what they say they wanna do. So, um, want it, you say you want to put patients first, but if I look at what you do rather than what you say, it's still takes a month to schedule an appointment. Uh, you don't have customer friendly software, um, uh, you don't follow up terribly well. You know, all the things that we're very familiar with as consumers of care system.

 

00:18:49:03 --> 00:19:54:13

Um, I very rarely see a disconnect between what a, what a small, um, entrepreneurial company says it wants to do and what it's doing that, that those are perfectly aligned. I often see a disconnect in healthcare between what a big company, big and common company says it wants to do and what it's actually doing. Um, so I, yeah, yeah, no, it's uh, um, you know, uh, there was, I used to love the show Dallas. Uh, he probably remember it and there was one episode, it was long time ago. Obviously we're jr the main character was, was scheming with his brother Bobby back and forth. And finally, Jay, you know, you know Bobby, once you give up your integrity, the rest is a piece of cake. And I think in healthcare we've got sort of this built in hypocrisy in a lot of what what happens because we've kept this kind of artificial way of paying for things not related to value, just related to volume.

 

00:19:55:01 --> 00:20:49:01

And that's what everybody does to sort of keep the machine going and earn a great living, but they know that's not the right thing to do. So they talked about all the value stuff they're doing, but um, you know, if you're 98% fee for service and you've got one person working on social determinants of health, that's probably not going to get the job done. Right, right. Um, so I, I what I am on the incumbent side, what I've seen for really successful companies is, is this concept of, of dual transformation. Have you heard of this? Um, so you've got the existing business and then the new business and so, so called the existing AE and you run that as efficiently as possible. Um, and then B is the whatever, the new businesses and I S I'd say broadly speaking in health, um, health is a, and health is B.

 

00:20:49:02 --> 00:21:56:04

You know, if you're going to try and eat on health, that's very different than trying to compete on healthcare. And yet if we're going to go to population health models and vertical integration, going to have to compete on health. And then you've got this sort of sea level up above which, um, kind of settles the jump balls and make sure resources, but essentially a does a a and you don't mess with that and B does B and you don't mess with that and let them go about their business. And um, you know, an example that would be the Fairview health system, Fairview university of Minnesota health system, which is just opened a system operation center. Um, they used to have 600 ways of calling into Fairview. Uh, now there's one center, so one call does it all. Um, they've also, uh, got some predictive analytics that sits in this building, whether a bunch of screens they can anticipate where, um, bottlenecks are gonna occur and then they can send a nudge to a nurse or to get a discharge out earlier and just bringing down like the States and proving that is kind of classic a business, you know, how do you run it better?

 

00:21:57:14 --> 00:22:52:02

And simultaneously they've created this company within a company to handle all the risk business. So they've got a little bit of an insurance company, they've got physician groups, so all that care management activity isn't trying to succeed within the fee for service to kind of treatment environments. So they really are competing on healthcare and a and competing on health and B and budget, different culture, different goals. Yeah, absolutely. You completely understand. And um, um, so it's really hard to do. I mean, but I don't, I think if you try to do both inside the same company, it fails. It's just, you know, like when Kodak tried to do digital photography inside the film business and film made digital for lunch and ultimately, you know, choked on it. So it's just one roadblock after another.

 

00:22:55:17 --> 00:24:00:11

Um, so who are some of the health innovators out there, both large, our upstart that, um, that you think are doing it well? Oh, there are lots. There are lots of them. Yeah. Well, I, and, and some, some of the partnerships are kind of interesting too. Um, there's a company called grand rounds of the San Francisco Silicon Valley funded and they started as, um, uh, doing second opinions. So they collected a network of top 1% specialists around the country. They would contract with employers who would pay per member per month. One of their employees would get sick, grand rounds would come in and look at the diagnosis and the treatment pattern, and about two thirds of the time would it, and usually change it in ways that were less intensive. Um, and that's, that's a great service, but they have now kind of migrated more into the primary care space and they have an algorithm that literally ranks every primary care physician in the country.

 

00:24:01:03 --> 00:25:01:15

Um, and what they've discovered is that higher performing primary care physicians get the referral patterns right the first time, uh, and, and get the prescriptions right the first time. So for example, 70% less, um, opioid, uh, prescription opioid prescriptions. Uh, so they, grand rounds is now partnering with Walmart and, uh, they are going to roll out this service. So when a Walmart associate needs a primary care, they will have their ability to look at all of the primary care physicians in that region and direct the associates to these higher performing primary care physicians. And the belief is, and it's already started to prove itself out, that they will get better care. And what we all want, you know, better outcomes, lower costs, uh, our customer experience, um, uh, Comcast is doing something with, uh, with a similar company, uh, what different from, uh, grand rounds.

 

00:25:01:15 --> 00:25:59:16

But, uh, another upstart company called crossover, uh, that does, uh, onsite clinics, nearby clinics and now virtual clinics. And Comcast says 180,000 people nationwide. So they're gonna run all of their employees for these crossover clinics where they have a lot of people, they'll have a, you know, onsite where there are reasonable number, it'll be nearby and otherwise it will be virtual, but it'll be one platform integrated great care. Um, and you know, Comcast for a long time has had some of the best outcomes of any of the corporate buyers. So part of what I think is happening is that the people that buy healthcare government and, uh, self insured employers are starting to demand more value from the system. Um, you know, demand driven change, superhero results. It's a little like a, you know, McDonald's is experimenting with kale salads, not cause they don't want to sell you more burgers.

 

00:25:59:16 --> 00:26:55:01

It's because some of their customers want some healthier options. And I've been waiting for this for a long time, but I think the buyers are getting smarter. Um, and the only response many of the big systems have is to really use, uh, you know, market leverage on, on pricing to keep them in, in network. So as we get these new types of services, like the two I just described, that starts to break down, you know, your daughter's virtual care, um, company, we'll, we'll, we'll, we'll get her generation and um, you know, I think the boomers too, um, people more like me than you, but you'll get there eventually are not going to go quietly into that good night. So they're starting, they're disproportionately buying Medicare advantage, which is a capitated payment model. And ultimately when you kind of get through it, you've got to take care of a group of people for a certain amount of money that changes everything.

 

00:26:55:11 --> 00:27:34:18

You know, these MAA plans, you get a free hearing AIDS, a gym memberships, dental care, all this other stuff coming in. And I think the boomers will also redefine end of life care. And I could go to any of these segments. And I, you know, if you wanted to know a creative hospice company, I can give you the handful of those. If you wanted to know a company that was thinking about PA patient navigation in a coherent way, I could talk about that. If you wanted to know about a company that was figuring out how to pull data up and put it on a platform so that innovative companies can write apps, I can tell you about that. They're all over the place. Um,

 

00:27:34:24 --> 00:28:09:00

Speaker 1: the pattern, Dave, what, what, what is the, um, if there is any, cause what I think is interesting is the first two that you described in detailed, um, you know, their business model involves the self insured employer group as the buyer. So they're able to circumvent a lot of the barriers that they might, um, have to face if they were going, um, into the traditional healthcare system. So what are, you know, it's kinda, you think about it. Are there any patterns to those examples that come to mind that we can, we can gleam?

 

00:28:09:15 --> 00:28:33:14

Speaker 2: Yeah. Well, uh, Roxy, the little slogan from my company or the big slogan for my little company, you know, like the little engine that could, is outcomes matter, customer counts and value rules. So I think what all these companies have in common is, are those three things that they are focused on, outcomes not on process. Um, they're focused on customers not on,

 

00:28:33:21 --> 00:28:35:11

Speaker 3: Mmm. Mmm.

 

00:28:35:17 --> 00:28:51:24

Speaker 2: Any number of other things that you can worry about and specifically on driving better outcomes and improving customer experience and value, you know, getting better outcomes for lower cost. So I would say every company that I would point you to is contributing to that in some way or another.

 

00:28:52:18 --> 00:28:53:08

Speaker 3: Mmm.

 

00:28:53:23 --> 00:29:55:08

Speaker 2: I sometimes, uh, I, if he can, he can tell you like two by two grids. Uh, if he can imagine one, this one will be easier than the last one where he, yeah, he got a sort of Mark it on the bottom. So you got bad market and good market. And then he got medicine, um, on the, on the Y axis and bad medicine and a good medicine. So in the lower left, bad market, bad medicine, you've got fragmentation. Um, you're paying too much. You know, it's, it's, it's awful. Um, if you're on the lower right where you've got good market, put bad medicine, that's like a, a reasonably priced MRI that you don't need, even if it's just 500 bucks, you don't need it. That's bad for you. Yup. Yup. So that would be over-treatment. Um, if you go upward left, um, so it's, it's a bad market, but good medicine that's, you need an MRI, but you know, you're paying 5,000 bucks for it.

 

00:29:55:08 --> 00:31:00:00

And those three, um, overpayment, fragmentation and over-treatment are the three phases of, of modern American medicine right now. Um, good medicine, good market, uh, convergence, what I call revolutionary healthcare, right care, right time, right place and right price. There are pockets of that in the country. Um, but it's, it's by far the exception, not the rule. So again, if you kind of come back to that outcomes matter, customers kind of value rules that you're driving up into that upper right quadrant, um, you know, we cannot, healthcare cannot defy gravity forever. And, um, we're not going to continue as a society to pay for a care that, that doesn't generate the type of return it should and has enormous waste associated with it. So I think this is the way the marketplace is attacking it. The other thing that's happening, uh, is on the regulatory side.

 

00:31:00:01 --> 00:32:40:08

We've got a very progressive, um, regulatory, uh, set of, uh, of leaders, uh, at CMS right now, uh, SEMA, Vermont and Alex CSR. Um, and they are doing everything they can to push transparency to level of competitive play. You may have seen last week, they just came out with a new policy that says insurance companies and hospitals are going to have to re, you know, make it very easy to see what they charge, what their agreements. The industry is like having a, you know, an apoplectic fit about it because they don't think they should have to reveal their prices. Well, guess what, when you have pricing transparency, you really empower people to make better decisions or companies that act as proxies on behalf of people. So, uh, again, kind of a long answer to your question, but I, you know, this is an industry that's, um, again, focused really on fee for service, payment, turning volume, not really on outcomes, not on value. And you know, that's, that's the old math. The new math is you're increasingly going to get kinda fixed payments for, uh, episodic care and capitation payments for population health and you've got a fixed amount you got to work with. So how do you take that money and, and, uh, provide great care and profit at the same time? So, yeah. So let's talk about outcomes a little bit. Sure. You know, thinking about a starter and their funding and their relationship with their investors or their board and the amount

 

00:32:40:08 --> 00:33:08:17

Speaker 1: of time that it takes to Dem to develop out a program that demonstrates outcomes and the resources that are needed to back that. Um, let's just talk about that a little bit. What's your perspective on the money and the time that takes and, and, you know, and just this conversation of, um, you know, could take me a year or two before I have some demonstrated outcomes. I got to get some cash coming in. Chicken or aide.

 

00:33:09:01 --> 00:34:21:21

Speaker 2: Yeah, no, it's uh, um, well my first advice to entrepreneurs is bootstrap for as long as you humanly can. Uh, when you have to take the outside money, uh, it's very expensive and um, they get a chunk of your company and there've been too many cases where because of the cashflow crunch, um, you know, an entrepreneur that's really created a company with a lot of value ends up with a lot less of the pie than they probably should if, um, so bootstrap as long as possible husband resources. Um, I think everybody's spent a little bit kind of Namor to the Silicon Valley where, you know, they're just seem to hand out money like popsicles to, uh, to companies. Um, and you know, sort of the attitudes that are, we'll invest in 10, nine, I'll go bankrupt, but the one that we will be a big winner and so on that one, I'm not sure those numbers are in a sort of like gambling, you know, gambler's always telling you about the time they have the big win. They don't tell you about the 10 times they'd lost it. So I sometimes

 

00:34:22:21 --> 00:34:31:03

Speaker 1: said no to Uber and Airbnb because they thought strangers were not going to ever come in someone's house or you weren't living in those cars.

 

00:34:31:21 --> 00:35:08:03

Speaker 2: Yeah. Well, Uber still hasn't made any money, which is, um, it's kind of interesting. They, I was just out at the big health conference, um, in Vegas and which is kind of got a tech, um, uh, investor focus to, we're writing the report for the conference. I just finished the executive summary for it and over and left where there in a big way lift was a Fivestar sponsor, Lyft health. Um, so, you know, think about, you know, what Lyft could do to the, uh, paratransit industry or even the ambulance industry to tell you the truth. Yeah. So it's, um,

 

00:35:08:07 --> 00:35:15:03

Speaker 1: and they're already thinking about outcomes, the customer and value. That's not something that they're having to learn.

 

00:35:15:12 --> 00:36:23:17

Speaker 2: Yeah, absolutely. In their DNA. Um, so that's, so that's, you know, again, he kind of keep coming back to these same concepts. Um, demonstrating value, creating value, and then convincing others to pay you money to deliver it is, it's really hard. Um, but it's ultimately enormously rewarding. And I think that's an, you know, part of it is being lucky, right? Um, like Facebook, um, was really lucky because Yahoo was a yacht know who bought my space. Maybe it was Fox and when somebody bought my space and, you know, kinda ruined it. And, uh, uh, so, you know, Zuckerberg and there had been multiple attempts to try to do this type of, um, social media connecting platform and, um, Facebook came around along right at exactly the right time when, you know, if they'd been earlier, they'd probably would've failed if they'd been later. There would've been somebody else other than Facebook doing it.

 

00:36:24:10 --> 00:37:12:22

Um, and timing is often as much a factor, uh, as hard work and ingenuity and so on. Absolutely. Yeah. I mean, again, I, I, I, um, have a lot of friends in Seattle and, um, I wish more of them would, would just admit that they got lucky when they worked for Microsoft and Microsoft, like it's gender, which isn't to say they weren't smart and didn't work hard, but there are a lot of smart people that work really hard. Um, but not everybody, you know, picks a winner that way. It's luck is luck is a big part of the life and, um, uh, recognize that trying to get to come in your favor, although I have always liked that slogan that the luck is where opportunity meets preparation. So you gotta be ready to ready to get lucky,

 

00:37:13:20 --> 00:37:24:09

Speaker 1: right. Hands down, not really one without the other. Um, so I, so Dave, just one last question before we wrap up today. Um,

 

00:37:24:21 --> 00:37:25:02

Speaker 2: Hmm.

 

00:37:25:21 --> 00:37:36:00

Speaker 1: Most of our listeners are health innovators. They're in the trenches right now with varying degrees of success and frustration. What, what advice do you have for them?

 

00:37:37:17 --> 00:38:29:07

Speaker 2: Well, um, on the, on the frustration side, I mean, I, I'd maybe read capsule, um, or, um, some of what I've said, which is a bootstrap as long as you can. Um, you know, uh, at some point, um, you probably need to take some money, but hopefully that's when you've got a product that works and you're going to build out a sales force, that type of thing. Um, uh, the second is you gotta be really concerned about the market positioning in the market messaging and the sales process. I can't spend all your time just making the product better and more beautiful and whatever. So that what I said earlier about having some marketing chops so that, um, you can go out and convince somebody to put a piece of their business in your hands.

 

00:38:29:11 --> 00:38:43:01

Speaker 1: It drives me insane how many innovators spend millions of dollars, the product, and then they want to invest about $35,000 in their communications and go to market strategy.

 

00:38:43:20 --> 00:38:58:13

Speaker 2: Well, I, I, yeah, there you go. I, so when I was a banker, uh, and we'd have these, uh, you know, beauty contests they used to call where you'd go in and make a pitch. Yeah. Oral presentation and

 

00:38:59:07 --> 00:39:01:17

Speaker 3: um, and you know, you

 

00:39:02:04 --> 00:39:15:14

Speaker 2: be one of three or one to five and somebody who's going to win and others were going to lose. And it used to amaze me Roxy, how, um, how much time people would spend cultivating a client writing a proposal,

 

00:39:16:06 --> 00:39:16:23

Speaker 3: um,

 

00:39:17:21 --> 00:39:29:19

Speaker 2: you know, doing all of that stuff. And then they would, would wing it in the oral interview. And I used to say to my team, it should be exactly the opposite. If you're one of three finalists,

 

00:39:30:14 --> 00:39:30:16

Speaker 3: okay.

 

00:39:31:08 --> 00:40:41:11

Speaker 2: You know, your chances of winning are, are at, you know, all of the things being equal or third, if you over-prepare for that rehearse, figure out what the message is going to be. Be tight on your transitions, have good graphics, all of that stuff, chances are you're going to win, are going to be much better than if you go, ah, you know, and people, I, I can't tell you how many times they'd go in for the book like this thick and they flip through pages and they lose cognition and wouldn't ask for the job. And I, you know, that I think those same lessons apply in any company, which is, that's got a product, a service and a market. And, um, the point of sale and those moments, you got to have your a game on and you gotta, you know, you've got to look your best and you gotta have candy and a LL, you know, it's, it's a, it's a matchmaking process. And people that sorta don't either recognize that or don't, um, give it credence, uh, are, are just not going to be as successful and they'll, there'll be frustrated that others who are better at that, that don't have as good a product. Um,

 

00:40:42:01 --> 00:41:06:03

Speaker 1: absolutely. How is this possible? I, I, my, my product is better. It's more efficient. It saves more money, but they tell a better story and the world is not fair. And he was right. That's true. That's true. Well, Dave, thank you so much for sharing your wisdom with our listeners today. How can folks get ahold of you?

 

00:41:06:23 --> 00:42:35:13

Uh, if you go to the website, foresight health.com, um, that's the number four or like my nephew goes, he goes foresight. So number four, S I G H T H E a L T H, foresight health.com. Um, you know, one, you can sign up. We, we do regular PR produce a ton of thought leadership. There's a huge backlog of stuff that we've written. There's there, you can also write to us there and, and, and so on. And I encourage people, I, I hope we get a few new readers out of this. We also do podcasts like you do, and this is, I do like the video thing here. We only do it the audio. So, um, um, but, uh, so that's, that's the best way to get ahold of us. And, um, and we're always eager to get, receive feedback and also, you know, um, tell your, uh, tele, this my edited version, right? Cause you can see, promote the book bought by the customer revolution, um, in healthcare. It's, uh, it's doing really well. And I think a lot of what we've been talking about is baked into that. And, uh, uh, so people will enjoy that as well or, or maybe use it to, I've gotten lots of compliments, uh, on, on his ability to answer some of the questions that we've talked about today. That's great. That's awesome. Well, thank you so much for joining me today. Thank you. Have a good Thanksgiving.