EP430: Advice for Digital Health Vendors Selling to Employers, With Barbara Wachsman

[00:00:00] Episode 430, Advice for Digital Health Vendors, Selling to Employers Today I Speak with Barbara

[00:00:09] Waxman American Health Care Entrepreneurs and Executives

[00:00:20] You Want to Know Talking Relentlessly Seeking Value We have been spending a bunch of time

[00:00:28] here on Relentless Health Value, talking about PBMs, lately and pharmacy benefits, but we

[00:00:33] are moving into a new topic area.

[00:00:36] It sort of kicked off three weeks ago with the pad with Rick Renard on the importance

[00:00:40] of care flows if you are a digital health vendor trying to get consistent outcomes.

[00:00:45] But then I actually went back to the PBM Pharmacy Benefits topic to talk with Luke Slindi

[00:00:51] and Julie Celesnec because you know the J&J lawsuit.

[00:00:55] But now we are back on the digital health and point solutions bus.

[00:01:00] I wanted to talk today about the trend to sell to employers and advice for digital health

[00:01:06] solutions who want to sell to employers, but there is a little bit of advice here for

[00:01:11] employers themselves.

[00:01:13] At a minimum this conversation affords a little bit of transparency to employers about what's

[00:01:17] going on on the other side of the table.

[00:01:19] So as I just said, today we talk about selling to employers why sell to employers is probably

[00:01:24] a first question.

[00:01:25] Well, one reason Barb offers is because that's where the money is.

[00:01:30] It's like that Willie Sutton quote someone asked him why he robbed banks and he replied

[00:01:34] because that's where the money is.

[00:01:36] I mean, hospitals know this.

[00:01:38] Have you seen their commercial rates and their multiples over Medicare?

[00:01:41] Payers know this too.

[00:01:43] Payers who use their ability to raise commercial rates as leverage to get lower M.A.

[00:01:48] rates, Medicare Advantage rates for themselves they know this.

[00:01:51] So yeah, why wouldn't a point solution entrepreneur take a page out of that business model?

[00:01:56] It's saying the quiet part out loud.

[00:01:58] But yeah, I guess it's good to know when you're the numero uno healthcare industry sugar daddy

[00:02:04] or sugar mommy as the case may be every employer listening right now has already opened up their

[00:02:09] phone and started an email to me.

[00:02:11] Barb gets into three pieces of advice for entrepreneurs looking to sell to employers.

[00:02:16] Here's piece of advice one number one.

[00:02:18] There has to be a market that has a need for what you are selling and there won't be

[00:02:24] a market with the need unless the problem you're solving for is big enough.

[00:02:28] And right now I am recapping things that Barb says on the show because when she talks

[00:02:32] about whether the problem is big enough, she means as per the employer and mainly because

[00:02:37] the fallout from that big problem accrues to the employer in a way that the employer

[00:02:43] fully appreciates.

[00:02:46] As I say in the pod that follows, the ground is littered with entrepreneurs often really

[00:02:51] smart people who oftentimes are truly admire.

[00:02:54] These are individuals who found a problem for patients or sometimes even clinicians and

[00:02:59] solved for it and then discovered that no one will pay them for whatever they've done

[00:03:04] because we can't forget that in the healthcare industry one person's waste is somebody else's

[00:03:09] profit.

[00:03:10] Here is show after show here at Relentless Health Value that showcases the sacred honeypots

[00:03:17] or these perverse incentives lie.

[00:03:19] So if you are an entrepreneur, please follow the dollar and see where it leads before

[00:03:23] getting too far.

[00:03:24] That would be my advice.

[00:03:25] I'd recommend the show with Rob Andrews and the one with Jodalyn Owen as a great place

[00:03:30] to start.

[00:03:31] One comment about the whole it's got to be a need that employers appreciate point that

[00:03:36] Barb makes which caught my ear she rhetorically asks should HR purchasers be buying solutions

[00:03:44] that improve health and well being.

[00:03:46] And the short answer is no.

[00:03:49] Barb says none of that should be the primary driver.

[00:03:53] The primary driver, Barb mentions should be about optimization of human capital to drive

[00:03:58] business outcomes.

[00:03:59] She says every decision a business makes should be about maximizing business outcomes.

[00:04:05] Now, I could take this a bunch of different ways and viscerally it has again kind of

[00:04:10] a quiet part out loud vibe.

[00:04:12] But in certain ways it also means buying decisions should be bigger than just cutting costs.

[00:04:18] I mean first of all no one is arguing here that cutting wasteful spending isn't always

[00:04:22] a good thing but neither are cost containment strategies that undermine employee health

[00:04:28] to the extent that they can't complete their work role or their job.

[00:04:32] Listen to the show with Nina Latia for more on this cost containment versus value based

[00:04:39] purchasing specifically in the pharmacy benefits space but same rules apply pretty much everywhere.

[00:04:45] Here's number two piece of advice that Barb offers be truly differentiated in terms

[00:04:49] of what you're trying to sell.

[00:04:51] Barb gives a bunch of examples of secret sauces she thinks are kind of compelling right

[00:04:56] now.

[00:04:57] Number three piece of advice navigate the internal politics of the employer and this

[00:05:01] is kind of selling 101 but find a champion and help them navigate their own organization.

[00:05:06] We talk at length about how long the cell process can take especially in some of these

[00:05:10] jumbo employers and then lastly number four manager investors as closely as you manage

[00:05:16] your possible clients and this is an interesting point that also comes up in the conversation

[00:05:21] with Kate Wollin that's coming up in a few weeks also in this conversation we have a sidebar

[00:05:26] about PM PM per member per month and performance guarantees and just some nuances about how

[00:05:32] to get paid.

[00:05:33] Oh, and one last point here if you are an entrepreneur who is thinking about selling to brokers employee

[00:05:39] benefit consultants or practice leads do listen to the show with AJ Loiacano which I on

[00:05:44] court a couple of weeks ago my guest today Barbara Walksman has had experience in every

[00:05:50] single element of the healthcare ecosystem she has worked in public health she's worked

[00:05:54] for an HMO.

[00:05:55] She's worked for a hospital system she's run benefit consulting practices and also

[00:05:59] spent the last dozen or so years at Disney running strategy and benefits today she is

[00:06:04] a limited partner in several private equity funds at Frazier healthcare partners.

[00:06:10] My name is Stacy Richter this podcast is sponsored by a Ventria Health Group.

[00:06:15] Oh, and hey you might want to subscribe to our weekly email which includes this introduction

[00:06:20] transcribed as well as links to the full episode transcribed.

[00:06:24] We also sometimes send out invitations to zoom meetups and other ways to get involved

[00:06:28] or support us in our quest to get Americans better healthcare so go to Relentless Health

[00:06:33] Value dot com and get yourself on that list.

[00:06:37] Here's the conversation with Barbara Walksman.

[00:06:39] Barbara Walksman, welcome to Relentless Health Value.

[00:06:41] Thanks.

[00:06:42] First it was in fashion to sell to health systems and practices and that morphed into why

[00:06:48] why don't we just sell directly to employers.

[00:06:49] So I think this is a area of growing interest for entrepreneurs.

[00:06:54] So first of all, why do you think people have cotton on to the idea of selling to employers

[00:07:00] and is this a decent thought?

[00:07:02] This is such a critical topic because innovation and let me just make a few broad comments.

[00:07:08] Innovation is so absolutely key if we are going to fix the delivery system in this country

[00:07:13] and fix affordability.

[00:07:15] So we are desperate for smart entrepreneurs and great innovation.

[00:07:20] We need to do things that are really transformative.

[00:07:23] So that said, I also want to underscore why talking to employers is important.

[00:07:29] Entrepreneurs who are in healthcare have to understand the system and there are three

[00:07:33] stools.

[00:07:34] There are three ways healthcare gets paid for in this country.

[00:07:37] Medicare, Medicaid and commercial and when I say commercial, I mean employers.

[00:07:43] People don't realize it's about a third, a third, a third but what's really important,

[00:07:49] is the commercial payer that provides the profit in the healthcare system today.

[00:07:55] This is where the profit is in the system for those that are trying to build a business.

[00:08:01] And I think this is why hospitals want to sell to commercial payers, this is why entrepreneurs

[00:08:07] want to deal with commercial payers, this is where the money is.

[00:08:11] Now there are all kinds of issues associated with this and I'll go on to your question just

[00:08:14] a second.

[00:08:15] If a hospital can't make money under Medicare or Medicaid, they're going to increase commercial

[00:08:19] rates and this is a problem.

[00:08:22] Many of business model has been built on going where the money is.

[00:08:25] I am sure there's lots of employers listening who might feel like a frog in a pot of hot

[00:08:30] water right now but moving on here if an entrepreneur does choose to go down this path

[00:08:36] of selling to employers, what does he or she really needs to understand to sell into this

[00:08:41] commercial slash self-insured employer world successfully?

[00:08:45] First and foremost, and probably the most obvious is that they've got to make sure that

[00:08:50] the market has a need for what you are trying to sell.

[00:08:55] You may think it's obvious, you may think it's so cool but there has to be a market and

[00:09:00] employers have to have a problem that you're trying to solve.

[00:09:05] You can't be a solution looking around for a problem.

[00:09:08] Exactly.

[00:09:09] Exactly right.

[00:09:11] And just thinking about this, you know, just given all of the perverse incentives in

[00:09:17] healthcare, sometimes there is actually a problem.

[00:09:21] I think one of the pitfalls out there that is probably one of the more common pitfalls

[00:09:27] is that there is actually a problem but due to the perverse incentives, it's not clear

[00:09:32] who that problem is for or if it's actually a problem for anybody.

[00:09:36] So you know, an entrepreneur great, they solve some problem but like nobody wants to pay

[00:09:40] for it because it is a problem but it's nobody's problem.

[00:09:43] Well, you're so right and along that thread, you've got to make sure it's a big enough

[00:09:48] problem.

[00:09:49] It's got to be a long-term problem.

[00:09:51] I think it ultimately goes to what is really important to employers.

[00:09:56] Today, employers are faced with huge trend increases, problems with affordability, problems

[00:10:02] with cost.

[00:10:03] And if you are going in and quote unquote, just nibbling around the edges, you're saying

[00:10:08] instead of using physicians, we're going to use nurse practitioners because they're

[00:10:13] cheaper or something along the lines where you're simply reducing an element of the cost

[00:10:19] but you're not really digging into the most important problem which is perhaps the employee,

[00:10:25] the patient isn't being diagnosed properly, isn't getting access to specialists, all

[00:10:31] those other problems.

[00:10:32] It doesn't matter if it's a physician or a nurse practitioner, you've got to be able

[00:10:36] to say we are going to solve that longer-term problem for you which is accessibility lower

[00:10:41] cost.

[00:10:42] So you're going to have obviously different employers who are focused on different things.

[00:10:46] There are some employers that are extremely focused on rising cost trend especially employers

[00:10:51] that are going to have a large number of lower paid employees, right?

[00:10:57] Then you have other employers who tech companies is the example that most use where focused

[00:11:05] on cost could be a distant third as far as priorities go.

[00:11:09] Really what they're trying to do is make sure that those benefits are as competitive as

[00:11:12] possible.

[00:11:13] It's all about talent retention.

[00:11:14] If we're talking about cost, what's the difference between nibbling around the edges

[00:11:20] and having something which is a value prop?

[00:11:22] Is it a 10% cost reduction across the entire patient population or is it 1% because if

[00:11:30] we're talking about reducing costs as a broad stroke, you're talking about a lot of different

[00:11:37] kinds of patients.

[00:11:38] I've heard we've got five generations in the workforce right now.

[00:11:42] The problem itself is really difficult to come up with what the cause is and then if

[00:11:47] you're trying to have a solution that addresses 17 causes, it just becomes a sprawling solution

[00:11:54] and more and more possible to actually achieve.

[00:11:56] Well, thanks, Stacy.

[00:11:57] I think we're done with our projects now because you've just defined one of the major

[00:12:03] problems we have out there.

[00:12:04] And I'm going to turn it on its head a little bit.

[00:12:07] I think employers are definitely concerned about cost.

[00:12:11] And I tell the story that I had sublime in our studio approach me when I was at Disney

[00:12:19] about our cost problem in Florida where we were paying an extra 30% higher than any other

[00:12:26] market in the country.

[00:12:28] And by the way, not getting any improvement in quality or access year over year of year

[00:12:34] and he said, look, if you could just get those costs under control, I could do another

[00:12:38] frozen.

[00:12:40] So I think from a business point of view, every employer wants to see efficiency in every

[00:12:45] single thing they do.

[00:12:47] Employers are concerned about cost from a business standpoint.

[00:12:50] It's a third rail for companies that are highly unionized again like Disney.

[00:12:56] It's also a huge problem of sucking up every salary increase for employers.

[00:13:01] For example, have minimum wage workers.

[00:13:03] But here's where I'm going to kind of turn it on its head.

[00:13:06] It really is about producing a productive employee.

[00:13:09] And I think some, especially in HR might disagree with me.

[00:13:13] It may be more about having happy employees.

[00:13:16] No, it is a human capital.

[00:13:19] It's a labor issue where employers need to have a productive employee, a person sitting

[00:13:25] in that seat driving that ride at Disney.

[00:13:27] This is what you really need.

[00:13:29] So when you talk about cost problems, the benefits department has got to think more broadly

[00:13:35] about the business that they're running and what's important to them in terms of cost

[00:13:40] savings.

[00:13:41] There are many ways you can understand really, where do we really need to save those costs?

[00:13:45] But it's also about producing a productive employee.

[00:13:48] It's getting to those fundamental incentives about what's preventing us from having people

[00:13:55] on the job and productive.

[00:13:59] And it is about changing the perverse incentives that really drive everybody.

[00:14:05] In the system to do more, not less.

[00:14:09] Centering on the core of what we're talking about here, make you sure that if you're an

[00:14:13] entrepreneur and you're walking into an employer, you are solving a problem that they actually

[00:14:20] feel needs solved.

[00:14:22] That problem is big enough for them to deal with.

[00:14:24] I mean, we're talking to people who a lot of times are doing healthcare benefits off

[00:14:29] the side of their desk.

[00:14:30] I've heard as well as a bit of Mitchell from PBGH has termed it.

[00:14:34] If I'm thinking about this like an entrepreneur and I'm trying to figure out what my plan

[00:14:37] of action is here, it sounds like a ton of discovery is necessary before even you start

[00:14:42] building because you have to understand what the perverse incentives are and you really

[00:14:45] need to understand what the needs are in the market.

[00:14:48] Honestly, I think benefits people really want to talk to entrepreneurs and say, look,

[00:14:53] this is not a problem for me but this is.

[00:14:57] And there are so many times where someone will say, wow, I didn't realize that.

[00:15:01] One example, great company out there that had a way of intercepting patients' employees

[00:15:10] that were being discharged from the hospital and readmission is a huge expense for employers.

[00:15:17] It's a profit center for hospitals.

[00:15:20] The problem was one, employers didn't realize that this was a big cost item and two,

[00:15:27] the hospitals were not motivated to work with this company to help employees prevent from

[00:15:34] being re-admitted.

[00:15:35] There was no incentive, the fines that Medicare ways for re-admissions are lower than the

[00:15:44] money that they will make once someone is re-admitted back into the hospital.

[00:15:49] And this was a huge stopping point.

[00:15:51] I mean, neither party would be willing to pay money to this company to support their

[00:15:57] employees once they're discharged and to avoid re-admissions.

[00:16:01] And they actually pivoted a bit to what they were offering and today, they are actually

[00:16:06] selling to carriers versus employers.

[00:16:10] So this is a product, if you will, that the carriers were more interested in than the

[00:16:15] individual employer.

[00:16:16] They were aware of the problem in more so than the employer.

[00:16:21] The ground is littered with companies who, again, going back to the point that we were

[00:16:26] talking about before, there is actually problems in the market.

[00:16:29] But who is incented to solve that problem?

[00:16:32] Because sometimes, as I've said a lot on this, but gets somebody's waste as somebody

[00:16:36] else's profit.

[00:16:37] So you have people in very perverse ways protecting that waste because it's their profit and

[00:16:43] it's very important, obviously, to understand who those entities are.

[00:16:48] You know, this is where employers can really step in.

[00:16:51] Yeah.

[00:16:52] So employers can take a stand and say, no, no.

[00:16:57] This is unnecessary waste and we are no longer going to pay for that.

[00:17:02] Again, entrepreneurs really need to understand if there's a market for what they're trying

[00:17:06] to sell.

[00:17:07] And the way that you make sure that you're not barking up their own tree is to, first of

[00:17:12] all, not think that you know better.

[00:17:15] This is so easy and that it's ridiculous that this problem hasn't been solved right now.

[00:17:20] But it's still a problem because these are very guardian nots.

[00:17:24] Like, these are very intractable situations.

[00:17:27] I'm also understanding that you kind of need to be working with someone who's got relationships

[00:17:32] and who has a deep footprint in the healthcare industry.

[00:17:36] It would be very difficult to get some of these meetings.

[00:17:38] It would be very difficult to get some of the knowledge that would be necessary to avoid

[00:17:43] some of these pit traps.

[00:17:44] All right.

[00:17:45] So let's move on to bit of advice number two in your list.

[00:17:49] What's your second kind of big category of advice for entrepreneurs?

[00:17:53] This kind of is a lead from the first that we've talked about understanding a market.

[00:17:59] But second, you've really got to be truly differentiated in terms of what you are offering

[00:18:06] to sell.

[00:18:08] It cannot be something where you are doing the same thing that five others are doing.

[00:18:13] But oh, there is a slight tweak to it.

[00:18:15] For example, today the GLP ones are a huge issue for employers.

[00:18:21] And entrepreneurs are trying to figure out a way that they can support the employer in

[00:18:27] reducing the utilization of these GLP ones.

[00:18:30] Well, some companies are saying we're going to put in pre-auth.

[00:18:33] Others are saying we're going to have health coaches that are going to take that person

[00:18:36] for the first four weeks and change their relationship with food before they're allowed

[00:18:41] to have the GLP ones.

[00:18:43] Others are saying we give up.

[00:18:44] We're going to let everybody have a GLP one that wants a GLP one.

[00:18:48] You've got to be differentiated.

[00:18:50] And I tell folks, present your solution as only you can solve that problem.

[00:18:57] What is your secret sauce?

[00:18:59] If you don't have something that's really different, employers are not going to buy it.

[00:19:06] They're getting inundated by requests from entrepreneurs to look at their latest bright

[00:19:12] shiny thing.

[00:19:13] This is why you have companies like EHIR stepping up and Silicon Valley employers form.

[00:19:18] These coalition leaders are saying we'll take that burden off of you, tell all these entrepreneurs

[00:19:23] that are calling you to just go away and go to the EHIR and we'll call through again.

[00:19:31] You've got to be differentiated.

[00:19:32] And of course it really should address what we talked about at the start, which is what

[00:19:37] is the problem that's out there?

[00:19:39] You can't just jump into that thinking, oh, this is what employers want.

[00:19:44] And we'll just do a PMPM.

[00:19:47] No, employers are not purchasing PMPM.

[00:19:50] Remember, Vermont these days it's understanding how you're different and all those features

[00:19:57] that you hear in the marketplace need to be attached to your product.

[00:20:01] Understanding really what are those key features for this particular employer?

[00:20:07] Just to react to the two points that you dropped at the end there, which is this whole PMPM

[00:20:13] thing, which was kind of a standard in the marketplace.

[00:20:16] I think one of the reasons why is because payers really like PMPM.

[00:20:20] It's a great way to get some extra money and if you're a payer or you're an employee

[00:20:26] benefit consultant and you go into an employer and you say, oh, but it's only 50 cents additional

[00:20:30] a month or it's only $1 a month or whatever.

[00:20:33] Now they're making additional dollars.

[00:20:35] So that became a model because these payers, not the ultimate purchasers, but the payers

[00:20:42] thought they were a great way to make additional profit.

[00:20:44] But if you think about it from an employer standpoint, it's just 50 cents plus, it's

[00:20:48] just like how many subscription fees can you get?

[00:20:50] Right.

[00:20:51] You know what I mean?

[00:20:52] Like you personally, and then all of a sudden you realize you're spending hundreds

[00:20:54] of thousands of dollars a month on one, just like all these small things that you signed

[00:20:57] up for.

[00:20:58] And I think employers have kind of come to that same realization.

[00:21:01] I want to talk about this for just a minute or so because I think it's the biggest misunderstanding

[00:21:06] and fallacy that entrepreneurs have about per member per month, per employee per month,

[00:21:11] whatever you want to call it.

[00:21:12] First of all, I think it's primarily private equity and venture that wants you to have

[00:21:17] a subscription if we call it that or membership or recurring revenue.

[00:21:22] They will ask you to have that as an element if you're pricing the day they meet you.

[00:21:28] And you have to tell them, look, this is just not flying.

[00:21:31] In the person who's purchasing this today, whether it's the carrier or the employer to just

[00:21:36] what you were saying, these small numbers that entrepreneurs think, oh, it's just simply

[00:21:41] 50 cents.

[00:21:42] If you're dealing with a company like a Disney, like a Walmart, a million lives, we're talking

[00:21:47] about, you know, a million dollars a month for something that again, it's all about engagement.

[00:21:54] How many people are actually going to be using that product for that recurring revenue

[00:21:59] that you're charging?

[00:22:00] Bottom line employers today are very opposed to PMPM.

[00:22:04] And when I say that, I'd say probably 80%, they're willing to have a performance guarantee

[00:22:13] where you're going to get certain bonuses.

[00:22:15] That is fair.

[00:22:16] If you can say one year out from when we start the employees that have used the service

[00:22:23] are doing better, they have met the goals that we have set for this product.

[00:22:28] They're willing to say we will settle up at year end if you really need a budgeted amount,

[00:22:34] you can will pay a dollar PMPM.

[00:22:36] But at the end of the year, we're going to look back and see did you perform for that

[00:22:42] dollar?

[00:22:43] And if you and or will translate it into fee for service.

[00:22:46] And if you are more than what we would have paid fee for service, we're going to claw

[00:22:49] many back.

[00:22:50] Yeah, I do think it would be important to recognize that there are employers all across

[00:22:56] the experience spectrum here.

[00:22:59] You have some employers, they are getting data and they are looking at it carefully.

[00:23:03] If you're dealing with an employer like that, they actually have a very negative impression

[00:23:08] of PMPM or value-based care just because they have seen how again payers a lot of times

[00:23:15] have used it as a way to extract PMPM or extract extra money.

[00:23:20] It just becomes a cost and it's really difficult to connect the dots back to what we get for

[00:23:24] this value-based care.

[00:23:25] So I'm kind of medical home PMPM override or something like that.

[00:23:29] Right.

[00:23:30] The employer is getting charged for and then if you look at, well what did I get for

[00:23:33] my medical home PMPM?

[00:23:35] It's basically nothing because I'm being charged for plan members who aren't even going

[00:23:40] to that particular health system that I'm getting charged for.

[00:23:44] So it's very fraught, right?

[00:23:45] You have some very sophisticated employers and they know all the games.

[00:23:49] Then on the other side of the spectrum, you have employers who simply do not have the

[00:23:53] expertise.

[00:23:54] I mean, so David Claude about this actually.

[00:23:56] They just don't have the clinical expertise to meaningfully evaluate quality of care.

[00:24:00] They're just basically focusing on cost and service and that can become a race to the

[00:24:05] bottom really fast again, tons of nuances but I'll tell you what I want to hear from you

[00:24:10] Barb.

[00:24:11] What are some examples of secret sauce or companies that you really feel are differentiated

[00:24:15] these days?

[00:24:16] That really have something that's interesting to you.

[00:24:19] The entrepreneur that has a way of identifying the employees that would have the greatest

[00:24:27] value of using their product.

[00:24:30] So entrepreneurs that first of all understand population health and understand what the

[00:24:36] particular need is, but really to be able to engage that population that they are trying

[00:24:44] to serve.

[00:24:45] The perhaps have a way of gathering data or perhaps they understand and this is where

[00:24:53] AI is going to come in, where they can say a employee that looks like this is going

[00:25:00] to have these kinds of problems in the future.

[00:25:03] This is the golden ticket and I'll just use this as an example.

[00:25:07] There are companies out there that can anticipate using predictive modeling, machine learning

[00:25:14] can anticipate when an employee will stop being adherent to their drugs.

[00:25:19] Drug adherence is the number one reason people end up in the emergency room.

[00:25:24] What is the opportunity here?

[00:25:25] The opportunity is for a social worker or a nurse or a physician to reach out to that individual

[00:25:33] employee, ask how they're doing.

[00:25:35] Oh, I see you haven't renewed your hypertension med.

[00:25:39] How can we help you?

[00:25:40] We had something very similar to this at Disney where we had a population in one of our

[00:25:47] on sites whose health absolutely depended on them remaining adherent to a certain drug.

[00:25:55] We as an employer had the data and we could look and see, hey, there's a whole group

[00:25:59] of employees here that's falling below 80% adherence what's going on or to say as an example,

[00:26:07] we know now that colon cancer, the rates are increasing dramatically among younger black

[00:26:13] men for an entrepreneur to be able to say we have a specific way that we can interact

[00:26:20] with this particular population and we have shown that the kinds of providers we use,

[00:26:25] the way we approach this particular issue has resulted in a far higher engagement rate

[00:26:31] that any of the carriers have.

[00:26:33] For example, I will use one other example.

[00:26:36] We did a pilot with a super interesting company, but basically was going to be able to contact

[00:26:43] our senior professional women at Disney who were eligible for mammography and not had

[00:26:48] a mammogram in the previous two years.

[00:26:51] They were able to reach out to them via text and at the same time reaching out in that

[00:26:57] text, allowing the employee to schedule a mammogram with a large hospital system that

[00:27:03] we happen to have across the street from our corporate headquarters.

[00:27:07] We had women getting that mammogram a half an hour after that text went out.

[00:27:14] Far greater engagement rates multiple, multiple times over what the carrier could do in terms

[00:27:21] of engaging women to get that critical mammogram.

[00:27:26] It was because of their technology, it was because of a way they thought of things differently,

[00:27:29] it was because of a way they decided, hey, let's engage the provider by certain slots on

[00:27:34] their scheduling system.

[00:27:36] It was all those elements that they put together and really produced something that was significantly

[00:27:43] different than anything we had seen before.

[00:27:46] So the thing that all of those examples have in common is really around patient engagement.

[00:27:53] And I think one of the reasons why you're saying this is because patient engagement is

[00:27:56] notoriously suboptimal, especially relative to some of these.

[00:28:02] Let me just mention one other quick thing and that is finding a way to show that you are improving

[00:28:08] quality.

[00:28:09] And by that, I mean faster and more accurate diagnoses.

[00:28:14] There's work being done out there by entrepreneurial companies that are helping providers be more

[00:28:21] efficient in the way that they come up with diagnoses and helping providers be more accurate

[00:28:27] in their diagnoses.

[00:28:28] A company that can say to me, number one, we have fewer specialists referrals because our

[00:28:34] physicians are more highly skilled.

[00:28:37] They are faster to make the correct diagnosis overall.

[00:28:41] I mean, again, this is the golden ticket for what an employer wants in getting that productive

[00:28:47] healthy employee.

[00:28:49] And all of this is super intriguing.

[00:28:51] I definitely, if there are employers listening with us into the show with Al Lewis and there's

[00:28:56] also a show with Rick Grenard.

[00:28:58] And there's an upcoming one with Dr. Kenny Cole which all sort of spiral around this point

[00:29:02] of well, I think there's a couple of points here.

[00:29:05] Do we actually have a validated need and a differentiated way to achieve that need, which

[00:29:12] are the first two points that you mentioned here?

[00:29:16] Then it becomes really important on the employer side to be able to validate what this entity

[00:29:22] is claiming that they can do.

[00:29:25] And some of this stuff is a black box, unless the employer is sophisticated enough to be

[00:29:31] able to measure some of this themselves.

[00:29:33] This is a point actually that core op-sau makes very clear on the podcast.

[00:29:37] She's like, you collect your own data and you validate the value prop and you validate

[00:29:43] the performance of these vendors yourselves because it's so easy just to squeeze the balloon.

[00:29:48] So true.

[00:29:49] But definitely hear what you are saying, the second point here, be different, be differentiated,

[00:29:54] solve an issue and then be able to explain why you are the only one who is able to accomplish

[00:30:01] that because otherwise you become one of many.

[00:30:05] What do we have for number three?

[00:30:07] Let me just say something about internal politics.

[00:30:10] So the entrepreneur have got to identify a strong and visible champion who is going

[00:30:16] to advocate for you as a partner.

[00:30:21] This is hard to do.

[00:30:22] I mean, some of this is taking time of getting to know who you're dealing with.

[00:30:26] You've got to be able to talk to the right person in the organization, potentially somebody

[00:30:31] who has the ability to pull a trigger.

[00:30:33] But more importantly, somebody who has strength within the organization to move up that governance

[00:30:39] model that is in every large company at Disney.

[00:30:43] I reported to a subcommittee of our board that met three sometimes four times a year.

[00:30:48] We had a very rigorous, very specific time frame for presenting new ideas, new programs we

[00:30:55] wanted to run to this committee.

[00:30:58] So timing extremely important, but also having somebody who has respect of the C suite if

[00:31:04] that's possible or of those folks above you, that you've got to get to support the idea

[00:31:09] that you have.

[00:31:11] Finding that champion and letting that person advocate for you and giving them all the information

[00:31:18] they need that's important to those above them is just extremely important.

[00:31:24] I've seen entrepreneurs who will give well, first of all, they'll give that person no

[00:31:29] information that's useful for them to be able to sign a contract with you or they may

[00:31:34] give you so much information that that person cannot make any sense of it to be able to take

[00:31:39] that up the chain.

[00:31:40] So you know what it's like when you're working with your own board, understand that this

[00:31:45] is what the benefit professional has to go through and you have got to find that person

[00:31:50] that's also willing to go for those hurdles.

[00:31:53] Everything is going to take longer than you think.

[00:31:56] We used to call it Disney time, which could be four times longer than an entrepreneur

[00:32:00] would imagine or probably equally as important.

[00:32:04] Your investors think it's going to take me to be able to get through one that governance

[00:32:08] process.

[00:32:09] It has a very specific schedule attached to it to get through the privacy and security issues

[00:32:15] that are now so important getting hacked is the kiss of death.

[00:32:20] So understand how long this would take and there is a time when that door is closed.

[00:32:26] You're trying to sell them something that you all have decided is best to put out during

[00:32:30] open enrollment.

[00:32:31] The door for open enrollment and adding something to your lineup can be closed as early

[00:32:36] as July for open enrollment that's going to happen in October for a plan that's going

[00:32:42] to start in January.

[00:32:44] And I think this is very frustrating to entrepreneurs.

[00:32:47] Now that said, there are certainly other things that one don't have to be installed during

[00:32:52] open enrollment.

[00:32:53] Although there are reasons you do and don't do that.

[00:32:56] Two that are so small and I'm putting that in big quotes that they are not even going

[00:33:02] to be part of the benefit plan itself.

[00:33:06] And again, I think you mentioned this, Stacy, there are certain things that would allow

[00:33:10] an employer to charge outside of the benefit plan.

[00:33:14] In this case, you're not up against the software programming, the communications work that

[00:33:19] have to go on to support open enrollment.

[00:33:22] We have a list of three things here and they span the gamut actually of making sure

[00:33:28] that your product is on point but then also making sure that your selling is on point

[00:33:36] and this last one I think you folded into very interesting concepts.

[00:33:41] Obviously, understanding who the overarching client is and what their needs are but then

[00:33:46] understanding the needs of your contact at that client which becomes part of the sales

[00:33:52] process here and realizing that a lot of people in HR they didn't start out in sales.

[00:33:57] But they are being asked to sell up a product so making sure that you're offering them as

[00:34:03] much help as they're going to need to be able to internally socialize and sell something

[00:34:09] is very important.

[00:34:10] But then you mentioned something also which is just what the sell cycle is and getting

[00:34:15] real about that because there's so many companies who run out of money because they do not

[00:34:21] have the runway that is aligned with the actual just what would be the expected sell cycle

[00:34:28] and these sell cycles oftentimes I mean same thing goes for hospitals.

[00:34:32] They can be years which makes it really difficult if you are a bootstrapping scrappy entrepreneur

[00:34:39] who just needs your first sale.

[00:34:41] So it definitely feels like there's a product element here I'm like making sure that you're

[00:34:46] actually you have something that is unique to the unique selling proposition which actually

[00:34:52] feels a big enough need for someone to pay attention to you on the one side but then

[00:34:55] on the other side you have a very well considered approach to selling whatever that is.

[00:35:03] No question about it.

[00:35:05] You've been talking a lot about the employer purchaser but you've really got to manage

[00:35:10] your investors when you're evaluating who you want to have invest in your company.

[00:35:16] You've got to have people that understand healthcare understand that sale cycle are going

[00:35:20] to give you the runway that you need to your point to be able to deal with this long

[00:35:25] time frame and you know for some it just may not work.

[00:35:29] You may decide instead I'm going to sell to the carrier or I'm going to go off and

[00:35:34] sell to providers or I'm going to sell the smaller companies and actually let me make

[00:35:38] a comment.

[00:35:39] Every employer wants to sell to what we call the big jumbo players those that are 100,000

[00:35:45] lives.

[00:35:46] I mean people are just so excited to sell something to a big brand like a Walmart

[00:35:50] or a Disney but really the majority of companies out there and the majority of self-funded

[00:35:56] employers are of much smaller size and these are the folks that are far more nimble sometimes

[00:36:02] do not have this incredibly stringent time frame can do things more quickly.

[00:36:08] So I think be very realistic about your market who you really want to sell to it's very

[00:36:14] easy to get dazzled by this idea that in one signature you're going to get 100,000 lives.

[00:36:20] I know you worked with Lavango and we know what happened with Lavango.

[00:36:24] It was what lessons might we be able to draw from that?

[00:36:30] From the employer perspective I think it the lesson is there are great stories out

[00:36:36] there but the magic is whether or not they can implement them whether there is something

[00:36:42] there there, whether you know the price the economic value is there.

[00:36:47] I mean I would say don't be fooled by the great story that so many entrepreneurs have

[00:36:54] and have such deep beliefs and conviction.

[00:36:57] Barb, is there anything I neglected to ask you that you want to mention here?

[00:37:01] I would just want to end by saying we are desperate for great innovation.

[00:37:05] It's really going to change the way cares delivered how much it costs and what we need

[00:37:11] to do to produce a productive employee.

[00:37:14] I also think that entrepreneurs really need to think not only about health care but whether

[00:37:19] or not their product can address disability whether it can address problems with occupational

[00:37:25] health.

[00:37:26] I think again for the entrepreneur to think more broadly about the cost of care in creating

[00:37:31] a productive employee whether it's their commercial plan, their disability program, their occupational

[00:37:36] health program.

[00:37:37] Entrepreneurs don't think that way and it's really important that they do great opportunities

[00:37:42] there.

[00:37:43] You're connecting the dots between just like the cost of human capital and healthcare.

[00:37:48] It sounds like anything that talks about improving the safety of an organization for

[00:37:55] an employee and a lot of this has to do with how healthy the employee is that might be

[00:37:59] doing something that is, oh I don't know, running a nuclear power plant.

[00:38:04] That gets the attention of the C-suite like you would not believe.

[00:38:08] Barb, Walksman, thank you so much for being on Relentless Health Value today.

[00:38:11] You're welcome.

[00:38:12] It was a pleasure.

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