August 13, 2021: In healthcare we spend too much time focusing on the tech and not enough time focusing on the world we live in. And the people that we’re serving. Health consumers today think that healthcare is more confusing, more complex and more costly than ever before. And they’re dissatisfied. That’s where Transcarent comes in. Imagine everything you need in one place, easy to understand and with the ability to talk to a doctor or order medication within 60 seconds. Now that’s progress. Glen Tullman, their CEO has vast healthcare experience including Allscripts and Livongo. He shares how Transcarent is setting the stage for the best interests of YOU, the healthcare consumer. Finally you’re in charge. You’re giving the orders.
Exploring the Patient Experience with Glen Tullman of Transcarent
Episode 434: Transcript – August 13, 2021
This transcription is provided by artificial intelligence. We believe in technology but understand that even the smartest robots can sometimes get speech recognition wrong.
[00:00:00] Bill Russell: [00:00:00] Thanks for joining us on This Week in Health IT influence. My name is Bill Russell, former healthcare CIO for 16 hospital system and creator of This Week in Health IT, a channel dedicated to keeping health IT staff current and engaged. Today we are joined by Glenn Tullman, CEO of Transcarent.
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[00:00:36]I ran into someone and they were asking me about my show. They are a new masters in health administration student and we started having a conversation and I said you know we’ve recorded about 350 of these shows and he was shocked. He asked me who I’d spoken with. And I said Oh you know just CEOs of Providence and of Jefferson health. And CIO’s from Cedars Sinai, Mayo Clinic, [00:01:00] Cleveland Clinic and all these phenomenal organizations, all this phenomenal content. And he was just dumbfounded. He’s like I don’t know how I’m going to find time to listen to all these episodes. I have so much to learn. And that was such an exciting moment for me to have that conversation with somebody to realize we have built up such a great amount of content that you can learn from and your team can learn from. We did the COVID series. Talked to so many brilliant people who are actively working in healthcare and in health IT addressing the biggest challenges that we have to face. [00:01:30] We have all of those out on our website and we’ve put a search in there and makes it very easy to find things. All the stuff is curated really well. You can go out on a YouTube as well. You can actually pick out some episodes, share it with your team, have a conversation. We hope you’ll take advantage of our website, take advantage of our YouTube channel as well.
[00:01:47] Today we are joined by Glenn Tullman, CEO of Transcarent. Glenn welcome to the show.
[00:01:52] Glen Tullman: [00:01:52] Thank you very much. It’s great to see you.
[00:01:54] Bill Russell: [00:01:54] Yeah. I’m looking forward to this conversation. There’s a lot of different ways we could [00:02:00] go in this, but I’m going to start with the present and work our way back. Cause I do want to go back here. Your Allscripts days. I want to talk a little bit about Livongo but I want to start with Transcarent. What is the challenge? What’s the problem that Transcarent is looking to solve in healthcare?
[00:02:16]Glen Tullman: [00:02:16] Well, if we look at where healthcare has been over the last 20 years, healthcare really hasn’t made the progress we all expected.
[00:02:25] And if you ask virtually any health consumer today, [00:02:30] what they’ll tell you is healthcare is more confusing, more complex, and more costly than ever before. And they’re dissatisfied. If you go to large self-insured employers, they will tell you that the costs of healthcare are out of control. That they haven’t made progress there.
[00:02:52] They’ll tell you that they’re frustrated that healthcare isn’t working and they’re increasingly being dragged into the healthcare [00:03:00] business. In fact, there was a recent wall street journal article that said the average large self-insured employer has between 14 and 20 different relationships to try to deliver quality care to their employees and their dependents because the existing system isn’t doing it. And yet they don’t want to be in the healthcare business. So they’re dissatisfied [00:03:30] and frankly, across the board, there’s no one, if you look at health systems, they actual providers, hospitals, and other healthcare facilities.
[00:03:41] They’re unhappy. Why? Because they’re being mistreated by the payers. They get paid less than they should. They get paid and they get stretched out. They get payments denied. So everyone in the system is unhappy today. And as we look at it and after leaving Livongo a lot of [00:04:00] employers came to me and they said, would you do what you did at Livongo for the rest of healthcare?
[00:04:07] That is, would you create a new and different kind of experience that actually aligns our interests. And when they say our interests, they mean the interest of you and I, and all the consumers of healthcare and the people who truly pay for large self-insured employers. Would you align our interests [00:04:30] together, because right now their interests aren’t aligned with the patient.
[00:04:35] So from that perspective, that’s what it was about. So we have to set the stage to say a lot of dissatisfaction. Somebody has to do something and in this case it’s us.
[00:04:48]Bill Russell: [00:04:48] It’s an interesting concept. We started a direct to employer strategy while we were at St. Joe’s in Southern California. It’s similar to what Northwell is doing with Northwell direct, but [00:05:00] we found it was really hard to do it. It wasn’t really in our wheelhouse, we didn’t do sales well. We had to stand up a bunch of services that were very different than our core business. It was very difficult for us to do.
[00:05:10] I would think healthcare providers would look at this and say this is a good way to sort of establish a competitive situation to the payers, because the payers more and more becoming providers.
[00:05:25] Glen Tullman: [00:05:25] Well, they are. I think you have to, what’s really starting to happen [00:05:30] is the health system, the provider, just, as you talked about, you established some unique relationships where you went direct to large self-insured employers at St. Joe’s when you were there and you were kind of leaders of the pack in that respect. And that’s what Northwell is doing. But put yourself in the place of a large self-insured employer.
[00:05:53] If you’re national you have to now establish those relationships in [00:06:00] every state you operate. And typically not just with one. So even Northwell as big as they are in New York one, they now have to say to someone, you can only go to Northwell that doesn’t give the consumer choice. And then what about their employees in California?
[00:06:17] Northwell can’t help them. So they can’t, and that’s why payers came into existence because they could give you national coverage. The problem is that they haven’t been doing that in a way. [00:06:30] That either reduces cost improves the quality of care or creates an experience that people actually like. So we’re all grasping for straws.
[00:06:42] And I think that’s why Transcarent has been so well received by health systems. There’s one other advantage of Transcarent and that is, we’ve done this crazy thing just like at Livongo we gave strips away for free and people said, that’s crazy. How can you do that? [00:07:00] Here, what we’ve said to health systems is, do you mind if we pay you in advance for the surgery? And they look and they said what you said, well we’re going to pay you in advance. By the way, if I want to do almost any other transaction or economy, I have to pay in advance for it.
[00:07:18] And so if I’m dealing with heart surgery, shouldn’t I pay in advance or at least part of it in advance. Of course I should. And so now that we’ve done. They’re [00:07:30] saying this is truly different. It is new. It’s a new kind of relationship. And we want to work with you because this is a real partnership.
[00:07:38] Bill Russell: [00:07:38] Glenn, this is really interesting. From Transcarent’s perspective, I want to walk through the experience and from a different couple of different perspectives. Let’s start with the employer. What’s the employer’s experience going to be in working with Transcarent?
[00:07:51] Glen Tullman: [00:07:51] So the employer first and foremost, this is truly a partnership. So we are aligned with [00:08:00] the employer. We will never be in a situation where Transcarent will or can make money when the employer does and today payers can make money and the employer is left holding the bag. So we start with full alignment and that means we don’t charge up.
[00:08:20] We share risks. We’re fully at risk. This isn’t, we’ll put 10% at risk. We’re fully at risk, and we’re at risk for three things, [00:08:30] providing a high quality experience too. If you’re the employer to your employees and their dependents, first and foremost, high-quality experience. Second providing measurable quality outcomes.
[00:08:44] We have to improve the health of the population, and we need to be able to demonstrate that we’re doing that. And last but not least, we have to do that at the same or lower cost. And interestingly, it’s not all about [00:09:00] cost to them. They want quality care. Remember if you’re the CEO of a large self-insured employer, your own family is going through your health system.
[00:09:09] You want quality care. You want a good experience. You don’t want your employees distracted by their health care. You want them to do their job. So we have to do those deliver on those three promises. And the way we do that is we make sure there’s alignment. So we’re always looking at it from the standpoint of [00:09:30] how do we improve the experience?
[00:09:32] How do we deliver measurable results? Let me give you one or two examples. So today, if you’re getting infusion at the hospital, we would ask you a simple question. Would you prefer to have that done in this safety and at the convenience of your own house and 90 plus percent of the people say yes, of course I would.
[00:09:55] And then half of them follow up with, but I could never afford it. It [00:10:00] turns out that it is 30% less on average to send a nurse to your own home, to administer that treatment than it is to have you get it done at the hospital. Think about that. You don’t have to travel there. That’s the single biggest reason people don’t get healthcare.
[00:10:18] They have travel issues. You don’t risk COVID or any other infection being at the hospital and what could be more convenient. Safer more comfortable than being at your own [00:10:30] house and yet 30% less. Well, here’s the problem. Who’s going to tell you? The hospital’s not. The insurers they’re all making more money when you spend more money.
[00:10:42] So we step in and say, listen, we have this new service. Let me give you another example with medications. If you go today to a CVS and you need a stat and it’s a generic. If you walk in and you have no plan, [00:11:00] they’ll say, okay, it’s $4 or $6 or whatever the cost is. If you have a plan and you say, yes, I’m insured.
[00:11:07] They’ll say, what’s your copay. My copay is $20. Okay. It’s $20. So because you’re a member of this club, you now just got to pay $16 more. That’s the most ridiculous thing in the world. Who’s benefiting from it? The PBM has benefiting. The payer is benefiting. But you aren’t. Your employer isn’t. So we’re going to stop that. You’re going to [00:11:30] say that’s ridiculous. We’re not going to allow these kinds of things to happen. And that’s where the alignment comes in. So that’s why lawyers love it because the real simple question I want them to ask is why would we not do this?
[00:11:47] Bill Russell: [00:11:47] Yeah, no it’s interesting cause when they formed Haven, one of the things they talked about a fair amount was the experience they’re like look, a couple of aspects of this, the experience for our employees is not good. We’re tired of doing the benefits meeting. Every time we do [00:12:00] the benefits meeting, we just get pummeled because it’s like, yeah, we’re going to raise the costs. And they’re like, and what’s better. And not much was actually better. So I could see that alignment. Now talk about the employee. Cause as the employer, we want happy employees. We want them to feel good about the coverage we’re providing, but also the overall experience. I mean, my wife has to navigate all this information to try to figure out who to go to for care. Should we get a referral, all that other [00:12:30] stuff. Is that part of what you’re going to help in really navigating that entire experience for the employee?
[00:12:37] Glen Tullman: [00:12:37] The sign of a great interviewer. You’re hitting all my buttons here. So first I’m going to, I’m going to step back and talk about Haven because a lot of people miss the fact that Haven was a wake up call for the industry. And I think the industry missed that fact. When you have three of the largest smartest employers in the world, [00:13:00] Amazon, JP Morgan, Berkshire Hathaway, and they come to you and they say, you are so bad, we’re going to form our own company to do just what you do. That should be a wake-up call. Instead, when they decided to not continue to move forward, we could talk a whole show about that, when they made that decision, people said, see, I told the so. This is way too complex. The message was there’s [00:13:30] not alignment, they’re dissatisfied. And somebody’s going to figure this out.
[00:13:34] I would argue then in heart Haven wasn’t successful because Amazon wanted to be in the business themselves. There’s a lot of other reasons, but none of those players are going away. So now let’s transition to the employee experience. You mentioned your wife is going to navigate or has to navigate through this healthcare system.
[00:13:56] Well, first and foremost, you know, let me use an example. If you [00:14:00] broke a glass in a room in your house. You could create a little path through the room of where there wasn’t glass. So then every time a guest came over, you could walk with them and show them the path. You could navigate the way through.
[00:14:13] Or you could clean up the glass, you could fix the problem. So in healthcare, almost everyone viewing this show has received a bill and the bill says, this is not a bill. Right. Do you ever get one of those? This is not. So think about [00:14:30] the thought process. Somebody said, everybody’s getting confused when sending them a piece of paper, they think it’s a bill.
[00:14:38] They don’t know. Should they pay it? Should they not pay it? They’re calling us, it’s creating massive confusion. So let’s redo this. And instead of fixing the problem and saying, should we send it at all? Or should we make it clear what it is? They said let’s print what it’s not. This is not a bill.
[00:14:57] So now everybody says it’s not a bill, well [00:15:00] what is it? What do I do with it? Why do they send it? So they’re still calling. They didn’t solve anything. What we’ve done at Transcarent is we’ve said, what about we send no bills? Because if a doctor says to you, you need surgery. And we now have an expert, second opinion that says, yes, you do need surgery.
[00:15:21] By sending you a bill, by charging you all we’re doing is putting a hurdle up it. Some people won’t be able to afford to get that surgery [00:15:30] and other people are going to go bankrupt because of that surgery because of the co-insurance. The number one cause of bankruptcy in the US is healthcare. So why as an employer when I want my employees to go bankrupt?
[00:15:46] If you need the surgery, we’re going to get you the surgery. So when you’re using the Transcarent system, there’s no copay and no co-insurance for your surgery. Number one. And number two, you [00:16:00] have a choice. So in the past, if you needed surgery and you were the CEO, you figured out the best place to go.
[00:16:07] If you were the janitor, you went wherever was closest where they told you to go. And it was on network. You had no say, was it a high-quality place? You didn’t know what it costs. We’re changing that. We’re saying whether you’re the CEO or whether you’re the janitor, you get world-class service when you’re talking [00:16:30] about surgery or other medical procedures.
[00:16:32] And by the way, the great companies out there, the Walmarts of the world, the targets of the world, folks like that are already doing this, even before Transcarent. They’re saying you can go anywhere you want, but we’re going to send you to Cleveland clinic. We’re going to send you to Memorial Sloan Kettering.
[00:16:49] If you have cancer, we’re going to send you the best places in the world cause that turns out to be a good deal. We get the right diagnosis. We only have to do it once we have [00:17:00] half the infection rate. Sometimes they’ll send you to a surgery center because that’s the best place you want high volume if you’re getting your knee done.
[00:17:08] So they’re already ahead of the game in terms of being smart. Transcarent is about bringing everyone else along. So for your wife, we’re going to provide quote unquote navigation services. But the best thing we’re going to do is make it so easy. She doesn’t need someone to help her navigate. You don’t [00:17:30] have someone who has to come to your house and help you use Google.
[00:17:35] You just use it. You know my son was playing a video game once and I wanted to be a good dad. And so I walked down and I said, I’m going to learn this video game. And I said to him do you have the instructions? And they looked up at me and he said, dad, nothing smart has instructions anymore. You just start doing it.
[00:17:55] Think about that for our healthcare system. Imagine it was so [00:18:00] simple that we met you where you are. So whether you’re at home, whether it’s the middle of the night whether you want to schedule your appointment on a weekend, whatever it is, we meet you where you are and we put you in charge. So that’s why I don’t call this consumer focused.
[00:18:18] It’s not somebody else focusing on you. I call it consumer directed. You’re in charge. You’re giving the orders. When you use Uber, the beauty of that is you’re in charge. [00:18:30] You tell them what kind of car do you want? You want a limo? You want a van? You want a small car? You tell them, do you want to share maybe because it’s lower cost pre COVID or do you want your own car?
[00:18:44] You tell them exactly when you want them there. And literally within minutes, they’re right in front of your house. 10 years ago, you’d have to be a millionaire to say, I’ll have my fleet show up at your house exactly when I want it. But [00:19:00] today, everybody gets that. So consumer directed.
[00:19:03] Bill Russell: [00:19:03] So let me give you my wife’s three hot buttons and let you address them. So number one, log into the website. So her question is always the health system’s website or the insurance carrier. I’ll say the insurance carrier. She’ll log in. It is as confusing as can be. So that’s number one. Number two, she then eventually has to get on the phone and she has to go through this maze, this crazy maze until she finally gets to somebody
[00:19:29] Glen Tullman: [00:19:29] Press 3, press [00:19:30] 5.
[00:19:31] Bill Russell: [00:19:31] Yeah. And she’s just praying that she gets that one person on the other line who is even remotely customer centric, who can help her. Right. And I think the final thing access to the doctor. I mean, at the end of the day, she just, she just wants to see a doctor and she has to go through all these things until she can finally go, okay, I got an appointment and it’s two weeks from now. And here’s a short pandemic story.
[00:19:57] So telehealth takes off. Our insurance carrier [00:20:00] gives us tele-health visits as part of our insurance plan. I mean they’re free essentially. I mean, we pay for insurance but they’re free as part of our insurance carrier. So through United Healthcare she started doing telehealth visits. She’s like this is the best thing ever. She goes, I could she just went on there, had the telehealth visit, saw somebody immediately got a prescription and away she went and she’s just like, why isn’t the rest of healthcare like this?
[00:20:25] Glen Tullman: [00:20:25] Yeah. Well, so let’s go through her exact [00:20:30] example. So the first thing you do is log on is as simple as you take your phone and you look at your phone, you’re on.
[00:20:37] Second we have 60 second access guaranteed to a doctor, 24 hours a day. So you’re texting with a doctor in 60 seconds. And interestingly, by the way, most people would prefer to text today rather than see a doctor in video. It’s the middle of the night. You may not be dressed, you may feel very bad. [00:21:00] Last thing you want to do is meet somebody new on video.
[00:21:02] So most people would rather text. Also that means all the directions the doctor’s giving you are documented. So if the doctor says, take two of these, and one of these take this tomorrow and this the day after it’s all written for you. Now, if at any time you say, I want to do video you say to the doctor, I’d like to do video and it turns to video.
[00:21:24] If the doctor wants to do video, they have to ask you, they can’t just turn it on. Why? Who’s in [00:21:30] charge. You’re in charge. So first and foremost, instant access, 60 seconds, not to somebody who can help you, to a doctor 24 hours a day. You’re in charge. Second, and I will, I will admit our own people came to me and said, Glenn, when you dial us, we have to say if it’s an emergency, do this are we going to have a recording?
[00:21:51] I said, no recordings. No recordings. We’re going to use this thing called the human voice. And we’re going to answer the phone. You say, yeah but we have to [00:22:00] repeat it. I said, what do you have to repeat? And said, we have to say, if this is a medical emergency then you should dial 911. You have to say that by law every time. I said, great. So that’s nine seconds. What else do you have to say? Cause I don’t want press one, press three, press seven. People call when somebody dials your cell phone, they want to talk to you. When somebody dials us and it’s a health issue. They want to talk to us. We’re going to give me a human voice. We’re going to give them instant [00:22:30] access.
[00:22:30] All they need to do is look at their phone and we’re going to let them talk to a doc, put them in charge. So everything your wife wants is live today on Transcarent. And that’s, that’s what the focus is. And by the way, you’ll see TV ads today. Sure. You’ve seen them. There’s a bank that’s advertising and says, when you call us, you get a real human.
[00:22:55] Why are they saying that? Because all of us are frustrated with that one, dial three, dial [00:23:00] seven. When you finally get through, it says that person’s not available. Leave a message. You’re so frustrated. And in many cases, and we learned this with diabetes. Somebody’s blood sugar triggers dangerously low or dangerously high. You can’t wait for a call back. And that’s why people jump in the car and go to the ER. We’re going to be available to them instantly. People say isn’t that expensive? Compared to what? Compared to an ER visit for $2,000. No. And forget about the [00:23:30] expense. Lead with quality. What do you want when your son or daughter, mother, or father is sick? You want to talk to somebody instantly. That’s what we’re going to deliver. A Transcarent.
[00:23:43] Bill Russell: [00:23:43] You just on a previous show, you just described exactly what I’m looking for because I was for my company was selecting an insurance carrier benefits for the employees. It’s just a handful of things. One is I want the best care that I can [00:24:00] provide for them. They do great work for my company. I want, I want the best care that we can provide for them. That’s number one. Number two, I never want to receive a phone call about healthcare, or insurance coverage. I just want it to work first and foremost.
[00:24:14] I want them to feel good about it. And and then the other thing is I want it to be the best healthcare possible. And I know that where I live, the best healthcare that’s available for my employees would not be at a couple of the hospitals down the street from [00:24:30] me. It would be at Mayo or it would be at the Cleveland clinic.
[00:24:35] And you just, you just sort of hit all those buttons. You’re giving us the easy button on navigating on finding the right things. You’re putting us in touch with the person that’s going to help to do that. And you’re giving us access to those things. I so I’m taking my businessman hat on.
[00:24:50] I’m putting it on right now. And I’m saying, how are you going to scale this? I would think every employer in the country is knocking on your door right now is there. And [00:25:00] you’re talking about really a high touch kind of experience, even though it’s a high-tech company, you do have a digital front door. How are you going to scale this?
[00:25:10] Glen Tullman: [00:25:10] Well, so you’ve, you’ve made a really important point and that is people say we all want to do high tech, high touch. And as with a lot of things, I say, no, we don’t. We just want to do high touch. And you just made that distinction. It’s really important. And I’m calling it out for that reason because we want to [00:25:30] use tech, but we want to use tech in the background to provide high touch.
[00:25:35] And a lot of people said, well, tech is tech coming to healthcare. Techs not coming. The folks coming are the Walmarts of the world, the Amazons of the world. They aren’t tech. They’re actually think about it. What is Amazon? It’s a place you go to buy stuff. What is a Walmart? It’s a place you go to buy stuff. Do they use tech and does Amazon?
[00:25:55] Yeah. Amazon web services. But by and large, Amazon’s a shopping place. [00:26:00] Walmart’s a shopping place. And they’ve made it easy to shop. That’s why 200 million people a week go to Walmart. So, so this is, they understand customers and experience. That’s what we need in this industry. And that’s really where we’re, again, we’re thinking about focus.
[00:26:20] So how do you scale it? Well, believe it or not, you scale it by doing less, not more so when you don’t have billing, if you think about the [00:26:30] traditional navigators, which I think are going to go away, because the whole concept of navigator doesn’t make sense. It says you’ve got something so complex. You need somebody else to help you through it, make it simple about 20% of the calls into the normal insurance helpline and sometimes higher or for billing.
[00:26:49] But remember I told you we don’t do billing. So we just eliminated 20% of the calls. We made it easy. And by the way, we made it really simple. Self-service you [00:27:00] pick your phone up and you press something that says, I want to talk to a doctor and connect in less than 60 seconds. What’s hard about that?
[00:27:09] Well, it’s not that hard. So what’s hard is if you say I want to schedule it now, we got to get with you. You’ve got to get with us. Schedule didn’t work. Once I make it instant access, all of a sudden I made it easier, not harder. So great software eliminates the middle. Think about it. [00:27:30] Airbnb. What they do is they connect you to the person who owns the place. Or Travelocity you.
[00:27:37] You and I remember, cause we’re old enough that we used to stand in line and wait for your ticket. And there was somebody up there and then all of a sudden you tool away and they go to take lunch and you just say to yourself, oh my gosh, how long is this going to be? Now we’ve taught the whole country that it’s really simple to just touch a screen, do it at home, do it on your phone.
[00:28:00] [00:28:00] You show up and we made it simpler. Well, guess what? There’s a whole bunch of people who are in the middle that we don’t need anymore. And it’s better. Travelocity gave us three things. We all want unbiased information. So they gave us everything. I remember calling our travel agent once and I said, there’s a flight to New York that leaves tomorrow morning.
[00:28:22] And they said, oh no, there’s not. I said, no no no. I saw it. So I’d advertised. It was on Southwest. Oh, we don’t deal with Southwest. Why don’t you deal with [00:28:30] Southwest? They don’t pay us to mention. Well, wait, that’s not unbiased information. I want all the info. That’s not good. That may be good for you. It’s not good for me.
[00:28:39] It’s just like your example of saying right now we could, you and I, or families could walk by high-quality hospital with half the infection rate on our way to a place that our payer told us to go, why are we going there? Because the payer gets a better deal. The payer gets a better deal. We’re going to [00:29:00] say, look, here’s the best places to go.
[00:29:03] And by the way, they may be local. They may be right in your community. You may have the best docs right in your community. But if you don’t, we’ll tell you, if you do, we’ll tell you and you can make that decision. So again, this idea of scale, good technology makes it easier to get to scale. I mean, think about what Amazon’s done.
[00:29:26] And by the way, it’s fascinating. Amazon’s [00:29:30] figured out that it takes less energy to have this stuff delivered home than it does for each of us to go out and buy it separately because they can have a delivery truck. I don’t know about you, but in the building I live in the Amazon truck comes and it delivers 35 boxes at once.
[00:29:47] So it’s one gas trip, 35 boxes. Hugely efficient, better for environment and economy. Maybe the wrapping isn’t quite as good. I haven’t figured that out yet, but [00:30:00] so we think we can scale. We have tremendous interest, but we think we can scale because of that.
[00:30:09] Bill Russell: [00:30:09] Well in the, in the second half of this interview, I’d like to ask you one question about Livongo and only one question, because it’s been covered in just about every other venue. And it’s just to put my mind at ease. And then I’d like to go through the industry a little bit. The Livongo question is this. I saw an early version of Lavango back when we were at St. Joes [00:30:30] and I didn’t see it. I saw an interesting tool for managing diabetes amongst a thousand other tools that were just out there. There were sort of there. Why was Livaogo able to break out of the pack?
[00:30:45] Glen Tullman: [00:30:45] Well, I think, and by the way, your reaction is every major employer and health system that is, we wanted innovation. We gave it to you. And you’re like, look my job isn’t to sort among a thousand different innovative companies. I have a real job during the day. [00:31:00] So every employer, every health system is feeling that way. Why did Livongo break out of the pack? I think it’s really simple. First and foremost member focus. We had a third of our employees who either had diabetes, which is where we started. I had a family member who did. They understood that the member had to come first.
[00:31:23] And we had to create this unique experience for the member. Everything we did was focused [00:31:30] on how do you make it easier for someone to stay healthy? So how do you make it easier? You take away the co-pays on strips and give them free strips. You send the strips before they need it. Why? Because you know how many they’re using.
[00:31:43] If they lose their meter, you don’t give them the ninth degree, you FedEx and the new meter the next day. Nobody wants to have diabetes. Nobody wants to prick their finger. So if they’re asking for another meter, give it to them. Don’t delay for a few [00:32:00] days. How does that help? And I can remember with our insurance company, one of the large blues saying my son is running out of strips and they said, the answer was, we can send needles today, but we can’t send you new strips for two weeks. I said, that’s the craziest thing I’ve ever heard. They said, if it’s an emergency, go to the ER, to get strips? $5 strips.
[00:32:24] You want me to go to the local Walgreens or CVS. Well there the [00:32:30] strips are $35 and I know they only cost $5. So we made them free. So one. Member focused. Relentless member focus and caring about the members. Cause it was like every time I looked at it as if it was my son. Our president, Dr. Jennifer Schneider, she had type one diabetes. She has type one diabetes.
[00:32:52] And she said, here’s my, I’m using all of them, they were using, they were a quality control. So Two. [00:33:00] Create an experience. Three. Make it easier, not harder to stay healthy. And that’s really, that was the secret. And that relentless focus. And then we figured out that for type two diabetes, 70% of the people who had hypertension also had diabetes.
[00:33:20] And so there was a natural overlap. They didn’t want to coaches to devices 2 this, 2 that. You wanted one app, one coach and that’s what we gave them. So it [00:33:30] was a natural extension. And that’s how we built it. But relentless focus on the experience and the member.
[00:33:38]Bill Russell: [00:33:38] Well, Glen again, not to jump over Livongo to quickly $18 billion exit was pretty amazing, but even more amazing was the company that you were able to build and the people that you were able to serve. But I do want to take advantage of some of your previous experience and your, broad view of the entire industry. Let’s look at the EHR market. First time I met you, you [00:34:00] were at Allscriptss. And the leader of that company.
[00:34:06] And I want to ask you about the EHR market. Where does the EHR market go from here? Do we end up with like three players, four players running the entire operations of every hospital system in the country. Or do you think we’re going to see something different emerge? Is there going to be something that breaks out of the pack?
[00:34:23] Glen Tullman: [00:34:23] Well, first of all, I would be remiss if I didn’t say thank you. You were an early client of ours at Allscripts. You [00:34:30] were great in terms of not just being a client but you helped us make the system better. And so thank you for that. There was a lot of innovation that occurred with us working together and we appreciate that.
[00:34:42] Where EHRs are today. So first of all, I think that electronic health records were necessary but not a sufficient condition. We had to get all of the information electronically to take the next step. But the next step was about making the [00:35:00] user interface much easier for doctors and other caregivers and on the backend using all this new information to create insights from the data just as we did at lavando, the industry was moving along.
[00:35:15] We had a 20 plus billion dollar stimulus courtesy of the government that allowed us to really accelerate adoption, which was created. Because we had to get that information, like trying to take the next steps, but then the [00:35:30] industry kind of stagnated. You saw a lot of leaders, the most innovative people in the industry leave.
[00:35:36] And so today what you have is electronic health records that are fundamentally big, dumb data repositories that they aren’t an easy to use. I mean, think about having spent the last six years in Silicon valley if you said to anybody, your system is so complex that you need a scribe [00:36:00] to help you enter the data. Talking about Epic. They would look at you and say, that’s the picture child for bad software. That it’s so hard to use, that you need somebody else to operate it.
[00:36:13] There’s no other software in almost any other industry that’s so hard to use that we need somebody else to sit next to the terminal and use it. And so one, we didn’t fix the front end and make it really easy for doctors to use and really valuable. And [00:36:30] on the backend, we surely haven’t used data science to say to doctors, here’s three things about this patient to discuss with her, discuss with him. And here’s the recommended treatments. You still use your judgment, but we haven’t served that. So most doctors think of the electronic health record today as a necessary evil, as opposed to a valuable tool. Like when we did e-prescribing at Allscriptss eventually [00:37:00] doctors understood, you should never write a prescription without drug to drug drug, to pregnancy, all the interaction data and knowing whether it’s on formulary and you could send it electronically to be filled. So there were no handwriting errors. Doctors grew to love that it was challenging early on to pry their script pads out of their hands. But when I left, we were doing a few hundred million electronic prescriptions and [00:37:30] that we knew saved lives and we knew improved the processes. And so did the doctors. They never had that same feeling about electronic health records because they didn’t make them better and smarter.
[00:37:43]So that’s still coming. So what we’re seeing is coming out of Silicon valle there’s some leading companies Trameer? happens to be one of them. And what they do is they sit on top of an Epic or a Cerner or an Allscripts, and they are the apps [00:38:00] layer. So they make it easy to write apps, to interact, to do all the things, to do the data science. So I don’t think we’re going to rip out the Epics and Cerners, but I do think all of the innovation is going to come around. It’s not going to come from.
[00:38:18]Bill Russell: [00:38:18] Yeah it’s interesting. I was earlier this week I was talking to somebody about Google studio. It’s that same thing. It sits, it sits above it and says the experience is so bad for the clinicians [00:38:30] that we need a layer that’s above it.
[00:38:32] And then the other thing I heard the ONC coordinators for health IT, they had all of them at the CHIME session. And one of the things they said is we started even before the stimulus money we started with this intention of getting good data and have it be interoperable. Then we had the the great recession.
[00:38:53] And the stimulus money came in and it was like all that sort of went by the wayside and it was just digitized the record. [00:39:00] And that’s how we ended up with this in this mess that we’re in, it just had a cure. I know it’s a really mature market at this point. There’s very little movement or opportunity for movement. But if I were to make you the CEO of Cerner, because Cerner was looking for a new CEO, what’s the breakout strategy?
[00:39:16]Glen Tullman: [00:39:16] Well I think the breakout strategy to turn, to do exactly what we just talked about, maybe you have to partner with someone who knows how to do it. But make the front end [00:39:30] unbelievably user-friendly for physicians and also for health consumers. And on the backend use real data science.
[00:39:40] When I was at Allscripts we did a project with one of the leading cancer organizations in the country. And what would happen is when someone checked in they would put in their information. We would run that information against the entire history of the place and against all the literature.
[00:39:58] And we come back with a [00:40:00] recommendation based on their history of a drug regimen in the light. It was kind of IBM Watson that worked. And before IBM Watson. And when we did that, the doctors would look at it and they say, this is hugely valuable. Well we have to get there. I just, I was just getting a new car. And when I got the new car, an electric vehicle what was great was it was integrated instantly with [00:40:30] my iPhone. They had bought the technology from Apple. It was all integrated. It would read my messages to me. I could, if I got a text message, it would read it. I could reply by voice and it was great.
[00:40:43] Now what happened was in that case Chevy, it was a Chevy bolt. In that case, Chevy said we could try to develop all this. Well, we can be smart. We can go to the people who know how to do this, put a front end on and make it unbelievable. [00:41:00] That was much more important to me in the buying decision and understanding the engine, which I don’t understand, but what I knew is that creature feature was really important to me.
[00:41:12] So if I was the CEO, Cerner, I focus on how do we make this so easy to use the doctors say, wow, this is so easy to use. How do we stretch it to the patient? To say when you’re at home, when you arrive at the hospital, there’s no, check-in all you do is [00:41:30] use a QR code, just like we’ve learned in the pandemic.
[00:41:33] We can do almost everything with the QR code. Scan the QR code you’re done. And that’s the check-in. Make it easier to stay healthy. And on the backend use data science to allow our docs to do what they were trained to do. Practice medicine use make really important decisions, deliver care, not fill out forms and do billing.
[00:41:58] Bill Russell: [00:41:58] It’s interesting. Again, my [00:42:00] wife, when we were buying a ca .Two criteria. One easy for her father to get in and out of and number two, had Apple CarPlay. I’m like, okay.
[00:42:09] Glen Tullman: [00:42:09] Think about that. And by the way, years ago, you may remember Leeia Khoker. He got to Chrysler and he said, I got to turn this company around. So he asked two questions. Well, what’s our biggest issue with engines. How long does it take into doing new engine? At that time five years to develop and get into a car a new engine. He said I have a [00:42:30] three-year contract. What’s next on the list? Next on the list was cup holders. People don’t have a place to put their cups.
[00:42:38] So if you remember Chrysler came out with minivan and everything else but tons of cup holders. It was really easy to be, and it was just some people loved it. And so nobody understood the engine. And in fact, if you remember for a while, Chrysler bought some engines from Mitsubishi again, they didn’t actually [00:43:00] care where the engine was. They outsourced what they needed to and they solved the consumer problem. That’s what we have to do. So your wife is very typical of everybody in healthcare. Here’s my issues. Solve them.
[00:43:13] Bill Russell: [00:43:13] Yep. All right. I have three questions. Three minute answers. We’ll close this out in 10 minutes. So headwinds. PBMs payers provider. So PBMs talk about the headwinds facing PBMs. There’s a lot of competition in that space at this point isn’t there? There’s a lot of new entrants.
[00:43:29] Glen Tullman: [00:43:29] Well it’s a [00:43:30] perfect question for me because yesterday as a part of Seven Wire Ventures, our venture firm, we had as a guest speaker, Mark Phair. And Mark was one of the people who help drive that industry forward, get it automated and then ultimately merged a catamaran into Optum and ran Optum’s PBM.
[00:43:52] And there were two takeaways from that. Mark basically said like current PBM model is fundamentally [00:44:00] broken. And that was one and second that the value distribution of something like $50 billion is going to shift more to the front end. And that is the people paying and more to the end pharmaceutical manufacturers.
[00:44:17] If you look at it, you can’t turn on a TV today without seeing an ad from capsule or pill pack or good RX. And all of these are multi-billion dollar companies. So [00:44:30] I think PBMs are under the gun. I think the industry is being challenged. And you now know that the major PBMs are all owned by larger insurance companies, larger payers. So I think that model is fundamentally going to change. I think rebates are going to go away and I think it’s going to be good for the consumer.
[00:44:50] Bill Russell: [00:44:50] Payer. Payer is an interesting space. Largely consolidated but a lot of, I mean, self payers, obviously going to someone like Transcarent. Where’s the [00:45:00] competition come from for the large payers at this point?
[00:45:03] Glen Tullman: [00:45:03] Well, I think the large payers have to reinvent themselves. Many Aetna of course merged with CVS and remains to be seen how that comes together and how that works. Cigna of course acquired Express Scripts. So I think you’re seeing first stage in that. But what big organizations do, we’ve seen this with some health systems, they try to get bigger instead of [00:45:30] trying to get better.
[00:45:31] And so they have to fundamentally redefine their relationship with consumers. Health consumers number one. Providers number two. Both health consumers and providers generally dislike payers. And it’s hard to build a successful business longterm if your primary suppliers in primary consumers dislike you. And that’s where they are. So they have work to do.
[00:45:59] Bill Russell: [00:45:59] Yeah, [00:46:00] I see that on the trust surveys. They always come in last place in the healthcare arena. Providers. Where’s the competition going to come from? Where’s the disruption? Where should providers be concerned about disruption?
[00:46:12] Glen Tullman: [00:46:12] Well, I think providers need to focus on a few things. One, they’re going to have to figure out a way just as pharma needs to get out from under the thumb of PBM. And go direct providers need to get out from under the thumb of [00:46:30] payers, fill direct relationships with employers and directly with consumers. And that’s what they have to do because today the quality providers are actually penalized.
[00:46:43] They provide better quality and all the payer wants is lower costs. So they have to change that equation. Transcarent will help them do that. And they should continue to focus on two things. One do more of what they’re good at. And you don’t have to do [00:47:00] everything. Do more of what you’re good at. And two, get a payment model that you can live with.
[00:47:05] And lastly, I should add, enforce your own quality. So if you aren’t good at something, get out of the business or fix the problem. Don’t wait to be told because increasingly we can measure quality.
[00:47:18] Bill Russell: [00:47:18] So next question is for the entrepreneur. So imagine you’re speaking at Stanford, MIT, Harvard, one of the universities that’s has a bunch of entrepreneurs, future entrepreneurs in the room. What have you [00:47:30] learned about starting and growing a business in healthcare that you might pass along?
[00:47:36] Glen Tullman: [00:47:36] Well, I think most important it’s worth doing. And that is, if you’re going to commit your life, your time, your energy and you do need to commit, you need to commit disproportionately to do it, do it for something that’s worthwhile.
[00:47:52] And there’s nothing more important in this country than our health. For us individually, for our families, for the economy. [00:48:00] We’ve learned that from COVID. So we have to fix our healthcare system. We have to build a better and more equitable system it’s worth doing that’s number one. So whatever you do. Make sure it’s worth doing.
[00:48:12] And number two, understand the consumer and the experience. And lastly, understand the ecosystem because we have a very complicated ecosystem. I’ve seen so many wonderful entrepreneurs, [00:48:30] wonderful products that don’t understand how to navigate ecosystem and ecosystem kills them before they can even get stuck. So you have to understand the ecosystem.
[00:48:41]Bill Russell: [00:48:41] Interesting, because one of the things I’ll take away from this is we spend too much time focusing on the tech and not enough time focusing on the world that we live in. And the people that we’re serving. Is one of the key takeaways. I think I’ll take from this. Let’s talk about students. I have a growing population of students that send me emails. They’re listening to the show. If [00:49:00] they’re undergraduate going into college or haven’t really decided what to declare as their major yet. What should they be studying to be relevant as they step into healthcare or health tech market space when they plan to graduate in a couple of years?
[00:49:16] Glen Tullman: [00:49:16] Well, I think that my advice to people is One, study what you love to do and B, study what you’re passionate about. You can learn about healthcare in a variety of ways. If you’re studying [00:49:30] healthcare, that’s great. You have to have a technology component, but have you, as you pointed out, it’s not about the technology. Technology is a tool. But you need to understand it.
[00:49:42] So I think every educational experience ought to be one part what your major is. One part technology and one part fun. I took juggling as one of my elective courses in college. And the instructor said, this may be the [00:50:00] only thing you use 20 years from now. And he was right. Everything else has changed. So don’t discount the ability to have fun, to do interesting things, but make sure it’s a blend.
[00:50:13] And the other thing is keep learning. Keep reading, keep learning, keep listening to books on tape. And stay relevant because everything’s going to change. I like to say that what happens in the next 18 months in healthcare will determine the next five years and the next five years will [00:50:30] determine the next 25 years. So we’re in for dramatic change. It’s going to come faster than we ever imagined, and it’s going to be an exciting time. So jump in.
[00:50:42] Bill Russell: [00:50:42] Really. Wow. Can’t wait to see that at the health conference. You juggling and Jonathan Bush, doing whatever he does whenever you guys happen to
[00:50:49] Glen Tullman: [00:50:49] Well actually at the HLTH, so I’m a very, very amateur magician and they asked everyone to do something that they were going to use as little clips. So I [00:51:00] did do a floating ball routine that you may or may not see. We’ll see what happens.
[00:51:05] Bill Russell: [00:51:05] You may or may not see. Glenn, thank you very much for your time. And I wish you the best of luck with Transcarent. I hope you are wildly successful. And at some point get down to serving companies of my size because it sounds exactly what I want. And I’m just going to have to wait until you guys get down to the small and medium business.
[00:51:23] Glen Tullman: [00:51:23] Not too long, not too long. Thank you. Thanks for a great interview. Thanks for all. Really appreciate it. It’s great to [00:51:30] see you again as always.
[00:51:31]Bill Russell: [00:51:31] What a great discussion. If you know someone that might benefit from our channel, from these kinds of discussions, please forward them a note, perhaps your team, your staff. I know if I were a CIO today, I would have every one of my team members listening to this show. It’s conference level value every week. They can subscribe on our website thisweekhealth.com or they can go wherever you listen to podcasts, Apple, Google, Overcast, which is what I use, Spotify, Stitcher. You name it. We’re out there. They can find us. Go [00:52:00] ahead. Subscribe today. Send a note to someone and have them subscribe as well. We want to thank our channel sponsors who are investing in our mission to develop the next generation of health IT leaders. Those are VMware, Hill-Rom, StarBridge Advisers, Aruba and McAfee. Thanks for listening. That’s all for now.