Transforming Digital Health in a Post-Pandemic World with the CEO of Xealth - This Week in Health IT
April 7, 2021

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April 7, 2021: It’s been a wild year for digital health. How has the pandemic influenced this space? It’s hard to imagine a one size fits all for addressing patient care. That’s where Xealth comes in. It’s a digital prescription platform that lets clinicians prescribe digital health tools to patients. Think of it like the SureScripts of digital health. Today their CEO Mike McSherry joins us. What is Xealth doing for payers and providers? How are digital tools impacting patients in terms of quality and experience? Have the demands from consumers changed over the last year? How will health systems start to differentiate based on new sets of digital tools that are in play and being developed? Can hospital systems afford to invest in a digital health feature or can they afford not to? And what will the healthcare consumer experience be in 2025?

Key Points:

  • One explosion in digital health was around virtual care for certain disease states. Diabetes management, behavioral health and hypertension remote patient monitoring increased exponentially. [00:03:55] 
  • The Teladoc Livongo merger is a sign of the rise of digital health and app based care management [00:04:10] 
  • Consumer expectations in healthcare are currently at an analog experience level [00:14:35] 
  • Healthcare is at the opposite end of the consumer experience spectrum. It needs to solve that magical middle and then bookend it to create a seamless consumer friendly care experience. [00:16:20] 
  • Parking is one of the biggest complaints of going into a health system [00:17:25] 
  • At the end of the day, convenience always wins [00:42:05] 
  • Xealth 

Transforming Digital Health in a Post-Pandemic World with the CEO of Xealth

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Transforming Digital Health in a Post-Pandemic World with the CEO of Xealth

Episode 387: Transcript – April 7, 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. This is a Solution Showcase. My name is Bill Russell, former healthcare CIO for a 16 hospital system and the creator of This Week in Health IT, a channel dedicated to keeping health IT staff current and engaged.

[00:00:19]Today, I’m joined by Mike McSherry, the CEO of Xealth, a digital health startup. And we talk a lot of different things. We obviously, we talked about Xealth a little bit but we also talk about how [00:00:30] health systems can differentiate themselves using digital tools. I think this is going to be a key differentiator moving forward. Great conversation. I think you’ll enjoy.

[00:00:37]Special thanks to our influence show sponsors Sirius Healthcare and Health Lyrics for choosing to invest in our mission to develop the next generation of health IT leaders. If you want to be a part of our mission, you can become a show sponsor as well. The first step is to send an email to [email protected]

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[00:01:39] Just a quick note, before we get to our show, we launched a new podcast Today in Health IT. We look at one story every weekday morning and we break it down from a health IT perspective. You can subscribe wherever you listen to podcasts. Apple, Google, Spotify, Stitcher, Overcast. You name it, we’re out there. You can also go to [00:02:00] And now onto today’s show. 

[00:02:03] All right. This morning, we have Mike McSherry the CEO of digital health startup Xealth on the line. Good morning, Mike. Welcome to the show. 

[00:02:12] Mike McSherry: [00:02:12] Hi Bill. Thanks for having me. 

[00:02:14] Bill Russell: [00:02:14] I’m really looking forward to this conversation. We’ve been near each other. I mean, I was, I was at St. Joe’s you were incubated out of Providence but we never really got to get to work together. So I’m looking forward because I’ve been following Xealth [00:02:30] for a number of years. You guys are doing some on some pretty exciting stuff. 

[00:02:34] Mike McSherry: [00:02:34] Yeah, no thanks. We, as you said, we were in committed inside of Providence up in Seattle and while we were still being incubated, they merged with St. Joseph’s.

[00:02:44] But we were working on the Epic side of Providence and by the time we got to working with St. Joseph’s you had already left the system. But we’re still colleagues. We’re still trying to advance digital health and you know, healthcare IT you know, technology to the forefront of patient care.  

[00:02:59] Bill Russell: [00:02:59] Well [00:03:00] let’s start there. I am going to circle back. We’re going to talk about Xealth in in the middle of this podcast, but let’s start with digital health. But you know, it’s been a wild year. A very interesting year in digital health. How has the pandemic really influenced the digital health space? 

[00:03:17] Mike McSherry: [00:03:17] Well, I mean, exponential growth. When all patient care essentially stopped, you know, you, you went from maybe 3% of patients having done some tele-health experience to, you know reaching 80% in some kind of [00:03:30] targeted timelines. That’s Since come down, I think, I think what we’re hearing across provider systems is there’s going to be a new normal of 60, 40, 60% back to like some in-person in-person kind of care and 40% remaining sort of loyal or convenient towards the telehealth experience.

[00:03:47] But that’s just on the you know, face-to-face or asynchronous kind of engagement level. The other explosion in digital health was around virtual care for certain disease states. And you take a look [00:04:00] at the diabetes management, the behavioral health you know, hypertension, remote patient monitoring that increased exponentially.

[00:04:08] And I guess the high water mark of that was the Teladoc Livongo merger, you know, where Teladoc bought Livongo for $18 billion. And that’s just a sign of the times of the rise of digital health and app based care management, online telehealth coaching specific to disease state, RPMs, like continuous glucose [00:04:30] monitoring or patient engagement, you know, metrics, you know, tracking patient adherence and engagement to that.

[00:04:35] So it’s not just the telehealth, which often times gets lumped into you know, digital health and the new front door strategies but it’s the intent care referral into these apps and services and in-home care treatments. And the RPM associated with that. 

[00:04:50] Bill Russell: [00:04:50] Did the Livongo valuation surprise you at all? Is that an indication of the potential that exists in this remote patient [00:05:00] monitoring and and and really digital care plans 

[00:05:05] Mike McSherry: [00:05:05] It was absolutely shocking, I think to me in the market. But you know, I think Teledoc’s playing the long game here that there’s going to be modality of care delivered  virtually and Lavango has expanded beyond just diabetes management. They do pre-diabetes they do behavioral health.

[00:05:24] I don’t know if they’ve bought or built an MSK solution yet, but you assume that they’re going to expand [00:05:30] into all sorts of chronic care disease States. And I think Teladoc, you know, took a bet that this is going to be a not quite a winner take all, but certainly you know, and oligopoly type structure you know, against that.

[00:05:43] And it was worth $18 billion to them. I haven’t looked at the stock price now. I don’t know, you know, how much it’s come down, whether it’s still worth that on their balance sheet, but they’re playing to have you know, the back to that 40%, it’s going to be delivered, you know, telehealth and virtual care.

[00:05:58] And then the downstream [00:06:00] referral, if you can cost, contain and keep that into your own in-house solution state, you’re going to be able to provide lower cost of care. And, you know, we all know that’s the end game. How do you provide a lower cost of care at equal or better outcome levels? And that’s what they’re betting on achieving.

[00:06:17] And they’re the first out the gate, you know, you have to assume that Armada and WellDoc and a couple of these other platform plays have achieved, you know, multi-billion dollar evaluations you know, creeping up into that [00:06:30] level. But it was a shock to the industry and real wake up call. How the industry is responding, you know, as measured in different increments, depending upon which sector payer provider, employer, pharma, et cetera, you know, as to how aggressively they’re playing in this digital health game.

[00:06:49] Bill Russell: [00:06:49] That feels to me, I’m already way off script here, but that feels, it feels to me the entry point that you’re going to compete with [00:07:00] health systems appears to be a, to get in, get in the way of primary care and also to figure out a way to essentially bypass all of it and go straight to the home.

[00:07:11] And I’ve talked to some people about just this concept of the Airbnb for beds, for hospital beds. I mean, if we can continue to build beds with high acuity in the home that appears to me to be the place that the digital startups can really [00:07:30] I don’t know, sort of surprises the wrong word. It feels like a strong word but really surprised start to take some of that revenue slowly take some of that revenue away from traditional providers and pavers.

[00:07:43] Mike McSherry: [00:07:43] Yeah. I, you know, at the end of the day, I think it’s going to be a hybrid model. I mean, look at Optum, you know, buying physician practices so they can actually have some face-to-face care delivery but you’re right. So much is going to this virtual first touch point and, [00:08:00] you know, payers, you know, I’m mean Express Scripts Cigna just bought MD Live so much as going to this telehealth first.

[00:08:07] And payers that, that control the premium and control the patient out-of-pocket can, can incense like start with my tele-health experience. And, you know, then you’ve got the new entrance, you know, the Amazon care, you’ve got the new front doors of, you know, what, what Walgreens is trying to do, what Walmart’s trying to do, you know.

[00:08:27] And they’re all starting with these virtual [00:08:30] experiences, but if you start with the virtual first. And you can kind of treat whatever that care protocol is. What would that patient need virtually? They’re all trying to have asset light infrastructure to refer virtually. You know, Teladoc buying Lavango, Express Scripts, building their digital health formulary Optum, you know United, building and buying their own formulary.

[00:08:57] They bought able to, they bought Vivify, they’re building a [00:09:00] diabetes management solution. So. In as much as they can refer patients virtually, they’re going to, I mean how many people start an e-com experience than she’s the in-store pickup option? No you want to close loop in as much as possible on that virtual experience.

[00:09:16] If it’s satisfactory and achieves the need of, you know, resolving that, that patient issue and. Only then if you can’t solve it virtually, do you refer them to the expensive hospital system infrastructure and, you know, keep in [00:09:30] mind that, you know, everything, we just referenced the Amazon, the MD live, the Teladoc, the Lavango, you know, they’re all commercially insured patients.

[00:09:39] And so if these commercially insured patients get routed away from hospital systems, then that, that destroys the provider finances. You know, if there are solely reliant upon CMS and Medicaid, Medicare reimbursement structures. 

[00:09:54] Bill Russell: [00:09:54] Yeah. All right. So let’s let’s talk about the viability of some of this stuff.

[00:09:58] We’ve seen a lot of progress [00:10:00] over a number of years, a lot of money coming into the space. Digital tools. Let’s talk about that progress. And really I’m going to go in three different directions here and the first being let’s see, let’s go with quality, you know, have we seen digital tools, impact quality?

[00:10:18] Do we have those kinds of metrics that we are showing people that say, look we can provide a better level of quality if you implement these digital tools along the way. 

[00:10:28] Mike McSherry: [00:10:28] So [00:10:30] in our definition of digital health, it spans from patient education to shared decision making tools, to apps that manage diabetes or hypertension or behavioral health as well as the facility of prep and recovery.

[00:10:46] So when you talk about quality in many cases, we’re sending out pre pre-surgical educational material or precision pre-surgical digital pathway. Stop eating here. Stop drinking here. Make sure you bring this [00:11:00] to the hospital system. Make sure you have this at home on the recovery pathway. And so that addresses quality, even though it’s a digitized patient education experience.

[00:11:09] So is that digital health? Maybe not in the quote app based world, but it is digital engagement with the patient that is leading to better quality and outcome measurements. So that’s one definition. We definitely have, we’ve got data showing behavioral health. Silver cloud is a behavioral health app.

[00:11:28] We’ve launched that at three different [00:11:30] systems and. We’re enrolling about two thirds of all the patients who’ve ever been prescribed that app actually adopt the solution. And then 75% of them are showing improved PHQ nuts. So that is definitely an outcome and quality measurement metric against that. We do an awful lot in maternity care and maternity.

[00:11:51] You know, highly expectant mom, highly engaged against her care and the newborn child prep the sort of what to expect when you’re expecting on [00:12:00] that level. And what we’re trying to do is correlate how much is in, you know, in light of telehealth that all needed to have a device accompaniment. So how is the blood pressure cuff and scale weight of the mom?

[00:12:13] Tracking against our healthy pregnancy so that otherwise healthy mom checkup can be done in a telehealth experience with that added device diagnostics. So that’s leading towards quality outcomes. We try to correlate that directly to low NICU events or [00:12:30] reduced low birth weight events. But  you know, quality scores solely based on digital engagement is the only.

[00:12:37] You know, kind of attribute it is probably a little difficult against all the other social determinants and you know, other kind of considerations associated with that mom and the healthy birth of a child. 

[00:12:50] Bill Russell: [00:12:50] Yeah. So, you know, so that’s quality. When we look at experience experiences is one of those areas that’s really in the wheelhouse of a digital [00:13:00] digital solution, a digital set of tools.

[00:13:03] Are the, have the habits, have the demands from the consumer changed, do you think over the last year to say, look digital first? I mean, from a safety standpoint, this is what I was hearing. When I was talking to people, they were, they were happy with their you know, their online visits. They were happy with remote monitoring.

[00:13:27] For chronic conditions. And the reason they [00:13:30] were happy is because they were told that it was unsafe to go to the hospital. And so they found a solution that they felt was more safe. But after doing that for nine months, do you think that changes a behavior? Do you think there’s going to be more engagement from that perspective and conversely, a better experience all around.

[00:13:47] Mike McSherry: [00:13:47] Yeah, there’s absolutely. And you know, we all do talk about the consumerization of healthcare and, you know, we can all do mobile banking transactions. We can book flights on our phones or you know, [00:14:00] websites, et cetera. So much of your consumer life can be transacted digitally. But when you hit the healthcare world, there’s phone calls, there’s faxes. There’s I jokingly call it the lowest common denominator. Now hospital systems, like, well, if a hundred percent of people can’t do something on their phone then let’s go to the lowest common denominator and make sure everyone makes a phone call or comes in for a face-to-face visit. And that does not meet consumer expectations.

[00:14:28] They can so [00:14:30] easily transact in their consumer life against every other element of life digitally but in healthcare it sort of hits this analog experience level. But you know, that’s changing and and it transacts with booking an appointment, you know, I mean, I think almost in most scenarios now you can book appointments with digitally but maybe not that specialist referral that has to be a phone call that, that transacts with that, [00:15:00] and then all the way through to the patient experience and whether it’s done telehealth or virtually, and then the resulting, you know, care protocol and treatment and whether or not the person felt that they had a successful outcome.

[00:15:12] When you looked at that whole like transaction experience, compare that with like, say Uber The magic of Uber is press a button. Phone shows up, you leave, and you don’t have to give cash or pay a credit card, or you know, deal with that. Like, you know two minute delay climbing out the taxi, while you’re in a rush to go [00:15:30] do something.

[00:15:30] So but the ride itself is kind of hit or miss, you know, am I going to, I want to talk to the driver, you know, am I going to trust the driver? Is the car going to be clean? And especially in this kind of COVID pandemic who was in it before, is my mass save all that level of uncertainty. Compare that with the patient experience here. The pain and parking and navigating through the walls of a hospital system and just getting there and the waiting room and lobby your little 15 minute window with that [00:16:00] hospital system, you know that with the doctor, with the nurse, That’s magical.

[00:16:03] Everyone loves it and says, Oh, I had a great visit with my doctor, but boy it’s such a pain on the front end to book and transact and get to that appointment. And then upon leaving, like you’re handed a brochure full of papers, or go here to get that or make this phone call to follow up on that front or it’s just it’s an opposite end of the experience spectrum and in what healthcare needs to do is solve that magical middle and the [00:16:30] bookend to create a seamless consumer friendly experience to that patient care. 

[00:16:35] Bill Russell: [00:16:35] Yeah. It’s interesting. When I talked to some people that talk to me about, they were implementing wayfinding to make it easier to go through.

[00:16:42] I’m like, well you know, step back one step from that and figure out a way to make it so easy that they don’t need wayfinding. And there’s sort of like to be like, what do you mean? I’m like well, you know, I mean, do you remember that? I don’t know if you remember this, but a CVS CMIO once talked about, they were putting Epic in and he was like putting Epic [00:17:00] in and it was a health system executive who was asking the question.

[00:17:03] He said, you know do you think you’re going to be able to compete with health systems? And he said, yeah, I absolutely think we’re going to be able to compete for some services with health systems. He said well, why do you think that he goes parking. That was the whole answer. I thought. Yeah, that’s that’s true. I mean, that was one of the, I mean, parking is one of the biggest complaints of going into a health system. The Campus is big, it’s hard to find where you need to go. [00:17:30] Yeah. 

[00:17:31] Mike McSherry: [00:17:31] And that just devolves even further to just convenience. And convenience, it spans a whole range of activity and interactions.

[00:17:40] Bill Russell: [00:17:40] So are health system is going to be able to start to really differentiate with each other against each other potentially, and differentiating their communities based on a set of digital tools? 

[00:17:55] Mike McSherry: [00:17:55] Well, I don’t know if the question is so much as health systems [00:18:00] differentiating against each other or against the new entrance and new competitors.

[00:18:05] Bill Russell: [00:18:05] Yeah, that’s probably a better question. 

[00:18:07] Mike McSherry: [00:18:07] And you know, there’s gonna continue to be consolidation in the US provider industry, I think, you know, and, and rightfully so you don’t want too much density in a single market, et cetera. But I mean take a look at the two biggest systems, you know, not-for-profit Providence and Ascension both probably do 25 billion a year in revenue.

[00:18:24] What did United Optum do? 250 billion national scale, 10 X the revenue. [00:18:30] Frankly 10 X the profit probably. So they can just reinvest in these convenience, these digital platforms, these behavioral elements. And so I think that’s the differentiation that hospital systems are going to have to do is, how do I remain viable and not viable, I mean, there are always going to be entities, the acuity, the ED infrastructure, and you know that element. But there’s a lot of the low acuity and chronic care going to get siphoned off to these more [00:19:00] virtual solutions and payer kind of directed solutions. And with payers even kind of building a lot of, you know, clinics they don’t have to the high acuity surgery centers. They, they can just focus on the chronic care, which is the book, the cost in the country. And if there, you know, so, so cutely managing steerage on that front the unnecessary surgical procedures and, and, you know, the MSK before the spine you know, surgery, you know, kind of you know, [00:19:30] Remediation those types of options will certainly hurt the finances of hospital systems.

[00:19:35] So if I were a hospital systems, I don’t know, I’d be looking at my neighbor across the crosstown as being my competitor. I’d be thinking, you know, five, 10 years down the line. How am I more effectively competing against these payers and new entrance to have have skin in the game and, you know maintain that patient relationship.

[00:19:54] And as we just discussed earlier, I think there’s going to be 60 40, 60% still going to be [00:20:00] the in person care and 40% is going to go virtual. And if you use those numbers the hybrid model wins but you have to have the seamless experience that bridges between tele-health is appropriate for X, Y, Z.

[00:20:13] You know, I’ll go in face to face for this procedure or this annual wellness visit or whatnot. But if you can’t seamlessly Intermingled as two different dimensions for ease of you know, consumer and patient convenience, you’re gonna, [00:20:30] you’re gonna risk losing all that. 

[00:20:31] Bill Russell: [00:20:31] Yeah. Well Mike lets talk Xealth for a little bit.

[00:20:35] My understanding digital prescription platform for integrating digital solutions into treatment plans. Is that, is that still where it’s at? Or give us an idea of what you do for payers and providers. 

[00:20:49] Mike McSherry: [00:20:49] Yeah. So we’re a platform that lets clinicians prescribe digital health tools to patients.

[00:20:55] We engage the patients typically under the hospital systems, patient portal. So it’s all white labeled [00:21:00] to the hospital system and or the doctor themselves. And then because it’s all digital, we track whether the patient used, is using device data, remote patient monitoring. So we’ve integrated over 40 different vendors on behalf of our hospital systems, patient, ED, articles, videos, apps, maternity care, diabetes management, behavioral health pre-op surgical pathways, post-op PT, OT, rehab, MS case [00:21:30] solutions. We’ve done a number of device integrations, C-PAP devices, continuous glucose monitoring, RPM solution COVID specific. And then more generically services. We’ve done. Pre-surgical products, fulfillment. We’ve done meal, several different meal delivery services.

[00:21:51] We did Kroger quarantine kits for COVID positive or suspected patients. We’ve done lifts rides for patients. Amazon product recommendation. So [00:22:00] our platform’s pretty broad and that whatever the clinicians think can be digitally facilitated to improve that patient care or ease of experience, we can put it into our prescribing and then engagement, you know workflow.

[00:22:14] What certainly kicked up post COVID is the degree of RPM associated with that. And the heightened need for that to make telehealth visits more appropriate, applicable and even be able to build for because of the device requirements against the [00:22:30] RPM could fill in. 

[00:22:31] Bill Russell: [00:22:31] All right. This is the part where I ask very basic questions. Not because I don’t know some of these answers, but just to get into the meat of it. So how a physician interacts with this  is generally through the EHR interface, they will go in there and just like they’re prescribing a medication, they’ll prescribe a a device, a glucose monitor, those kinds of things.

[00:22:55] And Xealth facilitates that that prescription from that end. [00:23:00] And then, is that pretty accurate? Give me an idea of how the physician interacts with that. And then give me an idea of how the patient interacts with it. 

[00:23:08] Mike McSherry: [00:23:08] Yeah, so on the physician side the analog is 10 years ago, physician used to hand write on a piece of paper and hand a piece of paper to a patient.

[00:23:18] And they’d take that to a pharmacy. And then a company Surescripts came along and the ACA sort of mandated usage of that. So now 90 plus percent of all medications get [00:23:30] E-prescribed via Surescripts to the pharmacy of your choice. So think of us as the Surescripts of digital health. A clinician, you know, we’re clinical decision support.

[00:23:39] We take a look at in real time basis, the patient’s vitals, clinicals diagnoses, you know, insurance, eligibility, age, gender, et cetera. And we use all that data to filter what digital tool is most appropriate to address that patient care. And the clinician can click a button, doctor, nurse ma we can have rural [00:24:00] configurations that require the doctor to do it.

[00:24:02] You know, it can to prescribing a med or can let anyone do it. We can also automate it. So if you have enough competence with what you want to do against the conditional match. Just automate the enrollments that patient. And we do that against pre-surgical prep, pre-appointment prep, pre consult, shared decision-making post-discharge and enrollment in a PTOT rehab program or product recommendations in the recovery against that surgical [00:24:30] procedure whatever.

[00:24:30] So 90% of the prescribed activity we do is on some automation routine versus a clinician clicking a button and maternity care. We automate enrollment in, in the maternity care app to all moms over the age of 18. But if under the age 18, it’s a subjective decision by the clinician to click that button or not depending upon the circumstances.

[00:24:53] So we’ve got that flexibility on the patient experience side, we send emails and SMS to the patient message from your [00:25:00] doctor, branded to the hospital system. It’s that message from your doctor. We typically get 60 to 80% open rates on the material we send to patients in some cases, even higher. No direct mail campaign from any consumer company insurance company.

[00:25:14] Anything else we’ll get that level of usage because it’s coming from your doctor and it’s teed up against a face-to-face encounter you just had, or you’re prepping from an appointment or you just left a surgery or an appointment. So it’s just kind of immediacy and timely against [00:25:30] the patient mindset that they’re oming in for some care treatment and recommendations against that. So email SMS, we can force the patient to log into their patient portal, a web mobile, or we can bypass that with the more simple date of birth configuration authentication for the patient, and then their click to download, click, to register, click, to buy, click, to watch, click, to answer it’s whatever that third party solution is providing is depends [00:26:00] upon the level of.

[00:26:01] Patient experience in engaging with that app content you know, article, video, et cetera. But again, since everything’s digital, we API integrate to all these third parties and then back in the EHR. We monitor the patient usage of that app or device or program and bring that data in real time for clinicians to make care assessments.

[00:26:24] And we’ve got a number of alerting mechanisms to trigger alert notifications. [00:26:30] When patient is noncompliant or device or app data is falling outside of threshold ranges. Or, you know, it’s a necessary step in the completion of the next step in our routine. I consent form or shared decision making or something else.

[00:26:45] So we just closed loop that whole experience level. And I’d say over time, we hope to be the benchmarking digital health effectiveness in the US we’re working with the largest ideas in the country. And. We’ve integrated in again, 40 plus [00:27:00] different vendors solutions. And we’re seeing the efficacy of engagement levels and ultimately trying to marry it up to outcome levels so that we think we’ll have the segmentation of knowing what apps and tools produce the best results against patient segmentation.

[00:27:14] And so much of this as folks focused on chronic care management. And it’s hard to that’s behavioral change. It’s hard to imagine one size fits all at addressing patient care. In that something that works for a 70 year old Hispanic, you know, [00:27:30] grandmother might not work for that 17 year old kid going through teen angst and measuring some level of care treatment.

[00:27:38] There’s going to be different tones, different voices, different segmentation of tele-health specialists, supporting, you know, that, that certain disease state. And we think we’re going to be in the position of being the quantitative aggregator of all that data. 

[00:27:51] Bill Russell: [00:27:51] So you really a plat, I mean, we use, we overuse this word, but in the true sense of the word, you’re a platform for enabling [00:28:00] digital transformation is too much of a buzzword.

[00:28:03] I would say the delivery of digital health through existing ideas that have very traditional models, but once the platform’s in play, they can then look at their workflows. They can then look at their their care plans and whatnot and they can integrate the the digital components. Do you guys just sit there and help them to just integrate those things  and and and really, I mean help them [00:28:30] to make that leap into a digital future for healthcare. Is that closer to what you guys are doing? 

[00:28:37] Mike McSherry: [00:28:37] Yeah. And back to the Surescripts analogy, they have 90% market share of EHR. I mean, they’re ubiquitous that you prescribing meds. We want to be ubiquitous that you prescribing digital. Tools and digital apps and devices. And I think that manifested itself, you know, one of the positive or to our business Cerner invested in us [00:29:00] a few months ago and are reselling us to their provider base.

[00:29:03] So they’re essentially chose us as their default platform for being digital, digitally, enabling all of their provider systems. And we’re already working with, I don’t know, 13 of the largest Epic systems, prov Providence, CPMC, mass gen Brigham advocate, Aurora Duke, Adrian, Baylor, Scott White, Alaina, Memorial care, Atrium, et cetera.

[00:29:25] So we think we’re. Working our way towards that ubiquity level. [00:29:30] And we’re building the two-sided marketplace. We add all these large provider systems. They tell all these vendors to integrate to our platform, and then we’ve built this two-sided marketplace of provider distribution and and the cross platform enablement a vendor does a single integration to us, and then we can span them to both Cerner and Epic deployments.

[00:29:52] We’ve got other EHR is on the roadmap in the future as well. 

[00:29:55] Bill Russell: [00:29:55] So talk about the, talk about the buying decision as specifically for healthcare providers [00:30:00] at this point. What’s the progression that they usually follow to get to a self implementation. 

[00:30:06] Mike McSherry: [00:30:06] Well, you know, selling to hospital systems, it depends on who’s got the budget and you’ve got that, you know, the cloud. But, you know, as we’ve just been discussing at a platform level, we need a clinical champion.

[00:30:17] We need doctors, nurses, MAs thing. I need to digitally engage my pregnant patients, my surgical patients, my diabetic patients, my behavioral health needs. You need the clinical [00:30:30] champion saying I want to digitally engage my patients. Next you need the CIO that our aggregation  strategy, our, our, it scalability, the it security framework that is going to provide an ROI cost savings versus them trying to do it themselves.

[00:30:48] And then increasingly at hospital systems, you’ve got a chief digital officer or patient experience. Population health. They care about adherence and engagement and RPM. So that if [00:31:00] they’re running the capitation risk, they can effectively monitor the patients. So we need to convince that swath of executives that are providers system, that our platform has benefits.

[00:31:12] And, you know, our budget almost always comes from the CIO, but. In some cases, the CIO is also the chief digital officer and the innovation lead in charter with digital transformation. And in other cases there’s a chief medical officer who’s on the [00:31:30] front of the transformation experience. And in other cases, it’s the chief digital officer and innovation that oftentimes, you know, coincides wwith investment, you know, kind of leaning out into the market and six of our large hospital systems have also chosen to invest in South Providence. UPFC Cleveland Clinic, Atrium, et cetera. 

[00:31:48] Bill Russell: [00:31:48] Wow. I’m curious. So, I mean, cause you guys have been around now for a little bit, I mean, in a startup years and you’re you’re well past your teen years, the. [00:32:00] yeah. Give me an idea of, does this, the sales process changed? I mean, early on you talked about incubation and that was probably very focused.

[00:32:09] On a set of use cases that you were working with Providence, and then you go out to market and there’s probably a different kind of sales phase. And then you start to scale it. I would assume that there’s sales looks a little different as you progress, but I could be wrong. What’s does sales look like?

[00:32:28] Mike McSherry: [00:32:28] Well, I [00:32:30] mean there’s pre COVID and post COVID and I’m sure. And you know, where systems are leaning into it, a more expansive future, like to better compete and, you know, they assume they’re going to be the consolidators of other systems in the market. And then you’ve got systems that are in retreat against their, you know, financial impact and, and how are they going to how are they going to out-compete, you know the new entrants.

[00:32:56] So, you know, there’s a classic innovator’s dilemma. Can [00:33:00] hospital systems afford to invest in a digital health feature or can they afford not to? And some are making that decision and we’ll see how that plays out in the competitive dynamics, you know, in the coming years it’s been a huge boon for our business in, in that we literally 100 X the volume of prescribed activity during COVID.

[00:33:22] And the level of a digital engagement and part of that was just the, it was the only way to engage patients. So it’s [00:33:30] several systems are reaching a hundred percent of the patient populations against education on how to do tele-health prep education around COVID safety and protocols, or a hundred percent of pre-surgical patients get reached with COVID safety protocols and awareness and pre-surgical product kit fulfillment, et cetera, to incense all the elective surgeries back to back to the, you know, again, safety protocols. So as we go forward in the [00:34:00] future, I don’t know that hospital systems can ignore digital and any longer, but you are finding that and this is probably my big lament in the market here. Digital, you know, we talked about Livongo and $18 billion valuation and the MSK solutions and the behavioral solutions and that massive, massive rise against all of that. Most of those solutions in chronic care have been targeted payer and employer and that valuation escalation has been [00:34:30] focused on those distribution channels, not provider distribution channels. And providers need to step up their game and both capitation exposure and risk as well as digital enablement of convenience and options.

[00:34:43] Otherwise they’re going to risk, you know, losing that new front door strategy. But it’s been a massive boon in success for Xealth in how we’re interacting with existing customers and the law medians that, that are coming to the, to bear or smallest customer. Right. I think does two and a [00:35:00] half billion in revenues.

[00:35:00] So we’re mostly targeted at the large tier ITMs. And then there’s going to be a question of how are the midsize systems going to adopt a digital engagement future. And we’ve got some strategies, especially in line with Cerner reselling Xealth that are going to address that market. I’d say.

[00:35:17] Bill Russell: [00:35:17] Interesting. Well I’ve got really two questions to close. One is just another way of trying to have this discussion of of the future and then the other sort of catch all, but let’s just start with [00:35:30] the future, which you just brought up. Let’s try to paint a picture of, you know, really what the consumer experience will look like in 2025 in healthcare.

[00:35:40] Given what we know about the impact of the pandemic the investment dollars rolling into digital health startups. The role of big tech, the pace of technology change in healthcare what might the consumer experience look like in 2025?

[00:35:58] Mike McSherry: [00:35:58] There’s certainly going to be more [00:36:00] proactive care delivered regardless. Haas, you know, the payers on the insurance, they, they on the risk mitigation, which is proactively engaging with patients before they start, you know, reaching a level where they have to go to ed visits or I don’t know, injured things that could have been dealt with on a PT, OT, you know, results in surgery because of lack of intervention, et cetera.

[00:36:24] And I think with the rise of RPM, be it, you know, your Fitbits, your [00:36:30] Apple watches, your in-home sensors along with the rise of RPM kits that manage CHF for, you know, recovery or more higher acuity levels. And all of the monitoring against that is going to lead to signals that provide more proactive intervention.

[00:36:49] And the payers have been capitated. The insurance most employers are capitated against their members. They want to pay for all this hospital systems because they lost such large chunks of procedural revenue [00:37:00] this year. Are now trying to aggressively move into the capitation risk management. And so they themselves are going to have to get into this more proactive.

[00:37:09] It’s going to take longer for them to adjust their business model, I’d say but I think that is an absolute and you know, some people might see that as an intrusion of their privacy and you know, over my dead body, nothing’s tracking me, et cetera. But I think there’s going to be financial and business models and incentives that for the majority of [00:37:30] Americans, they’re going to say yup, you can monitor, you can reach out to me. You can try to intervene with my care because it’s cost effective and worthwhile to me against these high deductible plans or you know, kind of other out-of-pocket expense and considerations. So I think that’s probably where things are going and don’t discount Amazon’s rise. You know, I mean, I think even just this week they announced, or there’s rumors that they’re now licensed to operate their Amazon Cares, their virtual [00:38:00] primary care and their nurse care delivery in Nome in all 50 States. And I’m fairly convinced that Amazon’s going to eventually get into the insurance game.

[00:38:08] And provide all those economic incentives and proactive measurements and device accompaniments. And they’re going to have a financial business model that most people like we’ve done with most of our consumer lives, I’m willing to give up a degree of my privacy, you know, be it Facebook or Google or whatever other big tech, you know, kind of mechanism we use for free [00:38:30] because of the convenience and cost savings that benefits me. And I think Amazon’s going to crack that nut pretty wide-scale here over the coming years. What’s your take? 

[00:38:41] Bill Russell: [00:38:41] That’s interesting. I wrote an article a little over three and a half, four years ago that said the next move for Amazon is to essentially what they built out, which is Amazon Care for employers.

[00:38:52] And then again, into the insurance game. So I agree with you a thousand percent on that. The announcement I read last week is [00:39:00] that they have licenses in 19 additional States. And they are going to expand. I think they are a significant player. And you know, when people ask me, you know, Whoa, what does it really look like for Amazon to be in care?

[00:39:14] And I said, well, you know, think about it from vaccine distribution standpoint, if they’d given a hundred percent of the vaccine to Amazon, how efficient do you think that would have been? I mean, my guess is they would have had people come to your door and vaccinate your entire family and they would have just [00:39:30] knocked it off by zip code.

[00:39:32] And you know, they have a ton of information. It would have been a completely different experience because they have a ton of information. They have the logistics capability you know, they, they could have handled the deep freeze for Pfizer, the moderate freeze for Madonna and the distribution of J and J.

[00:39:51] And it just would have been very different. And I think between now and 2025, that is, that’s going to be one of the big. Impacts. I [00:40:00] think CVS and Optum are going to be another impact that you’re going to see primary care start to get pulled away from providers, in which case the activities of the consumer starts to get you know, directed by someone else with a different set of interests.

[00:40:19] And essentially it’s funny, cause I say CVS and Optum when people are like, Oh, they’re two totally different companies, whether or not. They’re both, you know, to the largest payers in the [00:40:30] country who have significant presence in terms of primary care and direct and care. And that’s where they want to get to a digital care platform and whatnot.

[00:40:40] But the show is about you. I mean, if people. 

[00:40:45] Mike McSherry: [00:40:45] To go one step further on that you know, we’re, I’m in Seattle, you know. Providence is headquartered in Seattle and in this market Optum bought several large clinics. So they’re vertically stocked up. You’ve got Kaiser here [00:41:00] and now you have Amazon telling all a hundred thousand of their employees independence in this region to start with their primary care experience.

[00:41:08] So any gain of any of those three new entrants towards market share utilization or verticalization becomes a net loss for Providence. And to the blues here. So they’re going to have to become bedfellows to more effectively compete against the verticalization of those services. So I think you’re going to [00:41:30] start to see a number of different partnerships and entities and payvider kind of collaborations, cause it’s all going to be about scale and and these individual hospitals systems with their geographic monopolies are, you know, strong positions don’t. That’s great for surgery and you know, the a hundred mile radius of, you know, high acuity care treatment but you know, things that can be done in lower cost settings or virtually they’re going to have a hard time stacking up a digital [00:42:00] platform that meets the patient expectations against more convenience options. And at the end of the day, convenience always wins. 

[00:42:06] Bill Russell: [00:42:06] Yeah. The other thing I’m looking forward to Mike, and I think it’s, I think it’s right around the corner is, is insurance products that. That feel like they give me more choice. Right? So I’m signing, I will sign up for a digital first insurance product if somebody comes out with it and offers it to me. Right. So if they say 

[00:42:28] Mike McSherry: [00:42:28] Having some of the payers come out [00:42:30] with these like virtual first insurance plans 

[00:42:32] Bill Russell: [00:42:32] And yeah, and we have that, now we have a virtual, you all all your primary care begins with the virtual visit and then they, they send you off, but that’s. Really as far as it goes right now, but I think where it goes next is you know Even even larger than thatit it elevates above the geography and they say, look, here’s what we’re going to do. And it’s what Walmart and others have done. Right. [00:43:00] So it’s I I’m a small business owner and they come to me and say, look, digital first remote patient monitoring for your patients.

[00:43:07] We’re going to do a, you know, an employer type program for fitness and wellness and behavioral health. And, Oh, by the way, if you have a cancer diagnosis or something to that effect, you can get care at Mayo or at I don’t know, fill in the blank. There’s UCLA or others. And essentially what they do is they stitch [00:43:30] together, you know the programs that are the best in the country that I’m able to offer to my employees that essentially, because I’m saving money here, I can make it up with maybe a higher level of service across the board and other areas.

[00:43:44] That’s, I’m hopeful to get very creative with these new tools that they have available to them. 

[00:43:52] Mike McSherry: [00:43:52] I mean, take a look at you know, you’ve probably seen HIMS and hers And, you know, it’s a three-year-old company. [00:44:00] I think they did two and a half million telehealth visits, which is, last year, which is most than more than most large hospitals systems.

[00:44:09] And now, and they did a SPAC IPO. They were valued at one and a half billion or whatever. But they want to be the new front door for millennials and. And they, I think they bought a company that does in-home diagnostics and, you know, blood draws and things like that where they’ll send people.

[00:44:26] So they want to be as closed loop, you know, entirely virtual, [00:44:30] entirely like patient oriented, you know, experiencing convenience option on that front. And. That’s what millennials are adopting. That’s where they’re all shifting their needs too. They don’t have these, you know, long-term standing, you know, I, I must see my doctor face to face because that’s what I’ve done for the last 50 years.

[00:44:48] And so new modalities are cropping up and certainly the convenience option is going to win out on large swaths of consumer slash patient expectations here in the future. 

[00:45:00] [00:44:59] Bill Russell: [00:44:59] Yeah, well all right, last question. And I promise this is the last question, and I’ve started to close my interviews with this catch all, and it’s really, it’s produced some really great results and interesting conversations and it is, is there a topic we haven’t touched on that you think would be interesting for the community to hear about?

[00:45:21] Mike McSherry: [00:45:21] So you know, I’ve talked a lot about the payer dynamic of reimbursing against this chronic care management and that’s all commercially insured [00:45:30] reimbursement. But if you’re on CMS, Medicaid, Medicare, digital tools have not been reimbursed yet. And so arguably they have the most difficult time getting to that face-to-face doctor appointment.

[00:45:45] Is that taking time off from work? Is that, you know, taking the bus to get there? Is that the expense of getting there, parking or whatnot through all that? And why is it that commercially insured patients have all these great [00:46:00] digital convenience options on managing patient care when Medicaid and Medicare patients still off to go to that face-to-face visit and like, Oh, I’m sorry.

[00:46:10] You’re a Medicaid book. An appointment with my therapist. Yeah. We’re kind of booked up. That’ll be three months from now that you’ll get some FaceTime with them. Good luck to you. In the meantime. That’s not, you know, there’s a health inequality that has kind of reached a level here that’s been exposed and I think needs to get addressed. And CMS needs to look long and hard at [00:46:30] the efficacy and engagement and results of these digital solutions.

[00:46:34] They’re proving the worth in the commercial market share and employer kind of world. I think CMS needs to look at a reimbursement structure for those in the most acute need you know out in the Medicaid, Medicare world. 

[00:46:47] Bill Russell: [00:46:47] Well during this emergency time though, aren’t we reimbursing some of those things 

[00:46:53] Mike McSherry: [00:46:53] Telehealth but I don’t, you know, we haven’t seen that, you know, the, the Livongo’s of the world, the behavioral health apps of the [00:47:00] world that monitors the world are being covered at Medicaid, Medicare reimbursement levels.

[00:47:06] Bill Russell: [00:47:06] Yeah that would be an interesting. It’s interesting as you were talking, you know, why do we focus on consumers are commercial and whatnot. And I just sorta made the motion of it’s just money. 

[00:47:17] Mike McSherry: [00:47:17] Yeah the economic, you know, incentives here, you know, geared towards the commercially insured because of the reimbursement rates attained from there.

[00:47:28] You’re seeing huge strives for that [00:47:30] to, you know, sort of put caps on, on that level, you know, against what Medicare, Medicaid, you know, kind of pricing, you know billables are et cetera, but what we’ll see how all that plays out.

[00:47:40] Bill Russell: [00:47:40] But is the answer more reimbursement, more government money, or is the answer to reduce the costs on the, and this is a different question but reduce the costs on the on the provider side to actually, you know, figure out a way to make money on Medicare [00:48:00] reimbursement rates and Medicaid rates, because traditionally they haven’t.

[00:48:04] Mike McSherry: [00:48:04] I mean, if you, if you force caps on the provider systems, bundles, you know some, you know, Increased cap to what exert existing you know, Medicare, Medicaid rates are. And if you required hospital systems to cost contain and get that commercial market share and bring all prices down in line, then they’re going to be forced to more digital automation.

[00:48:28] Every other industry is using [00:48:30] digital enablement process automation, software infrastructure to reduce costs. The hospital system has, and they continue to add more bodies, more resources, more face-to-face exposure which in itself is good for, you know, employment numbers, bad for the total economy and the c`ost of healthcare.

[00:48:54] And it gets distributed unequally out to you know, the patient population trying to manage their [00:49:00] care against the costs. 

[00:49:01] Bill Russell: [00:49:01] Yep absolutely. Hey Mike, thanks. Thanks for your time. This was a great conversation and I look forward to staying in touch with you. 

[00:49:08] Mike McSherry: [00:49:08] No thanks Bill. I appreciate you having me on and always great chatting with you.

[00:49:11]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 [00:49:30] 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 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. [00:50:00]

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