Latest / CareTalk: Healthcare. Unfiltered. / Making Healthcare Massively Better w/ Halle Tecco, Author of Massively Better Healthcare

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Making Healthcare Massively Better w/ Halle Tecco, Author of Massively Better Healthcare · CareTalk: Healthcare. Unfiltered.

• 0:07
  John: Welcome to Care Talk America's home for incisive debate, for healthcare, business and politics.
• 0:12
  John: I'm John Driscoll, the chairman of the Yukon Health System, and today we have an incredibly well-informed guest, Halle Teko, who's the author of Massively Better, a professor at Columbia and Harvard Business School.
• 0:28
  John: She is a healthcare innovator.
• 0:30
  John: Uh, one of the founders of the, one of the first venture capital firms focused on digital health and a warrior for the right kinds of innovation at a time when digital health and AI couldn't be more relevant to healthcare, uh, traditional healthcare as well as.
• 0:47
  John: Digital healthcare, uh, for, for the, for many of us who've watched digital healthcare over the last two decades, this feels like a time where the promise of technology, compute and insight is going to have a bigger impact on actually the way people actually practice and cap and our, and our, and our, and our, and hopefully are improved by our healthcare system.
• 1:12
  John: So the timing of her book massively better.
• 1:15
  John: Couldn't be, couldn't be better timed, perfectly timed to the ai, the impact of AI and healthcare.
• 1:23
  John: Welcome, Halle Teko.
• 1:25
  Halle: Thank you, John.
• 1:26
  Halle: I'm so excited to be here today.
• 1:28
  John: So, Halle, tell us a little bit about your origin story.
• 1:30
  John: How did you get into interested in healthcare and, and what motivated you to found rock health?
• 1:38
  Halle: Yeah, so when I was a, uh, young business school student, I had the opportunity to work at Apple at the nascent app store, the app store.
• 1:47
  Halle: Was just about a year old when I got that opportunity and they put me in charge of the healthcare segment and I was in charge of overseeing the healthcare and medical apps.
• 1:57
  Halle: And that says a lot more about how little they cared about the segment than my qualifications for that job as a 26-year-old intern.
• 2:07
  Halle: Um.
• 2:08
  Halle: But it was absolutely eye-opening.
• 2:11
  Halle: I was, at the time already very excited about healthcare and healthcare innovation.
• 2:16
  Halle: Um, and it really solidified to me the enormous opportunity and frankly, the arbitrage opportunity for healthcare because all these other apps that we were seeing, uh, that had so many investors going after them, and founders that were building just beautiful apps using every native feature, the iPhone, uh, very.
• 2:36
  Halle: Interesting products that they were building, but really markets that were a fraction of the size of healthcare.
• 2:44
  Halle: And I thought, why don't we bring these great app developers into healthcare?
• 2:47
  Halle: Because no one was really building anything meaningful in the healthcare app store at the time.
• 2:53
  Halle: And so I went back to business school.
• 2:55
  Halle: Um, and partnered up with my co-founder of Rock Health to work on this concept of seeding early stage healthcare companies, bringing together great technologists from Silicon Valley, which is where we started the organization in, in San Francisco, um, with the healthcare industry.
• 3:14
  Halle: So our early backers were Mayo Clinic, Kaiser Permanente, McKesson.
• 3:18
  Halle: We worked with some of the giants that were interested.
• 3:22
  Halle: In bridging this, um, gap between technology and healthcare.
• 3:26
  Halle: And so, uh, you know, did that in, in 2010, launched, uh, rock health a little bit after that in 2011.
• 3:33
  Halle: Um, and the rest is history.
• 3:35
  Halle: I've since just been dedicated to supporting great founders who are passionate about helping us fix the healthcare system.
• 3:41
  John: Those early rock health meetings that, you know, in San Francisco felt a little bit like insurgent meetings.
• 3:48
  John: Of outsiders.
• 3:50
  John: I mean, I, I can't tell you how much of the digital health folks felt outside and, and relatively unwelcome Yes.
• 3:58
  John: In the healthcare system because honestly, I don't think relatively unwelcome.
• 4:02
  John: 'cause I don't think the incumbents for sure, even though those great big names that supported you, they weren't always embracing.
• 4:09
  John: The digital new.
• 4:11
  John: They were, they were there.
• 4:12
  John: There were a lot of, uh, there were, there were a lot of castles of, of yes.
• 4:16
  John: Of, uh, of bureaucracy.
• 4:19
  John: And, and Yes.
• 4:19
  John: Maybe talk a little bit about those early days and what kept you, kept you motivated to kind of keep, keep storming.
• 4:27
  John: Storming the gates.
• 4:29
  Halle: So I actually talk about this quite a bit in my book because I think it's something a, a lot of folks face when they come into healthcare.
• 4:36
  Halle: And I always say, uh, there's really no such thing as an outsider.
• 4:39
  Halle: If you have a body, if you've been part of our healthcare system, you are a stakeholder and you deserve a seat at the table.
• 4:45
  Halle: Um, but a healthcare system is, is pretty good at making people feel like they don't belong and feel like they don't have, uh, a say or a right to be there.
• 4:54
  Halle: And I certainly felt that, um, for several years, and there were folks that I call in my book.
• 5:01
  Halle: I, I use the term the COG, which is the cranky old guard.
• 5:05
  Halle: Now, there were people who had been in healthcare for years and years who were extremely helpful and gave me very kind, but firm feedback that I needed to hear.
• 5:15
  Halle: Um, and then there were those that just made things really difficult and were not nice and were not helpful at all.
• 5:20
  Halle: And those are the people that I call the cranky old guard.
• 5:23
  Halle: Um, and I think the only thing you can do, and the only thing that I did was surround yourself with believers.
• 5:31
  Halle: And if you can find the folks that will.
• 5:34
  Halle: You, you want honest feedback.
• 5:36
  Halle: And I did at the time, I wanted to know what I didn't know, and I wanted to work with experts in the space as an outsider.
• 5:43
  Halle: Um, and if you can surround yourself with those people and try to, um, meet the cranky old guard in the middle and hear them out, but also.
• 5:53
  Halle: You know, help them see that a change is possible and that a future that looks different than what healthcare looks like today is possible, is inevitable, and that they can be part of that change as well.
• 6:07
  John: What were the early signs that you could kind of storm the gates and succeed as a digital health innovator?
• 6:15
  Halle: I think it started when direct to consumer became a reality.
• 6:22
  Halle: There was always a small group of biohackers that were interested in tools and gadgets and widgets, but that was never a big enough market for vc.
• 6:33
  Halle: That was never a big enough market for the public markets, um, until around maybe 20 10, 20 15.
• 6:42
  Halle: And we saw a rise in companies like HIMSS and hers, aura 23 and me.
• 6:47
  Halle: Um.
• 6:49
  Halle: Et cetera.
• 6:49
  Halle: So many of them, they also,
• 6:50
  John: a lot, a lot of them started to emerge at about the same time.
• 6:53
  John: It's really pretty exactly your point about that wave.
• 6:57
  Halle: Yes.
• 6:58
  John: Of and And how much of that was the innovators meeting the moment, and how much of that do you think was healthcare itself kind of opening up to the notion that.
• 7:09
  John: You know, a lot of, a lot of the, the old guard, cranky or not needed to find new solutions to this massive cost, quality, and disconnect problem of healthcare.
• 7:19
  Halle: You've got it.
• 7:20
  Halle: That's exactly what happened is patients became frustrated.
• 7:25
  Halle: They saw increasingly higher costs, longer wait times, dissatisfaction, peaked, and people were looking for solutions.
• 7:35
  Halle: And finally there was, there were solutions available and technology was advanced enough to be able to deliver care, treatment, um, products that.
• 7:47
  Halle: Didn't exist in the past, but I think it was mostly met by consumer demand and the demand was latent early on and then just kept building and building.
• 7:58
  Halle: Um, and because, as you said, healthcare wasn't able to meet the demand and desires of patients, they found other ways to do things.
• 8:06
  John: Yeah, just as, as a, as a, as an investor.
• 8:10
  John: Because you know, Brock Health was really an investment firm, and you started in San Francisco where a lot of things start, but not a lot of things finish necessarily in healthcare.
• 8:20
  John: But you've been consistently engaged in businesses that have have grown.
• 8:25
  John: What does Silicon Valley get right about healthcare and what does it get wrong?
• 8:30
  John: What are your lessons for your fellow investors who sometimes, you know, are, are, are pure tech investors that.
• 8:37
  John: Poke their toe into healthcare, but don't always get it right.
• 8:40
  John: What, what's your, what's your guide for the investment community?
• 8:43
  Halle: I would say the thing they get right.
• 8:47
  Halle: Lemme say the thing, they get wrong first.
• 8:49
  Halle: The thing they get wrong is, I think that they consistently.
• 8:53
  Halle: Underestimate the power of the incumbents, both the market power and the regulatory power that incumbents have.
• 9:00
  Halle: And um, you know, we even saw Haven, which had a million members and some of the biggest names behind it, and Atul Gawande as a CEO and its.
• 9:10
  Halle: Still didn't have enough, uh, leverage to succeed.
• 9:14
  Halle: Um, and so, you know, pointing to that example, it's like, it's hard.
• 9:17
  Halle: It's really, really hard when you have these incumbents with so much power and we cannot underestimate it.
• 9:22
  Halle: You have to bake that into your model.
• 9:25
  Halle: The thing that they get right is.
• 9:27
  Halle: Really listening to the user.
• 9:29
  Halle: Not everybody, of course, but I think in general, the Silicon Valley ethos is really about delighting the users and creating experiences that are, uh.
• 9:42
  Halle: That are delightful, which we don't really know about in healthcare.
• 9:45
  Halle: That's not something
• 9:46
  John: No, it's, it's, it's sort of like a shocker.
• 9:48
  Halle: I know we haven't had, you know, the luxury of being able to focus on that.
• 9:52
  Halle: Um, and so I do, I really like that about Silicon Valley and I think that there's a lot that we can learn from people who have spent careers building products that are very patient centric.
• 10:04
  John: Yeah, I think I, I, we, we might disagree on haven.
• 10:07
  John: I think Haven was an overabundance of instinct over insight.
• 10:12
  John: Okay.
• 10:12
  John: And as a result, get ran towards a problem.
• 10:16
  John: First without solutions.
• 10:18
  John: And that's one of the things I'd think about all of the companies you named that, that sort of broke through in DTC.
• 10:24
  John: Yeah.
• 10:25
  John: Or crossover into business to consumer.
• 10:27
  John: Business to business.
• 10:29
  John: They, they really had an insight into the problem they were trying to solve.
• 10:33
  John: Yeah.
• 10:33
  John: As opposed to just notion that the problem was very large, which I think was kind of driving Yeah.
• 10:37
  John: Haven.
• 10:38
  John: But I, but I, I, I think those are really good lessons for investors.
• 10:42
  John: Okay.
• 10:42
  John: Now let's go to the innovators.
• 10:44
  John: I mean, your book is really about the innovators guide to how to crack this.
• 10:47
  John: Yeah.
• 10:47
  John: What are your top three recommendations for in innovators in healthcare to kind of crack the code and win?
• 10:54
  Halle: Yeah, I mean, first work from the inside out, which is one of the rules in the book, and that really means that you become an anthropologist of the problem and you really embed yourself with the community and the stakeholders to understand who you're serving and who you're building for.
• 11:10
  Halle: I think that there's a lot of times, there are a lot of times when people see a shiny object and try to apply it to healthcare, and that rarely works.
• 11:18
  Halle: We really need to understand the problem you wanna solve and.
• 11:22
  Halle: Maybe your first solution doesn't work out, but you'll have some learnings and maybe the second one will.
• 11:26
  Halle: So just become so focused on the problem versus the solution.
• 11:31
  Halle: The solution will change.
• 11:33
  Halle: The problem needs to be consistent.
• 11:34
  Halle: Work from the inside out.
• 11:36
  Halle: Um, another one I talk about in the book is aligning the margin and the mission.
• 11:41
  Halle: We say this in public health, no, no margin, no no margin, no mission.
• 11:46
  Halle: Um, and they really can be.
• 11:49
  Halle: Two sides of the same coin.
• 11:51
  Halle: We, there are business models and there are payment models where you're aligning outcomes with payment.
• 11:58
  Halle: We see this with Omada Health, one of our early companies at Rock Health that's now a publicly traded successful company in the, uh, preventing pre-diabetes.
• 12:06
  Halle: And, um, you know, they, they went out of their way to change CPT codes so that they could actually charge for outcomes instead of being, having a model where they're charging employers and health plans based on utilization.
• 12:20
  Halle: It's like, let's only get paid if we're successful at preventing someone from progressing to diabetes.
• 12:26
  Halle: And um, and I think that that's something to consider very early on as companies are, are.
• 12:32
  Halle: Building out their financial model and their business model is just make sure that you feel good about how you're making money.
• 12:39
  Halle: Not the more money you make, the worse healthcare is, or the less accessible it is.
• 12:44
  Halle: You really wanna make sure that, uh, you're advancing your mission every time a new dollar comes into the door.
• 12:50
  John: John's insight, you know, obviously pay for outcomes, not activity is one that I think is a less, that a lot of, we, we wish it happened a lot more in healthcare.
• 12:58
  Halle: Yeah, we absolutely do.
• 13:00
  Halle: And I'll say, you know, sometimes it's not feasible to have an outcomes-based model.
• 13:05
  Halle: It doesn't always make sense like, uh, vaccines for instance, right?
• 13:09
  Halle: Like that you, you need to be paid per vaccine.
• 13:12
  Halle: I think that is, is pretty clear.
• 13:14
  Halle: But we're starting to see, um, interesting.
• 13:18
  Halle: Interesting alternatives.
• 13:19
  Halle: We've started to see pharma companies that have these money back guarantees.
• 13:23
  Halle: I mean, those are really exciting as well.
• 13:25
  Halle: So it doesn't necessarily have to be the payment model, but if you can kind of build in some sort of guarantee for the buyer, uh, that they're not out.
• 13:33
  Halle: And the example that I give in my book and I open up that chapter with is IVF.
• 13:38
  Halle: Uh, you know, I was a, a very profitable IVF patient for the clinic I went to, unfortunately, because it took me many, many, many, many, many rounds to have my son.
• 13:49
  Halle: And, um, you know, and the least profitable patients are the ones that are actually most successful and get to that live birth faster with fewer treatments.
• 13:57
  Halle: Um, and so that's just one area.
• 13:59
  Halle: And you know, it's because it's mostly cash pay.
• 14:02
  Halle: We haven't had health plans come in to really negotiate and bring down the prices and that these are, a lot of them are private equity owned.
• 14:10
  Halle: Um, it's, it's quite problematic and it's a very obvious place in healthcare where.
• 14:15
  Halle: They're making money, they're making more money by not helping people achieve the goal that they, they we all want to achieve, which is a healthy live birth.
• 14:25
  John: Yeah, no, it's an unhealthy business model.
• 14:27
  John: Effectively congrat.
• 14:29
  Halle: Very, yes.
• 14:30
  Halle: Congratulations.
• 14:31
  Halle: Glad to be on the other side of it, but yes, I'd like to change future parents.
• 14:34
  Halle: Yeah.
• 14:35
  John: Con, con, congratulations on that one, and thanks for bringing that through.
• 14:40
  John: There's just a lot of buzz about ai.
• 14:42
  John: There's a tremendous amount of, I mean, it was probably one of the most important themes of JP Morgan.
• 14:47
  John: Yeah.
• 14:47
  John: Last week in San Francisco.
• 14:49
  John: It's the most important theme in American business, arguably today.
• 14:53
  John: Yeah, absolutely.
• 14:53
  John: There are a lot of folks who are.
• 14:56
  John: Looking to leverage small ideas in large, small cap, small capital, and large amounts of capital in ai right now, what would your, uh, well, a, a, what's your recommendation for folks leveraging the new tools of artificial intelligence and big compute, uh, your, your book's about massively better?
• 15:13
  John: How can the Yeah.
• 15:14
  John: AI innovators be massively better?
• 15:16
  Halle: Yeah, well I actually gave a talk to, um, a group of therapists a few weeks ago and, um, you know, I said, I don't care if you believe that AI is going to do help or harm healthcare.
• 15:31
  Halle: You have to become proficient because we need you to understand how these tools work so that you can help build these guardrails.
• 15:38
  Halle: And so I'm really disappointed at hearing clinicians who.
• 15:44
  Halle: Are upset about AI being used and who are acting like Luddites, because I don't think that's helpful and I don't think that's actually going to change anybody's behavior.
• 15:55
  Halle: Patients are using.
• 15:56
  Halle: We know patients are using chat GBT at scale to ask health questions, so instead of.
• 16:04
  Halle: You know, instead of like opposing it.
• 16:06
  Halle: I think it's more important that we become experts, that we use the tools ourselves, that we understand how they work, we understand how these models are built to the best of our knowledge and a giant leap by Bob Watchers coming out very soon.
• 16:19
  Halle: I had a, uh, I read his, it's out footprint of it.
• 16:22
  Halle: It's
• 16:22
  John: out.
• 16:22
  John: It's out.
• 16:23
  John: It's, it's fabulous.
• 16:24
  Halle: It's great.
• 16:25
  Halle: I mean, I think that's a great place to start as, um, Dr. Dr. Bob
• 16:28
  John: Wachter is, is gonna be on the show.
• 16:31
  John: Oh, great.
• 16:31
  John: Very soon.
• 16:32
  John: But it's wonderful.
• 16:33
  John: Great.
• 16:33
  John: Yeah, it's, you'll have a great conversation
• 16:34
  Halle: with him.
• 16:35
  Halle: He's, he's awesome and I feel like that's a great place to start.
• 16:37
  Halle: Read that book.
• 16:39
  Halle: Understand it and then be the change.
• 16:42
  Halle: I think speaking out about what guardrails need to exist within AI is far more useful than just complaining about the use of ai.
• 16:52
  Halle: I hear doctors complain about the AI tax.
• 16:55
  Halle: They're annoyed that their patient comes in with chat, GBT printout of questions that they think should be asked.
• 17:02
  Halle: Uh, I was like that.
• 17:03
  Halle: You're not gonna stop that.
• 17:04
  John: They used to be annoyed when people came in with Google searches.
• 17:07
  John: Exactly.
• 17:07
  John: Now that at least they're, they're, they're better informed.
• 17:10
  John: And so what are the Exactly, you know, as, as an innovator yourself and as someone who's funded a lot of innovators, what do you, what are the watch outs for AI and AI entrepreneurs today?
• 17:20
  Halle: Yeah, so I think that, um, what we're seeing is.
• 17:24
  Halle: The market is like, you're either selling an AI product or you're trying to build AI into your business because otherwise investors aren't interested.
• 17:33
  Halle: Um, and so it's, it, it can be quite obvious from the investor standpoint when you're, you're building a, a services business and you're.
• 17:43
  Halle: Just putting the word AI everywhere because you think you have to, I think coming up with a strategy for how AI will impact your business and how it can reduce your cost to serve, it can delight your users, et cetera.
• 17:56
  Halle: Like where are the actual, where's the actual leverage for AI in your business versus just throwing out buzzwords so that you can get investor interest.
• 18:05
  Halle: 'cause I think good investors see through that and it's okay to not.
• 18:09
  Halle: Be an AI company.
• 18:10
  Halle: Right now I'm on the board of a company called Co Fertility.
• 18:13
  Halle: We're very much a services business.
• 18:15
  Halle: We, of course, use technology and software to streamline our operations and help our member advocates, uh, carry higher caseloads and be more effective and have higher NPS.
• 18:27
  Halle: We, we use all of that and it's okay to be a services business.
• 18:29
  Halle: There are great services businesses in healthcare.
• 18:32
  Halle: Healthcare will always have a service component.
• 18:35
  Halle: Um, I think just be a little bit more strategic about how AI can realistically impact your business.
• 18:42
  John: Hallie, thank you so much for this conversation and congratulations on the book.
• 18:46
  John: I think it's an essential book.
• 18:47
  John: Thank you for innovators right now and for our viewers and listeners, if you like what you heard or you didn't, we'd love you to subscribe on your favorite service.
• 18:56
  John: Congrats again on the book.
• 18:58
  Halle: Thank you.