Latest / Vanguards of Healthcare by Bloomberg Intelligence / Carrum Health Is Rewiring Specialty Care Around Value

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Carrum Health Is Rewiring Specialty Care Around Value · Vanguards of Healthcare by Bloomberg Intelligence

• 0:21
  Speaker 1: Welcome to another episode of Boomberg Intelligence and His Vanguards
• 0:24
  Speaker 1: of Healthcare podcast, where we speak with the leaders at
• 0:26
  Speaker 1: the forefront of change in the healthcare industry. My name
• 0:29
  Speaker 1: is Jonathan Palmer, and I'm a healthcare analyst at Bloomberg Intelligence,
• 0:32
  Speaker 1: the in house research arm of Bloomberg. I'm thrilled to
• 0:35
  Speaker 1: welcome today's guests, Satch Chaine, the founder and CEO of
• 0:39
  Speaker 1: Karen Health. He brings a really unique perspective and background
• 0:42
  Speaker 1: to the sector, combining a foundational computer science education with
• 0:46
  Speaker 1: years of hands on experience designing value based care pathways.
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  Speaker 1: Over the last twelve years, Karen has evolved into a
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  Speaker 1: premier marketplace, tackling some of the most severe cost centers
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  Speaker 1: and corporate benefits. On today's episode, we're going to focus
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  Speaker 1: whether value based care will finally fix the incentives in
• 1:02
  Speaker 1: US healthcare and what CHARM has learned after a decade
• 1:05
  Speaker 1: of trying to fix it.
• 1:06
  Speaker 2: Such.
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  Speaker 1: Welcome to the program.
• 1:08
  Speaker 3: Thank you, Jonathan. That was a very kind of reduction
• 1:11
  Speaker 3: and I appreciate it.
• 1:12
  Speaker 1: You're welcome. So why don't we jump right in. How
• 1:14
  Speaker 1: would you describe Karm's core mission in a few sentences
• 1:17
  Speaker 1: and when did the light bulb really go off for
• 1:19
  Speaker 1: you to start to found the company.
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  Speaker 2: Yeah.
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  Speaker 3: The KARDM story kind of started back in two thousand
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  Speaker 3: and nine when after spending my time in professional services world,
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  Speaker 3: in banking and consulting kind of roles, I took a
• 1:36
  Speaker 3: more of an operator role in a hospital rep cycle company,
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  Speaker 3: in a company called Arwan down.
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  Speaker 1: The older creative, yes.
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  Speaker 3: Alder creative exactly, and not growing up in the US,
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  Speaker 3: not necessarily being a user of healthcare. Back in those days,
• 1:52
  Speaker 3: I saw the US healthcare system from the eyes of
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  Speaker 3: a hospital rep cycle company. And for folks who are
• 1:58
  Speaker 3: not familiar with what a f cycle company does in healthcare,
• 2:03
  Speaker 3: these are the companies that hospitals hire to choose health plans,
• 2:06
  Speaker 3: chase patients to maximize their investment for the hospital. And
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  Speaker 3: there I saw the real ugliness of our healthcare system.
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  Speaker 3: I mean, think of a patient that is going through
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  Speaker 3: let's say, a back pain issue and they are looking
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  Speaker 3: for the right path to get better. In our current
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  Speaker 3: healthcare system, it's very difficult to trust a doctor whom
• 2:30
  Speaker 3: you can you know, just rely on that if they
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  Speaker 3: are saying you need a procedure, you can be assured
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  Speaker 3: that you truly need a procedure and you will actually
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  Speaker 3: benefit from it. There's no data, there is no place
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  Speaker 3: you can go to figure out what's the quality of
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  Speaker 3: the doctor, are they trustworthy and so on and so forth,
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  Speaker 3: And then you have no idea about the process. You
• 2:51
  Speaker 3: have no idea about how much will it cost. You
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  Speaker 3: think you have a nice insurance, but because the procedure
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  Speaker 3: is done, the bills start rolling your way and and
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  Speaker 3: just uh, you know, out of the blue and n
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  Speaker 3: s ceciologists is out of network and uh, and none
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  Speaker 3: of that happens by mistake. Uh, it is just the
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  Speaker 3: system we have built where every single stakeholder is you know,
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  Speaker 3: is benefiting either directly or indirectly from more care delivered
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  Speaker 3: at high prices. And there's a word of specialtycare. If
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  Speaker 3: I share more on where specialty care is, it's uh,
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  Speaker 3: it's half of our healthcare.
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  Speaker 1: Span, right, And what are the key categories in specialty.
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  Speaker 3: So that's a great question because specialtycare is not one
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  Speaker 3: size thing. It's it's all different things. It's a it's
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  Speaker 3: surgical care, it is cancer care. It's uh, it's BA
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  Speaker 3: well health treatment like rehabilitation, et cetera. And they all
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  Speaker 3: get folded into the umbrella of specialty care. So specialty
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  Speaker 3: care in the US is roughly two point five trillion
• 4:02
  Speaker 3: dollar economy, growing at thirty five percent faster than the
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  Speaker 3: rest of the healthyare span. If you you know, if
• 4:11
  Speaker 3: you want to contextualize it, if our specialty care span
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  Speaker 3: was a country, it will be one of the largest
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  Speaker 3: countries in the world.
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  Speaker 1: That's a good way to visualize it.
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  Speaker 3: For comparison, Canada's GDP is two point five trillion dollars
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  Speaker 3: and it's growing at a rate that is basically flat.
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  Speaker 3: So even within a year, specialty gare span will take
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  Speaker 3: over Canada GDP.
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  Speaker 1: If you want an amazing stack. So let's let's rewind
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  Speaker 1: a little bit. You know, the light bulb goes off
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  Speaker 1: to form CAREM. What did you said about building in
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  Speaker 1: those initial days and who did you make the pitch to.
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  Speaker 3: So the big aha back in those days was that
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  Speaker 3: the reason we are where we are. You know, a
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  Speaker 3: special decare model is one the wrong provider incentives.
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  Speaker 2: That's a disease, you know.
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  Speaker 3: You know, our US healthcare world we made a few
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  Speaker 3: decades ago where we decided to incentivize providers to get
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  Speaker 3: paid on the basis the volume of care as opposed
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  Speaker 3: to the value of care, and everything kind of flows
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  Speaker 3: from there, whether it is you know, higher unit costs,
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  Speaker 3: unnecessary procedures, and poor outcomes.
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  Speaker 2: You combine that.
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  Speaker 3: Those missialigned incentives for the providers with the peer focus
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  Speaker 3: on broad, uncurated network, and that just leads to this mess.
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  Speaker 3: We are in our healthcare system where whether it's a
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  Speaker 3: peer or a provider or anyone in between, they all
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  Speaker 3: benefit from you more care delivered at high prices. Unless
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  Speaker 3: you can truly fix the incentive in the system and
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  Speaker 3: move away from the volume of care to the value
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  Speaker 3: of care, nothing else you can do, we'll livery sustainable
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  Speaker 3: impact on our healthcare costs and outcomes.
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  Speaker 1: You know that that that push pull between fee for
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  Speaker 1: service and value based care has been a theme on
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  Speaker 1: this this podcast on a number of different episodes. So
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  Speaker 1: with that in mind, what did you set out to
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  Speaker 1: build Initially?
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  Speaker 3: So, the core thesis behind CADEN was that to build
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  Speaker 3: any lasting change in specialty care, we have to change
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  Speaker 3: the provider incentives. Okay, valueb as scare was a big
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  Speaker 3: buzzword back in those days. I'm talking two thousand and
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  Speaker 3: twenty eleven timeframe, and a lot of large health systems
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  Speaker 3: and large health plants were you know, talking a lot
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  Speaker 3: in the market about valueb a scare and what they're
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  Speaker 3: doing in to uh, you know, complement what CMS was
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  Speaker 3: doing in Medicare medicaire space. I actually spent a lot
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  Speaker 3: of time with these large health systems and large help
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  Speaker 3: plants on their value based care strategies, and it just
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  Speaker 3: became clear to me that beyond the lift service, there
• 7:09
  Speaker 3: wasn't really a real intention to move away from the
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  Speaker 3: FEFA service PPU network model because the whole system is
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  Speaker 3: built around it, and changing it is very disruptive. So
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  Speaker 3: we felt that if the incumbents are not going to
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  Speaker 3: move away from this world, why not we create a
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  Speaker 3: business case as an outsider that shows that if valueb
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  Speaker 3: sc are done correctly, it can truly deliver. You know,
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  Speaker 3: it can bring down the cost, it can improve the outcomes,
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  Speaker 3: it can improve the experience and do it in a
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  Speaker 3: fashion that is lasting and not just you know, you
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  Speaker 3: try to do something and a couple of years it
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  Speaker 3: will go away.
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  Speaker 1: So you had the thesis, then you know, who were
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  Speaker 1: the initial I guess pilots that you did or what
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  Speaker 1: did the pilots look like to get you up and running.
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  Speaker 3: Yeah, so you know, again, as you asked earlier, specialtycare
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  Speaker 3: span or specialty care problem is not one single thing.
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  Speaker 3: It's many different things.
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  Speaker 2: So we.
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  Speaker 3: Zone zone in very quickly on self insured employers for
• 8:15
  Speaker 3: reasons that you know most people know. It's like they
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  Speaker 3: have direct incentive to make sure the care is more
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  Speaker 3: affordable and it's high quality. And self insured employers cover
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  Speaker 3: roughly a third of the years population spend roughly a
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  Speaker 3: trillion dollars on healthcare span every year to provide the
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  Speaker 3: benefits for their employees, and half of that, or roughly
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  Speaker 3: half trillion dollars, is spent on specialty care. So we
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  Speaker 3: focus on that vertical and even within specialty care span,
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  Speaker 3: we focus on surgeries, and even within surgeries, very specific
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  Speaker 3: surgeries like need replacement and hip replacement.
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  Speaker 1: So high volume is would that be fair exactly?
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  Speaker 3: High volume procedures fairly standardized, but the cost and quality
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  Speaker 3: is all over the place.
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  Speaker 2: Okay, Even within.
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  Speaker 3: A hospital, you will see very different patterns from different
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  Speaker 3: surgeons for the same procedure, and the variation just continues
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  Speaker 3: to spill across hospitals, across city, across stain and so yeah,
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  Speaker 3: the you know, you pick any studies and the cost
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  Speaker 3: and quality for those procedures is all over the place.
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  Speaker 1: So maybe just diving into that a little bit deeper.
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  Speaker 1: You know, when I think about I think most people
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  Speaker 1: who list into this podcast are well whare that the
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  Speaker 1: cost range is for any surgery, whether it's a hip
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  Speaker 1: replacement or a C section, can be wildly different. I
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  Speaker 1: guess the question I have though, is how do you
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  Speaker 1: measure quality?
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  Speaker 3: Yeah?
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  Speaker 1: Because that seems more amorphous to relative to the price discussion.
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  Speaker 3: Yeah, And so I will chair how we approach quality
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  Speaker 3: and how how we built this value BA scale model
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  Speaker 3: on top of that that quality focus that we have.
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  Speaker 3: So quality is where Caram zone in on. From the
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  Speaker 3: very early days for us, quality starts with appropriateness. You know,
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  Speaker 3: the best key procedure is when it actually never happened
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  Speaker 3: because a clinician recommended something more conservative that actually led
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  Speaker 3: to a better outcome for the member. So from the
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  Speaker 3: appropriateness standpoint, we rigorously curate providers we are working with
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  Speaker 3: to look into the data to figure out what is
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  Speaker 3: their pattern of doing a procedure when a member comes
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  Speaker 3: to them with a specific a healthier problem. And we
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  Speaker 3: combine that with actual outcome data to figure out when
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  Speaker 3: a provider actually does a procedure, what are the outcomes,
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  Speaker 3: and we shoot for top ten percent providers who you know,
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  Speaker 3: score high in our quality scoring and those are the
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  Speaker 3: providers we want. So we combine that quality thesis with
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  Speaker 3: changing the incentives of these providers. So we work with
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  Speaker 3: them using these bundle payment contracts where the price is
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  Speaker 3: defined for the entire episode of care and it comes
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  Speaker 3: with risk on the provider side that if anything goes
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  Speaker 3: wrong with the procedure, either there's a penalty on the
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  Speaker 3: provider or they have to cover that readmission complication for
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  Speaker 3: free of charge. Okay, So you are curating the best
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  Speaker 3: of the best providers that are out there, and you
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  Speaker 3: are changing their incentives so that even if they don't
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  Speaker 3: do a procedure, there is a financial upside for them.
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  Speaker 3: And when they do the procedure and there is for
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  Speaker 3: some reason there is an adverse event, they are on hook.
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  Speaker 3: So that completely align the incentives or the clinicians involved.
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  Speaker 3: So from day one they focus on doing the procedure
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  Speaker 3: when it is necessary, and when they do the proceed
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  Speaker 3: the focus is on getting the best outcome or they
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  Speaker 3: lose money in our contract.
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  Speaker 1: Interesting, So when you build these networks, is it every
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  Speaker 1: physician or provider in that system that becomes part of
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  Speaker 1: the network or is it individual to doctor Smith is
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  Speaker 1: part of the center of Eccellens, but doctor Jones is not.
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  Speaker 2: That's a great question that.
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  Speaker 3: You know, when we started this model and we started
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  Speaker 3: to work with, you know, some of the big name
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  Speaker 3: providers like Johns Hopkins or a Mayo clinic or a
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  Speaker 3: Cleveland clinic or HSS here, and we will say, well,
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  Speaker 3: if we are going to curate you for let's say
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  Speaker 3: a joint replacement procedure, we have to see the outcome data,
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  Speaker 3: the clinical data at the surgeon level, and.
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  Speaker 2: Then we will evaluate the quality.
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  Speaker 3: At the surgeon level, and we'll tell you which of
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  Speaker 3: the surgeons in your in your book of business we
• 13:02
  Speaker 3: are actually going to certify to work with CADMA.
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  Speaker 1: It was a bit of a I was a little
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  Speaker 1: bit of a hurdle to get them to share that
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  Speaker 1: data exactly.
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  Speaker 3: And I mean the tagline we used to hear back
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  Speaker 3: in those days like all of our surgeons are you know,
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  Speaker 3: absolutely the best, and so either you take all of
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  Speaker 3: them or you take none of them. But when we
• 13:24
  Speaker 3: explain that In this model, the provider is actually on
• 13:29
  Speaker 3: risk that if they do not put their best surgeons
• 13:33
  Speaker 3: on the platform, they might lose money in this contract.
• 13:39
  Speaker 3: It you know, it changes the conversation where they're like, okay,
• 13:43
  Speaker 3: if that's the case, we are willing to put our
• 13:46
  Speaker 3: best surgeons because they will deliver the best outcomes and
• 13:48
  Speaker 3: that create the best financial offside for that. So yeah,
• 13:52
  Speaker 3: So our quality algorithms run at the facility, surgeon, and
• 13:58
  Speaker 3: procedure level. So if we are certifying an orthopedic surgeon
• 14:05
  Speaker 3: for hip replacement, that surgeon cannot go and do a
• 14:09
  Speaker 3: shoulder replacement on our members because they are certified only
• 14:13
  Speaker 3: for a certain person.
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  Speaker 1: Okay, And then maybe this is a simplistic or native question,
• 14:17
  Speaker 1: but we're the systems doing this sort of analysis themselves
• 14:22
  Speaker 1: in evaluating their their surgeons.
• 14:25
  Speaker 2: So the answer is yes and no.
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  Speaker 1: It didn't want to know, Yeah exactly, I.
• 14:31
  Speaker 3: Mean this is a you know, I will say over
• 14:36
  Speaker 3: the last twelve years, we are seeing more focus among
• 14:40
  Speaker 3: our providers to collect more quality data and keep a
• 14:46
  Speaker 3: and keep a focus on you know, who is really
• 14:48
  Speaker 3: performing well in the outcomes and who is not. Because
• 14:52
  Speaker 3: you know, the value based a model, everyone knows in
• 14:57
  Speaker 3: next ten twenty years ppo service model will not be
• 15:00
  Speaker 3: here to stay. And so whether providers are heading the
• 15:05
  Speaker 3: curb on valuabais caare or behind in the curve on
• 15:07
  Speaker 3: the valuabiscare, they.
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  Speaker 2: Know that that's the world we are.
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  Speaker 3: Moving towards, of course, and for any provider to perform
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  Speaker 3: really well in a valuables scare model, they have to
• 15:18
  Speaker 3: keep track of you know, which surgeons, which clinicians are
• 15:23
  Speaker 3: deliving appropriate care, high quality care, and those who are not.
• 15:28
  Speaker 3: They want to nurture them, coach them, help them get better,
• 15:31
  Speaker 3: or in some case just you know, part ways with them.
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  Speaker 1: This all makes sense, maybe flipping the script a little
• 15:36
  Speaker 1: bit to the customer, the employer or the really the patient.
• 15:41
  Speaker 1: Can you talk about how you built that book of
• 15:43
  Speaker 1: business over time? You know, I'm a healthcare expert and
• 15:47
  Speaker 1: I you know, I understand exactly what you're saying about,
• 15:50
  Speaker 1: you know, improving outcomes and lowering costs. But you know,
• 15:53
  Speaker 1: is there a hurdle to get over on the employer
• 15:55
  Speaker 1: benefits side and the HR managers who manage you know,
• 15:58
  Speaker 1: these contracts.
• 15:59
  Speaker 2: Absolutely.
• 16:00
  Speaker 3: I mean, if you think of Cadam world, it's a
• 16:04
  Speaker 3: two sided marketplace. You know, on one side, we are
• 16:07
  Speaker 3: building this value based care network by partnering with you know,
• 16:12
  Speaker 3: some of the best providers in the country who meet
• 16:16
  Speaker 3: over quality standards. And then on the other side, we
• 16:20
  Speaker 3: are trying to get employers on board and convincing them
• 16:27
  Speaker 3: that instead of sending your members in the you know,
• 16:31
  Speaker 3: the current PPU on curated networks, you should send them
• 16:35
  Speaker 3: to this high value, high performance network that caram Health
• 16:38
  Speaker 3: has built. And so you can imagine how those conversations go.
• 16:43
  Speaker 3: If you're speaking with a John's Hopkins and say that, hey,
• 16:49
  Speaker 3: in our model, you'll have to give us very rigorous
• 16:52
  Speaker 3: quality data to participate in this model, and we will
• 16:57
  Speaker 3: pick only a few surgeons from your roster, and you'll
• 17:02
  Speaker 3: have to give us rates that are almost half of
• 17:06
  Speaker 3: what you offer to your health plans. And on top
• 17:10
  Speaker 3: of that, you'll have to take risk in this model
• 17:14
  Speaker 3: where if anything goes wrong, you know, you'll have to
• 17:16
  Speaker 3: cover that for fee of charge. They will take a
• 17:20
  Speaker 3: pause and they will say, interesting, how much volume of
• 17:26
  Speaker 3: procedures you are representing today and our answer will be
• 17:31
  Speaker 3: back in those days none. And now you go to
• 17:36
  Speaker 3: an employer and you have the same conversations. Likely instead
• 17:39
  Speaker 3: of this uncurated PPO network, you should try our platform
• 17:44
  Speaker 3: which has you know, the high value providers. And they
• 17:48
  Speaker 3: will say, you know, let's say you're speaking with an
• 17:51
  Speaker 3: employer like US Foods or a United Airlines, which have
• 17:55
  Speaker 3: employees in almost all the states, and they will say,
• 17:59
  Speaker 3: this sounds great. Tell me about your network in all
• 18:01
  Speaker 3: these different strates. And they're like, well, we are in
• 18:05
  Speaker 3: one state right now, but you know, believe me, you
• 18:09
  Speaker 3: know we will be in all different So it's so
• 18:11
  Speaker 3: it's a chicken in act problem you have to solve.
• 18:15
  Speaker 3: And the problem, by the way, is interesting. And of
• 18:17
  Speaker 3: that how our business school and how our medical school
• 18:20
  Speaker 3: actually wrote a case on Karam where they were like,
• 18:24
  Speaker 3: this CATAM model is very interesting. But can Karam become
• 18:28
  Speaker 3: a national player by solving this chicken in act problem
• 18:34
  Speaker 3: in every market and for every specialty?
• 18:37
  Speaker 1: Interesting? So where are you in that journey? How national
• 18:41
  Speaker 1: is the CAREM network? And where are you visa VI
• 18:44
  Speaker 1: the chicken in the egg? Yeah, I mean the reason
• 18:47
  Speaker 1: you touch some numbers around it in terms of I
• 18:49
  Speaker 1: don't know providers or systems or cust employers.
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  Speaker 3: The reason we are sitting here today and having this
• 18:55
  Speaker 3: conversation is because we grinded our way to break this
• 19:00
  Speaker 3: chicken and egg problem by market by procedures. So today
• 19:05
  Speaker 3: we cover basically the entire spectrum specialty care. So out
• 19:11
  Speaker 3: of you know, if the employees span only fifty percent
• 19:14
  Speaker 3: of the healthy span on specialty care, today we cover
• 19:17
  Speaker 3: something around forty percent of their specialty gre span and
• 19:21
  Speaker 3: that includes you know, all specialties like MSK, bariatrics, cludiovascular
• 19:29
  Speaker 3: cancer care, beheral health, general surgery, ent urology, and you know.
• 19:34
  Speaker 1: You just go down the west, go down the list.
• 19:36
  Speaker 3: We partner with roughly fourteen hundred plus send US of
• 19:42
  Speaker 3: Excellence across the country and that provides coverage to roughly
• 19:47
  Speaker 3: ninety five percent of the US population that is within
• 19:50
  Speaker 3: driving distance of one of our Centers of Excellence partners.
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  Speaker 2: So the average distance.
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  Speaker 3: For a member to the closest centers for Excellence of
• 20:01
  Speaker 3: caremes is less than thirty miles today.
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  Speaker 1: That's not bad. So, I mean, I think about the
• 20:06
  Speaker 1: numbers that the big pharmacies put out there, and it's
• 20:09
  Speaker 1: five to ten miles to the closest CBS or Walgreens.
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  Speaker 1: Thirty thirty is not that much further.
• 20:14
  Speaker 3: But you know, if you're going to be requiring a
• 20:17
  Speaker 3: joint replacement or one of these acute procedures. If you
• 20:22
  Speaker 3: know you are accessing a provider that has the best
• 20:26
  Speaker 3: interest in their heart for you and have the right
• 20:30
  Speaker 3: incentives to make sure you have the best outcomes, you
• 20:33
  Speaker 3: are willing to go more than five ten miles to
• 20:36
  Speaker 3: your point beyond where you'll go for your pharmacy. Absolutely,
• 20:40
  Speaker 3: and then on the employer's side, you know, we ended
• 20:43
  Speaker 3: last year with roughly six point seven seven million lives
• 20:47
  Speaker 3: on the platform, working with Fortune ten, Fortune hundred companies
• 20:52
  Speaker 3: as well as many state governments, including state of Kentucky,
• 20:56
  Speaker 3: State of Tennessee, state of Maine. So I mean like,
• 21:01
  Speaker 3: this is one of those models that once you build it,
• 21:05
  Speaker 3: any purchaser looking at it and they wonder, you know
• 21:08
  Speaker 3: why we will we not use this model and bring
• 21:12
  Speaker 3: the cause down for specialty care, avoid members getting unnecessary procedures,
• 21:16
  Speaker 3: and have better outcomes for the population.
• 21:20
  Speaker 1: When you sign up a new employer, what does the
• 21:22
  Speaker 1: revenue model look like? Is it a per member per month?
• 21:25
  Speaker 1: Is it is it based on I don't know the
• 21:27
  Speaker 1: actual surgeries or episodes.
• 21:32
  Speaker 3: Yeah, So when we started our journey on this, we
• 21:39
  Speaker 3: started with more pepm per employee per month kind of model.
• 21:43
  Speaker 3: That is where the world was it to ten years ago,
• 21:46
  Speaker 3: but over a period of time the revenue model moved
• 21:50
  Speaker 3: into more on the utilization basis.
• 21:53
  Speaker 1: Okay, so does that include risk as well?
• 21:56
  Speaker 2: Yes?
• 21:57
  Speaker 3: Okay, so you know the way it works is any
• 22:01
  Speaker 3: member that uses CADM for getting one of their procedures,
• 22:05
  Speaker 3: then we build the employer for that entire bundle, and
• 22:09
  Speaker 3: our fees is baked into that bundle price. And that
• 22:13
  Speaker 3: bundle you know, comes with a risk bearing arrangement where if,
• 22:17
  Speaker 3: for example, for a joint replacement, there is any adverse event,
• 22:21
  Speaker 3: you know, if there's a readmission or complication during the
• 22:24
  Speaker 3: warranty period, then the provider on hook will cover that
• 22:28
  Speaker 3: for charge. So it completely shifts the risk from the
• 22:33
  Speaker 3: employer to the provider and also gives full predictability to
• 22:38
  Speaker 3: the employer where they know exactly how much this episode
• 22:42
  Speaker 3: of gar will cost for them.
• 22:44
  Speaker 1: Maybe what's loop in? You know what the traditional provider
• 22:47
  Speaker 1: market looks like. Why were the United's and Etna's not
• 22:51
  Speaker 1: doing this already?
• 22:52
  Speaker 3: Yeah, I mean that's the question we used to face
• 22:56
  Speaker 3: every single day. I can imagine that, you know, if
• 22:59
  Speaker 3: this model has value, why incumbents will not replicate the model,
• 23:05
  Speaker 3: and you know, there is a lesson to be learned
• 23:09
  Speaker 3: that when a new model starts to take hold, uh,
• 23:16
  Speaker 3: and there's a paradigm shift in uh, you know, in
• 23:20
  Speaker 3: the ecosystem, it's challenging for for incumbents to you know,
• 23:27
  Speaker 3: steer the ship in a different direction. So I mean,
• 23:30
  Speaker 3: we know, like for example, when ecomas started to take
• 23:34
  Speaker 3: hold and Amazon was showing that this is the right
• 23:38
  Speaker 3: way to uh to drive ecmmos adoption, big and mortar
• 23:43
  Speaker 3: retail businesses, you know, struggle because their whole value chain,
• 23:49
  Speaker 3: supply chain is built around this world of you know,
• 23:53
  Speaker 3: big and mortar business or you know, the Blockbuster challenges
• 23:59
  Speaker 3: adapting to this new world of you know what Netflix
• 24:03
  Speaker 3: was building even though they had access to you know,
• 24:07
  Speaker 3: everything from the media libraries and the consumer base and
• 24:12
  Speaker 3: all that good stuff. So if you now bring that
• 24:17
  Speaker 3: to the world of healthcare, if large health plants are
• 24:23
  Speaker 3: the key value prop is offering these broad, highly accessible
• 24:27
  Speaker 3: networks and the contracts are structured in a fashion where
• 24:32
  Speaker 3: their hands are tied in driving steerage to certain providers
• 24:36
  Speaker 3: versus you know, being neutral in driving the steerage. They
• 24:40
  Speaker 3: had challenges in uh in adopting a model like this
• 24:44
  Speaker 3: where uh, this model is built for high performance and
• 24:49
  Speaker 3: curation and not broad access. And so if any given market,
• 24:55
  Speaker 3: like you know, let's take the example of Manhattan, where
• 24:58
  Speaker 3: we are working with providers like HSS and other you
• 25:04
  Speaker 3: know providers over here, you're not working with fifty plus
• 25:08
  Speaker 3: providers that you know are serving the population here. It
• 25:12
  Speaker 3: is challenging undertaking for a United Healthcare or an ETNA
• 25:17
  Speaker 3: or an Anthem to say that for these inexpensive procedures,
• 25:22
  Speaker 3: we will be driving volume only to these certain providers
• 25:25
  Speaker 3: and not everyone, because all those providers who are not
• 25:29
  Speaker 3: getting that volume will be upset and and may terminate
• 25:33
  Speaker 3: the contract or threatened to dominate the contract with the
• 25:36
  Speaker 3: health plan. That is one issue. Second issue is the
• 25:42
  Speaker 3: tech required to be able to scale this bundle payment
• 25:48
  Speaker 3: model VALUEBSK model requires a huge investment from health plans.
• 25:53
  Speaker 3: And so you know, for a health plan, you know,
• 25:58
  Speaker 3: on one side, they may lose the shirt on their
• 26:02
  Speaker 3: network and on the other side you have to make
• 26:05
  Speaker 3: an investment on top. It just you know, becomes an
• 26:08
  Speaker 3: innovatives dilemma that incumbents always deal with in any industry.
• 26:11
  Speaker 1: Were the incumbents the beneficiaries I guess if the status
• 26:15
  Speaker 1: quo or was it the providers who were probably the
• 26:17
  Speaker 1: beneficiaries of the status quo? Both of them really.
• 26:20
  Speaker 3: How so so from the health plan standpoint, I mean,
• 26:27
  Speaker 3: they built this broad PPO style model for last four
• 26:33
  Speaker 3: or five decades, they've invested heavily in building this network
• 26:37
  Speaker 3: that are highly accessible and so and the whole value
• 26:44
  Speaker 3: chain from how the reinvestment happens, how the adjudication of
• 26:49
  Speaker 3: the claims happen, how utilization management work, how.
• 26:53
  Speaker 2: Proud artwork like.
• 26:54
  Speaker 3: All of that is built around the world of FEEF
• 26:57
  Speaker 3: for service PPO model. And now you move to a
• 27:01
  Speaker 3: different model where the network doesn't need to be this
• 27:04
  Speaker 3: big it and the prior of utilization management, all those
• 27:10
  Speaker 3: different things are not necessary. It's a huge transformational change
• 27:17
  Speaker 3: for a help plant to undertake. And and also you know,
• 27:22
  Speaker 3: if you have seen all the you know, the policy
• 27:25
  Speaker 3: work coming out of healthcare reform, health plans are a
• 27:31
  Speaker 3: beneficiary if the overall healthcare span is a lot bigger
• 27:36
  Speaker 3: versus smaller, and so for them to move to a
• 27:39
  Speaker 3: model where the actual span will come down will be
• 27:44
  Speaker 3: a huge shift and the unit economics will look very
• 27:47
  Speaker 3: different from health plans.
• 27:48
  Speaker 1: Well, if I go back to that analogy you use
• 27:50
  Speaker 1: with Amazon and retail catching up, is there something analogous
• 27:54
  Speaker 1: in healthcare? Because when I think about that Amazon story,
• 27:57
  Speaker 1: I think that it took Walmart, you know, a deck
• 28:00
  Speaker 1: to catch up and be online. But they're there now.
• 28:03
  Speaker 1: Is that happening also in the world of the big
• 28:05
  Speaker 1: managed care companies, are they also shifting in this direction?
• 28:09
  Speaker 1: Are they frenemy at this point?
• 28:12
  Speaker 3: That's a great insight there. Yes, you know, any of
• 28:17
  Speaker 3: these changes are multi decade changes. Like I mean, e
• 28:21
  Speaker 3: commerce started back in nineties and we are, you know,
• 28:24
  Speaker 3: thirty forty years later, still going through that transformation where
• 28:28
  Speaker 3: people are still shifting away from you know, their buying
• 28:31
  Speaker 3: habits from buying in a brick and mortar shop to
• 28:35
  Speaker 3: actually buying everything online. And we believe this valuebius scare
• 28:39
  Speaker 3: transformation is a similar change.
• 28:42
  Speaker 2: It's not.
• 28:43
  Speaker 3: We're in the second decade of value based scare, but
• 28:46
  Speaker 3: it will take another couple of decades before this beacon
• 28:49
  Speaker 3: of the de facto model. And back in the early
• 28:52
  Speaker 3: days of karm, you know, we were not necessarily the
• 28:56
  Speaker 3: favorite of health plants because they will look at us
• 28:59
  Speaker 3: as you know, a thread or you know, if I
• 29:04
  Speaker 3: put it more honestly, just a nuisance, like you know,
• 29:07
  Speaker 3: we don't want to deal with these guys. But as
• 29:10
  Speaker 3: the markets started to shift towards value based care and
• 29:13
  Speaker 3: as models like CADAM we showed that you know, in
• 29:17
  Speaker 3: our model, we are able to reduce the number of
• 29:21
  Speaker 3: procedures by thirty percent, we are able to bring the
• 29:24
  Speaker 3: unit costs down by almost half, an outcome and readmission
• 29:29
  Speaker 3: rate complications HET are down by eighty percent. Markets started
• 29:32
  Speaker 3: to pay a lot of attention and and employees were
• 29:36
  Speaker 3: putting more and more pressure on health plans that why
• 29:39
  Speaker 3: it cannot be you know, in a more harmonious relationship
• 29:44
  Speaker 3: with models like CAREAM.
• 29:45
  Speaker 2: So we started to see change.
• 29:49
  Speaker 3: Over the last four five years. When you know, large
• 29:54
  Speaker 3: health plans like United health Care or Anthem or Etna
• 29:58
  Speaker 3: and even CBS PBM started to work with karm in
• 30:01
  Speaker 3: a fashion that they became a distributor of the solution.
• 30:05
  Speaker 2: I say so they.
• 30:08
  Speaker 3: They enable their employee clients self insured employer clients to
• 30:12
  Speaker 3: buy Karum on their paper so that an employer doesn't
• 30:17
  Speaker 3: have to go around and bold caram on top.
• 30:21
  Speaker 1: Of their healthcare so to simplifies the sign up process
• 30:24
  Speaker 1: as because it's one contract that they sign exactly and
• 30:27
  Speaker 1: Karen's offered through the United contract or the CPS contract,
• 30:30
  Speaker 1: whatever it might be.
• 30:31
  Speaker 3: I mean, as you can imagine, for large employers, procurement
• 30:34
  Speaker 3: is a huge friction of course, So anything that can
• 30:37
  Speaker 3: reduce that friction during the procurement process because they are
• 30:41
  Speaker 3: now just signing an amendment to their existing United Healthcare
• 30:44
  Speaker 3: contract is a huge plus.
• 30:47
  Speaker 2: And then it also comes.
• 30:49
  Speaker 3: You know, integrated with the data exchange on the claims
• 30:53
  Speaker 3: and eligibly diffront. So it's just a very low lift
• 30:57
  Speaker 3: for an employer to adopt care without having to go
• 31:01
  Speaker 3: through the full nine yard of firefighting.
• 31:03
  Speaker 1: That makes a ton of sense in ok ahead, plea.
• 31:06
  Speaker 3: One thing I'll add there. More recently, the model is
• 31:11
  Speaker 3: moving even beyond that, where now in light of this
• 31:16
  Speaker 3: cost crisis we are seeing in healthcare, health plans are
• 31:20
  Speaker 3: realizing that how much value models like KARAM are delivering.
• 31:24
  Speaker 3: So they have now moved to a step beyond where
• 31:28
  Speaker 3: like one of the national health plans now is actually
• 31:30
  Speaker 3: embedding CAREAM within the ecosystem and we are powering their
• 31:35
  Speaker 3: own centers of Excellence program. So that completely changes the
• 31:39
  Speaker 3: game where beyond just a distribution partner, you are actually
• 31:44
  Speaker 3: advocating for CAREM to the members when members are calling
• 31:47
  Speaker 3: about any of the healthcare condition and if you see
• 31:50
  Speaker 3: a member require let's say, an expensive cancer treatment, then
• 31:55
  Speaker 3: instead of you know, giving them the broad directory, you're
• 31:58
  Speaker 3: actually going to be proactively directing member to use CADAM
• 32:02
  Speaker 3: because that is where the better outcome and lower cost are.
• 32:06
  Speaker 1: That's fascinating. One of the things that you said that
• 32:08
  Speaker 1: struck me is just thinking about your journey over the
• 32:10
  Speaker 1: last ten years. As you look at maybe your younger
• 32:12
  Speaker 1: self or if you rewind in time, is there an
• 32:16
  Speaker 1: area that you wish to pushed harder on in the
• 32:18
  Speaker 1: early days that might have bore more fruit today?
• 32:25
  Speaker 2: You know, I mean.
• 32:28
  Speaker 3: As a as a founder when you're starting, you know,
• 32:33
  Speaker 3: ten twelve years ago, and you're starting with this very
• 32:38
  Speaker 3: theoretical viewpoint that hey, you align the provider incentives your
• 32:42
  Speaker 3: pain in sense, you know, you change the incentive game,
• 32:49
  Speaker 3: and you bring purchasers and members along in this journey,
• 32:52
  Speaker 3: and then at the end of the rainbow there will
• 32:54
  Speaker 3: be lower costs and better outcome and better experience. It's
• 32:58
  Speaker 3: a lot to convince yourself and get over that imposter syndrome.
• 33:06
  Speaker 3: Is like, am I really in a good path here?
• 33:08
  Speaker 3: And I'm just adding noise to the system, and or
• 33:12
  Speaker 3: this theory is just a great, you know idea, but
• 33:16
  Speaker 3: it may never translate into real world outcomes.
• 33:21
  Speaker 2: And so and you wake up every day in the sweats.
• 33:25
  Speaker 3: Like, oh my gosh, you know we are doing this today.
• 33:29
  Speaker 2: But the these results.
• 33:31
  Speaker 3: Are many many years away from us. And you know,
• 33:34
  Speaker 3: you almost have to be delusional that telling yourself that
• 33:40
  Speaker 3: the world will arrive where Valuba care will be you know,
• 33:44
  Speaker 3: a force and and you know, large health systems and
• 33:49
  Speaker 3: large natural health plans who were otherwise never a believer
• 33:52
  Speaker 3: in value based scare world, they will see the world
• 33:55
  Speaker 3: from your lands will actually partner with you. So yeah,
• 33:59
  Speaker 3: I mean what I will tell to my younger self
• 34:02
  Speaker 3: is maintain that conviction, maintain that delusion and and take
• 34:07
  Speaker 3: this journey and and and believe that if you do
• 34:11
  Speaker 3: things right, you put in the hard work, you'll come
• 34:14
  Speaker 3: out alive on the other side with some good stories.
• 34:16
  Speaker 1: Trull Well said, Well, maybe thinking about some of those stories,
• 34:19
  Speaker 1: you know what has surprised you in terms of what
• 34:22
  Speaker 1: you've seen in patient outcomes over the last ten years.
• 34:24
  Speaker 1: I mean, is there are there a couple of areas
• 34:26
  Speaker 1: that you really point to when you talk to you know,
• 34:29
  Speaker 1: maybe prospective employers or new health systems that you sign up,
• 34:33
  Speaker 1: where you say, this is a great example of what
• 34:35
  Speaker 1: we're trying to do here.
• 34:37
  Speaker 3: Yeah, I mean, you know, what we have now touched
• 34:41
  Speaker 3: upon is what actually is the member experience through into
• 34:45
  Speaker 3: it through a you know, this new world we have
• 34:48
  Speaker 3: built here. So you know, I was mentioning earlier what
• 34:50
  Speaker 3: the patient experience is where you have no as a
• 34:54
  Speaker 3: member in the PPO network, you have no idea what
• 34:56
  Speaker 3: the good doctors whether you need a procedure, what you
• 34:59
  Speaker 3: know how much it will cost, and what the process
• 35:02
  Speaker 3: will look like. In the CAREM world, when a member
• 35:04
  Speaker 3: comes to us, we take their information and then we
• 35:08
  Speaker 3: mash them with the best you know, providers that are
• 35:13
  Speaker 3: you know, uh set up to deliver the best outcome
• 35:15
  Speaker 3: to them and they can fully trust the doctor that
• 35:18
  Speaker 3: if they are recommending a procedure or not recommending a procedure,
• 35:22
  Speaker 3: they are you know, they have the best outcome in
• 35:26
  Speaker 3: their mind for the member. And then we assign a
• 35:31
  Speaker 3: care counciage member and give them our app that members
• 35:35
  Speaker 3: can use to guide themselves to the.
• 35:36
  Speaker 2: Entire episode of care.
• 35:38
  Speaker 3: And the best part is members typically never see any
• 35:41
  Speaker 3: medical will, let alone any surprise will. So from a
• 35:44
  Speaker 3: members standpoint, you don't have to worry about the quality,
• 35:47
  Speaker 3: the cost, or the process of fighting the healthcare system.
• 35:50
  Speaker 3: You can actually focus on getting healthier. And so there is,
• 35:55
  Speaker 3: you know, our last ten tral years, there's just no
• 35:58
  Speaker 3: shortage of believable patient stories.
• 36:02
  Speaker 2: We hear that.
• 36:05
  Speaker 3: You know, when you hear them, you take a pause
• 36:09
  Speaker 3: and just you know, reflect on. You know, you're building
• 36:12
  Speaker 3: something that truly touches people's lives. So an example is
• 36:16
  Speaker 3: recently a member, you know, we got engaged with who
• 36:20
  Speaker 3: had a pretty advanced stage of cancer and and they
• 36:25
  Speaker 3: could benefit from a car.
• 36:27
  Speaker 2: TI treatment very high cost, very high cost.
• 36:30
  Speaker 3: You know, the cost of that procedure is you know,
• 36:34
  Speaker 3: somewhere between one to two million dollars typically, And so
• 36:38
  Speaker 3: we got engaged with that member and uh and we
• 36:41
  Speaker 3: you know, uh, we made sure through our CEI partners
• 36:46
  Speaker 3: that you know, this is the right candidate for getting
• 36:50
  Speaker 3: a CARTI treatment. We connected them with MEO Clinic and
• 36:55
  Speaker 3: they went through the process and you know, Mayo Clinic
• 36:58
  Speaker 3: have harvested themselves and re engineered them so that those
• 37:02
  Speaker 3: cells now you know, could fight the cancer cell and
• 37:06
  Speaker 3: we reinjected into the patient's body and it all you
• 37:12
  Speaker 3: know is working out where the member is now you know,
• 37:16
  Speaker 3: receive the treatment is recuperatoring. Like I mean, in the
• 37:19
  Speaker 3: sense of this treatment, the olds were really against this
• 37:24
  Speaker 3: member to achieve the best outcome, and they are getting
• 37:28
  Speaker 3: the treatment from one of the best places in the
• 37:30
  Speaker 3: world where they can truly trust that the providers are
• 37:35
  Speaker 3: doing the right thing and have the highest likelihood of
• 37:40
  Speaker 3: making this treatment success.
• 37:42
  Speaker 1: Well, that's a great overview. And one of the things
• 37:45
  Speaker 1: you mentioned was about the concierge and I guess the
• 37:48
  Speaker 1: app and the technology. Can we talk a little bit,
• 37:51
  Speaker 1: because no discussion these days, yeah, is complete without discussing
• 37:54
  Speaker 1: where technology fits in the path forward. So how are
• 37:58
  Speaker 1: you guys thinking about I guess, the new world of
• 38:00
  Speaker 1: AI and where does it intersect with what Karen is doing?
• 38:03
  Speaker 3: Yeah, I mean, you're right, if you know as a
• 38:07
  Speaker 3: CEO you're not front end center about where the word
• 38:11
  Speaker 3: is heading with AI, you you may face some serious
• 38:16
  Speaker 3: headwinds down the road. And we really like the world
• 38:21
  Speaker 3: where we are heading with AI. So just think of,
• 38:25
  Speaker 3: in the absence of a model like CAREAM, how AI
• 38:29
  Speaker 3: works in the PPO world. It's kind of an arms strange.
• 38:32
  Speaker 3: Think of a provider that is, you know, in the
• 38:35
  Speaker 3: rep cycle world, is using AI to make a clinical
• 38:40
  Speaker 3: justification for a procedure that is otherwise not necessary and
• 38:44
  Speaker 3: now they're sending that pri request to the health plan.
• 38:48
  Speaker 3: Now health plant is using their own AI to deny
• 38:50
  Speaker 3: that claim and and and not agreeing with the justification.
• 38:54
  Speaker 3: Now the provider is now figuring out figuring out a
• 38:59
  Speaker 3: way to you use AI to overturn those claim denials.
• 39:03
  Speaker 1: So that's the arms race.
• 39:04
  Speaker 2: It's an arm race.
• 39:06
  Speaker 3: And the cost of using these AI tools, using their
• 39:09
  Speaker 3: technology is baked into the system and in the price
• 39:14
  Speaker 3: is you know, either directly or indirectly. Now moving away
• 39:18
  Speaker 3: from that word to a world where the provider is
• 39:23
  Speaker 3: incentivized to make sure they are able to deliver the
• 39:26
  Speaker 3: best outcome with the use of AIS. Now they are
• 39:29
  Speaker 3: thinking about how to use AI to flag a member
• 39:32
  Speaker 3: that has a high likelihood of getting a readmission or
• 39:35
  Speaker 3: complication and identifying those members and you know, curating the
• 39:40
  Speaker 3: process for them so that they can avoid a readmission
• 39:44
  Speaker 3: or complication, and when they do that, there is a
• 39:48
  Speaker 3: higher financial upside for that provider, and that's a complication
• 39:54
  Speaker 3: avoided is a great outcome for the employer and obviously
• 39:57
  Speaker 3: a great outcome for the mansion. Right, So everything else
• 40:01
  Speaker 3: is the same, the technology, the care processes, the care
• 40:06
  Speaker 3: delivery is just the econ mix of the model runs
• 40:09
  Speaker 3: in a different direction. And we are using AI and
• 40:14
  Speaker 3: to help our COEs avoid a lot of these complications
• 40:18
  Speaker 3: and the admissions. We also on the demand side have
• 40:24
  Speaker 3: been using AI for the last four or five years
• 40:27
  Speaker 3: in identifying members who are on a path spaghettive procedure,
• 40:32
  Speaker 3: make them aware of this new model that we have
• 40:35
  Speaker 3: built and engaging them in the process. So I mean,
• 40:39
  Speaker 3: I can go on and on in all different use
• 40:42
  Speaker 3: cases of AI in our board and how are you
• 40:43
  Speaker 3: using it?
• 40:44
  Speaker 1: I'm somewhat amazed, you know, I think if you had
• 40:46
  Speaker 1: asked those of us in the industry that if we
• 40:49
  Speaker 1: thought that providers would be some of the quickest adopters
• 40:52
  Speaker 1: of AI, you know, VI visa V REV cycle, because
• 40:56
  Speaker 1: I think we've seen that actually show up in the
• 40:58
  Speaker 1: numbers of the public companies the mrs all gone up
• 41:00
  Speaker 1: the last couple of years, and I'm convinced part of
• 41:02
  Speaker 1: that is that arms race exactly where the providers moved
• 41:05
  Speaker 1: quicker than managed care.
• 41:07
  Speaker 3: I mean, as Charlie Manger says, show me the incentive
• 41:11
  Speaker 3: and all show you the behavior. So if the incentive
• 41:14
  Speaker 3: is that providers can benefit from you know, AI by
• 41:20
  Speaker 3: justifying more care delivery or higher costs, then they will
• 41:26
  Speaker 3: obviously use the I to go in that direction. But
• 41:29
  Speaker 3: if you change the incentives where the EI can be
• 41:32
  Speaker 3: used to avoid a readmission of complication, that will actually
• 41:37
  Speaker 3: lead to better margins for a provider, they will head
• 41:40
  Speaker 3: in that direction.
• 41:41
  Speaker 1: Interesting. You know, if we think about your journey for
• 41:43
  Speaker 1: the next five years, what does the roadmap for Karen
• 41:46
  Speaker 1: look like. I don't know, twenty and thirty one just
• 41:49
  Speaker 1: an arbitrary date.
• 41:50
  Speaker 3: The roadmap for KARUM is. You know, obviously KARM today
• 41:55
  Speaker 3: is serving self insured employers. The model that we have
• 42:01
  Speaker 3: built and this value based ecosystem we have built it.
• 42:06
  Speaker 3: You know, it can help with specialty care for any
• 42:09
  Speaker 3: other vertical, whether it is fully insured book of business,
• 42:13
  Speaker 3: of health plans or Medica advantage plans or Medicaid. So
• 42:19
  Speaker 3: the goal is that in our maturity, anyone getting any
• 42:25
  Speaker 3: kind of procedure in the country, they should have access
• 42:28
  Speaker 3: to a model like CAREM where they can be sure
• 42:32
  Speaker 3: that the provider they are speaking with has the best
• 42:35
  Speaker 3: interest in their heart and are curated for the quality
• 42:39
  Speaker 3: and the cost will be very affordable and the outcomes
• 42:43
  Speaker 3: will be great.
• 42:45
  Speaker 2: So we don't want this to be.
• 42:46
  Speaker 3: A model just that is just limited to employers, but
• 42:51
  Speaker 3: everyone in the country should benefit from a model like it.
• 42:53
  Speaker 1: And what's the hurdle to moving into medicare or Medicaid.
• 42:58
  Speaker 3: One is our own bandwidth that you know, we are
• 43:04
  Speaker 3: after ten to twel years, are you know, catching this
• 43:08
  Speaker 3: huge tailwind where employers are you know, very engaged and
• 43:14
  Speaker 3: want to use the solution. So on one side, you know,
• 43:19
  Speaker 3: we have a lot of business to execute on and
• 43:22
  Speaker 3: h and getting into any new verticos require a you know, uh,
• 43:27
  Speaker 3: the platform needs to be modified, the sales go to
• 43:30
  Speaker 3: market motion needs to be modified. So it's a it's
• 43:35
  Speaker 3: a bandwidth tissue in the near term. But also uh,
• 43:39
  Speaker 3: you know, some of the some of the policy changes
• 43:44
  Speaker 3: that you know also are required for our model to
• 43:49
  Speaker 3: become easy to adapt for medicaid and Medicaid like you know, currently, CMS,
• 43:57
  Speaker 3: you know pays all providers, you know, based upon again
• 44:01
  Speaker 3: the volume of the care that is being delivered. And
• 44:04
  Speaker 3: and CMS have hard time steering members to high value
• 44:08
  Speaker 3: providers even if they know who are the high value
• 44:11
  Speaker 3: providers versus others. So as CMS thinks about adopting value
• 44:18
  Speaker 3: based scare in a fashion that is incentivizing members and
• 44:21
  Speaker 3: incentivizing providers to move more towards value boused care, uh,
• 44:26
  Speaker 3: that is when our model becomes more applicable.
• 44:28
  Speaker 1: Well, I'm glad you touched touched upon the regulatory angle.
• 44:31
  Speaker 1: Is there anything that you're looking at on the horizon
• 44:33
  Speaker 1: from a policy perspective that would really be a catalyst
• 44:37
  Speaker 1: for for Karen more just the CNMI pilots those sorts
• 44:42
  Speaker 1: of things.
• 44:43
  Speaker 3: I mean, one, I will say that employers are bearing
• 44:51
  Speaker 3: bigger and bigger part of the cost burden of health care,
• 44:55
  Speaker 3: and and employers are you know, fairly fragmented market because
• 45:01
  Speaker 3: there's thousands of employers making these purchasing decisions, you know,
• 45:06
  Speaker 3: in their own silos.
• 45:08
  Speaker 2: So on one side, we expect employers.
• 45:11
  Speaker 3: To become more vocal in driving the healthcare policy because
• 45:16
  Speaker 3: you know, they are the ones who are paying the bills,
• 45:17
  Speaker 3: and they want to make sure models like value based
• 45:21
  Speaker 3: here it's not like they have to make a push,
• 45:23
  Speaker 3: but ground up the system is moving more aggressively towards
• 45:28
  Speaker 3: high value care. And then on the CMS side, I
• 45:32
  Speaker 3: will say, we are seeing actually a lot of great
• 45:36
  Speaker 3: signals coming out of CMS where CMS is becoming more
• 45:43
  Speaker 3: friendly towards you know, all this innovation that is coming
• 45:46
  Speaker 3: out of you know, Silicon Valley and other places in
• 45:48
  Speaker 3: digital health and so. And we are having some of
• 45:52
  Speaker 3: those discussions with folks in CMS, like you know, to
• 45:56
  Speaker 3: your point, like what policy changes are required for CMS
• 45:59
  Speaker 3: to move in, you know, in adopting.
• 46:02
  Speaker 2: Models like CADAM and so.
• 46:05
  Speaker 3: Yeah, I mean none of these things happen overnight, but
• 46:08
  Speaker 3: all the next one year, three years, five year period,
• 46:13
  Speaker 3: we expect CMS to be making some of those policy
• 46:16
  Speaker 3: changes so that the steerage and the valuable scare becomes
• 46:21
  Speaker 3: more mainstream, you.
• 46:23
  Speaker 1: Know, maybe thinking about the future a little bit more.
• 46:25
  Speaker 1: And we're coming to the end of our time. You know,
• 46:27
  Speaker 1: when you think about it as a as a CEO
• 46:29
  Speaker 1: of a healthcare company and as a former technologist, what's
• 46:32
  Speaker 1: going to surprise us about healthcare and ten years that
• 46:35
  Speaker 1: we do today that will seem absurd maybe ten years
• 46:38
  Speaker 1: from now.
• 46:39
  Speaker 2: I think the.
• 46:42
  Speaker 3: Today, you know, all the fiction I am I mentioned, like,
• 46:48
  Speaker 3: you know, getting a procedure or even just getting an
• 46:51
  Speaker 3: appointment with your PCIP is kind of a daunting task
• 46:56
  Speaker 3: for anyone because you know, you'll call your PCIP and
• 46:58
  Speaker 3: it's like, oh my gosh, you know, there's nothing available
• 47:01
  Speaker 3: for next one month. And on the procedure side, it
• 47:05
  Speaker 3: is even another level of craziness. I mean, we are
• 47:10
  Speaker 3: seeing a shift over there as people are using AI
• 47:16
  Speaker 3: more and more for their initial clinical assessment, and currently
• 47:22
  Speaker 3: it is happening more in a fashion that is not
• 47:25
  Speaker 3: necessarily you can almost characterize it irresponsible fashion because the
• 47:30
  Speaker 3: models are not necessarily created for delivering the right clinical advice.
• 47:35
  Speaker 3: But over the next five ten years, as the models
• 47:38
  Speaker 3: become stronger and the policy to adopt clinical AI changes,
• 47:46
  Speaker 3: we expect a lot of people becoming a far more
• 47:50
  Speaker 3: informed consumer in terms of you know, what care they need,
• 47:55
  Speaker 3: what are the options available to them, and how much
• 47:58
  Speaker 3: exactly it will cost. In that world, you add this
• 48:03
  Speaker 3: component of value based care, where providers are now using
• 48:07
  Speaker 3: AI to deliver better outcome, better experience, less unnecessary care
• 48:14
  Speaker 3: and actually financially benefiting from it. Those two words as
• 48:17
  Speaker 3: they combine together, I think I'm very optimistic. How that
• 48:22
  Speaker 3: what will look like both from a patient standpoint, purchase
• 48:25
  Speaker 3: a standpoint, as well as provide a standpoint.
• 48:27
  Speaker 1: Well, do you think the technology and AI will solve
• 48:31
  Speaker 1: the supply problem and that we won't have enough doctors
• 48:33
  Speaker 1: in the future and that the clinical AI will help
• 48:37
  Speaker 1: relieve some of that burden.
• 48:39
  Speaker 2: Absolutely.
• 48:40
  Speaker 3: I mean even today when it comes to specialty care,
• 48:44
  Speaker 3: there is an oversupply in the system. Our bad occupancy
• 48:48
  Speaker 3: rate in the US is only sixty to seventy percent,
• 48:52
  Speaker 3: when in the developed countries it's eighty to ninety percent.
• 48:56
  Speaker 3: So there is already an over capacity. And we know
• 48:59
  Speaker 3: almost a third of the specialty here that is delivered
• 49:02
  Speaker 3: does not improve outcome for the members. So you combine
• 49:06
  Speaker 3: this with uh, you know, the efficiencies that an EI
• 49:10
  Speaker 3: could bring to that equation. Yeah, there is no question
• 49:14
  Speaker 3: that you know, less procedures again going forward will happen,
• 49:19
  Speaker 3: and and they will happen by providers that are delivering
• 49:24
  Speaker 3: high value care.
• 49:24
  Speaker 1: Well said, Well, thank you such for for the lesson
• 49:27
  Speaker 1: on CAREM and all your views on the future.
• 49:29
  Speaker 2: You know.
• 49:29
  Speaker 1: One of the ways I like to wrap these conversations
• 49:31
  Speaker 1: up is to ask the guests about a core wife
• 49:33
  Speaker 1: lesson either from your personal or professional life, that you
• 49:36
  Speaker 1: really see driving what you see as your mission. Is
• 49:40
  Speaker 1: there anything that comes to mind?
• 49:41
  Speaker 3: Well, one thing all a light here, which is you know,
• 49:46
  Speaker 3: we are at this journey for a fly twelve years
• 49:48
  Speaker 3: and and you know, when you come from the tech
• 49:53
  Speaker 3: world and you are entering healthcare and you're starting a company,
• 49:57
  Speaker 3: you know, you you all think about out the financial
• 50:01
  Speaker 3: upside that this endeavor will break them will bring to you.
• 50:05
  Speaker 3: But the reality is that you know, if you're not
• 50:11
  Speaker 3: in healthcare or you know, making a driving a transition
• 50:15
  Speaker 3: like this for the right reasons, you will run out
• 50:18
  Speaker 3: of juice very quickly. What I love about what I
• 50:22
  Speaker 3: do and what everyone else in Cadam Health do here
• 50:26
  Speaker 3: is that on one side, we are creating a company
• 50:30
  Speaker 3: that you know, financially is likely to be very successful,
• 50:34
  Speaker 3: but we're also making a huge societal impact.
• 50:37
  Speaker 2: And there are very.
• 50:38
  Speaker 3: Few opportunities in you know, in your career that comes
• 50:41
  Speaker 3: your way where you know you are making a very
• 50:44
  Speaker 3: positive impact on the society but also financially rewarding. So
• 50:49
  Speaker 3: you know, I feel blessed I got the opportunity to
• 50:52
  Speaker 3: do something like this along with so many other folks
• 50:54
  Speaker 3: at CADAM and and yeah, I won't trade it for
• 50:58
  Speaker 3: anything else.
• 50:59
  Speaker 1: Well, I appreciate you sharing that and look forward to
• 51:02
  Speaker 1: your future journey.
• 51:03
  Speaker 3: Thank you, John Tom, thank you for having me here.
• 51:05
  Speaker 1: That's Satch Jane, founder and CEO of Karen Health. Thank
• 51:09
  Speaker 1: you for listening to this episode of the Vanguards of
• 51:11
  Speaker 1: Healthcare podcast by Bloomberg Intelligence. Don't forget to click the
• 51:15
  Speaker 1: follow button on your favorite podcast app or website so
• 51:17
  Speaker 1: you never missed an interview with the leaders rewriting the
• 51:20
  Speaker 1: playbook on healthcare innovation. I'm Jonathan Palmer and until next time,
• 51:24
  Speaker 1: take care.