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Cortica’s Plan to Bring Value-Based Care to Autism · Vanguards of Healthcare by Bloomberg Intelligence

0:21
Speaker 1: Welcome to another episode of Bloomberg Intelligence's Vanguards of Healthcare podcast,
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Speaker 1: where we speak with the leaders at the forefront of
0:27
Speaker 1: change in the healthcare industry. My name is Jonathan Palmer,
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Speaker 1: and I'm a healthcare analyst at Bloomberg Intelligence, the in
0:32
Speaker 1: house research arm of Bloomberg. I'm thrilled to welcome doctor
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Speaker 1: Neil hat and Gatti to the program. He's the CEO
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Speaker 1: and co founder of Cordica, which was born out of
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Speaker 1: his wife and co founder, doctor Suzanne Goh's clinical practice.
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Speaker 1: Suzanne is still the company's chief medical officer. Neil brings
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Speaker 1: a really unique triple threat perspective to the table to this.
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Speaker 1: He's a Rhodes Scholar with a medical degree from Harford,
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Speaker 1: and before joining Cordica, he spent time as an equities
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Speaker 1: investor and held leadership positions at a number of medical
1:00
Speaker 1: device companies that had successful exits. Today, he and Suzanne
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Speaker 1: are tackling one of the most fragmented and high stake
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Speaker 1: areas of medicine, autism and neurodevelopment care. Cortica is really
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Speaker 1: moving the needle by replacing siloed therapy with this integrated
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Speaker 1: whole child model that combines neurology, technology, and behavioral health.
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Speaker 1: I'm really excited to dive into how they're scaling this
1:21
Speaker 1: model and navigating the current regulatory landscape. Neil, welcome to
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Speaker 1: the program, and thank you for joining us.
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Speaker 2: Now, thank you, Jonathan, really an honor to be here.
1:29
Speaker 2: Thanks for that generous introduction. My pleasure.
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Speaker 1: Well, why don't we start at a very high level.
1:34
Speaker 1: You know, what's the mission of Cordica in a few sentences.
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Speaker 2: We're really trying to defragment the clinical experience that families
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Speaker 2: would otherwise have to undergo in their diagnosis and treatment
1:47
Speaker 2: for their child with autism or a range of neurodevelopmental conditions.
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Speaker 2: We're also trying to democratize access to the highest quality
1:55
Speaker 2: of clinical care that would be available in the world. Typically,
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Speaker 2: this both cares only at the greatest academic centers, and
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Speaker 2: I was very fortunate along with my wife to train
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Speaker 2: at some of those places. They're outstanding. It's just very
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Speaker 2: hard to access, with long wait times and even within them,
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Speaker 2: very fragmented. So we've wanted to really democratize access to
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Speaker 2: that and defragment and coordinate what is otherwise a very
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Speaker 2: challenging and disjointed journey.
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Speaker 1: So maybe let's start with the origin of the company.
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Speaker 1: You know, as I mentioned in the intro, it's born
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Speaker 1: out of your wife's practice. But can you maybe talk
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Speaker 1: about some of the milestones as you've guys scaled it
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Speaker 1: over the last decade.
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Speaker 2: Yeah. Absolutely, So this this started with my wife's kind
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Speaker 2: of clinical passion. We met as first year medical students,
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Speaker 2: and from the first time I met her, I remember
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Speaker 2: hearing about her passion about the developing child brain and
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Speaker 2: the relationship between parents and children, particularly when children are neurodivergent.
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Speaker 2: This is back in two thousand so, well before autism
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Speaker 2: was in the the in common parlance and seen a
3:04
Speaker 2: lot in the media, and it was very far from
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Speaker 2: my interest. To be honest, it was hard for me
3:09
Speaker 2: to understand physiologically what was happening as a medical school student.
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Speaker 2: In fact, I learned really nothing about it. In my
3:16
Speaker 2: time in medical school. I gravitated to where there was
3:19
Speaker 2: kind of an easier application of technology. So like some
3:23
Speaker 2: of like cardiology, was very straightforward for me. You could
3:25
Speaker 2: image see illegion, you could find it either physically or
3:32
Speaker 2: electro physiologically with things like EKG. And she continued this
3:37
Speaker 2: passion throughout academic training, was a part of co directing
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Speaker 2: multiple academic center autism programs, and then when we had
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Speaker 2: our first kid, she wound up starting leaving academia and
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Speaker 2: starting a small boutique private practice to treat families in
3:55
Speaker 2: this integrated way, really to get out of the encumbrances
4:00
Speaker 2: of doing this in an academic setting. And I was
4:04
Speaker 2: a part of three prior medtech companies helped build and transact,
4:10
Speaker 2: And when I transacted my third I was kind of
4:12
Speaker 2: looking for my next thing to do, and had historically
4:16
Speaker 2: spent time in fields like cardiology and anti surgery, and
4:20
Speaker 2: was just fascinated by the kind of clinical outcome she
4:22
Speaker 2: was getting and how desperately needed this kind of innovation
4:26
Speaker 2: was in autism care. Compared to cardiology, where there's a
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Speaker 2: lot of innovation, there are fifty some startups pursuing individual
4:35
Speaker 2: therapeutic indications and autism, there are very few that are
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Speaker 2: really like pushing the needle, certainly at that time, which
4:41
Speaker 2: is back in like twenty sixteen or so, about ten
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Speaker 2: years ago. So I joined with the intent of taking
4:48
Speaker 2: a model that had been well validated and shown to
4:51
Speaker 2: be very effective at that time, maybe fifty sixty families
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Speaker 2: not really being able to take insurance, not being able
4:59
Speaker 2: to scale that time. And my goal here was to
5:03
Speaker 2: work with her to scale, make it more accessible, join
5:08
Speaker 2: with health plans, build the underlying technology infrastructure. How are
5:12
Speaker 2: we going to hire multi disciplinary care teams and train
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Speaker 2: them to work together. So key milestones for us were
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Speaker 2: really about first being able to demonstrate that what she
5:25
Speaker 2: was doing on her own as a single physician working
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Speaker 2: with the small team could be scaled beyond her. So
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Speaker 2: could we bring in other physicians of different specialties and
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Speaker 2: trainer to train them to deliver that same level of effectiveness.
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Speaker 2: Then it was about can we build an underlying technology
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Speaker 2: platform that allows this group of clinicians to work together,
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Speaker 2: because there's no off the shelf electronic medical record that
5:53
Speaker 2: combines everything on the medical side, So you're ordering MRIs
5:57
Speaker 2: and labs and prescribing medication to what is done in
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Speaker 2: ABA applied behavioral analysis. That is a lot of field work,
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Speaker 2: it's a lot of data collection. Those EMRs could not
6:07
Speaker 2: be more different, and so how can you kind of
6:10
Speaker 2: put those together make the data from both sides accessible
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Speaker 2: to clinicians from both sides. That was a big milestone,
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Speaker 2: and I'll say sort of four In total, those are two.
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Speaker 2: A third is around can we scale from more than
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Speaker 2: one location? For a long time we only in one place?
6:30
Speaker 2: And then the fourth was attracting capital. Could this get
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Speaker 2: to a place where outside investors would say, hey, this
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Speaker 2: is outside the norm of standard odds and therapy, which
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Speaker 2: at the time was applied behavioral analysis. But could we
6:43
Speaker 2: get professional investors and at ideally strategic investors who represented
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Speaker 2: health plans, parent groups to buy into this model and
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Speaker 2: help scale it. So those are the milestone we sort
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Speaker 2: of saw between say twenty sixteen and twenty twenty that
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Speaker 2: really allowed to start to grow.
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Speaker 1: That was a great summary, you know, maybe taking it
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Speaker 1: a step deeper, you talked about the quartica model and
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Speaker 1: maybe the traditional model. Can you maybe further bifurcate the
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Speaker 1: difference between those two and how maybe Cordica's model of
7:14
Speaker 1: treatment is different than the traditional ABA.
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Speaker 2: Yeah, the traditional model of applied be hero analysis ABA
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Speaker 2: has tremendous great data going back twenty thirty years. It
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Speaker 2: is founded in psychology, great outcomes data spanning dozens and
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Speaker 2: dozens of publications, and autism speaks and other industry groups. Really,
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Speaker 2: parent advocacy groups were very successful over the past twenty
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Speaker 2: years in getting ABA covered at the state level and
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Speaker 2: a lot of bipartisan federal support, which was a huge
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Speaker 2: win for the field. ABA relies on behavioral modification for children,
7:59
Speaker 2: so it's about positive and negative reinforcements, understanding what causes
8:05
Speaker 2: a child to behave in an optimal way and what
8:09
Speaker 2: causes a child to behave in dysregulated or self injurious ways,
8:15
Speaker 2: and how do you reinforce when they're behaving appropriately versus not.
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Speaker 2: It's a really important tool, and the issue that we
8:25
Speaker 2: have had as physicians is it should be one of
8:28
Speaker 2: several tools that are employed, just like every other field
8:31
Speaker 2: of medicine. I spend a lot of time in cardiology
8:33
Speaker 2: and specifically interventional cardiology, which is a wonderful tool. There
8:36
Speaker 2: are lots of innovation incenting and plaque excision and things,
8:42
Speaker 2: but we always knew that it was one of many tools.
8:44
Speaker 2: I mean, you want to actually avoid the need for
8:47
Speaker 2: interventional procedures by being preventive on the front end, and
8:50
Speaker 2: then there's a category of lesions where you need surgery
8:52
Speaker 2: and intervention is inappropriate. So similarly, in autism, a BA
8:57
Speaker 2: is a very important tool, but it should sit alongside
9:01
Speaker 2: a thoroughmedical understanding of each child, and that's about understanding
9:06
Speaker 2: their genetic underlying conditions. Are their metabolic issues that are
9:11
Speaker 2: that are happening, so mitochondrial dysfunction, vitamin deficiencies, immune dysregulation,
9:16
Speaker 2: microbiome dysfunction, all of these have been very well characterized
9:21
Speaker 2: and understood in the neurology, developmental, pediatrics, and fields. There's
9:26
Speaker 2: a lot around seizure management. Twenty to thirty percent of
9:28
Speaker 2: children with autism have underlying seizure disorders if those aren't treated,
9:35
Speaker 2: and sometimes in the worst case, you'll see a child
9:37
Speaker 2: who has issues of seizure, but they are seen in
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Speaker 2: the ABA field for very valid reasons as self simulatory
9:46
Speaker 2: behaviors and treated with behavioral modification, whereas really it's a
9:49
Speaker 2: seizure that needs to be treated with appropriate ketogenic diet,
9:54
Speaker 2: the right medication management. There's a lot around feeding, making
9:59
Speaker 2: sure children are eating the right foods that then lead
10:02
Speaker 2: to the right GI health throughout a lot around sleep,
10:06
Speaker 2: medication management for conditions like ADHD, and then their developmental
10:11
Speaker 2: goals around sensory processing, fine and gross motor skills that
10:15
Speaker 2: are addressed by things like speech therapy, occupational therapy, and
10:19
Speaker 2: then overall child and family wellness, which are addressed by psychotherapy, counseling,
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Speaker 2: social workers, and so we deeply believe, I deeply believe
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Speaker 2: that ABA is very, very important. It's a huge part
10:33
Speaker 2: of the toolkit in working with children and their families.
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Speaker 2: It's just not complete on its own, in the same
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Speaker 2: way that every other field of medicine wouldn't view a
10:44
Speaker 2: single tool, though highly effective, to be complete on its own.
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Speaker 2: And Cordica differs from kind of conventional ABA therapy where
10:53
Speaker 2: we say this is really important, but it is a
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Speaker 2: part of what we do. It's the largest single part
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Speaker 2: of our workforce. We have about twenty two hundred employees,
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Speaker 2: half of them are in a BA even more, but
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Speaker 2: we complement them with all the other services that are required,
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Speaker 2: similar to what's done in academic medical centers where they
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Speaker 2: really try to bring together a holistic evaluation, a multidisciplinary evaluation,
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Speaker 2: and use that to come up with a multidisciplinary treatment plan.
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Speaker 1: So do all those services sit or are those different
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Speaker 1: services sit under Cordica's roof for Umbrella today, they do, Yeah,
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Speaker 1: they do.
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Speaker 2: We've figured out over the years on how to deliver
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Speaker 2: all those services with the fewest number of clinician types
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Speaker 2: and so it's only about a half dozen or so.
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Speaker 2: But our physicians and nurse practitioners are very versatile. We
11:44
Speaker 2: train them to be. They're well rounded clinicians in being
11:49
Speaker 2: able to work up where appropriate genetic issues, metabolic issues, sleep.
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Speaker 2: We have experts within quartica who specialize in things like
11:59
Speaker 2: epileps neurogenetics or medication management s peciiclarly in this field
12:04
Speaker 2: called psychopharmacology. But the physicians at each center or the
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Speaker 2: nurse practitioners that each center really functions as generalists. And similarly,
12:13
Speaker 2: we have bcbasports certified behaviors who do a BA but
12:18
Speaker 2: are really thoughtful about how are these other symptoms signs arising?
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Speaker 2: How can I coordinate with this internal care team around me.
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Speaker 2: So though we treat a lot, it's done by kind
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Speaker 2: of the smallest group we can, which is about a
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Speaker 2: half dozen clinician types.
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Speaker 1: So you mentioned it briefly there, but how does care
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Speaker 1: coordination work? Is it by the physician or those BCBAs
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Speaker 1: or a combination thereof.
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Speaker 2: It's a combination. We have a couple of roles that
12:50
Speaker 2: are really dedicated to their administrative roles that are really
12:53
Speaker 2: dedicated to care coordination. So on the initial stages, it's
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Speaker 2: an intake coordinator who helps guide the parents to the
13:00
Speaker 2: right the evaluation and work up, depending on how much
13:03
Speaker 2: diagnostic information they have before they arrive. Then it's a
13:08
Speaker 2: medical assistant in the early days, as the medical workup
13:12
Speaker 2: is being done and various tests are being ordered. We
13:16
Speaker 2: don't do all the testing in house. We do genetic testing,
13:19
Speaker 2: we do EEGs, but we don't do labs. For example,
13:22
Speaker 2: we don't like blood draws in our clinics, so the
13:24
Speaker 2: medical assystem will facilitate that, often with sometimes outside academic
13:28
Speaker 2: centers or lab facilities. And then we have a scheduling
13:32
Speaker 2: care coordinator. Once that comprehensive treatment plan is developed. That
13:37
Speaker 2: scheduling care corder make sure that every type of service
13:41
Speaker 2: that that family needs is available to them in the
13:46
Speaker 2: right site of service, in the sense that some of
13:49
Speaker 2: those are best delivered in the home because it most
13:51
Speaker 2: generalizes the type of therapy. A clinic is a much
13:55
Speaker 2: more constrained and fixed environment where you're most likely to
13:58
Speaker 2: get good results, which is great. At some point you
14:00
Speaker 2: want to fade that into the home. Some of our
14:02
Speaker 2: services can be done by telehealth, particularly when they're parent facing,
14:06
Speaker 2: not working with the child but only with the parents,
14:08
Speaker 2: and so this care coordinator make sure that all the
14:11
Speaker 2: different components of care are available to the family at
14:15
Speaker 2: the right time, at the right side of service by
14:17
Speaker 2: the right clinician. We do struggle with weightless with some
14:21
Speaker 2: of these things, particularly like primetime hours. A lot of
14:24
Speaker 2: the after school hours are hard to come by, so
14:28
Speaker 2: they kind of manage the wait list as well. So
14:31
Speaker 2: we have those administrative roles, and we also have the
14:34
Speaker 2: clinicians themselves doing care coordination via rounds, so we have
14:40
Speaker 2: every week a dedicated time where the whole team comes together.
14:44
Speaker 2: It's very similar to what's done in academia at rounds
14:48
Speaker 2: or tumor board is another way people kind of think
14:51
Speaker 2: about this, where you bring multiple experts together, you have
14:54
Speaker 2: fifteen cases to review and it's a fascinating exchange where
14:58
Speaker 2: a clinician behavior technician who's working with the child in
15:02
Speaker 2: the home may say, I noticed the child's getting really
15:05
Speaker 2: groggy around three pm. What have we done with as medications?
15:09
Speaker 2: And the physician can adjust the dosage or notice the
15:13
Speaker 2: child's really disregulated around these times. How do we improve
15:16
Speaker 2: the AAC which is alternative or augmentative communication device, so
15:20
Speaker 2: they're able to better communicate and therefore back down on
15:24
Speaker 2: some behaviors. So it's a very collaborative, cool environment where
15:28
Speaker 2: our care coordination really flourishes.
15:31
Speaker 1: God, the complexity you just described there. I'm thinking of
15:33
Speaker 1: a family who doesn't have this, this opportunity to work
15:37
Speaker 1: with the care coordinator, trying to do it all by themselves.
15:40
Speaker 1: It must be a full time job.
15:43
Speaker 2: Yeah, you said it perfectly. You know what made me
15:45
Speaker 2: get into the field, and you mentioned my background. I
15:49
Speaker 2: was a securities analyst on the buy side, trying to
15:53
Speaker 2: figure out, like you know, whether markets or individual kind
15:57
Speaker 2: of areas of healthcare were worth pursuing. And when I
16:00
Speaker 2: spoke to ten families to understand is this venture and
16:05
Speaker 2: autism a worthy one? I heard exactly what you said
16:08
Speaker 2: ten times. It was. The common story is, you know,
16:12
Speaker 2: the two parent working household. One of the two parents
16:14
Speaker 2: leaves the workforce to do all this quarterbacking. It is
16:18
Speaker 2: a challenge. And in the old days, they used to
16:20
Speaker 2: keep a binder where they would have the medical records
16:23
Speaker 2: from the diagnosing psychologist. Give that to the pediatrician. The
16:27
Speaker 2: pediatricians say, hey, go to a GI specialist. They would
16:30
Speaker 2: then get that work up, they would hand that to
16:32
Speaker 2: their ABA team, and so it really is a full
16:35
Speaker 2: time job quarterbacking it. And parents have to get very
16:39
Speaker 2: very smart about what works, what doesn't work, And for
16:43
Speaker 2: their own child, they are a lot of data capture. Hey,
16:49
Speaker 2: when we expose our child of these things, these good
16:51
Speaker 2: things happen or these bad things happen. So they're constantly
16:54
Speaker 2: taking data and figuring out correlations and presenting that back
16:58
Speaker 2: to their clinical team. It is very, very difficult. And
17:01
Speaker 2: what shocked me is you take a condition like oncology,
17:04
Speaker 2: which is and it's a very scary and challenging condition.
17:09
Speaker 2: If we expected patients to navigate between surgery, medication, radiation,
17:15
Speaker 2: and that whole pathway themselves, it would just be I
17:19
Speaker 2: mean that that would make no sense. The algorithm is
17:23
Speaker 2: that you get imaging work up, biopsy, genetic workup, and
17:28
Speaker 2: based on that you're put into a workflow. And the
17:31
Speaker 2: patient's job is to recover and heal and focus on
17:35
Speaker 2: getting better as opposed to deciding what should I be
17:39
Speaker 2: getting at what time? Is now the right time for
17:41
Speaker 2: me to get surgery or It's just it's crazy to
17:44
Speaker 2: think that that would be the expectation in cancer care,
17:48
Speaker 2: yet we expect that of families and autism, and so
17:53
Speaker 2: that's why we built we built the company. It just
17:55
Speaker 2: feels felt like at some point in the future, near future,
17:58
Speaker 2: I think we'll look back and say, it just very
18:00
Speaker 2: unreasonable to expect parents to be parents and guide their
18:04
Speaker 2: their children through through such a fragmented ecosystem.
18:07
Speaker 1: Well, that's a it's funny. I was just thinking about
18:09
Speaker 1: the word ecosystem for my next question, how to how
18:12
Speaker 1: do patients and families enter the CORDICAI ecosystem? You know, where,
18:16
Speaker 1: where were where were they? And how do they wind
18:18
Speaker 1: up on your doorstep?
18:21
Speaker 2: A lot of them find uh, find us themselves. This
18:25
Speaker 2: is a very active group that are trying to define
18:28
Speaker 2: the right therapies for them. And they come either pre diagnosis,
18:33
Speaker 2: like they've noticed a a challenge in meeting developmental milestones,
18:40
Speaker 2: or a preschool teacher, their pediatrician may have said something
18:43
Speaker 2: to them and they're trying to find the right the
18:46
Speaker 2: right next step, or sometimes it's they have been in
18:50
Speaker 2: the system, ping ponging between say lots of A B A.
18:54
Speaker 2: They've been an academic center, ping pong between different medical
18:57
Speaker 2: providers and the child is ten, twelve, fourteen, and they're
19:02
Speaker 2: continuing to observe challenges, and so they find us that way.
19:06
Speaker 2: That's a good chunk. Maybe half of our patients just
19:09
Speaker 2: they themselves kind of find us through word of mouth
19:12
Speaker 2: or online searches, just you know, the communities they're a
19:16
Speaker 2: part of. We also get a lot of referrals from
19:20
Speaker 2: primary care pediatricians, So PCPs in pediatrics are used to
19:27
Speaker 2: having a roster of developmental pediatrician specialists or pediatic neurologists
19:32
Speaker 2: to refer a whole range of conditions. So autism is
19:36
Speaker 2: about half of what we see, but the other half
19:38
Speaker 2: is a whole range of developmental neurologic conditions, everything from ADHD, headache, seizure,
19:46
Speaker 2: down syndrome, rare genetic syndromes, speech delay, motor delay. And
19:52
Speaker 2: so we like to be thought of for those primary
19:55
Speaker 2: care pediatricians as a trusted referral source for anything develop
20:00
Speaker 2: mental neurologic. They don't have to work up the odds
20:02
Speaker 2: and they don't have to think it's anything that they
20:05
Speaker 2: would feel like we could be helpful. We encourage them
20:09
Speaker 2: to send it's hard to be a primary care pediatrician,
20:12
Speaker 2: you see lots of stuff coming your way. I mean
20:14
Speaker 2: it's infectious things, orthopedic things, developmental things, psychiatric, and so
20:21
Speaker 2: we like to say, have the maybe twenty five percent
20:24
Speaker 2: that you see that falls under kind of neurodevelopment, send
20:27
Speaker 2: them to us and we'd love to help. And we
20:29
Speaker 2: have this feedback loop between a specialist physician and the
20:32
Speaker 2: PCP to show them you post that referral, how is
20:36
Speaker 2: the child doing in our hands? Those are the primary too.
20:40
Speaker 2: We are starting to get some collaboration with health plans
20:44
Speaker 2: where health plans have done the work of claims analysis
20:49
Speaker 2: and found that this holistic model saves them a lot
20:51
Speaker 2: of money compared to I can go through kind of
20:54
Speaker 2: the components of savings, but they found that as fifty
20:58
Speaker 2: to sixty percent savings per member per year basis. So
21:02
Speaker 2: they are increasingly sending members to us. But parents don't
21:07
Speaker 2: always use their health plan uh to find resources I
21:10
Speaker 2: could see, So it's own. Yeah, it's only one pair,
21:12
Speaker 2: and health plans are kind of made aware of these
21:14
Speaker 2: situations they send them to us. So it's probably no
21:16
Speaker 2: more than ten to twenty percent of our of our
21:18
Speaker 2: intake today is through that channel.
21:21
Speaker 1: Well, I think we'll come back maybe to the numbers
21:24
Speaker 1: and the finances and the payments, but just thinking about
21:26
Speaker 1: your footprint and your scale. What states are you guys
21:29
Speaker 1: in today and where do you aspire to be And
21:32
Speaker 1: I don't know the next three to five years.
21:36
Speaker 2: We're in eight states today, so kind of west coast, Midwest, Northeast,
21:42
Speaker 2: in North Carolina, in the South. And the pattern has
21:47
Speaker 2: been when we left, we started in California, so that's
21:51
Speaker 2: our largest footprint, it's about forty percent of our center.
21:54
Speaker 2: Is the starting to decrease as a percentage of the total.
21:59
Speaker 2: And then as we expanded across the country. It was
22:02
Speaker 2: kind of for two reasons. One is we found a
22:04
Speaker 2: physician who was very like minded, similar profile to my
22:09
Speaker 2: co founder and wife Suzanne, to ped atronologists, developmental pediatrician
22:14
Speaker 2: who was practicing in say academia or a multi physician group,
22:19
Speaker 2: saying that, Hey, it's really challenging for me to see
22:22
Speaker 2: these families do a work up and then not being
22:26
Speaker 2: able to really engage in that follow through. I said,
22:29
Speaker 2: referrals out for aba OTPT for school care. I sent
22:34
Speaker 2: them to other specialists and some percent of the time
22:37
Speaker 2: they're able to make that happen. They come back there successful,
22:40
Speaker 2: but the vast majority of the time they're not, and
22:43
Speaker 2: I only hear of the feedback when the parent comes back,
22:45
Speaker 2: and it's very difficult for me to really make the
22:50
Speaker 2: kind of gains that I'd like. And so we had
22:52
Speaker 2: physicians across the country reach out to us in Texas,
22:56
Speaker 2: in New Jersey, in areas. So those were kind of
23:02
Speaker 2: reasons we entered those states. Illinois very physician driven, and
23:07
Speaker 2: then we would build around those physicians this interdisciplinary care team.
23:12
Speaker 2: The other way that we started to expand was with
23:14
Speaker 2: health plans. As we got to know more health plans,
23:18
Speaker 2: they were saying, we see this problem of fragmentation for
23:21
Speaker 2: our members, this provider ecosystem where we're seeing for a
23:24
Speaker 2: given member, claims coming in from fifteen different providers and
23:27
Speaker 2: look like anyone is talking to each other. See a
23:29
Speaker 2: lot of overutilization from those inductal provider application. I'm sure
23:33
Speaker 2: a lot of duplication. Absolutely, medication is overused because a
23:40
Speaker 2: physician doesn't see that they're also getting other therapies somewhere else.
23:43
Speaker 2: And so in multiple instances, we were pulled into states
23:48
Speaker 2: by health plans. So Massachusetts, North Carolina were places where
23:53
Speaker 2: it was really about the plans pulling us in Arizona.
23:57
Speaker 2: Now we had a small footprint. We're massively expanding because
24:00
Speaker 2: of large health plan collaborations, and I think that will
24:04
Speaker 2: be our future. We are only now expanding where health
24:08
Speaker 2: plans are saying, hey, this makes a lot of sense.
24:11
Speaker 2: We're going to construct a novel incentive system value based care,
24:17
Speaker 2: and specifically in value based care, it's a whole child,
24:19
Speaker 2: whole person, value based care where we integrate medical and
24:22
Speaker 2: behavioral and reward coordination of care, reward permember per year
24:29
Speaker 2: savings versus the conventional fee for service model. And we're
24:33
Speaker 2: seeing receptivity across the country. I mean there's no plan
24:36
Speaker 2: we talk to that says, yeah, this makes no sense.
24:39
Speaker 2: Every plan, every plan does this in so many areas
24:43
Speaker 2: like kind of kidney disease and diabetes and heart failure
24:47
Speaker 2: and orthopedics. I mean, the movement is to integration, coordination,
24:52
Speaker 2: paying for value, paying for quality, and so it's really
24:56
Speaker 2: about a plan's kind of infrastructure capabilities to pull this off.
25:03
Speaker 2: And so our hope is over the next three to
25:05
Speaker 2: five years, we are in most major metro areas across
25:09
Speaker 2: the country and also have a virtual version of our
25:14
Speaker 2: program in all fifty states, and that's actively in development.
25:18
Speaker 2: We have that virtual version in all the eight states
25:20
Speaker 2: we operate in today, so you could anywhere in the
25:22
Speaker 2: state of Massachusetts or anywhere in state of California and
25:25
Speaker 2: access us virtually. We're looking to expand that that footprint,
25:29
Speaker 2: and it really comes from this this ethos. Why I
25:33
Speaker 2: feel compelled to expand is I've heard too many parent
25:37
Speaker 2: stories from parents and states we don't operate in countries
25:41
Speaker 2: we're not in of how challenging the journey is otherwise,
25:45
Speaker 2: like they'll hear from the FDA, you know six months ago,
25:48
Speaker 2: luc of orn is the panacea that you should be
25:52
Speaker 2: thinking about. I don't think they quite said that, but
25:54
Speaker 2: that was the misinterpretation. And so parents everywhere are like, hey,
25:58
Speaker 2: should this be a part of my child's program? And
26:01
Speaker 2: if you don't have expert physicians to say, this is
26:04
Speaker 2: really about fully metabolism, which needs to be studied the
26:06
Speaker 2: right way for your child, and if so, then it's appropriate.
26:09
Speaker 2: If not, it shouldn't be used. But that stuff happens
26:12
Speaker 2: all the time with like should my child be diagnosed
26:14
Speaker 2: with ADHD and on a stimulant? Should we be thinking
26:18
Speaker 2: about nutrition differently? And get lab work ups are they
26:22
Speaker 2: do have a mitochondrial difficially, it's very common in this
26:25
Speaker 2: patient population. Being able to solve those problems at scale
26:29
Speaker 2: for parents around the country is really a kind of
26:32
Speaker 2: underlying driving force for me and our team.
26:36
Speaker 1: Maybe just going back to one thing you mentioned around payers,
26:39
Speaker 1: what does the mix like look like between government and
26:44
Speaker 1: private commercial pay.
26:46
Speaker 2: We're about seventy five twenty five now. We were seventy
26:50
Speaker 2: five commercial and twenty five Medicaid. And within that Medicaid
26:56
Speaker 2: it's mostly managed Medicaid, so we do very little with
26:59
Speaker 2: state directly. We mostly work with managed care intermediaries. That
27:05
Speaker 2: Medicaid side is rapidly growing for us because in the
27:09
Speaker 2: past twelve months, more and more plans and state governments
27:15
Speaker 2: have realized that this is a massively growing spend item
27:19
Speaker 2: which we may get to. But it's been the public
27:21
Speaker 2: the topic of multiple articles over the past several months,
27:26
Speaker 2: and a lot of questions of like what's the right
27:28
Speaker 2: way to balance their fiscal responsibility with taking care of
27:33
Speaker 2: families that we owe you we have an obligation to.
27:36
Speaker 2: But we're seeing that medicaid side of our business grow
27:39
Speaker 2: rapidly because they're looking for a solution that best manages
27:43
Speaker 2: the needs of families with the right financial way to
27:47
Speaker 2: do it.
27:48
Speaker 1: Well, let's talk about that kerfuffle and the media. You know,
27:52
Speaker 1: there was the Wall Street Journal article about Indiana and
27:54
Speaker 1: some of the bad actors on the medicaid side. And
27:58
Speaker 1: I guess, what's what's your perspective on on maybe that
28:02
Speaker 1: article and the issue And then you know, I think
28:04
Speaker 1: that maybe the secondary question is around the challenge between
28:08
Speaker 1: fee for service incentivizing things versus you know, value based care.
28:13
Speaker 1: I think maybe if you cover both those buckets, we
28:16
Speaker 1: we wand up in the same and an interesting spot.
28:19
Speaker 2: Yeah, they're super related. And it's a really good question
28:23
Speaker 2: and insight of yours that that it's the second issue
28:27
Speaker 2: fee for service and incentives around it that drives the first.
28:31
Speaker 2: So that the the articles did a really nice job
28:33
Speaker 2: of highlighting some real challenges. I mean some are outright
28:37
Speaker 2: fraud and true abuse. So and there have been stories
28:43
Speaker 2: in Minnesota where where companies are fabricating actually the delivery
28:49
Speaker 2: of services, paying families to say that they were in
28:53
Speaker 2: receipt of services. That's obviously outright fraud. The Indiana story
28:58
Speaker 2: spoke about, you know, a company that realized that they
29:02
Speaker 2: were just getting paid a percent of their build rate,
29:05
Speaker 2: no matter what that build rate was. And so went
29:07
Speaker 2: from you know, reasonable one hundred dollars an hour for
29:12
Speaker 2: for for deliver for care delivered to three hundred dollars
29:15
Speaker 2: to six hundred dollars and up and up and up,
29:17
Speaker 2: and that's that's clearly like just abusing a system. I
29:21
Speaker 2: think that's the minority, truly, the minority of cases, Like
29:25
Speaker 2: it's a one to two percent issue. The ninety eight
29:29
Speaker 2: percent issue is over utilization, which is kind of what
29:33
Speaker 2: I started this conversation with. We approached it clinically. We
29:38
Speaker 2: just didn't feel like as physicians, every child needed lots
29:42
Speaker 2: and lots of ABA. It should be part of an
29:45
Speaker 2: overall care plan. It should be dosed based on the
29:48
Speaker 2: needs of that child and compared to all their other needs.
29:52
Speaker 2: Like if the major issues around GI health and metabolic
29:57
Speaker 2: workup and mitochondrial supplements and they're seizure issues, sleep issues
30:03
Speaker 2: like that needs to be attended taken care of in
30:06
Speaker 2: the context and an ABA program that's that's dosed appropriately.
30:09
Speaker 2: So we were thinking about it purely clinically. But the
30:13
Speaker 2: consequence of that on the economic side is then you
30:16
Speaker 2: need a lot less A B A. And so what
30:20
Speaker 2: has happened to drive up spend is it's been rampantly
30:25
Speaker 2: over utilized and indiscriminately. I think there are children who
30:31
Speaker 2: certainly need that level, but there are many children who don't,
30:35
Speaker 2: and that's been kind of the root cause of the
30:39
Speaker 2: of the problem. In the journals articles, that's talking about
30:42
Speaker 2: a four x increase and spend for more most states
30:45
Speaker 2: over the past three years, and that's four hundred percent
30:48
Speaker 2: in three years. Is very difficult for any state budget
30:51
Speaker 2: to sustain. To your second question, that it ties to
30:56
Speaker 2: that perfectly, and that if the system incentivizes via a
31:00
Speaker 2: fee for service structure, that is, you only get paid
31:03
Speaker 2: for every hour you bill, then of course as a provider,
31:08
Speaker 2: you are incentivized to build the most number of hours.
31:12
Speaker 2: And if the response of health plans or states to
31:16
Speaker 2: that is to cut the rate and say, hey, we're
31:18
Speaker 2: paying X and now should pay eight percent of X,
31:22
Speaker 2: it drives the behavior in the wrong direction, which is
31:25
Speaker 2: the provider saying, hey, for me to be sustainable, I
31:29
Speaker 2: now have to build twenty five percent more than it
31:33
Speaker 2: was before in volume. So it's just like downward spiral.
31:37
Speaker 2: It also leads to a downward spiral and talent. If
31:39
Speaker 2: you're getting paid eighty percent less per hour, it's like, well,
31:42
Speaker 2: I can't hire the experienced clinicians who demand a higher salary.
31:48
Speaker 2: You're committed to the field for years. I got to
31:50
Speaker 2: hire the dabbler who is new to the field and
31:53
Speaker 2: may only last six months or a year, but they're
31:56
Speaker 2: taking this on at a sub market wage. That downward
32:02
Speaker 2: spiral is awful because it reads leads to real negative
32:05
Speaker 2: clinical consequences for families. The only way to fix this
32:11
Speaker 2: is to change the incentive structure, which is you have
32:14
Speaker 2: to reward value, and you have to reward holistic value.
32:19
Speaker 2: That is not just behavioral outcomes that would be treated
32:23
Speaker 2: with ABA. You've got to reward all the outcomes that
32:26
Speaker 2: parents would care about, which is sleep and feeding and
32:30
Speaker 2: all the things that parents come forward with with a
32:32
Speaker 2: young child. And then as that child ages, reward getting
32:37
Speaker 2: them into school, successfully supporting them while they're in school,
32:41
Speaker 2: and over a lifetime, getting them into college, getting them
32:45
Speaker 2: appropriate vocational training with the right job, getting them into
32:48
Speaker 2: independent living. All those things matter as opposed to the
32:52
Speaker 2: current system, which heavily incentivizes lots of ABA at a
32:56
Speaker 2: young age and then fades away support as the as
33:00
Speaker 2: the child ages into into adolescents and into adulthood. So
33:06
Speaker 2: it's very fixable because you just have to know what's
33:11
Speaker 2: very easy to know what to families and children and
33:15
Speaker 2: adults with autism need and reward those things and then
33:20
Speaker 2: allow the provider ecosystem to respond to those incentives. This
33:25
Speaker 2: should not be a a tie rate against private equity
33:30
Speaker 2: and healthcare because that's an easy thing to do. It's
33:34
Speaker 2: it's actually more about private equity's driven a lot of capital,
33:36
Speaker 2: Whi's driven a lot of access, which has been good
33:39
Speaker 2: for the field. Actually more centers, more availability. I think
33:43
Speaker 2: it's gotten more therapists into into the field. What's broken
33:46
Speaker 2: is the incentive system. And if you fix the incentive system,
33:50
Speaker 2: that capital will will be attracted to the right kinds
33:54
Speaker 2: of outcomes. And I would encourage more capital here because
33:58
Speaker 2: it's still dwarfed by the fields I came from, like
34:01
Speaker 2: cardiology on college. It's nothing compared compared to those fields,
34:05
Speaker 2: and we need more. So this is not an anti
34:07
Speaker 2: private equity or growth equity in those things. It's it's
34:11
Speaker 2: about fixing the incentive so that capital will be put
34:13
Speaker 2: to work in the right ways.
34:15
Speaker 1: Well, maybe we'll come back to the capital discussion. You know,
34:19
Speaker 1: I'll put my finance happ back on in a couple
34:21
Speaker 1: of minutes. But thinking about the incentive structure, I mean,
34:24
Speaker 1: if you could change one thing today, or ask Washington
34:27
Speaker 1: to change one thing today, what would it be.
34:29
Speaker 2: It's it's payment for value, payment for value. That that
34:34
Speaker 2: word has been kind of it's been used a lot
34:37
Speaker 2: in the past ten years. Is the panacea value based care?
34:40
Speaker 2: It was big initiatives out of the CMMI, which is
34:43
Speaker 2: innovation inside of CMS. And I think because of something's
34:48
Speaker 2: gone wrong around providers taking risk, that risk not being
34:55
Speaker 2: calibrated properly, either being over awarded or underrewarded for it.
34:58
Speaker 2: It's kind of I think folks have said it's not
35:02
Speaker 2: the panacee era. It may be like even a bad word,
35:05
Speaker 2: but in this context of autism, when you compare fee
35:08
Speaker 2: for service, where providers are rewarded today for driving as
35:12
Speaker 2: much volume as they can, a pivot to saying hey,
35:16
Speaker 2: we're going to pay for the outcomes that matter to families,
35:20
Speaker 2: just value based care. That that is a single biggest
35:22
Speaker 2: thing that and the federal government doesn't really control that
35:26
Speaker 2: much in policy, but what they can do is issue
35:29
Speaker 2: guidance statements and encourage states commercial health plans, manage Medicaid
35:35
Speaker 2: organizations to pay for value. That's the single biggest thing
35:40
Speaker 2: that the field could really use.
35:43
Speaker 1: Maybe switching back to that capital discussion, you guys raised
35:46
Speaker 1: some capital back in twenty twenty four. I believe that
35:49
Speaker 1: was your last round. What did you guys earmark that for?
35:52
Speaker 1: And I guess you know what are your capital needs today?
35:56
Speaker 1: And sitting here at the start of twenty twenty six.
35:59
Speaker 2: Yeah, we've been fortunate in raising sort of every eighteen
36:05
Speaker 2: to twenty four months starting back in twenty nineteen, and
36:07
Speaker 2: so did a Series D extension last year that was strategic.
36:11
Speaker 2: We had a large family office with a connection to
36:13
Speaker 2: autism come in and then Morgan Health which is JP
36:16
Speaker 2: Morgan's healthcare innovation arm. And in all cases the use
36:21
Speaker 2: of proceeds has been kind of similar. It's infrastructure building
36:25
Speaker 2: a lot around technology. We have a very large tech
36:28
Speaker 2: team that's done a lot smaller with AI, but it's
36:32
Speaker 2: really enabled us to do all the care coordination, all
36:34
Speaker 2: the complex data storage across all these different sources. But
36:41
Speaker 2: tech is one area. Also, infrastructure around learning and development, hiring,
36:48
Speaker 2: clinical quality publications were one of the few in the
36:51
Speaker 2: field that puts out academic medical center type publications every
36:56
Speaker 2: year or so. So that's been one purpose and the other
37:00
Speaker 2: has been expansion. So uh, as we expand the new states,
37:04
Speaker 2: the capital we put in before those sites become profitable.
37:08
Speaker 2: In terms of future capital needs, we're we're very close
37:11
Speaker 2: to the point of operating sustainably. We we raised a
37:16
Speaker 2: fair bit of capital over our you know a through
37:20
Speaker 2: d uh, and so really an imperative that that our
37:23
Speaker 2: leadership team is set for ourselves is use this capital
37:27
Speaker 2: to operate sustainably. We may go out to the markets
37:30
Speaker 2: again you sometime end of this year, early next year,
37:34
Speaker 2: but it will be growth beyond our existing footprint, not
37:38
Speaker 2: to uh, not not to fund the cash burn of
37:43
Speaker 2: the business, but really around kind of that next phase
37:45
Speaker 2: of explosive growth. As we more and more see this
37:50
Speaker 2: whole child, whole person care model become increasingly the standard
37:55
Speaker 2: of care.
37:56
Speaker 1: When you scale and and you know, go to a
37:58
Speaker 1: new market, what's the biggest friction in terms of building
38:02
Speaker 1: out that that presence or franchise is it is it
38:05
Speaker 1: the waber or are the care coordinators you know where
38:09
Speaker 1: where where is it the hardest to build the next center?
38:13
Speaker 2: I mean the hardest actually is the payer relationship on
38:16
Speaker 2: the front. Really yeah, it's establishing with the health plan
38:22
Speaker 2: the right way to to get paid, incentivizing the things
38:26
Speaker 2: we've been talking about, whole child, whole family value. Once
38:33
Speaker 2: we get that in place, it's a pretty standard playbook.
38:36
Speaker 2: We work with the plan on where do they have
38:38
Speaker 2: members that are underserved, look at those markets. Hire this
38:43
Speaker 2: kind of core group of talent, and that's gotten more
38:47
Speaker 2: and more replicable. And we found that physicians and nurse
38:50
Speaker 2: practitioners have an interest in this area like being part
38:54
Speaker 2: of a broader faculty. We have about thirty five medical
38:59
Speaker 2: faculty and get to bounce ideas off each other. They're
39:02
Speaker 2: really part of integrated care team. Each physician or NP
39:06
Speaker 2: also gets to you know, they're the quarterback of their
39:08
Speaker 2: center around overseeing anywhere from one hundred to three hundred
39:12
Speaker 2: clinicians of different specialties to take care of their uh
39:17
Speaker 2: their patients post referral. So hiring has not been a
39:22
Speaker 2: huge hurdle. It's something that that you know comes in
39:26
Speaker 2: a matter of months. In real estate, the build out
39:30
Speaker 2: of custom centers we've developed a playbook for We've looked
39:34
Speaker 2: at other companies that have done this well, like Oak
39:36
Speaker 2: Street Health part of the CVS portfolio, CBS investor of
39:40
Speaker 2: ours also so looked at like how do they build
39:43
Speaker 2: out these these facilities that have really appealing layout and
39:50
Speaker 2: footprint for children and families or inviting also have all
39:54
Speaker 2: the requirements of of gym equipment that bolts into the
39:58
Speaker 2: ceiling and outdoor place space. And we have a playbook
40:02
Speaker 2: at this point to find space and build it out.
40:04
Speaker 2: It does take some time, i'd say, from the from
40:07
Speaker 2: the moment we say hey, we want to be in
40:08
Speaker 2: a state and the payers have agreed, takes about six
40:12
Speaker 2: to nine months to get the full team and the
40:15
Speaker 2: site assembled. But at this point has become a fairly
40:20
Speaker 2: kind of tried and true playbook on how to how
40:22
Speaker 2: to stand them up.
40:24
Speaker 1: You know, going back to that friction with payers, you know,
40:26
Speaker 1: what do they misunderstand about the category? And I guess what?
40:30
Speaker 1: And I'm sure this varies depending on who it is,
40:32
Speaker 1: but what resonates with them that maybe gets them across
40:36
Speaker 1: that that hurdle is it the total cost of care?
40:39
Speaker 1: Is it fewer visits, you know, lower medication usage. You
40:42
Speaker 1: know what seems to really resonate with them.
40:45
Speaker 2: Yeah, And I wouldn't blanket all pairs with with statement
40:51
Speaker 2: is I mean some are exceptionally and many are exceptionally good,
40:55
Speaker 2: and they're incredibly great people at plans who really understand
40:59
Speaker 2: the problem and are wonderful to work with. We have
41:01
Speaker 2: several payers on our cap table six and then even
41:07
Speaker 2: beyond that, we have many that we worked probably another
41:10
Speaker 2: ten to twelve or so. We're absolutely wonderful to work with.
41:13
Speaker 2: And what do they see. I'd say it's two things. One,
41:19
Speaker 2: they see a member experience that is fragmented and challenging,
41:23
Speaker 2: and the best payers now believe they exist to make
41:29
Speaker 2: that better. They believe deeply in improving the customer experience.
41:33
Speaker 2: I mean one I'll call out just because they mentioned
41:35
Speaker 2: this at their investor day and then made this a
41:39
Speaker 2: highlight as they approach their plan sponsors is CBS Etna.
41:45
Speaker 2: At their investor day in December, their COO used time
41:50
Speaker 2: in a relatively short allocated window to talk specifically about
41:53
Speaker 2: acciden care and making it better and coordinating it and
41:57
Speaker 2: recognize the friction. And they also speak a lot about
42:00
Speaker 2: about just overall their role in healthcare is to make
42:03
Speaker 2: the customer experience and navigation better. And so there are
42:08
Speaker 2: many other plans who similarly have this ethos of you know,
42:12
Speaker 2: we've got to get better at improving how consumers access
42:18
Speaker 2: the healthcare system. And so this is a very clear
42:21
Speaker 2: area where it's broken and needs to get better. And
42:25
Speaker 2: the other is around cost and they look at three
42:29
Speaker 2: buckets of spend and autism and some of this is
42:32
Speaker 2: our education with them, but a lot of faumnists themselves.
42:35
Speaker 2: And one is ABA regalization. Our average is nine to
42:38
Speaker 2: ten hours a week. A lot of them are seeing
42:41
Speaker 2: providers at thirty five hours a week, so they're seeing
42:44
Speaker 2: like huge opportunity there. It's a big multiple four x.
42:49
Speaker 2: Another is around admissions that particularly for moderate and severe phenotypes.
42:54
Speaker 2: As those children age, the parents can struggle with having
42:59
Speaker 2: the child at help. They're self injurious, hert others, the
43:05
Speaker 2: furniture around, and so a family will feel like, hey,
43:07
Speaker 2: this is overwhelming, show up in the ED. Then get
43:10
Speaker 2: admitted to a residential facility. And with a coordinating care model,
43:15
Speaker 2: we've shown that we can reduce admissions by a factor
43:17
Speaker 2: of ten x. It's not a high percentage on an
43:19
Speaker 2: absolute basis, it's maybe one to three percent of children
43:22
Speaker 2: with autism get admitted in a year, but we're finding
43:25
Speaker 2: point one percent in our population. And then the third
43:30
Speaker 2: is the cost of academics medical centers, which continues to
43:34
Speaker 2: kind of go up because they're very expensive. That a
43:36
Speaker 2: lot of negotiating leverage, and that's where most of the
43:38
Speaker 2: specialty care is today. So if a child is trying
43:41
Speaker 2: to get a specialty neurology care, sleepcare, gi genetics inside
43:46
Speaker 2: of great institutions Boston Children's Hospital, Duke UCLA, they're very,
43:51
Speaker 2: very expensive and so being able to find alternative sites
43:56
Speaker 2: of service to that. But you take those factors together
44:00
Speaker 2: with our model, we can show fifty sixty percent savings
44:04
Speaker 2: on a permember per year basis, and that's a driver
44:07
Speaker 2: for them to work with us.
44:09
Speaker 1: Maybe just thinking about your model a little bit more,
44:11
Speaker 1: and I'll put my analyst hat back on. You know,
44:14
Speaker 1: where's the leverage in the business model? And I guess
44:17
Speaker 1: you know from a CEO perspective, what internal KPIs are
44:20
Speaker 1: you most focused on day to day managing your growth
44:24
Speaker 1: and the business as a whole.
44:26
Speaker 2: Yeah, we focus on site sustainability, So there's a target
44:32
Speaker 2: called it contribution margin. So the contribution of each site
44:37
Speaker 2: there's a very reasonable level. I mean we think that
44:40
Speaker 2: if you get too high there, then you're compromising on something.
44:44
Speaker 2: You're either getting paid too much from your health plans
44:46
Speaker 2: and that will come back at some point, or you're
44:51
Speaker 2: overworking your clinical team and they will burn out and leave.
44:54
Speaker 2: But there's a sweet spot which is a very healthy
44:57
Speaker 2: contribution margin of each center that we that we strive
45:02
Speaker 2: for and then the that the other is our corporate
45:06
Speaker 2: overhead UH and we want to make sure that the
45:08
Speaker 2: aggregate contribution margin across all of our centers will end
45:12
Speaker 2: this year around close to twenty nine centers or so,
45:14
Speaker 2: you know, the contribution margin from all of those in
45:16
Speaker 2: aggregate more than offsets are our corporate spend. In the
45:20
Speaker 2: early days, we spent a lot. We're building a lot
45:23
Speaker 2: of tech, a lot of people oriented uh UH infrastructure,
45:29
Speaker 2: a lot of FP and a but with with AI
45:33
Speaker 2: and and good use of AI from everything from scheduling
45:36
Speaker 2: to revenue cycle management, which is how we interface with
45:38
Speaker 2: payers for aths and going, how we do development itself,
45:43
Speaker 2: how we analyze our clinical data and provide clinical insights
45:46
Speaker 2: back to our clinicians. A lot of that that used
45:49
Speaker 2: to be manual is now AI first, and it's been
45:52
Speaker 2: able to really reduce our corporate footprint and overhead. And
45:57
Speaker 2: so those are the metrics we look at a lot,
46:00
Speaker 2: the aggregate sort of contribution margin and the corporate spend
46:03
Speaker 2: and making sure that you know, we're we're on track
46:06
Speaker 2: to UH to self sustainability profitability very soon.
46:11
Speaker 1: So maybe two questions, and I think these dovetailed together.
46:13
Speaker 1: You know, as we think about data and personalization and
46:17
Speaker 1: the rise of AI, how's that going to look different
46:20
Speaker 1: in five years? And I guess the corollary to that is,
46:24
Speaker 1: you know, what's gonna what's Cordica going to look like
46:26
Speaker 1: in five years? What's going to surprise us about your success?
46:29
Speaker 1: And the next couple a couple of years here, I
46:33
Speaker 1: think that you know.
46:34
Speaker 2: The piece that I'm most There are a few sort
46:36
Speaker 2: of applications. One is, if I put into three, it's
46:39
Speaker 2: a there's administrative, there's clinical workflows, and then clinical insights.
46:43
Speaker 2: And it's the third bucket that's kind of the most
46:45
Speaker 2: most cool administrative workflows we're actively using today.
46:49
Speaker 1: And I think sure everybody across the provider landscape is.
46:53
Speaker 2: Yeah, exactly from from scheduling, to how we do insurance
46:58
Speaker 2: interfaces uh, et cetera. On the on the clinical workflows
47:02
Speaker 2: we started to adopt, though I think still in early
47:05
Speaker 2: innings of ambient AI, we use allow with their physicians
47:09
Speaker 2: on how does ambient AI record a conversation or witness
47:14
Speaker 2: a conversation between a family and a physician uh, and
47:17
Speaker 2: then take all of that data put it into a
47:19
Speaker 2: note and an action plan. It's a little harder, actually,
47:23
Speaker 2: it's a lot harder when you've got a therapist working
47:26
Speaker 2: with a child in a gym and there are other
47:28
Speaker 2: kids around, and that kind of ambient AI recording is
47:31
Speaker 2: something we haven't done as much of yet, but I
47:33
Speaker 2: think are you looking forward to to getting into There's
47:36
Speaker 2: some vendors doing some work in that area too, But
47:40
Speaker 2: the one that I'm most intrigued about is the clinical
47:44
Speaker 2: insights that we can gather and use them to phenotype
47:49
Speaker 2: and determine the appropriate care plan for each child. So
47:53
Speaker 2: right now, the physician is kind of the main overseer
47:56
Speaker 2: of care or nurse practitioner is receiving so much information.
48:00
Speaker 2: There's like lab data, genetic data and EEG which run.
48:04
Speaker 2: There's history from the parents, there are real time updates
48:07
Speaker 2: from the parents, clinician, input from the behavioral team, the
48:11
Speaker 2: speech TMOT team, et cetera, the school system, and they're
48:15
Speaker 2: they're synthesizing all of this and in their mind kind
48:18
Speaker 2: of categorizing each child into a phenotype. And they're very big,
48:24
Speaker 2: standardized phenotypes that are in the d s M five
48:27
Speaker 2: level one, two, three of autism, but they're much more
48:30
Speaker 2: refined phenotypes. Like all clinicians will have kind of probably
48:33
Speaker 2: one of dozens of buckets, they put a child in
48:35
Speaker 2: two and say, okay, based on this, this is the
48:37
Speaker 2: right therapy for this child right now. And the future
48:42
Speaker 2: is having all that data in one place and using
48:48
Speaker 2: tech uh to understand what is the phenotype of that
48:52
Speaker 2: child at that time and therefore what are the optimal
48:55
Speaker 2: set of therapies. And it's a real personalization, personalized medicine
49:00
Speaker 2: of autism that we have in many other fields of
49:03
Speaker 2: medicine and that we'll be here very soon. What you
49:07
Speaker 2: need to pull this off is access to all that data,
49:12
Speaker 2: and you need access to a broad care team. So
49:14
Speaker 2: if the action is more on the medical side, you
49:16
Speaker 2: can implement that. If it's a specific type of behavioral intervention,
49:21
Speaker 2: you've got that. If it's OT and fine motor skills,
49:26
Speaker 2: you know, that's in your toolkit. But the future of
49:28
Speaker 2: using AI to personalize care and know and what are
49:33
Speaker 2: the triggers that are causing certain behaviors and how can
49:37
Speaker 2: you modify those That's that's really the future. Because it's
49:41
Speaker 2: such a data rich field. I struggle sort of thinking
49:45
Speaker 2: about other fields of medicine that have so much data
49:49
Speaker 2: to bring to bear in a treatment plan. I mean,
49:52
Speaker 2: ecology is very data rich, but it's a codified set
49:56
Speaker 2: of data. Like you've got a lot of gene expression
50:00
Speaker 2: imaging data, but it all can sorted, be put in
50:02
Speaker 2: one place and you know, analyzed. This is such a
50:08
Speaker 2: broader range of data that's environmental factors and so many things.
50:12
Speaker 2: It kind of boggles the mind on how much would
50:16
Speaker 2: need to be analyzed to construct these phenotypes and optimal
50:19
Speaker 2: developmental trajectories.
50:21
Speaker 1: It's really well said. I don't think I appreciated how
50:23
Speaker 1: multi modal your data is in this in this space,
50:28
Speaker 1: you know, relative to like something like oncology or cardio.
50:31
Speaker 1: That's that sort of thing. That was a great explanation.
50:33
Speaker 2: Thank you, Yeah, thanks. It's something that from the very beginning,
50:37
Speaker 2: we put a lot of emphasis in is creating a
50:42
Speaker 2: data warehouse. We had an early pilot with health Lake,
50:45
Speaker 2: which is an AWMSIS product. Yeah, exactly, so we were
50:50
Speaker 2: There was a white paper we put together with them
50:51
Speaker 2: in twenty twenty one where I mean from our inception
50:55
Speaker 2: we knew we were sitting on this an incredibly valuable
50:58
Speaker 2: data set, and we have built it to now be
51:00
Speaker 2: thirty thousand patients spanning everything from their genetic sequencing to
51:06
Speaker 2: years and years of behavioral outcomes data what meds were
51:09
Speaker 2: they on with their loud show? And it shows some
51:12
Speaker 2: really cool correlations, But to date those have been largely
51:16
Speaker 2: you know, our biostatistical team going in asking a question
51:20
Speaker 2: with a physician like, hey, did this particular you know,
51:23
Speaker 2: genetic polymorphism, how did it correlate with outcomes over multiple years?
51:27
Speaker 2: They ask a question standard research, Now you can tap
51:33
Speaker 2: AI into this and how to draw all sorts of
51:36
Speaker 2: hypotheses from such a massive data set. So that's the
51:41
Speaker 2: future that I'm really excited about.
51:44
Speaker 1: That's very well said, and I'm excited to see that
51:46
Speaker 1: future as well. Maybe just to wrap it up here,
51:49
Speaker 1: one of the ways I like to end these discussions
51:51
Speaker 1: is to ask the guest about something for either their
51:53
Speaker 1: personal or professional life that they see as I don't know,
51:56
Speaker 1: a guiding a guiding force, and what they see as
51:59
Speaker 1: their mission. And is there something that comes to mind, Neil,
52:01
Speaker 1: that that you see as maybe guiding what you and
52:04
Speaker 1: Czan s as your your mission in life.
52:06
Speaker 2: Yeah, I really appreciate that question. So I think in
52:10
Speaker 2: both of our families, we came from immigrant families, there
52:14
Speaker 2: was this ethos of be useful, which I thought was
52:18
Speaker 2: really interesting because when Schwarzeger put out his autobiography was
52:23
Speaker 2: titled with with that ours were in our respective languages.
52:28
Speaker 2: I grew up in an Indian household, my wife in
52:30
Speaker 2: a Chinese one, but there was very much this ethos
52:33
Speaker 2: of like we were fortunate around sort of the academic
52:38
Speaker 2: exposures we had. We were fortunate for a lot of
52:41
Speaker 2: education was paid for with scholarships and things. So there
52:44
Speaker 2: was this real desire by my grandfather, who I got
52:50
Speaker 2: to be very close with, and my parents and my
52:53
Speaker 2: wife's folks on you use this to be useful to
52:57
Speaker 2: the world as opposed to just useful to yourself. So
53:01
Speaker 2: it's a lot of what what drives us and Uh,
53:05
Speaker 2: you know, I feel like we're fortunate to have found
53:07
Speaker 2: an area of medicine where we can be really impactful
53:11
Speaker 2: that really needs it, and we've attracted an incredibly cool
53:16
Speaker 2: team around us that's really driven by by the same purpose,
53:20
Speaker 2: including I think a very cool investor syndicate. We have
53:26
Speaker 2: growth and venture investors, and some really cool strategic investors
53:30
Speaker 2: who are health plans, nonprofit health systems, parent groups who
53:36
Speaker 2: are very motivated to change the field. And so yeah,
53:39
Speaker 2: it's really I think what I'm what I'm driven by
53:43
Speaker 2: is just this this hope to be impactful to parents
53:47
Speaker 2: who could use it.
53:49
Speaker 1: Well, I think you guys are doing a great job
53:51
Speaker 1: and I can't wait to see where you guys go next.
53:53
Speaker 1: Thank you so much for sharing that.
53:55
Speaker 2: Oh thank you, Jonathan, really appreciate the opportunity here and
53:59
Speaker 2: fantastic set a quot us. Thank you.
54:01
Speaker 1: Yeah, we'll have to have you on a couple of
54:02
Speaker 1: years see where you are. That's doctor Neil Hattengotti, CEO
54:06
Speaker 1: and co founder of Cordica. Thank you so much for
54:09
Speaker 1: joining us for our latest episode, and please make sure
54:11
Speaker 1: to click the follow button on your favorite podcast app
54:14
Speaker 1: or website so you never miss a future discussion with
54:17
Speaker 1: the leaders in healthcare innovation. I'm Jonathan Palmer, and you've
54:20
Speaker 1: been listening to the Vanguards of Healthcare podcast by Bloomberg Intelligence.
54:23
Speaker 1: Until next time, take care,