Episode Transcript
[00:00:02] Speaker A: Welcome to Align for Impact. I'm your host, Matthew Naylor. I started this podcast because healthcare and leadership both come down to the same thing. Alignment. When people, purpose and performance connect, real impact happens.
On this show, we'll talk with entrepreneurs, brokers and change makers who are challenging what is broken in healthcare and in business and find new ways to make a difference for companies, communities and the people they serve.
So Santos, I really love these conversations because it's about alignment and impact and I think what Rovi Health is doing is all about alignment and impact.
Let's begin our conversation. Just tell, tell us a little bit about yourself. Where are you from? Where'd you go to school? How'd you get into this business? And then we'll talk about Rovi a little bit.
[00:01:05] Speaker B: Yeah, that sounds great. So you know, I am originally from born and raised in New Jersey. I actually grew up in India for a couple years, came back for college, went to the University of Pennsylvania, studied engineering and finance there, ended up spending a couple years in consulting and then just jumped into startups. That was always a passion of mine. I loved building and started off in the fintech side first. So it was at a company called Angellist. They built software for private equity and venture was very early there that grew to run a $4 billion company.
And then I left. I was leading a team of around 30. But you know, for me I really wanted to be very impact oriented. What I did in my life, I think there are a lot of ways to make money, but I wanted to try and change people's lives while doing it. So jumped into healthcare. I thought that was the place I wanted to scale impact to your point and originally started off in the provider space. So is selling to large IDNs. So thank your, you know, Mount Sinai's of the world. Your providence is the world and really helping engage the Medicaid population.
So traditionally one of the hardest to reach populations usually use the ED as the front door and these health systems were losing a lot of money there. So they came in and said hey, can you help get them to high value care?
Learned a lot from that, right? What is, what does value based care actually mean? How do you actually get in front of people and get them to use healthcare how you want to and took a lot of those learnings and said hey, how can I scale this impact even broader than just one single health system? For me that meant going to the payer side and specifically employer based healthcare. There was so much innovation happening. Technology was uniquely allowing us to scale impact much broader. Than was ever possible before. And more importantly, there's this massive pressing need for employers. They needed cost containment. They were willing to experiment. So as a result of that, started Rovi last year.
And, you know, we went through Y Combinator, which was. Which was great, and, you know, just quickly saw market demand. We, you know, scaled to around 30,000 lives in the first three, four months of US being operational. And, yeah, it's been a pretty phenomenal journey, Santos.
[00:03:03] Speaker A: You know, it's interesting, your journey of consulting large company, then spinning out and being a founder, being an entrepreneur, and your first journey on this entrepreneurial path. I'm going to kind of double back on that in a minute here, but tell us a little bit about Rovi. What was the value creation plan? What was the issue that you saw specifically?
And what are you trying to develop and design and build to solve for that problem?
[00:03:36] Speaker B: Yeah. So start by thinking about, you know, healthcare costs are compounding. They're going up, you know, 8 to 10% every single year. And started thinking about why that is. For me, it's fundamentally because healthcare is an inefficient market. In any other market, price and quality are very correlated. So the more you pay for something, you're getting a higher quality of good or higher quantity of services.
Healthcare is one of the only industries that's not like that. You could. You see this all the time. Right. There could be a hospital charging $4,000 for an MRI. That same MRI is available for $600 one block away, both in network.
And people don't know this. It's because people don't shop for care. And that was the fundamental issue that we saw. And our belief was that, okay, people aren't shopping for care because it's hard. You're calling up a bunch of places. You don't know the price, you don't know quality of doctors.
So because it's so hard, what if we just shop for them? If we can get people to optimize based on value, we could put this downward pricing pressure on the market and reduce 30% of healthcare costs right there. So the entire thesis behind why we started Rovi was let's make it an efficient market. Let's start by creating these informed shoppers or doing the shopping for them and put that downward price pressure on the entire industry.
[00:04:46] Speaker A: Sounds great, but sounds like really, really complicated.
[00:04:50] Speaker B: Yep.
[00:04:50] Speaker A: How have you gone about building that, executing on that vision and strategy?
[00:04:56] Speaker B: Yeah. So a lot of it is how the biggest thing is how do you drive engagement from the end patient? Right. Or the End employee.
Historically, if you think about what employees do today, they follow the default referral, right? So they go to their doctor, their doctor says, hey, you know, their doctor might be affiliated with a large health system and they give them a referral to go get a procedure. That referral is always going to be at that really expensive health system and patients are trained to just follow that by default. So the biggest thing that we anchored in on, like how do you actually change this behavior? Is you have to redirect the referral.
And the way to do that really breaks down into a few different elements. First is a massive timing issue.
Like if you think about what we're doing, it's a lot of like care, navigation, advocacy, helping, you know, people make the right decisions. It's not a new concept, but it's been really, really hard to execute on because of the timing issue. You need to get to people before they actually get care.
And if you think about the industry, we're relying on claims data that has a 60, 90 day lag from the time of care. By the time you see it, things are, you know, out the window.
So we solve the timing issue by using clinical data.
We give people their own, you know, RN under who, who is who can be clinical in nature. And we use medical records. Right. So we see when you go to your doctor, you complain about back pain, we predict, okay, you're going to have an MRI next, so let's reach out to you. So that was one part, the other part was really helping inform the decision itself. And that means, you know, giving people price and quality.
I think people don't realize you can get quality for doctors. People don't ask their doctor, right, like, how many times have you performed this procedure? What are your outcome rates?
So what we do is we analyze a lot of claims data and actually give people those type of quality scores, those type of outcome. We can tell you if your doctor's experienced and we can tell you how much your doctor is going to cost. So those are kind of the three elements of just giving people information, bringing it together. That became some of the foundation for how we're able to know, act on this.
[00:06:51] Speaker A: How are you leveraging optimization, integration and data and AI to deliver upon this value creation plan that you're creating to have the impact that you're looking for with the client?
[00:07:08] Speaker B: Yeah, I think a lot of this starts with just the data side of it. Right. You know, again, to really do well, you have to combine medical records, you have to combine claims, but there's so many Other data sources that exist, you can tell when someone goes to the emergency department. You can plug into what's called ADT feeds, Admission, discharge and transfer feeds. You can get labs from people. There are all of these disparate data sources that exist out there. And the first thing we're doing is just unifying them. How do we create the best longitudinal record of a patient that we possibly can?
On top of that data layer, you have to start figuring out how do you act. Right. Just because you know that someone has a propensity to go to the ed, let's say what do you do about it? And that's where AI I think has been really, really helpful. Historically, population health has worked well to identify high cost risk. But the challenge has always been what do you do once you know your patients are high risk?
And what AI allows us to do is really create these individualized engagement plans is the way to think about it. Right. So you have someone who, you know, always goes to a hospital for imaging.
Well, okay, let's run an individual play for them such that, you know, when next time we see they might get a and imaging done, we know they're likely going to go to the hospital. We'll get in front of them, we'll create a personalized tailored message. We know they might be price sensitive or something like that, so we can bake in incentives and you can actually change their behavior as a result. So it's this idea of hyper personalization on top of a data layer and then, you know, integrating with the ecosystem that supports this type of, this type of work that becomes really, really important.
[00:08:36] Speaker A: And when you think about engagement, know phi medical information on a patient is very sensitive information.
[00:08:45] Speaker B: Yes.
[00:08:46] Speaker A: How do you, which I would think would be terribly difficult in your set of circumstances to get to that level of data and information on an actual member. How do you engage with, you know, like a Crumbdale specialty from a data perspective and a member engagement perspective to make sure that you can get those medical records so that you can actually just even do step number one.
[00:09:11] Speaker B: Yeah. And this is where, you know, programs like Chromedale are great because if you think about this world without a Chromedale, we're sitting there trying to integrate with like, you know, 10 different TPAs who all have different schemas.
Whereas with Chromedale you guys have built this data layer over time, you've already cleaned up a lot of that. You're running your own predictive scores on it. And that becomes a really great base for us to build on top of.
With regards to the medical records. The reason we can do it is because we are a provider organization. We are creating this one to one relationship between a provider and a patient. So it's no different than someone going to their doctor and their PCP and expecting that your PCP has your medical records. That's the exact same relationship we create where, you know, members are not going to be happy if, you know, this data is just out there, but they want their doctors to have it, they want their providers to have it. So that's the big reason why, you know, it is. I mean, members love it, right? If you tell them, hey, you have this nurse that's looking for medications, that's looking to make sure that your care is appropriate, they want that. And what we do with Crumbdale then is we combine those data sources, right? We get claims, we get medical records, we put them together and that wouldn't be possible without having really, really strong data foundations.
[00:10:17] Speaker A: And Santos, when you think about the reducing the expense, how, how are you doing that at the member level? Because I would assume you'd have to build like a massive call center of nurses and professional people to be reaching out to a member on their specific set of circumstances.
And I always think of like people, I think of process, I think about systems and scaling a company. I'm going to assume, and maybe I shouldn't assume, but AI has to be a big part of your strategy on how do you engage with a member. Can you speak to that a little bit?
[00:11:01] Speaker B: Yeah, you're spot on there, like historically, right? To run something like this, this hyper personalized, hyper individualized engagement or navigation, you'd have to staff a massive workforce. And what that results in is, you know, making it only accessible to large employers who can afford to pay 20, 30, 40 pepm. Because you run as a services company, that's probably one of the biggest things that AI has unlocked for us. Our nurses are just hyper efficient. They're not doing the work that nurses shouldn't be doing. And getting bogged down by which is like looking up providers, looking up quality, manually booking appointments, all of that we automate for them.
[00:11:33] Speaker A: And how do you automate it? Is it like an AI bot that's like engaging via text or email or phone call with a member?
And is it done in a very systematic way? And then how does the transition happen from the AI bot, if you will, to then the nurse? There's a. I would assume, and again I shouldn't assume, but I would assume there's like a bridge. Yeah, that's been built with what you're, what you're delivering.
[00:12:00] Speaker B: Yeah. So we always put the nurse front and center in member communications. But where the AI helps is like drafting messages. Right. Someone reaches out and says I need a cardiologist.
The AI kicks off all the work, finds the cardiologist, looks up options, drafts a message saying hey, here are the top three doctors. So when our nurse comes in, all the nurse is doing is reviewing, making sure the work looks good and sending. So it takes what used to be like a 20, 30 minute case if you think about it that way down to just two minutes. Right. For a nurse. And that 10x increase in capacity for our nurses is what allows us to then bring this type of technology over to the mid market. Right. Because we pass on those savings to our customers.
[00:12:37] Speaker A: And what, what do you think the ROI is? Are you tracking roi? How does it impact other components of a self insured medical plan? Like I would think reinsurance, this type of level of data and access to this level of information would be great indicators if not what has happened, but what is happening and what potentially is going to happen in the future.
Can you help us understand your strategy a little bit around that?
[00:13:07] Speaker B: Yeah, absolutely. And I think that goes for the entire industry, Stop Loss especially. But people are very reactive to what comes in claims. Right. And what that results in is if you think about this, at the end of the year, you know, September brokers are coming in saying hey, I need quotes right now. You know, we all know medical, medical claims are really back weighted right to the last quarter. So there's imperfect information that Stop Loss is quoting on and therefore Stop Loss is probably, you know, being a little bit conservative. Right. They're putting in lasers or they're, they're predicting this is what's going to happen with, with someone where they don't have the information.
This is something that we can solve because we are proactive and because we have things like medical records combined with claims and we're managing a member throughout the year so we understand their behavior. Right. Do, are they actually, let's say they are a high cost claimant. Can we manage their care 20, 30% below what they would do normally? And these are all insights that we can feed into Stop Loss to say, hey, this group, yes, that might look like a risky group, but they're being managed really, really well. So you might have, you know, underwritten them at this level. You can give that level of discount because you have this data flowing in. You believe in engagement and interventions and cost management because There's a program in place to handle it for the members.
Yeah.
[00:14:13] Speaker A: And I think the industry has been so, for so long, for so many years, for decades, has been very reactive than proactive. And when you think about pre authorization or even case management, that level of data, getting it to the cost containment side is a very reactive approach to managing both like the frequency of claims and the severity of claims. It feels like a big part of your value proposition is engaging way before even pre authorization has taken place. Is that a right way to look at it?
[00:14:49] Speaker B: That's exactly right. We want to be earlier than the pre cert and if we do our job well, there's a world where we don't even need pre certs. Right. Because we're helping the member make the right choice that is plan aware. Right. And guiding them to the decision that we know is already approved by the plan.
And that I think is the right way to do it. Right. If you think about pre certs and prior authorizations, they definitely have a place. But we can all agree that they cause member friction. Right. That's what you see the news headlines coming in is, you know, my care was denied for XYZ reason, even if it wasn't the plan's fault. Right. It was clearly communicated. So our goal is how do we move that up front? So when the member is making a decision of where do I get care, what medication do I use, we get to them at that point and say, hey, this is what's covered by your plan. This might be zero cost to you. We give them the options that are available so they never even go through this pre cert flow. That would be the ideal case for, you know, how I see this playing out.
[00:15:39] Speaker A: And so when you think about the Crumbdale specialty digital health wall and you think about the optimization integration we have with Rovi Health, there is a real scenario where a member is signed up and engaged in the program and they may, you know, are looking at a knee replacement or a surgery. You know, if I'm understanding you correctly, what your technology is doing is as the members actually thinking about that experience with the physician or researching it on their own, you, through your technology and platform, are reaching out to that member very proactively and giving that member both the transparency around value.
Like what is the. Where's the best facility, who provides the best services, who has had the best outcomes and price? Is that a fair way of looking at it?
[00:16:36] Speaker B: That's exactly right. And the third thing, there is also convenience. Right.
[00:16:40] Speaker A: Convenience.
[00:16:41] Speaker B: Right. So we'll Tell them, hey, this physician can get you in next week for this procedure.
[00:16:46] Speaker A: Book the actual appointment.
[00:16:47] Speaker B: We will book the appointment for them or end to end as a concierge. Right. Because if you think about this, how do you beat the default referral? You have to have three things in place. You have to be, you know, sending people to high quality doctors, they need to trust that it is a high quality physician. You need to be more cost effective and you need to be 10x more convenient. You need to become this easy button for every single employer member to say, hey, I would rather use Rovi than I would go call up a bunch of places and act on this referral that I got traditionally from my provider. I would just want to go through Rovi because I know they're going to give me high quality, cost effective care.
And the last thing with this is, you know, we do things like incentives as well. So if your members or employees are making good decisions, they should share in the value that's created there. So the plan saves a lot of money. But then can we do things like waive co pays or reimburse co pays or coinsurance? So the member also has an incentive to shop.
[00:17:36] Speaker A: So Rovi can be dynamic when integrated and optimized properly around plan design.
[00:17:44] Speaker B: Yep.
[00:17:45] Speaker A: So if you have choices and you have a high deductible health plan, if I'm listening correctly, and co pays and deductibles, you could actually build incentives that are dynamic, that actually can take place with the member when things are actually transpiring. Is that a, is that the right way to look at it?
[00:18:07] Speaker B: Yeah, that's exactly right. Right. So we can set up an hra, we'll administer the hra and we can start creating these dynamic incentives for your members to encourage behavior. Right. Like, hey, if someone goes to independent imaging center instead of a hospital, let's just waive their $200 coinsurance. So, you know, they, it reinforces that idea of, okay, let me shop for value in the healthcare system.
[00:18:27] Speaker A: Wow. So if someone was a, it was a lab, it was a surgery center, whatever it may be, you can give the flexibility, the choice to the member and, and dynamically give them incentives to look at both value and cost.
[00:18:45] Speaker B: Exactly right. It's like, hey, if you want to go to your hospital, you can do it, right? That's, that's up to you, but it's going to cost you a ton more versus going to this really high quality center that we vetted that'll be free.
[00:18:55] Speaker A: That's incredible. That's Incredible. Where do you see, you know, I want to double back on my original statement of being an entrepreneur. You know, going from consulting, being in a big business, and then becoming an entrepreneur and growing a company from scratch.
What has been the biggest challenge for you? What's been the thing that has kept you up at night?
[00:19:18] Speaker B: Yeah. I think a lot of it comes down to, are you driving value in this world for your customers, is the way that I look at it.
At the end of the day, I want to build a business and build a company that I think is going to have a massive impact in this industry.
And to do that, I think the road is really, really hard. You need to convince change in a lot of places, especially an industry that is not very accustomed to changing very quickly.
And to me, it's like, hey, can we actually, you know, get that change not just in small pockets, but at scale? And that's what I think about a lot. Right. Is like, okay, great, if we optimize, you know, couple tens of thousands of lives, that's great. But can we get to a million lives or 10 million lives that are all shopping and all being value based on. And how do you get from point A to point B is like, where, where. I think about this a lot because I do think there are a lot of health tech companies that get stuck, you know, just optimizing for a small population of people and never scale the impact beyond, beyond, you know, where they started. So a lot of it. And we talk about this as a team a lot. We want to take big swings. We want to do things that we think can really shake up this industry. And we know the path there is going to be really, really hard.
But it's, it's how we. How we build today. We try to take that asymmetric risk.
[00:20:31] Speaker A: How many people do you have on the team today?
[00:20:33] Speaker B: We're very small. So we have five people on the team today. We're trying to keep it as small as possible. So ideally, if we can keep it below 10 through Series A, that would be amazing.
[00:20:41] Speaker A: Nice.
What are you most excited about when you look out over the next, say, six to 12 months? What really excites you about this entrepreneurial journey that you're on and the alignment and impact you're looking for as a leader?
[00:20:56] Speaker B: Yeah, I think a couple things that I really, really get fired up about. One is I think the impact of technology. Right. I think we're at a really interesting moment where I think the industry understands that AI or generally technology is going to have a massive impact on it. And people are willing to experiment, they're willing to take bets that they wouldn't have taken even three years ago, where they might have taken a 10 year procurement process or something like that. Where today they're like, okay, we need to do something different.
That culture of change that has sort of seeped in, right. Obviously Chromedale is very much leading that, but throughout the industry I think people are like, we need to experiment, we need to do something different.
And that to me is one of the most exciting parts about this, where if the industry is with you and wants to try things, then the real question just comes, can you experiment fast enough with your partners? Can you build something that drives enough value quickly and then success will follow?
So that's probably the biggest one is the culture change that I'm feeling in the industry is what really makes me excited.
[00:21:58] Speaker A: Santos, what does a typical client look like? You know, an employer group in the self insured marketplace, Is it a small customer? Is it a Fortune 50, Fortune 100, Fortune 500? Who are you targeting as like the ultimate customer?
[00:22:15] Speaker B: Yeah, so today a lot of our customers probably reside somewhere around like the 250 employee lives all the way up to like 4,000 EEs. So really in that mid market segment.
Lower mid market, up up to mid market. And that was intentional, right? We, I think if you look at the jumbo employers, they have the ability and have tried navigation and you know, they're able to pay the massive PEPM rates for it and do this type of high touch service.
Where we saw the biggest gap coming in was mid market. Right. People. There were companies that just suddenly went through hypergrowth. They went from like two fifty to a thousand employees. But their benefit strategy hadn't caught up and they were trying to sit there and figure out what do we do next? They couldn't afford the strategies that jumbo employers could.
So we were very purposeful about saying this is the segment that we want to start with because they can move a little bit faster, they have a bigger need and yeah, so that's kind of where our main employee base lies today.
[00:23:07] Speaker A: I think your business is all about alignment and impact. And in a very complicated and opaque employer health system, I think you guys have an opportunity to drive a lot of value, reduce costs, produce a better outcome and more importantly, just create a better experience for the member and you know, their navigation of, you know, real significant issues. I really appreciate you having me on the show today.
This is Matthew Naylor. You've been listening to Aligned for Impact.
