Month: August 2019

We’re trying to fundamentally drive an improved healthcare model in the market

Episode #21

Podcast with Thomas J. Grote, Chief Executive Officer, Banner|Aetna

We’re trying to fundamentally drive an improved healthcare model in the market
paddy Hosted by Paddy Padmanabhan

In this episode, Tom Grote discusses how Aetna and Banner Health’s relationship evolved from an ACO into a new commercial joint venture – Banner|Aetna – and how with a shared vision they are improving the primary care model to transform the healthcare market in Arizona.


The collaboration between a leading regional health and a national health insurer in a 50:50 joint venture helps develop and deploy new technology solutions to improve healthcare outcomes while focusing on keeping costs low. Tom believes that joint ventures such as Banner|Aetna can also accelerate the shift from the fee-for-service model to value-based care. He discusses the incremental benefits of Aetna merging with CVS, their approach to strategic technology partnerships, and sharing of best practices among JVs of Aetna with other health systems.

Tom advises ACO leaders and Chief Population Health Officers to focus on relationships and try to align with partners who share a common vision and believe there is a better way to transform the whole healthcare system.

Welcome to the big unlock podcast where we discuss digital transformation and emerging technologies in healthcare. Here are some of the most innovative thinkers and leaders in healthcare and technology. Talk about how they are driving change in their organizations.

Paddy: Hello again everyone. Welcome back to my podcast. This is Paddy and it is my great privilege and honor to have as my special guest today Tom Grote, Chief Executive Officer of Banner|Aetna which is a joint venture between Banner health in Arizona and Aetna Insurance. Tom welcome to the show.

Tom: Thanks very much. Glad to be on.

Paddy: Thank you. Just to get us started off here Tom. Can you tell us a little bit about how the JV came about a little bit of the history of the Banner|Aetna relationship?

Tom: Sure. Banner Health and Aetna had an ACO arrangement, Accountable Care Organizations relationship for five years. And it was relatively successful and had been able to grow membership together, drive down costs for the members, and improve quality. But there were seemed to be so much more that can be done on trying to improve the healthcare delivery system in terms of the care management approach and the member experience. And you know I think collectively we both felt that the current arrangement did not give us the significant opportunities to really impact that delivery model. So, we had a shared vision about trying to come together and trying to transform healthcare in the market. The joint venture presents some pretty unique opportunities, while an ACO relationship provides incentives for improving efficiency and quality. It doesn’t necessarily allow you to do traumatic changes to the way healthcare is delivered. And we felt that the joint venture platform provided that appropriate structure. The key being that we own the insurance company together. So, we’ve formed a new insurance company owned half by Banner and half by Aetna which creates full alignment and the financial incentives of the two organizations which is really addressing one of the key ongoing issues in healthcare delivery. And working together it gives us an opportunity to be more bold about how we try to change healthcare and the care management model. You know one of the things we do as we turn over utilization management responsibilities to Banner health. Under normal arrangement you know people would not understand that concept because it would look like the fox watching the hen house. But as a joint owner of the insurance company founders want to do what’s in the best interest of our members and delivering quality and efficient care. So, it enables us to move initiatives forward like getting care decisions closer to the delivery of the care and allow for more significant changes in the way we deliver healthcare. So that’s a key aspect of why that joint venture was formed and the key advantages of it. Another area is in just technology and innovation. Together working with a delivery system and the insurance companies we can develop new solutions and new approaches you know relatively quicker, actually quicker than probably both of our parent organizations. So, it provides a really unique platform to try new approaches to care delivery and member experience approaches for the people here in Arizona. So that was the foundation for why we ended up evolving our previous relationship from the accountable care organization into a joint venture.

Paddy: And we will explore some aspects of how you’re using technology, data, analytics, and innovation as we go through this conversation. Just to round out one quick question on the

structure of the JV itself. Aetna is a part of CVS, so is it fair to say that now the joint venture is 50 percent owned by CVS and the other 50 percent is by Banner health?

Tom: Yes, that would be accurate. Yeah, we’re still Banner|Aetna. But that’s true as the parent organization, CVS is the half owner of the company.

Paddy: Does anything change for the JV and its mission as a result of that?

Tom: I think there are opportunities with the CVS assets in Arizona to integrate those into our care delivery model and provide additional access points and opportunities for us to better manage our members and their product additions together. So, there will be many clinics and eventually health hubs in the markets that are very accessible to our members and they’ll provide additional access points to our members. I think the key with this though is that it’s a connected experience and CVS just becomes part of our healthcare delivery ecosystem here in the markets. So, the encounters are all captured, the data is shared and we’re able to coordinate that overall member experience.

Paddy: Thank you for that. That’s very helpful. So, Banner|Aetna’s mission is to provide superior quality at lower cost. And I imagine that what it essentially means is managing healthcare at a population level. So, what metrics do you typically track in pursuit of your mission. And how do you benchmark performance against your peer group?

Tom: We typically start with best practices from around the country but then you have to adjust for local market nuances. Arizona is actually a lower cost, lower utilization state relative to some of the other states. So, in that regard you have to adjust downward or upward on some of the goals that you set for the joint venture. But we monitor the performance of the joint venture on a monthly basis against the established benchmarks that we put forth and collectively meet with Banner on the monthly basis to review how our performance is tracking both from an efficiency and quality perspective and then implement programs around initiatives that we want to drive improvements in either our quality standards or in the efficiency and the way we deliver care. So, I think it’s one of the unique things about the joint venture is that we are coming up with solutions together to challenges that we see or opportunities that we see to improve the way we can deliver care on behalf of our members.

Paddy: So, in this podcast we talk a lot about digital health. The use of data analytics and emerging technologies. Can you maybe share with us what kind of technologies you alluded to how you’re using technology to drive improved healthcare outcomes in an improved patient experience? Can you maybe give us some examples and talk to us a little bit about how you’re using technology to drive your mission?

Tom: Absolutely. We just introduced an exciting new virtual care platform for our members as of July of this year. We had evaluated the historical approaches and did not find them to be driving the kind of utilization and member satisfaction that we would expect out of a virtual care solution. So we went to market and evaluated 15 different companies in the virtual care space and found this organization called 98Point6 that delivers an incredibly convenient and low cost approach to primary care and they leverage a text-based system that leverages artificial intelligence upfront to gather information and then a board certified doctor comes on the back end to develop a treatment plan, order prescriptions, order labs whatever is needed to help support the member’s health. And the amazing thing about this is that the structure utilizing that technology enables

them to deliver it at a very affordable basis. And so, for our members it’s no cost to access this primary care physician service that they’re in a PPO and it’s only five dollars that they’re in a HSA. So, we are extremely excited about this new offering and it provides incredible convenience at very affordable rates. So that’s the kind of thing that we stood up in less than nine months that would take a much larger organization much longer to deliver. You know another example is you know we do try to leverage capabilities of our parent organizations. And so, there is the Aetna Attain app that was jointly developed with Apple and Aetna to deliver a new Apple watch app that’s more than just tracking physical activity. It’s looking at the health history of the members, understanding the members, understanding their overall health goals. Not just about activity but about sleeping better, or eating better, and providing incentives to members to improve on those areas that the member wants to be most focused in on and reward them for those capabilities. So those are two examples of where we are implementing technology to improve the member experience or improve the health status of our members.

Paddy: Those are actually great examples of what we would call digital health solutions. It seems to me that if I look at what’s going on in the marketplace there is a lot of activity in the whole primary care experience space with both traditional and non-traditional players in healthcare coming up with chatbot enabled symptom triaging or just you know mobile enabled healthcare services and so on and so forth. It seems to me like the activity level in this space is very high and it seems that it’s all eventually going to help healthcare consumer gain better and quicker access to care at a time of their choosing and possibly at a very affordable price as well. Do you agree with that assessment Tom?

Tom: Yeah, I agree with that 100 percent. And I think you know going back to CVS. We’re now in a situation that you know our members can access care at low cost through the virtual care solution with 98Point6. They can go to a mini clinic at CVS or go to a primary care physician whatever is most convenient to them and we just want to provide as many convenient and affordable access points as we can on behalf of our members. Because you know members want to access care differently and especially when you look at the millennials and their heavy use of their phones for accessing most services.

Paddy [00:11:02] So one important aspect of enabling these digital health solutions is obviously the data and the analytics. I mean you referred to that a couple of times. You know you’ve now got access to the Aetna insurance claim data and member data, you have access to the local population’s health history through the Banner health relationship and possibly more through the CVS connections now as well. Can you talk about how you’re able to leverage the combined power and potential of data from these multiple sources about your specific member population and also what kind of guard rails do you need to have in place when you’re doing that?

Tom: Yes. So, you know connecting all those data points is obviously incredibly important. And so, we actually engaged with IBM Watson to help develop a joint database so it’s pulling in information from the claims, the lab work, the pharmacy data and combining it with the clinical information that Banner is providing. And I guess the key there is merging the records, so you make sure they’re consistent records of the same person so that you get a more comprehensive view of your members. And ultimately, we haven’t deployed it yet but we will also be layering on top of that social determinant information so that we can better connect and identify with our members. And so, I think the key with that is now taking this information that’s going to be more real time than looking at just claims data so that we can better manage the population going forward. And so that’s the focus of this relationship with IBM Watson is providing that

comprehensive more real time database so that we have a better view of our full members information. As you said you know especially when we’re done with health information you know the guard rails and the protections are really important and working between IBM, Aetna, and Banner who are all heavily vested and member protections all the appropriate guardrails are in place and then only those that need to see the data have access to it.

Paddy: Talking specifically about your population which is in a specific part of Arizona. Are there any population level aspects that you need to consider when trying to promote the use of digital health like demographic difference? You mentioned millennials for instance. Is your population skewed in one way or other to a certain kind of demographic that you have to take into consideration? I’m curious because digital adoption rates vary from state to state from region to region and demographics has a lot to do with whether your population is even going to use those tools.

Tom: Right. Yeah, I think generally we are focused on commercial populations. And so, I would say that we have a very good cross-section of the population of Arizona. I think the unique aspect of Arizona is that about 30 percent of the population is Hispanic. And from that perspective there’s a higher prevalence of diabetes in that population. And so, you know one of the things that we’re doing is recognizing the makeup of the population of the state is working closely with Banner to develop a market leading diabetes program. And that is in development. So, there’s a lot of work to develop on that but it’s responding to that population and making sure that we are doing what we can to improve the whole health of the population here in Arizona.

Paddy: Banner|Aetna is not the only JV that Aetna has. You’ve got multiple JVs. When I looked it up you have one with Sutter health, with Allina Health and a couple of others as well. Do you get the opportunity to share best practices, learn from what they’re doing especially around things like innovation and so on? Can you tell us a little bit about that?

Tom: Yes I think it’s really important in each of these JVs have different initiatives that they’re pursuing and it’s you know it’s locally based which is how healthcare should be managed. But we have a JV operations team at Aetna that helps to support improvements to the member experience and support operations across all five JVs. So, they are a single entity that is able to see initiatives going across the JVs and recommend opportunities to bring forth new initiatives to the other joint ventures. Our C-suites teams have frequent calls with one another, and we talk a lot about what we’re working on, what are the key initiatives are and so forth. And to date we’ve had a number of different initiatives that have been shared by multiple joint ventures. So, we recently introduced a new member welcome kit which number of the JVs implemented. We’re putting in a new IVR enhanced persona and 98Point6 is another example of initiatives that are being deployed by multiple joint ventures. So, we’re constantly trying to communicate with one another about different programs initiatives that are going on to see if there are things that we would like to deploy as well. And a lot of our focus is on that member experience. What is it we can do to streamline that process for the members as they go trying to access healthcare.

Paddy: So the focus is overwhelmingly on the member experience it sounds like.

Tom: Yeah, it’s the biggest challenge in our industry. We have both sides of the equation when you have the delivery system and the insurance company working together it provides the best platform to try to really come up with a solution that can change that and improve upon going forward.

Paddy: Now that’s a perfect segue to what I was also asking next which is kind of the flip side of the coin in some ways and this might sound a little provocative or controversial but payers and providers are historically not collaborated as much as one might expect. Based on your experience and that you’ve been a part of this JV and you’re working very closely with the provider. What are some of best practices? What does it take to make a JV like this work now?

Tom: The true shared vision is absolutely critical that the delivery system understand that fee-for-service is not here for the long term and that the ability to manage populations is going to be what the future holds is a critical aspect upfront because as you go through that transformation from just value-based care and to owning an insurance company you are taking a more drastic movement away from fee-for-service and more focused on population health. So, the organizations really have to be committed to believing in this new model and take senior management leadership of the two organizations to really push through their organization to help support initiatives within the respective companies to support the joint ventures. There’s so much historical friction between the delivery system in the insurance companies that it’s really important that senior management intervenes and says you know we have to find ways to change the way we work together to improve it for our members. And you know in many regards you have to ask people to go away from their standard metrics and their overalls to rethink how we should interface with one another. And it’s not an easy process sometimes because somebody there is an accounts receivable area you know has a specific goal they’re trying to achieve and you know and they’re very focused on that instead of thinking well maybe if we changed the way we set up our contracts we could eliminate all this behind the scenes work and so forth. So, it’s really important that the two organizations are constantly reinforcing what the JVs are trying to accomplish and that you know it’s going to be critical but think outside the box to come up with new and better ways to transform that healthcare delivery process.

Paddy: That’s well said. Now you mentioned fee-for-service. All indications are that there is a shift that is taking place from fee-for-service to some kind of accountable care model. At the same time the research and the studies also show that this shift is not as quick as some of us might want it to be. I read somewhere that something about 25 cents on the dollar on every healthcare dollar goes through some kind of an alternate payment model. Now whether that number is accurate or gives us a sense of the order of magnitude. Do you care to comment on where we are in that continuum and what do you think it will take to accelerate the shift towards value-based care?

Tom: Yeah, I do think that the joint ventures accelerate that process because it is more than what we’re paying the underlying piece. Under this arrangement on our fully insured business if collectively Banner|Aetna with support of Banner and Aetna are able to control the utilization and deliver more efficient healthcare on behalf of our members which is going to remove people from the hospitals, put them into lower cost settings, and about removing or reducing readmission rates and so forth. Those are shifts to the delivery system. But when you’re in the joint venture together and you are able to create those improved efficiencies. Yes, it is taking revenue out of the health system. But you know they have an opportunity to recover a portion of that through the insurance company now and sharing in the earnings of the insurance company. And so, it does change that perspective. It really is about total cost of care and it’s really about how do we solve this together. I think the joint ventures provide this unique opportunity to really escalate this process and it’s not at this environment where you get that full alignment is this how we can move that process along faster. It is still challenging because there’s always somebody that’s looking at reduced utilization in the hospital and saying well this is impacting our immediate bottom line. But

I think it’s important to have that long-term vision that we are going to continue to move in a value-based care realm going forward.

Paddy: So, Tom we’re kind of coming up to the end of time here. I did have one question for you what advice you have for other ACO leaders and Chief Population Health Officers across healthcare based on your experience and your learning so far.

Tom: I think the key piece is having relationships with organizations that truly share the vision and are committed to it as part of their makeup because that presents the real opportunities to be creative and innovative and the way you can work together. I think our joint ventures are an example of that we are really looking at the whole delivery model how does it work, how can we partner together. The bottom line is what we’ve done historically hasn’t been successful. And we can’t keep going down the same route and if we do that, we’re not going to have improvements in healthcare delivery. And so really trying to align with like partners that believe that there is a better way to do this is critical to drive change in our healthcare system.

Paddy: So, Tom we’re kind of up to the time here. Any concluding thoughts, any final thoughts that you want to share before we conclude the podcast.

Tom: Yeah, I think that I’ve been in this business a long time. I started back in 1987. This opportunity to work with Banner and together on this joint venture has been certainly the most exciting thing that I’ve ever been involved in my career because we look at it as a real opportunity to leave our mark on this industry and find a better improved ways to deliver care on behalf of the people in Arizona. So, it’s an extremely exciting opportunity. And I think when we have the right collaboration, we train organizations to really fundamentally drive an improved healthcare model here in the market. So, it’s definitely a thrilling relationship that we’ve developed here.

Paddy: Thank you. Thank you. That was great and I really appreciate your time today. Tom. It was a great conversation I enjoyed it very much. And I look forward to staying in touch. Thank you again.

Tom: Thank you so much.

We hope you enjoyed this podcast subscribe to our podcast series at www.thebigunlock.com and write to us at info@thebigunlock.com

About our guest

Thomas J. Grote leads the Banner|Aetna joint venture as Chief Executive Officer. He is responsible for building a sustainable model of healthcare enhanced by a distinctive member experience for joint venture members throughout Arizona. He is also responsible for enhancing product offerings while lowering costs, creating a clinically integrated network, and growing Banner|Aetna’s footprint throughout the state. Tom is accountable for the overall success of the health plan, and works to leverage the strengths of each partner to create an improved member experience within the Arizona healthcare delivery system. Prior to being named CEO of Banner|Aetna in 2017, Tom held various sales and profit & loss management roles throughout his 30-year career at Aetna. He was also a key contributor in the development of Aetna joint ventures in Northern Virginia and Northern California. Tom holds a Bachelor’s degree in finance from the University of Notre Dame and has obtained his Certified Employee Benefits Specialist designation.

About the host

Paddy Padmanabhan is a widely published and quoted thought leader on digital transformation in healthcare. He is the author of The Big Unlock: Harnessing Data and Growing Digital Health Businesses in a Value-Based Care Era, and the CEO of Damo Consulting Inc, a digital transformation and growth advisory firm based in Chicago.

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Our mission is to move consumers from an offline to an online relationship

Episode #20

Podcast with Aaron Martin, EVP and Chief Digital Officer, Providence St. Joseph Health

"Our mission is to move consumers from an offline to an online relationship"

paddy Hosted by Paddy Padmanabhan

In this episode, Aaron Martin discusses his role and responsibilities as the Chief Digital Officer of Providence St. Joseph Health, and covers a wide range of topics including patient engagement, the innovation model they follow, and the portfolio of digital health startups that he manages as the head of Providence Ventures.

For Providence St. Joseph Health, digital is all about moving consumers from an offline to an online relationship. The focus of digital health innovation is about prioritizing problems and identifying “needle-moving” solutions that can have a big impact. He believes that entities that deliver convenience, access, and personalization will win and keep patients in future.


He advises startups to have a “small story” which addresses the here and now of delivering returns to investors, as well as a “big story” which addresses the larger impact of the solution over time. More in the podcast.

Welcome to the big unlock podcast where we discuss digital transformation and emerging technologies in healthcare. Here are some of the most innovative thinkers and leaders in healthcare and technology talk about how they are driving change in their organizations.

Paddy: Hello everyone and welcome back to my podcast. This is Paddy and it is my great privilege and honor to have as my special guest today Aaron Martin, Executive Vice President and Chief Digital Officer of Providence Health. Aaron welcome to the show.

Aaron: Thank you so much Paddy. It’s great to be here.

Paddy: You’re welcome. So, let’s start with this. You have a fairly unique position within Providence Health and actually indeed within the healthcare sector. So maybe you want to tell us a little bit about the scope of your responsibilities as Chief Digital Officer and how that’s different from the current industry organization models.

Aaron: Sure. It’s fairly standard outside of healthcare. How I know that I’m a member of an organization that convenes 50 Chief Digital Officers from across different industries twice a year and it’s fairly standardized. And industries like retail banking, financial services, hospitality, places like that. Healthcare is of course a little bit behind. In my role again is pretty typical outside of health care but not too much inside of health care although that is changing. What rolls up to me is any consumer patient facing digital stack our digital interfaces reported to me. So that’s the digital part of what I do. We also have an incubator that creates new businesses and I’ll talk about that later in our discussion, as part of the digital part of what I do. So, I have responsibility over marketing. So that includes Brand, CRM, and the web sites or apps et cetera. And then the third part of what I do is I oversee Providence Ventures which has a $300 million venture fund basically that has 16 portfolio companies in it and is cooking on gas right now. So that’s kind of the scope of my responsibilities and I am happy to kind of talk more about that.

Paddy: Absolutely. And we will talk about all of those aspects. So, let’s start with digital and the definition of digital. In our work with all the health systems that I talk to the definition of digital varies from health system to health system. How do you define digital and how is digital let’s say different from traditional IT?

Aaron: Yeah well, I mean one way to think about is how we’re organized so. So again, my responsibility as anything is consumer facing digital tech stack, so you know again our web sites or apps anything the consumer sees, the patient sees. And then my counterpart B.J. Moore who comes from Microsoft. He’s the CIO, and he owns anything that’s caregiver facing so we call our employees caregivers anything that he owns basically our data lake and he also owns our enterprise systems relationships. So, you know Epic and Microsoft and those types of things. And so, if you think about it also kind of goes to what the mission of each part of those two different organizations are. Our mission is to move our relationships with consumers from an offline relationship to an online relationship. So, and that’s incredibly important to us in particular in health care because health care is a cross subsidized business on the provider side and so we make all of our money on the commercial side of the business. On a great day we kind of break even on Medicare and we lose money on Medicaid. And so, to sustain our mission into supporting the poor and vulnerable we have to do an exceptionally good job in digital engaging with the commercial population who is highly digitally engaged. And then also that part of our business is also at risk of being disrupted because if you look at all the disruptors in the marketplace whether it be startups, tech companies, or existing health care companies that are changing their models. They’re not going after the Medicaid population generally they’re going after the commercial population which is the high margin portion of our business and they’re going after it with better you know convenience and tools on BJ’s side of the net. He is really focusing on the caregiver productivity what is the experience like working for Providence St. Joseph. How do we leverage our data in new and interesting ways to improve the way that we deliver care? And then also our relationships with some of these big tech vendors in terms of how they’re going to support us.

Paddy: You know my firm did some research recently on the different organization models in the current state of digital transformation. More often than not the model we see is that the Chief Digital Officer role kind of folds into the CIO role. And it seems like at Providence Health these are two distinct roles and as you describe your role focuses more on the patient acquisition, patient engagement side of things. But the CIO is focused more on the enterprise side of things including caregiver enablement, caregiver productivity and so on. And of course, the innovation piece which in most organizations is actually a standalone unit as we see it through our research. It’s an interesting model and as you pointed out different other sectors of banking, retailing, and so on they have more of the kind of model that you just described.

Aaron: Yeah, I think it I think it has to do with the skill sets involved so. So, if you look at my background it’s e-commerce. So, working with Amazon for nine years you know how you engage with consumers online using digital tools. How do you enable transactions? How do you keep engagement etc? If you look outside of health care usually there is an individual who has that kind of background paired either with somebody who has a deep marketing background and brand background or vice versa. So, it’s either the Chief Marketing Officer has the Chief Digital Officer reporting to him or her or vice versa outside of health care. Inside of health care you’re right I think you see that much more you know the CDO and CIO kind of combined. But I think as health systems and insurers start to understand that these are very different problems to solve. You’ll start to see the Chief Digital Officer and Chief Marketing Officers you know those reporting relationships start to protocolize and get separated from the CIO which is a very different set of skills around you know how do you deliver a technology at massive scale. You know serving your employees, how do you deal with massive amounts of enterprise data and then how do you manage very complex relationships with technology partners, vendor partners who are helping with those two other issues. So that’s kind of how it nets out outside of health care we’ll see what healthcare does with it.

Paddy: Right. So actually, that’s a good segway to what I was going to ask you about next. You mentioned you came from outside the industry. What do you see as an outsider looking in as the biggest opportunities and the biggest barriers to technology-led innovation and maybe you can talk a little bit about your innovation model as well?

Aaron: Yeah I mean I think there’s many opportunities and the problem is been prioritization and so one of the first problems that we’ve fixed within our organization and fixed is a stretch. I mean I think we’re on a journey around this is how do you prioritize the problems into what we call needle movers and how we’ve done that is I work with our head of our digital strategy Sara Vaezy who leads a team that, think of it as an internal consulting team, what they do is they work with our clinical and operations leaders from across our hundred sixteen thousand person organization to identify and then scope, and size, and prioritize these needle movers. And so, we do that in a big way every three years and so we’re going through a refresh of that now and then we do it incrementally every single year obviously. And to give you an idea we’ve identified literally a hundred problems that hit our radar from these discussions and we’re boiling it down to kind of the top thirty-five and we’re actually putting a value against them. So, you know if we solve this problem what is it worth to us. That could be in terms of economic value, it could be in terms of clinical value, in terms of mission. But you know we’re putting some sort of value metric on it. And then what we do is we start to engage the organization around how are we gonna solve that problem. Does it have a digital, if not solution a digital, approach to it that might be helpful and then we go through our innovation models kind of starting from there and I’m happy to kind of walk you through that if that would be helpful.

Paddy: Oh, absolutely I think for the benefit of our listeners we would definitely love to hear about your innovation model. You used an interesting term needle mover. Maybe you can talk about a couple of the big needle moving problems that you try to address and maybe talk to us in terms of how you apply your innovation model to those topics.

Aaron: So, a good example of one that we’re furthest along with is we call it convenience access and personalization. So, the problem we’re trying to solve is healthcare is generally none of those things so it’s not being yet there’s low levels of access and it’s definitely not personalized. And so, what we’re trying to do is change those to you know from kind of bugs until to features. This the kind of way that we kind of went through that and the economic value around that is again you know especially in the commercial market the thesis is that the entity that gets there first and kind of delivering that on those three areas will win and engage not only win the most new customers especially in the commercial market that will win the most new patients and turn and keep them because of this engagement model. And so, what we did again to kind of we took the 100 problems or so narrowed them down you know _____ [unclear] and personalization was a big part of the problem. We then further broke that down and obviously went through a sizing and prioritization of what is this worth to us. And then we went through a very kind of deliberate set of steps. And so, step one is we call it the tech cascade and it involves kind of three steps. The first one is do we already own a solution to that problem. So, if Epic or Microsoft or one of our enterprise solutions that BJ oversees our CIO can solve the problem great let’s use that. Because we’re already paying for the technology why you know go and get something different just for the sake of difference. And so that’s step one. If not, then we go to step two. And then that’s where Providence Venture Fund comes from and what they do is they go out and they scan the market for what we call best of breed solutions and so they’ll go out and look for just incredible companies that just really solve that problem. So the example I always like to use because we’re investors and I’m on their board is coming called Kyruus what they do is they have really solve the problem of physician search match and book where they’ve created a platform that maintains and integrates at source of truth down to the credentialing levels and the source systems all the way up to call centers and on the web site. So that you have an accurate provider directory and you can book with those providers online and to really solve that problem. That’s an example of a company that we went out there and found and we actually worked with them for 18 months before and then we decide to invest after that right. So again, so going back to the tech cascade do you have it already, can you find it. So, in the case of finding it we found Kyruus for the physician’s search, match, and book part of the convenience personalization and access problem. And then what we did is as we know if we don’t have, can’t find it, then we will actually build it. And so, what’s unique about our health system as I mentioned is, we’ve got about 85 software engineers and product folks from places like Amazon and Microsoft based here in Seattle. I’m sitting on the same floor as my team here in Seattle. And what they do is they create new companies where we find white space or existing solutions, we believe aren’t going to solve the problem. And so, they basically go through that very deliberate process. There where they’ll first setup and create the technology determine if it works or not. And then the second thing we’ll do is once we run it for a while and determined it works, we can scale it then we’ll actually sell that technology to another health system. And then once we saw that ____ [unclear] another health system we will recruit a management team. Even though Providence Ventures will lead deals outside of companies that we incubate, we typically try to avoid leading deals with companies that we do incubate. So, what happens is you know these incubated companies are going through a series of very you know arm’s length in a validation. The first one is does it work. The second is you know is it valuable enough for not only us to use it but for another health system actually write a check for it. This is a huge validation step. Third validation step is it valuable enough as a business so that a very experienced senior management team will come in and run it as a business. We’ll be excited about running it as a business. And then if it’s kind of beyond that if it’s those two hurdles are cleared will an uninterested or a third-party venture firm come in and actually revalidate as a potential business and tell us what the equity of this company is worth. So that again got an unbiased third-party kind of weighing in on it. And so, the example I know you spoke to the CEO of Xealth, Mike McSherry built a technology, hired them as a senior management team. UPMC was the second customer and then DFJ came in and financed it. So that’s the kind of model we’ve got there. So just to kind of summarize like if we had it great, we’ll start stop there and we’ll let Epic solve the problem or Microsoft or whoever. If not, then we’ll get Province Ventures go out and look for a solution. If they can’t find a best of breed solution then as a last resort, we’ll build it, but we’ll build it with the idea that we’re going to spin it out. And the reason is because we’re not Microsoft, or not Amazon, we’re not Google. We don’t have unlimited development resources and we can’t prosecute a roadmap indefinitely. And so, what we have to do is leverage the venture community and other customers of this technology to extend that roadmap and get more people working on it. So, as a data point when Mike and team first start off with Xealth, I think that four or five people working on the team now they’ve got over 40.

Paddy: Right. You know Xealth is a fascinating story. And Mike was on my podcast episodes ago and one of the things he said which stuck with me was that. For digital health solutions to be successful he said they have to be “doctor prescribed”. What he was trying to say is that unless you have the clinician on board, you’re going to struggle to gain an option. So, can you talk a little bit about your own views on what drives digital health adoption and what kind of structural issues do you see impacting the success of companies like Kyruus and Xealth.

Aaron: So yeah, I think Kyruus and Xealth are really good examples of two different ways that digital adoption occurs. I totally agree with Mike around his comment and that’s the reason why we built and partnered with Mike and team to build what Xealth is. We were looking as a health system the adoption of some of the technologies we’re putting out there by patients. And it was reasonable but still kind of a bit low. And then we looked at we have our own health plan and was far far worse. And so, with health plans you know if you look at how they kind of work with their members, the members aren’t really that well engaged. You know they kind of not see them if they’re healthy you know a few times a year. You know the thing I always tell people is when I was at Amazon, I probably visited our benefits web site once in nine years right. So, I could even for sure unless I pulled my card out tell you who I was covered by and it’s because you know out of sight out of mind. And so, the struggle that health plans have is getting engagement with their members so that you know their members they can improve their members health and then same thing happens with health systems who are also trying to improve the health of their patients. And so the problem what Xealth serves for is you know and Mike and I and the rest of the team were kind of thinking through the problem you know it sounds obvious when you say it out loud but you know it took us a while to get there which is if you abstract everything you know what is the most effective way that technology is adopted in health care and it’s by the physician’s pen. So if you know if you think of biopharmaceutical is nothing more than just technology to help people or medical devices that’s all prescribed and then we thought about it well you know then the problem seems to be that channels is very narrow and very specific to biopharmaceuticals, is why can’t it be expanded to digital therapeutics, apps, content, left right, social determinants and in and anything that can be prescribed through your URL. So that was a huge breakthrough and it’s the reason why we’re so excited about Xealth and the reason why they’re getting so much traction with health systems and then now have a lot of. I was just on a call this morning with a very very large payer who is very familiar with Xealth and they recognized immediately the challenge that they’ve got and how Xealth can be helpful. Right. So, it’s you know its kind of SureScripts for everything else right. Then on the flip side you know Kyruus this is a different situation in that. You know patients are coming to us today trying to book appointments what Kyruus this does not really increase the volume of that adoption. I mean it happens today and you know we have you know millions of patients a year come in to see us. You know it’s really increasing the effectiveness of matching them with the right provider. Right. And so that’s what they’re doing is increasing the efficiency of that because what happens in that space is they drive up what you know Amazon would call it conversion rate which is you know how many people hit the website and actually find what they’re looking for and by. While in our case its patients searching for a physician. And how likely is it for them to get matched with the cardiologists that they want to see. So that’s what Kyruus does. There’re slightly different use cases. In one case Xealth is actually creating a new channel that didn’t exist before and Kyruus is improving on one of the oldest channels there are in terms of getting help and assistance.

Paddy: Right fascinating story is you know I just wanted to make one quick comment. Sometime back one of my guests on this podcast was the Chief Analytics Officer of Premera and Premera of course is the big health plan in your part of the country. They kind of referred to the same issues in terms of the demographic makeup of the Pacific Northwest. You know young invincible they don’t feel the need to go to a doctor. How do you engage with folks who don’t feel the need to engage because they are healthy and active and so on? So, it’s very interesting. You know I heard the flip side of the coin from your comments as well which is very interesting and I imagine that depending on the demographics of the region in which the solutions are being rolled out you would have a different adoption rates. Just because of all the differences in the demographics. Is that a fair statement?

Aaron: Yeah, I think it is. I think you know that said I think the problem is pretty pervasive and then you’re also going to see this happen and Medicare advantage in that as well. So, you know don’t forget the biggest part of the Medicare population is now growing at a ten thousand per person rate. People kind of crossing 65 right now per day. All those folks are highly digitally engaged right like those folks you know my dad’s seventy five and he’s on his phone more than I am and I think what’s different is the popularity of Medicare advantage has really driven the ability for these plans to again provide other helpful services to that population. And the problem is they’re not aware of it and they are not going to go to their plan to go find out they’re going to go visit their physician to go find out what they need to go to use.

Paddy: Right. OK so one of the things that I do on my podcast is something called a lightning round with my guests. In the lightning I ask you for your top of mind thoughts on a handful of emerging technologies. After all we’re talking about technology led digital health innovations. So just a few here. So, the first one on my list is artificial intelligence and machine learning.

Aaron: Yeah, I think the two areas my team is very focused on are actually three is basically digital bots on the front end to help with navigation, disease prediction, and to a lesser extent kind of helping the patient be treated more efficiently. So, we’re definitely looking at that space and we’ve experimented with our own bot we call it Grace and it’s a bot that helps with navigation on our website. My thinking about that is you’re going to see that technology become pervasive and it’s also going to be contextually aware over time which will be awesome. And it will have the same it’ll have a personalized personality for you over time. And so you know our hope is Grace is present when we first kind of make contact with you when you’re trying to figure out where to go within our health system all the way through treatment, through kind of follow up, and that kind of thing and you get to work with Grace and it is helpful to kind of help navigate through all day. As we simplify the health system that will navigate you through that complexity all along the way. An extension of those types of technologies, technologies that are already in the home, so we were one of the first health care organizations to work with Amazon on their HIPAA enabled Alexa. And that was super fun and the reason why we were able to do it so fast is because of all the infrastructure and technology we put in place prior that made it easier to develop for that technology and so you can see a lot more of those types of things happen. And then the third area that we’re doing a lot of investigation around is in clinic AI in which you know the physician is able to you know passively talk without having to invoke a bot and then that bot basically effectively acts as a virtual scribe or a digital scribe and takes that note. Eventually it will take the order and then the physician kind of goes through it and checks that everything’s appropriate and push on so that they’re having to deal with the EMR ______ [unclear].

Paddy: It’s a fascinating news because I actually wrote about chatbots in healthcare in one of my recent blogs and I actually called out Grace as a great example. I am happy to share that with you. So, you know symptom triage is one of the most basic things where anyone has an urgent care need. What’s the first thing they do they go on Dr. Google right. Google is not exactly the recommended standard of care but like it or not that’s what people do. And so yes, it’s a great opportunity for health systems and clinicians to really make these tools available to people at the time of need. And at least you know even if you can’t go too deep into the triage especially with a complex case and so on. But at least for the vast majority of routine care need you can at least guide your patients or your consumer. So, I thought this a fascinating use and the possibilities for machine learning to really make the engine smarter and smarter over time. It opens up endless possibilities and of course let’s not forget that there is an acute crisis in terms of shortage of skilled clinical staff. The chatbots solves for that problem as well.

Aaron: You know on that last piece I’ll just kind of amplify what you just said. I was on a panel and the audience was full of physicians and so I think one of the questions that I was asked was you know do you think that AI would be involved in not only triage and disease prediction but also in diagnosis and treatments. While other fellow panelists were being a little bit more deferential than I was and they were kind of saying well not sure if that’s going to go all the way and whatever and my response was God I hope so. And people were kind of shocked to that statement. I said look if you just do the math on the number of patients that are going to need care and number of physicians, nurses, MAs etc. that we’ll be able to provide care. It doesn’t pencil out so you’re going to have to figure out a way of you know kind of with these kind of low risk, low acuity, urgent care types of scenarios where a bot can do those types of very basic things. If we don’t figure that out, we’ve got a huge supply demand mismatch and they’ll be rationing of healthcare which I’m super not in favor of.

Paddy: Right. You know we’ve covered two of the items on my list of the lightning round. I have one more which is also related to this topic that I wanted to get your thoughts on – voice recognition.

Aaron: Yeah, I think that’s kind of related to kind of in our world it’s going to be related to digital scribing. So, in our world that is going to be a big part of it as well as you know kind of the bots at home. So again, you know we’re kind of as in the Amazon. Amazon would say we’re kind of at day one and all this technology is super early. So like right now we’ve trained Alexa in a HIPAA compliant way to find the nearest retail healthcare location to the individual and book an appointment right like the super basic. But you kind of see where that could go in the future and you can also see how the Alexa team has done some pretty amazing things with other partners around delivering content in specific ways and et cetera, et cetera. So, I think what you want to have is more access, that’s more convenient, and then it’s pervasive and engaging. You know I think the biggest part of the problem with healthcare right now at least from taking it from a tech angle is you know people especially the poor and vulnerable and the Medicaid population these kinds of vulnerable populations have limited access. It’s super inconvenient and one of things I always talk about in a big part of my passion is I always talk about how inconvenience hurts the vulnerable populations way more than it does middle and upper income. And the reason is you just kind of sit down and think about it. If you’re a working mother with one possibly even two jobs and one of your kids get sick, it’s a huge economic problem for you because you’re taking off. Best case scenario half a day’s work you have to travel to and fro a clinic which is probably not conveniently located, get seen by the physician and so on. So, you’re out whatever your co-pay is you’re out. The time you know that it took, and you know in terms of wages you could’ve earned it’s massively bad. So, it’s not surprising that people pick the most rational choice which is to go and go to the ED after hours. Which is the most expensive care venue. And so, you know a good example of what we’re doing around low acuity is trying to make it so convenient that you know why I would ever go to the ED for something minor right. Even if I have that situation right.

Paddy: Yeah. You know you alluded to this earlier access and convenience these are possibly among the top two challenges for health systems today. You look at it both from the clinician standpoint as well as from the healthcare consumer standpoint. These emerging technologies can only alleviate the situation and improve the situation. But I hope that man and machine together can actually address this massive problem that we have when it comes to access. So let’s switch topics we’re coming up to the end here. But I do want to touch on a couple of things. You mentioned big tech in healthcare, and I know that Providence Health just announced a big contract with Microsoft around digital transformation. All the big names like Apple, Google, Microsoft, Amazon they all have big ambitions for healthcare, but they all have slightly different approaches to the market. Of course, none of them is building the last mile solution. The innovative solutions that your portfolio companies are investing and building like Xealth and Kyruus. And we need dozens of dozens of those. That’s a whole separate issue in terms of mortality rates or whatever and we’ll talk about that separately. But what is your general sense of how big tech is coming along in healthcare and where do you see them in the sort of a steady state scenario of digital transformation in healthcare.

Aaron: Yeah, I mean if you not talking about any of them in particular but just kind of lumping them all together. You know what I’ll say is you know the fundamental they will all to a greater or lesser extent dabble in care provision would be my guess. Just basically for the purposes I think of learning healthcare and not necessarily being in the business of healthcare delivery. And the reason is this I just always I jokingly tell people I don’t know how that meeting with Jeff Bezos would go where you’re like OK I got this great idea. Why don’t we go into a kind of a 1 percent NOI business that has all these kind of legal and regulatory issues, huge amount of risk, it is hard to scale. You know I just can’t imagine what that conversation would be, or you know Tim Cook or whoever. I think rather they’re going to continue to do the things they already do which is at a high level bring more information to the party, make it more scalable to deliver care and then also shift demand around and get paid for it. Which is basically what all of them kind of do right and help consumers make better choices. And that’s the reason why a consumer would want to pay them to do that right effectively. So, I think you know if you look at all their different business models that’s what they do. And I think they will be partners. Every single one of them in various different ways with health systems and less competitors over time on a steady state basis. So, I had an interesting conversation with the leader of one of those organizations and they laid out a really great vision of how they would go after say chronic disease management or something like that. And I said that’s great. It sounds like though what we’ve got to be ready as an industry is, we need to be transaction ready and this person was like what do you mean by that and I said well. We have to collectively as a health system build infrastructure by which we can send receive and book any resource that we have. And then also be able to provide information around. The quality and the pricing of that transaction. And this person said yeah, you’re exactly right. And so, I can’t imagine them. And so I think one of the discussions we’ve been having as it is as an organization with other health systems is let’s get that part ready because even if you know that future is not true where Google with its very high browser market share and it’s you know it’s very high share of the search business or Amazon of its very high search sheriff ecommerce, or Apple of phones, or Microsoft enterprise software. Even if none of that comes _____ [unclear] which I can’t imagine it wouldn’t but let’s say it doesn’t. At least you’ve got a better experience for your consumer right. But then what will happen is there will be these different new models that they’ll need to collaborate with existing health systems in various different ways. And they will you know one of the important variables that they will pick is who’s ready. And the reason why I know that is you know back when I was at Amazon and we were my team was responsible for getting selection onto the Kindle in North America. You know a big variable was which publisher had their books ready to be put on Kindle. So, we’ve been really kind of because we’re not competitive with most of our counterparts across the health system. You know in other regions just give you a statistic. We’ve met with you know now over 100 health systems in the past 24 months have come to Seattle on that with us. And it’s an interesting discussion about how to get ready as an industry. For these changes that are coming. It boils down to at least on the front end side of things you’ve got to get really good at I mean one of the key things that are emerging at least for me have been you know you have to do an exceptional job at your core business which is you know delivering high quality care at a reasonable cost i.e. value. You have to learn to manage risk like population health/ insurance risk. That’s the second thing you have to do. The third thing you have to do is you have to have an awesome brand. And then the fourth thing you have to do is you have to be digitally ready to partner because there’s gonna be a whole bunch of different partnership opportunities. And what I don’t want to have happen is have four or five six seven different platforms that we have to integrate to. I would much prefer health systems to create a set of standards by which these different partners in the future can kind of integrate. So that the complexity on our side doesn’t grow.

Paddy: Right. In many ways it seems to me Aaron that this is we are right now at a stage where the battle is for the attention of the consumer in a primary care setting. Where does the consumer go first when there is ______[unclear]. And so, I feel like there’s a lot of activity around trying to gain control over that primary care experience. So, it’s not just the big tech firms and you look at all the non-traditional players CVS, Walgreens. They are also getting into this space. You know Walmart potentially.

Aaron: So yeah, I am more concerned about CVS/Aetna than I am about an Amazon. And the reason is because they’re actually in the business of providing care. Amazon is not. And so, it would be much more plausible for them to do a great job of competing with us on the full spectrum to your point.

Paddy: Right. Well the flip side to the big tech question is obviously digital health startups and that’s the world you live in at least the part of your daily life going up and working with them. So, you know 10 billion in VC money every year give or take literally hundreds of digital health startups. Many of the you know don’t make it. So, what’s your state of the union comment on the whole digital health startup environment?

Aaron: I think it’s very healthy assuming you know I mean I’ll give you kind of like the things I tell health tech CEOs based on my experience so far in health tech which is you know if you kind of follow these rules and this mainly has to do with the health techs solutions that are selling on the provider side. That’s the context for these comments. Well first thing I say is you’ve got to have a what I call a small story and a big story. So, this small story is how are you going to deliver value in the next 6-18 months to whoever you’re selling to. If you don’t have that nailed down to where there’s actually like a financial payback then matter. I mean you’re not going to get anywhere at scale. That’s one comment. The second comment is then the big story is got to be like all right this is much more for the VCs and you know the Chief Digital Officers of where this is going. If you saw that first problem that small story whereas the big story you know convinced me that this doesn’t just become an interesting kind of point solution that becomes a bigger solution over time that you’ve earned the right to kind of you know build based on your success with the small story. So that’s the first thing you know I would say to exact. And then the second thing is making sure the problem you’re working on is like on the top 10 or 15 agenda of a health system. That’s what we call a needle mover. The problem you can run into in healthcare is it’s the land of opportunity. And you know there is a ton of smaller problems that you know your solution will have an NPV positive effect on, but it won’t get traction within the health system or insurer or whoever because it’s not top of mind at the CEO level. Right. And so, it’s got to be one of these needle movers in my opinion because otherwise you know it’s just not going to get the attention. You know the third area is don’t overbuild your company a lot of these technologies come from outside of health care where they’re super freaked out about. You know because they’ve been trained in this you know outside of healthcare like wow this is a perishable opportunity if we don’t get our share super quick. You know it’s gonna go away et cetera et cetera. And then I see a lot of overbuilding companies from a product standpoint as well as a sales force standpoint. Most health systems will not be able to consume the amount of future development that you’re able to deliver with the product team. And then on the flip side you know the sales cycles are very very long. So, they’re 12 to 18 months. And so, if you don’t need a 50-person sales force to cover the top two hundred sales health systems. You need probably four or five right to do it effectively because there’s not that much activity between calls.

Paddy: Yeah, you know this is fascinating because what you talked back a little bit. You don’t want many of these digital start startups started as B2C business. They wanted bypass the clinician patient relationship. They figured out that’s not going to work. So, they’ve now pivoted to B2B but B2B moves more slowly and helped it is not a winner take all market, this is what John Sculley the former CEO of Apple said, he was on my podcast recently. This is not the winner-take-all-the-market and most startups think they’re the next Uber or Facebook or whoever they’re used to they are wined of this whole thinking process of hey it’s a winner take all market if you’re not the winner you’re not going to take any part of the market.

Aaron: And I think it is a winner-take-all. So, we have one portfolio coming up we’ll tell you who has one and they’ve said they’re taking all but it’s not because it’s a winner-take-all-market it’s because their competitors just couldn’t survive that chasm. And so, these guys were very very _____[unclear] in terms of you know not overbuilding focusing on you know kind of the areas that we were. We’ve been talking about and just you know just being around when the segment of the software that they’re working on gets defined and you know people say oh this is a thing now I need to buy it. They ended up being a winner take all just because they were around, but you had these other CEOs kind of you know headed down this path of like all right. We are probably be two three major competitors in this market. It’s a big market so.

Paddy: Right. Well Aaron we’ve pretty much come up to the end of our time here. And this has been a truly fascinating conversation and thank you so much for sharing your thoughts, sharing so much information about the work that you’re doing. It seems like really exciting stuff. I wish you and everyone in your team all the very best and I look forward to staying in touch.

Aaron: Thank you so much for the opportunity I really appreciate it.

We hope you enjoyed this podcast subscribe to our podcast series at www.thebigunlock.com and write to us at info@thebigunlock.com

About our guest

Aaron is Executive Vice President, Chief Digital Officer, Providence St. Joseph Health (PSJH), and Managing General Partner, Providence Ventures (PV). Providence St. Joseph Health is a not-for-profit health system that combines Providence Health & Services and St. Joseph Health. Both organizations have served the Western U.S. for more than a century and together comprise 106,000 caregivers who serve in 50 hospitals, 829 clinics and hundreds of programs and services. Aaron is responsible for digital and marketing for PSJH. His team is also responsible for driving innovative new programs across PSJH that improve convenience, lower cost and improve quality. Aaron is also responsible for Providence Venture’s $150M fund which invests in early to mid-stage health care technology companies. Aaron serves as on the boards of PV portfolio companies AVIA, Kyruus, Wildflower Health and Xealth. Aaron is a current board member of Presbyterian Healthcare Services, an integrated not-for-profit health system based in Albuquerque, NM.

Prior to PHS, Aaron worked for Amazon, McKinsey & Company, and was a founder of two early-stage technology companies funded by New Enterprise Associates and Mayfield. While at Amazon, Aaron was general manager of Amazon’s self-publishing and print on demand business. Aaron went on to lead the Kindle North American Trade publisher business helping major publishing partners like Random House, Simon & Schuster and Harper Collins transition their businesses to ebooks on Kindle.

About the host

Paddy Padmanabhan is a widely published and quoted thought leader on digital transformation in healthcare. He is the author of The Big Unlock: Harnessing Data and Growing Digital Health Businesses in a Value-Based Care Era, and the CEO of Damo Consulting Inc, a digital transformation and growth advisory firm based in Chicago.

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Digital innovation is an applied science

Episode #19

Podcast with Manu Tandon, Chief Information Officer, Beth Israel Deaconess Medical Center

"Digital innovation is an applied science"

paddy Hosted by Paddy Padmanabhan

In this episode, Manu Tandon discusses how Beth Israel Deaconess Medical Center, a Harvard Medical School-affiliated academic medical center, is working towards their mission to bring in innovations that are happening outside of healthcare.

Digital innovation is an applied science; it is about finding new ways to solve existing problems through emerging or sometimes through traditional technologies as well. At Beth Israel Deaconess Medical Center (BIDMC), a core part of the overall technology stack is their homegrown EHR system. BIDMC is the only health system in the country to run their own EHR system. In this podcast, Manu Tandon discusses the many benefits and challenges that arise from having a homegrown EHR system.

BIDMC is in the process of migrating their existing services substantially to the AWS cloud platform; this has opened the gateway to new and innovative technology solutions for BIDMC’s digital transformation journey. Tandon advises digital health startups to focus on workflow integration and points out that creating new, technically smart solutions is not the only way to achieve success with digital health solutions; people and process matter as much as technology in the journey of digital innovation.

Welcome to the big unlock podcast where we discuss digital transformation and emerging technologies in healthcare. Here are some of the most innovative thinkers and leaders in healthcare and technology. Talk about how they are driving change in their organizations.

Paddy: Hello again everyone. Welcome back to my podcast. This is Paddy and it is my great privilege and honor to have as my special guest today Manu Tandon, CIO of the Beth Israel Deaconess Medical Center which is an affiliate of the Harvard Medical School. Manu welcome to the show.

Manu: Thanks Paddy. Thanks for having me. It’s an honor to be here.

Paddy: Thank you so much. So just to set the record straight and for our listeners to really understand the structure. So, Beth Israel had a recent restructuring right back in March I believe you want to just quickly walk us through what the current structure of the Beth Israel health system is.

Manu: Sure the BIDMC which is Beth Israel Deaconess Medical Center as you mentioned is academic medical centers, Boston- based, it’s a non-for-profit, is affiliated with the Harvard Medical School, located in downtown Boston as a tertiary quadrant care hospital with about 670 beds. On a research side receives about 170 million in research funding. And like you mentioned back in March we just became part of a bigger system the name of the new system is Beth Israel Lahey health (BILH). BILH is bringing together about 13 hospitals, few AMCs, committee hospitals and is super excited about this new development and I will say that we are in a early form of our merger. And so, there is a lot to figure out but a lot of exciting thoughts and exciting stuff that’s happening around it right.

Paddy: Right. And I know that BIDMC also launched a Center for Health IT Exploration and John Halamka was on my podcast last week and I guess that’s also part of the overall health system. Is that right?

Manu: That’s right. John and I work fairly-closely. John’s looking at the BILH level innovation market space. He does a lot of work internationally and nationally. We at BIDMC has something called a Center for IT Exploration which is like you said a little bit more focused on the academic medical center, more tied with the annual operating goals of the hospital and you know our mission here at the CITEx, which is the short for Center for IT Exploration, is to look at innovations that are happening outside of healthcare and trying to bring them into healthcare but under the context of our operating plans. If our operating plan says hey our number one problem is to maximize our existing capacity, then we are looking always looking for solutions that can help us with doing that. I hope to talk to you about a few of those as we go along today.

Paddy: Excellent. So we met Manu when I attended the Executive Education program at the Harvard Med School where you gave a fascinating presentation on your IT environment and the thing that struck me the most was that you are the only major health system in the country to run your own electronic health records system. So, you tell us a little bit about how that came about for the benefit of my listeners and why the Beth Israel Deaconess Center choosen not to implement one of the major industries EHR platforms to date.

Manu: Yeah. So, I think I’ve been here only for four and five years. Our EHR obviously predates me, several very highly talented folks have touched it as it has gone along. Back in 1970 it started with an NIH grant to two doctors Warren Slack and Howard Ablation. They were trying to build a system which was patient centered and I guess they were more patient centric at the time before such a term even existed. And so, what they did was they had this notion of usability and workflow to be central to the development of such a system. They started out with building actually a master patient index with about five hundred thousand patients which is what we had at the time and then sort of one thing kept leading to another and over time they added you know clinical ancillary systems like labs and radiology, and the diagnostic, administrative systems like registration, admitting, outpatient appointment, charge capture systems, clinical documentation. So, this has now grown into what we call OMR. And then includes basically the entire gamut of EHR functionality in 2004. We launched web OMR, which was basically a web-based version of OMR. So that’s kind of where we are right now in terms of your question of why we still use it. It works within the four boundaries of the hospital fairly-well; it compares quite favorably and provider satisfaction surveys. We occasionally compare its functionality to the leading EHR vendors, and it seems to fairly okay on that account as well. As I mentioned is browser based so that has some advantages to it. It’s accessible from any browser running on any device anywhere. I will also add that having your own EHR allows us to control the workflows and as I’m sure you know one of the biggest adoption barriers to innovations and third-party innovation especially is workflow integration. So, we seem to not have that issue. I think this combination that we have has resonated with several innovators like Amazon, Google, and MIT with whom we have quite fruitful partnerships. I will say it does come with challenges. Interoperability is I will say as a national level it remains a challenge and you know keeping up with interoperability is a challenge, I think. You know occasionally we have to go through certifications that draw resources to it regulatory requirements state or federal. And I think now that we are part of a big system as I mentioned the top of the call on your prompt. You know I think we are taking a look at safe handoffs of patients within the system and where do we go with our EMR. But I would say we’re all where we are right now. You know the EMR works quite well like I said within the four walls of the hospital it provides a good core platform if you may for workflow integration, for innovative solutions which we see as a differentiator. And then obviously it helps that it is very friendly to the bottom line as it comes at a very tiny fraction of what it would cost otherwise. And we have been blessed to have great staff highly skilled, dedicated. Even after so many years, Paddy, of its existence we are still rolling out more than a dozen enhancements every month to it. So, it’s a very robust environment.

Paddy: That’s a fascinating story actually. So, can you talk a little bit about the overall technology stack and the ideas we see that you manage and a little bit about the high-tech governance model.

Manu: Sure. So, the tech stack, we spent some time talking about it. The core of our tech stack is our homegrown EHR system. But then we have all the typical applications you would imagine you know PeopleSoft; we use PeopleSoft software for HR finance, supply chain, several websites, revenue cycle system. We are in the middle of a multi-year project to migrate to the Amazon Web Services public cloud. So, at this point we are about 50 percent migrated. Over the course of the next year and a half we expect to complete that project. I will also say that besides having a core EHR we have been, as we have been thinking about our digital strategy. We have been thinking about expanding, if you may, our core EHR platform by adding three additional platforms that work fairly closely with our core EHR platforms. I would say those are our mobile platform where we are able to add mobile apps that work well with our EHR. We have added a location services beacon/ IoT platform and we have added natural language processing NLP platform and all these additional new platforms that I mentioned are all hosted on AWS. So, we have sort of a hybrid data center model going on. I will say that culturally we are kind of like a product shop within a hospital, if you may, because we have a full stack of as you can imagine we have developers, architects, designers, analysts, testers. So, we are more like a software shop that way more traditional software shop within the hospital. That’s what our tech stack looks like. In terms of your second question on governance which by the way I want to say that’s a really key question and sometimes often overlooked. So, I congratulate you for asking about it. It’s probably a session that I can talk forever on, but I will just summarize by saying that we take governance very seriously. We have four components to it. We have a steering committee with about 24 members that owns the strategic plan. The second component of our governance is a fairly straightforward way for anyone to make any IP requests. In fact, since we have put that new process, we have seen about a 300 percent uptick in the number of distinct users that make the request. The third part of our governance process is a robust upfront triaging system which is really where we put our smartest people, I call that part of the secret sauce of governance. In the final leg of our governance is a transparent system for reporting progress to stakeholders. I think the reason is critical because the governance process allows us to what I will say establish trust, transparency, and accountability and I think those three are prerequisites before one can launch innovation and digital solutions.

Paddy: Right. So, you mentioned digital strategy in my podcast. We talk a lot about digital strategy and digital transformation. Our research and everything that we see in the market and all the CIOs and everyone else that I talk to suggests to us that healthcare is still in early stages of a digital transformation. The definition of digital varies from health system to health system. So, can you talk to us a little bit about how you’re approaching digital and what are some of your key priorities. You talked about a couple of those earlier but how do you treat digital differently.

Manu: When I think about this, I can go back to like what is digital innovation. Is it the development of new capabilities or is it really something else? And I guess you know different folks have different opinions about it but where I personally land on this, I think that pure new capabilities I think emerge from real science or pure science. And I think you know I call them innovations and discoveries. To me digital innovation is an applied science. It’s about making connections. It’s about finding new ways to perform existing functions. It’s about seeing a business problem from a 360-degree view. Understanding the people process and technology components that are playing into it and then really creating a solution that leverages either new or in fact just sometimes traditional technologies in a new connected way which to me is the innovation part of it. In terms of how we handle it internally we don’t necessarily differentiate between the innovation stream and the more, let’s just say, conventional stream. We have one common process for our users to engage IT regardless of whether they are looking for a traditional or a digital platform. Like I mentioned earlier we are a common triaging process that really acts like a matchmaker if you may between business problems and the right technology platform whether that’s a new innovative technology or existing technology. And I would say that organic growth of innovation within our otherwise product-oriented development shop has served us fairly well and that’s how we see ourselves continuing down this journey.

Paddy: So, the way you’re defining digital innovation as you take emerging or existing technologies or traditional IT, you find new ways to do things that are better faster, cheaper, better experience. Is that a reasonable summary?

Manu: That’s a perfect summary.

Paddy: Very good. Now are you also the Chief Digital Officer by definition? Is there is a formally named title or is the CIO also the Chief Digital Officer at BIDCM?

Manu: We have one unified team I would say. So, the quick answer is no we don’t have a Chief Digital Officer. We have what I would say one unified team all under the CIO. So, when I say unified team, I am including our core operations, we run a 24/7 hospital after all, as all likely needed to support that. It also includes our entire EHR product stack that we talked about a little back. And then it also includes our Center for IT Exploration that we refer to the top of the call which is really our innovation arm. It’s all under one team, one triaging system, one way to engage, one budget if you may. And a lot of the staff that works into these three streams intermingle and sometimes move on from one role to another quite a bit. I would say Paddy, that’s a conscious choice we made it to do it this way. Sometimes doing it this way may seem like it can slow things down. I know a lot of organizations have taken a different sort of part to this where they have created the center of innovation sort of outside of operations. We chose to not do that. We chose to keep it in operations because I believe in the long run that’s more scalable and plus the solutions that come out of the innovation side. If you may get absorbed better in the operational side and are sustained longer and in a more informed way by our staff when you do it in a combined unified way like I defined.

Paddy: Right and I think you are a little bit unique in that regard because as you pointed out what I see in the broader world of health systems is that the innovation group tends to be a standalone unit at least among the larger health systems. The digital and the IT function are kind of rolled into the same role. Is that also your observation? Do you kind of agree with that statement?

Manu: Yeah that’s exactly right. So, we thought hard about that and made the choice that we made for the reasons that I explained.

Paddy: Right. Now let’s talk about digital strategy itself within your health system. What we are seeing in other health systems is that there’s multiple models for driving digital strategy. At one end we have a model where they say our EHR system is our digital strategy. So, you know fill in the blank with whatever EHR vendor name you want to put in it. That’s their digital strategy. At the other extreme we have enterprises that are taking a step back and looking at an enterprise level digital roadmap and prioritizing all the initiatives and aligning them with enterprise level strategy and goals. What we see mostly though is that digital is being driven as a portfolio of individual projects each of which is evaluated on its own merit and its own unique business case. Do you agree that is the predominant model today? Where do you see yourself in that continuum as far as an overarching enterprise level digital strategy is concerned?

Manu: Yeah, I mean I would talk to this question just based on my own experience. Like I mentioned, our story starts with having our own EHR which as we talked previously. We have paid a lot of attention on governance, a common governance process and on a conscious effort to build more platforms that support that core EHR and I feel that with those three things in place a core EHR, a strong governance process, and an expansion of platforms. I think beyond that to me the journey needs to be driven by the priorities of the hospital and so in our example our President Peter Healy and his senior management team which I am a part of. You know we every year sit down and set up our operating plan and whatever comes out of that is essentially our charter for our digital strategy that we build off. And maybe I can best explain this with a few examples. For example, one of our operating goals was to maximize our existing capacity. And one of the things we found out was the discharge process could be expedited for example if we were able to notify physicians of the availability of a result that perhaps is the last thing waiting between a patient getting discharged. So, you know we could use our some of our mobile platform in that particular example to build a mobile app that notifies the clinician smartphones or even their watch that results back and with one click. Given that it’s a browser-based system takes them into the EHR where they can put in the discharge note order and then the patient can be discharged. Why is that important because that maximizes capacity, it doesn’t make someone stay here any longer than they need to. Another example is you know in hospitals like ours the operating rooms are the biggest focus of both resources and opportunity. And I don’t know if you know how operating rooms or blocks are utilized but it basically boils down to every surgeon having sort of a slice of time if you may where they can book their patients into. Now, if a surgeon is not going to be there say two months from now or let’s say two weeks from now because they’re going to go on vacation or something and they say release their block. How do you make sure that release block gets rebooked? And there’s a rare use case where we thought that a simple mobile app that could notify unexpected availability of blocks to other surgeons could help improve our backfill rates and we have seen that. So, these are just examples to sort of support the point that to me the digital strategy is having common governance, having common platforms, having a dedicated team but then really be solutions driven based on the top business priorities.

Paddy: Right. These are great examples of the real bottom line benefit and in the short term it’s not like you’re waiting for a long time to spend something up and waiting for the results. So, these are actually a great example. So, Manu one of the things that I do in my podcast is something got a lightning round where I ask for the top of my thoughts from my guests on a handful of emerging technologies. It doesn’t have to be necessarily what’s happening in your own health system but a general observation around the state of adoption of technology. First one is something that we’ve already talked about at length in your context. But I’d love to hear your views on what you see as adoption rate in the health system marketplace – cloud computing.

Manu: I mean you must have picked that up I’m favorable towards cloud computing. I think it’s cost effective; I think it provides flexibility. I think it can be more secure than on-prem if it is designed correctly and like we experience in our journey with AWS, it actually opened up to new innovative platforms to surround our EMR with. Prior to having this flexibility, I think you know if we had to try to do solution, we would have to set it up for the new servers and it would take months. Now we can basically try things within the click of a button, we can switch it off when we want to. So, I am overall very positive about the cloud as long as it is given the due diligence that it deserves to make sure that it is designed correctly and securely and use productively.

Paddy: Do you feel like your peers in the health system space by and large embraced cloud and they’re well on their journey towards migrating significant portions of their workload and getting into a hybrid kind of a model?

Manu: I don’t know. I mean I think there is more usage of SaaS solutions in the healthcare sector whether it’s cloud ERPs or service centers or call center solutions. I think the opportunity still exists for migration of on-prem assets to the cloud in the healthcare sector. I especially talk about this with anybody I can, and I would be a proponent for it.

Paddy: Right. Let’s move on to the next one. So, a lot of talk around this artificial intelligence, machine learning. Where are we in the healthcare space?

Manu: Well you know I think there’s a lot of attention with AI/ ML in the sort of image recognition. But I will say that I think there’s a ton of potential of AI/ML in what I call core operations and in reducing administrative burdens on clinicians. I’ll give you just a few examples that we have had some success with here. As you may know, before you got to have a few forms in line. So, got to have your consent form, you got to have your H&P form which is your history and physical form. And these forms come in all shapes. They’re called forms but they’re literally not forms. They’re just basically blocks of information that can come in and faxes and from different places and sometimes hand carried in. So, this is great for machine learning. Machine learning does well in recognizing you know images and NLPs are very powerful for this. We have implemented using TensorFlow for solution that runs on AWS with consent forms. We’ve been using a solution from Amazon called comprehend medical to detect H&P forms and they are now in production and they are saving hours and hours of time of nurses and other skilled resources that would have otherwise been looking for these forms. You know that’s an example of how I see machine learning playing a role on the operational and administrative side of it.

Paddy: Is your data and analytics organization are also part of your function or is it a standalone function?

Manu: It is part of our function.

Paddy: OK and clearly as part of your Amazon relationship it sounds like you are taking advantage of all of the advanced analytics capabilities that they offer as part of their cloud services. So, do you feel that in addition to just the cloud computing aspects of it which is scale and efficiency. You’re also getting the incremental benefit of all of their advanced tools if you will the analytical tools?

Manu: Yeah. It allows us to sort of try quickly, fail quickly, move on quickly or try quickly, succeed quickly, move on quickly. Because it has lowered the barrier of entry into bigger stacks of platforms which are otherwise not easy to get to. So that’s the beauty of it.

Paddy: Right. OK. The next one on my list – voice recognition.

Manu: Yeah, I think specifically in medical context voice recognition has great potential. So, understanding not just words but inferring context like taking out diagnosis, problem lists, and prescription lists with a high degree of confidence from unstructured data to convert that into structured data that can in turn then be fed into ML models. I think voice recognition and we are seeing solutions in that space. I think that’s to me I think the awesomeness of its potential because it can take this tons of knowledge that is locked in unstructured data and make it more structured.

Paddy: Right. The last one on my list here is something that’s kind of was in the news a bit in a big way last year but it seems to have fallen off the radar a little bit. I love to hear your thoughts on it – blockchain.

Manu: So, I’m high on cloud I don’t know what to say about blockchain. I am yet to see, I mean I’m Obviously open minded about it, but I’m yet to see a strong healthcare use case. I think I’m standing on the sideline observing it more that I’m not actively pursuing it as that’s how I would say.

Paddy: Yeah, you and several other CIOs I must add. OK. We’ve covered a fair amount of ground so far Manu and we’re almost coming up to the end of our time. Let me ask you something. What do you see as the top three challenges for a typical health system CIO today?

Manu: You know Paddy I can speak in context of my world. I think in my world demand and supply of IT services is one of my top challenges I would say. I think in general I think there’s three times the demand of what we can do. So even though we do hundreds of projects it just feels to me like it’s not enough. In the healthcare sort of business environment, you can’t expect to just keep adding resources to address that. So how do you enhance your productivity. How do you get more smarter in the way you work is something that I am constantly finding myself thinking about. We are doing things like trying to you know in IT worker space you know context switching is very costly. Programmers like to have dedicated space where they can work on things without disruptions that enhances focus. So, we are looking very carefully at how our unplanned work sometimes seeps into our work streams and I’m a bit of a fan of The Theory of Constraints. So, I try to look at it from the constraints perspective as to understand where our bottlenecks are. And we use methods like the Kanban boards to manage our weeps. And we look at it to try to synchronize our work across the department. All this to say that the challenge of demand and getting productivity enhanced is I would say at the top of my mind. Other two challenges, I would go back to interoperability. Save handoffs of patients between healthcare systems are when they arrive at a new place remains a challenge. And cybersecurity I would say is the third one. I spent a good portion of my time with my very capable CISO to deal with cybersecurity seems to be almost always under some kind of an attention or the other. So yeah those are the three demand, interoperability, and cybersecurity.

Paddy: All right. Very interesting and we didn’t talk much about cybersecurity. There’s probably a whole separate topic for a whole separate conversation. But as far as the first one is concerned, I imagine there’s a lot of technology consulting firms out there who love to come in and help you and I’m sure you have a lot of calls from them anyway. Just to round out our discussion today, want to talk about the digital health startup environment. You know we follow this a lot; this is kind of what we do as a firm in our digital transformation advisory practice. You know the broad numbers are that VCs are putting in about 10 billion a year give or take on funding digital health startups. The vast majority of them don’t go anywhere. Of course, the past week we saw a couple of big digital IPOs come out so that’s like a shot in the arm for the industry. What’s your sense of, what that whole landscape looks like today? Are you seeing real innovation coming out that you think you can integrate into your environment and accelerate your innovation. And if so what’s your advice to digital health startups looking to partner with the BIDCM in your digital journey?

Manu: Yeah I mean I think I get this question quite a bit. What I find myself end up telling folks is something actually that we talked at the top of this podcast which is paying attention to workflow is not enough to have a smart solution. It has to be put in the context of a very fast paced work pattern. The opportunity to impact lives is a short window where you can impact the decision making of a physician. So, I think thinking of the workflow part of it, I would suggest is one of my top advices I would also say that the less data you need for your solution the better. It’s an unfortunate advice to give. Data should be more fluid than it is today but that may or may not be the reality. So, if your solution depends on tons of data integration with major vendors, I think that’s a red flag to me. And then finally I would say that people and process matter as much as technology. I think innovation is not a technology only domain. So, creating new technically smart solutions is not the only way one can disrupt the space, the process side of it, and the people sign up for it it’s just as important.

Paddy: Yeah, I think that’s well said because people tend to conflate cool tech with digital health innovation and the people process the cultural side of it, the workflow integration. This is all the you know in the balls of how you actually make this thing happen very often. That tends to get overlooked. You also mentioned interoperability which is a big challenge. Even though in your environment you’re operating your own EHR system. So, for internal innovations I imagine it’s a lot easier for you to roll out innovation. But for someone else to come in and integrate with your environment I imagine it’s a little bit more of a challenge.

Manu: Yeah, indeed. I mean it is easier for us, almost think of it as a differentiator. And we do have APIs and we do integrate with a ton of _____[unclear] systems when we need to do so but I agree with everything you said.

Paddy: Fantastic. Manu it’s been such a pleasure speaking with you. I learned a lot and I’m sure our listeners are going to find this to be a fascinating conversation as well. Once again thank you so much for coming on the show and I look forward to staying in touch with you.

Manu: Thank you Paddy. Thank you for having me.

We hope you enjoyed this podcast subscribe to our podcast series at www.thebigunlock.com and write to us at info@thebigunlock.com

About our guest

Manu serves as the Chief Information Officer for Beth Israel Deaconess Medical Center, a Harvard Medical School-affiliated academic medical center. In his current role, he is responsible for all IT matters pertaining to the academic medical center. He directs BIDMC’s “Center for IT Exploration” which works to adopt innovative analytics, mobile, cloud and AI/ ML solutions for operational efficiencies and to enhance the experience of BIDMC’s providers, patients, and staff.

Before joining BIDMC in 2014, Manu served as the Secretariat CIO for Massachusetts Executive Office of Health and Human Services where he led the state’s largest IT public portfolio. As Massachusetts’ state HIT coordinator, Manu led the development of the nation’s first medicaid funded statewide Health Information Exchange (HIE) known as “MassHIWay” which has now delivered over 200 million healthcare transactions since its inception.

Manu was recognized by Computer World as one of the top “100 Premier IT Leaders” in the world and by New England HIMSS as “The CIO of the Year” for 2014. Manu has an engineering degree from Indian Institute of Technology, an MBA from Boston University, and an MPA from Harvard Kennedy School.

About the host

Paddy Padmanabhan is a widely published and quoted thought leader on digital transformation in healthcare. He is the author of The Big Unlock: Harnessing Data and Growing Digital Health Businesses in a Value-Based Care Era, and the CEO of Damo Consulting Inc, a digital transformation and growth advisory firm based in Chicago.

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Digital transformation: Our trajectory is good, our position is imperfect.

Episode #18

Podcast with John D. Halamka, Executive Director, Beth Israel Lahey Health Technology Exploration Center

"Digital transformation: Our trajectory is good, our position is imperfect."

paddy Hosted by Paddy Padmanabhan

In this episode, health IT veteran John Halamka discusses how the Health Technology Exploration Center, incubated within Beth Israel Lahey Health, is testing emerging technologies in the digital health innovation ecosystem.

In the world of digital health, we are seeing an explosion of apps, cloud services, wearables, etc. Knowing how to integrate them into the workflow where they are helpful to the patients, providers, and payers is the next big step.

With over 23 years of experience as a CIO, John Halamka now mentors young colleagues and faculty at the Harvard Medical School. He advises health systems executives coming into CIO roles to be agile, take risks, and keep experimenting with new technologies.

Welcome to the big unlock podcast where we discuss digital transformation and emerging technologies in healthcare. Here are some of the most innovative thinkers and leaders in healthcare and technology talk about how they are driving change in their organizations.

Paddy: Hello again everyone and welcome back to my podcast. This is Paddy and it is my great privilege and honor to have as my special guest today John Halamka who is the former CIO of Beth Israel Deaconess and he is now the Executive Director of the Health Technology Exploration Center for Beth Israel Lahey Health. John welcome to the show. .

John: Well thanks so much. .

Paddy: You’re most welcome. So, John let’s start with this after a long career as CIO you’re now leading an exciting new initiative. Tell us how Technology Exploration Center came about and what are you focused on.

John: Sure. So, if we look at the evolution of healthcare digital health innovation throughout the world what you’re seeing is an explosion of apps, cloud services, wearables. But does anyone really know if these works or not, how to integrate them into workflow, whether they’re helpful to patients or providers or payers. The answer is not totally. And that building an exploration center inside an operational healthcare system to test out a worldwide emerging technology seem like a reasonable next step. After twenty-three years of being in an operational role I am now in a mentorship and guidance role for many young faculties and those who are part of the Beth Israel Lahey Health innovation ecosystem.

Paddy: Right. And thank you for that. You know you and I met at the Harvard Medical School Executive Education Program where you were on the faculty. You talked a lot about what you’re seeing in digital health and digital transformation of healthcare across the globe based on the work that you’ve been doing now. Healthcare in the United States is in early stages of digital transformation and the definition of digital varies from health system to health system. How do you define digital? What caused digital different from traditional IT?

John: Sure. So, how about this. We’re all on a journey to turn data into information, knowledge, and wisdom. And when I see some healthcare systems that say – Oh we’ve gone digital, we have created PDFs of paper records, we’ve digitized fax workflows. Well OK! I mean yeah that’s a digital paper but is it really possible to do machine learning on a fax. Are we able to, with a digitized PDF, do structured analytics using vocabulary controls? Well not so much. So, to me digital means codified vocabulary-controlled data that is capable of serving systems that turn it ultimately into wisdom.

Paddy: That’s a really interesting definition. I’ll come back to the question of data and advanced analytics and all of that in a bit. I just want to spend a minute again on the current state of digital in healthcare. Even the health systems that we work with and we track they are driving digital mostly as a portfolio of standalone projects. Somebody is doing telehealth, someone else is doing remote monitoring, hospital home, all kinds of things. A small handful of enterprises are taking a step back and looking at digital as an enterprise strategy. What’s your take John on the current state of digital transformation by applying the definition that you just applied? Where are health systems in this journey today?

John: Sure. So how about this our trajectory is good, our position is imperfect. And what do I mean by that. My daughter is 27. In her life she will experience coordinated care that gives her the data from each visit on her phone and I have had a mostly paper based medical record in my life. And of course, my mother has had nothing but paper right. So, you know we have gone over the course of the last 50 years to the codification of problem lists, medication lists, allergy lists, slabs and rads. We’ve got federal regulations that are encouraging us to share data across the community but it’s still a subset of the data. And so, we look at cancer in particular. My wife was a cancer patient and how easy is it to get structured cancer data out of even the most modern electronic health record today. So, it’s still tough right. Things like where is the tumor, what are the nodal involvement are there, distant metastasis. It’s mostly written in notes, its unstructured. And so I would say where we are is we’ve taken in a pareto analysis the first bold steps to put in structured data things that are most important but the tail will be very long and certainly on areas like cancer we really should move quickly so that the patients in the future have the benefit of the data from patients in the past.

Paddy: Well you talked about coordinated care and obviously that implies a certain level of coordination in the sharing of data. I can tell you from my personal experience that it’s probably the experience of most health care consumers. Data is not very portable. If I have a visit with someone who is different from my primary care physician. Those visit if it’s a wellness clinic don’t automatically make it to my MyChart and then I have a discontinuity in my records and that potentially hurts me because then my PCP has to come up to speed etc etc. He has magnified this problem across the entire healthcare system. So, let me ask you this question. You mentioned data that is fundamental to the digital transformation. My sense is and this couldn’t be a provocative statement. Much is made of the potential for advanced analytics, but the vast majority of health systems are still deeply entrenched in retrospective analytics. What is your take on that?

John: And of course, you have to look at different use cases. So, if the use case is – Oh, I am working on reimbursement and will reimbursement take many forms fee-for-service, value-based purchasing. But your retrospective analysis of performance and quality might work you know as a short term first effort and you are correct that prospective at point of care, workflow integrated clinical decision, support based on machine learning, care plans and algorithms is still very much a work in process. And, where do I have hope the FHIR CDS hooks specification which basically says EHR will be able to consume cloud services provided by external entrepreneurs inside the workflow so that you have more prospective guidance and best practices. It’s early it’s coming. So yeah, you’re right for reimbursement purposes a lot of retrospective analysis today but for safety quality total medical expense control FHIR CDS hooks and prospective Point of Care Decision Support coming in the next year or two.

Paddy: Alright, now you mentioned FHIR, Fast Health Interoperability Resources, for those who may not be familiar with the acronym. We have to talk about therefore the I word, interoperability. And I know you’ve been deeply involved in efforts to standardize APIs as part of your work with HIMSS with the Argonaut project. Tell us a little bit about the state of the union on data interoperability.

John: Well sure so if we do the very quick history of interoperability remember in 1989, we said oh what we need is something that sends demographics and orders and results around HL 7 V2. And actually, I mean we’ve seen pretty good success of being able to knit together ancillary systems and core electronic health records with HL 7 V2 but that by no means is interoperability of your entire lifetime record or sufficient for many other use cases. So, in the Bush administration and the Obama administration we moved to XML forms and although those were good at providing a summary record of an encounter, they were filled with optionality you never quite knew what data you were going to get. And they were challenging to get say a subset. I just want to see the EKG or just the lab because they were a document right. They read the entire visit. So, the next logical step after the CCDA was an API where you are able to query a resource and say give me just this bit of data in a highly structured schema for this patient. And that notion is very empowering because it means that entrepreneurs without a huge amount of healthcare IT expertise if given a spec for an API can say oh well all I need is the allergy information and here’s how I call it and now I’ll get the substance, the reaction, the level of certainty, the observer in a date timestamp with great consistency I don’t need to Parse XML. I don’t need a PHD in informatics. So, we’ve got our EHR our vendors going from V2 to CCDA and now to APIs a federal regulatory requirement is likely to be on the books soon requiring these Argonaut APIs for patients to easily access their core medical data. So yeah, I think that trajectory is pretty good.

Paddy: Yeah and that will be hugely empowering for patients as well. So, we certainly hope that happens sooner than later because it’s been a vexed issue for several years running. So, John we do something called a lightning round in my podcast where I ask for top of mind thoughts, I ask my guests. The top of mind thoughts on a handful of emerging technologies in health IT so it’s a perfect segue from our immediate last discussion. AI and machine learning what are your thoughts?

John: Sure, the challenges is you need to be careful about what use cases you pursue. And let me give you just two quick examples. So, you ever flown a 737 MAX airplane. How do you feel about a machine learning algorithm based on a single sensor having closed loop control of flight control? Oh, that sounds very bad. So, when somebody says no, I’ll use machine learning to control ventilators, drug dosing, make diagnoses. You say you know maybe what we want to start with are use cases that augment clinical decision making by helping say narrow the scope of what our potential actions but ultimately give those access to humans and all the machine learning work I’m doing is about augmenting and sifting through data. I’m not building any closed loop use cases for now.

Paddy: Right and when you say close loop use cases, you’re referring to use cases where the machine pretty much makes the decision on your behalf. Is that what you mean?

John: Right and may make a ventilator change, a drug change, a diagnosis you know the machine is in fact without human intervention. Creating an action that potentially could result in harm.

Paddy: Right. I don’t think the public is ready for that either. I kind of agree with you on that. All right. Next one on the list voice recognition, Alexa, Siri. What do you think of those?

John: So if you look at the history of our industry and I’m 57. So, I was there for the beginning of the PC revolution. I built an Altair 8800. Wow we didn’t need a mainframe. We could have something in our homes and then we went from that to the web. And from that to mobile. Well to me the next great natural extension of computing is Ambient Computing. And that is a quick example for you. My mom, nearly 80, lives in Southern California and I have with her permission created a comprehensive Google home environment. So, she simply walks around her home and says oh I’d like to watch this program, I’d like to listen to that music could you give me information on this author, where do I buy this book? And she doesn’t even think about it as being a computer. It is simply an ambient part of her environment. And certainly, I believe that this is the next direction for much of what we need to do in health care is we just whether we’re a clinician creating a church or a patient trying to navigate the health care system. We’re using these ambient tools and not typing.

Paddy: That’s fascinating use case. Do you ever have privacy concerns around this pervasive use of the technology in the home and this constant stream of information that is being gathered up and servers at the backend somewhere?

John: Right. And of course, every one of us has a different privacy preference. And in my particular case I have made the decision that you know I run a 70 acre farm the entire farm is Ambient Computing enabled the convenience and efficiency of having Ambient Computing for me to get through my day outweighs what I perceive as my privacy risks. But everyone may feel differently and in fact on the ambient computing devices on the farm there is an on off switch. So those who feel uncomfortable simply turn it off and that’s OK.

Paddy: OK all right. The next one on the list. This is something that you have become quite an expert on blockchain.

John: Right. So again, with blockchain you need to pick your use cases carefully. Is block chain a data analytic platform? No. Is it interoperability platform? No. And is it a management platform? No. Is it fast? No. Is it easy to use? No. But things like ensuring data integrity I can prove that a medical record was not altered or a public ledger that enables me to find information about doctors location or credentials or the notion that I as a patient might declare my privacy preferences and consents in a public ledger for general reuse. These are some use cases that absolutely have promise. So, it will not solve all problems, but it certainly is handy to solve a few.

Paddy: Right. And you mentioned the provider directory and alliances like the Synoptic Health Alliance are trying to solve just that problem. What really is a critical success factor for a blockchain initiative to gain widespread adoption. Is it the network effect? Is it something else?

John: And the answer of course it’s value alignment of incentives. So, for example as a physician I have over 1000 insurance companies that want my provider directory information and my credentialing data and things of that nature. It’s a nightmare. So, what you said was we now have a who cares is blockchain. We have a workflow that is going to radically reduce complexity in your dealing with insurance companies. Great. Anything that saves me time reduces costs a prevents public embarrassment whatever you know that will be a critical success factor for adoption.

Paddy: Right. OK. Last one in the lighting round, extended reality – AR, VR.

John: Sure, so many of my surgical colleagues feel the notion of taking imaging studies and overlaying those in a field of view as one is doing an operation provides a level of guidance and safety. Certainly, the notion of training using a VR is important in many of the sim centers do that fairly well. So, as a physician who trained in a very old fashion dissect a cadaver. And by the way the tissue is largely degraded and very hard to visualize. I absolutely see the value of both augmentation and training using these techniques.

Paddy: I’m actually familiar with that use case. It’s a startup that I’m aware of that uses haptics to simulate the whole cadaver experience that you just described. Fascinating. Let’s switch back to digital health. Now this week has been a big week for digital health. Two big IPOs – Health Catalyst, Livongo – hard to escape you know all the attention that’s going into those two. So, 10 billion in VC money every year give or take. Most startups are struggling and after a long draught out we have three major health IPO this year. What’s your take on the current state of digital health startups and digital health adoption? Are we turning the corner here or are we going to continue to struggle for a little longer? What’s your take?

John: Sure. So, I think there is some worldwide societal problems to address like the aging society, lack of access to appropriate specialists. And so, when I look at some of these digital health startups which are doing Internet of Things, telemedicine, AI, machine learning they are addressing some of these major societal problems. So, as John Kotter at the Harvard Business School tells us nervous is going to change unless there’s an urgency to change. And having health care at 18 or 19 percent of the GDP aging society a low birth rate and not enough care is an urgency to change. So, it seems to me that the next couple of years we’ll see these digital health startups become an essential part of our health care system and potentially could even reduce some costs or if nothing else bend the cost curve.

Paddy: Right. OK. We’ve pretty much coming up to the end of our time here too. And I have one last question for you. Your career 23 years as a CIO and more you successfully reinvented yourselves yourself a few times over. What advice do you have for those coming into CIO roles in health systems today?

John: I know I am often asked to predict the future and I say I can look ahead to six quarters. Beyond that who could predict right, who would have predicted the internet’s impact in 1993. So, I think the answer is just be agile, recognize your time horizons are short, and take risks because you don’t quite know what technology is going to triumph. So, try a lot of them, fail fast and eventually one will hit. And as you point out their reinvention looks like it was planned well to be honest sometimes just good luck.

Paddy: That’s a candid assessment. John it’s been such a pleasure speaking with you. Thank you so much for coming on the podcast and look forward to following all of your writings in the Geek Doctor and the blockchain newsletter. Among the other things that you are doing. Thank you once again.

John: Well absolutely glad to be here and thank you.

We hope you enjoyed this podcast subscribe to our podcast series at www.thebigunlock.com and write to us at info@thebigunlock.com

About our guest

John D. Halamka, M.D., leads innovation for Beth Israel Lahey Health. Previously, he served for over 20 years as the chief information officer (CIO) at the Beth Israel Deaconess Healthcare System. He is the chairman of the New England Healthcare Exchange Network (NEHEN), and a practicing emergency physician. He is also the International Healthcare Innovation professor at Harvard Medical School.

Dr. Halamka completed his undergraduate studies at Stanford University, where he received a degree in medical microbiology and a degree in public policy with a focus on technology issues. He entered medical school at the University of California, San Francisco and simultaneously pursued graduate work in bioengineering at the University of California, Berkeley focusing on technology issues in medicine. He completed his residency at Harbor–UCLA Medical Center in the Department of Emergency Medicine.

As the leader for innovation at the $7 billion Beth Israel Lahey Health, he oversees digital health relationships with industry, academia, and government worldwide. As a Harvard professor, he has served the George W. Bush administration, the Obama administration, and national governments throughout the world planning their healthcare IT strategy. In his role at BIDMC, Dr. Halamka was responsible for all clinical, financial, administrative, and academic information technology, serving 3,000 doctors, 12,000 employees, and 1,000,000 patients.

Dr. Halamka has authored a dozen books about technology-related issues, hundreds of articles and thousands of posts on the popular Geekdoctor blog. He runs Unity Farm in Sherborn, MA and serves as caretaker for 250 animals, 30 acres of agricultural production and a cidery/ winery.

About the host

Paddy Padmanabhan is a widely published and quoted thought leader on digital transformation in healthcare. He is the author of The Big Unlock: Harnessing Data and Growing Digital Health Businesses in a Value-Based Care Era, and the CEO of Damo Consulting Inc, a digital transformation and growth advisory firm based in Chicago.

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THE HEALTHCARE DIGITAL TRANSFORMATION LEADER

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Sign up to get Paddy’s Newsletter that is personally curated by Paddy along with analytical notes on the developments for the week.

THE HEALTHCARE DIGITAL TRANSFORMATION LEADER

Sign up to get Paddy’s Newsletter that is personally curated by Paddy along with analytical notes on the developments for the week.