"Incrementalism is not a bad thing in digital health"

Q. Tarun, tell us about your background, how you got into this role, and the populations you serve at Virtua Health. 

Tarun: “Wherever you go, there you are,” I think, sums up my journey which wasn’t ever truly planned. I’m a physician by training — Internal Medicine Hospitalist — and I was actually going to be a Gastroenterologist. I had a Fellowship lined up and then, I came to profound realization that I just didn’t really like abdominal pain. So, I gave up the Fellowship before I started and was gainfully unemployed. I ended up joining a startup at a time when hospital medicine was just emerging. So, I was a Hospitalist. We grew a hospitalist company, a business, and then, I exited successfully. Transition points are recurring themes in my journey but from here, I got the opportunity to get connected with Virtua. 

I’ve been very fortunate at Virtua. I’ve had a number of different roles ranging from informatics, being part of the medical group, and population health. In 2019, I was asked to take on an assignment for digital. Since we had done only five ambulatory video visits in 2019, I set the goal for 500. Then, March 2020 came along. As the saying goes, better lucky than good , we were a little short of 200,000 but we did exceed our goal that year. 

That’s the role we created to hardwire into our organization some of those accelerations from digital transformation being produced by the pandemic. How did we do that so as to not revert to the original way of doing things? We created a digital transformation office. I’m so fortunate to be able to head that team.

Virtua created the integrated delivery network in the southern part of New Jersey, right along that Philadelphia latitude. In terms of a market, New Jersey is pretty dense. From the population density perspective, one of the things that’s really interesting is, there is a tremendous diversity in socioeconomics. 

We have some of the more affluent neighborhoods. One of them actually has two Apple stores within 10 minutes driving distance of each other. Seven miles away is Camden, one of New Jersey’s most disadvantaged communities. It’s just a startling fact that the life expectancy among those seven miles is 16 years. That’s important for us to think about and include in our digital transformation. We’ve got to make sure that what has continued to probably create inequities does not continue to accelerate forward. 

Q. What are your key priorities for the organization? How does the digital transformation function fit into those?

Tarun:  Some of the key priorities I’ll list are probably not that different from many of the other integrated delivery networks. There have been these remarkable swings since 2020, a tough year that saw many business operations shutting down resulting in essentially suppressed demand. 

2021, for us and a number of health systems, saw a dramatic rebound of that demand. It’s likely that that suppressed demand from 2020 was coming into 2021. Then came the Omicron surge which actually hit us—from a volume perspective—harder than the first surges did. What a tough first quarter for that from the perspective of economics and running the business! Now again, it’s rebounding. 

One of the things that is really an important for us here, is understanding market volatility. That is not classically something you would think about in healthcare. That was always the story about healthcare. People are always going to be sick and so, will always need healthcare. It’s a recession-proof business. It’s anything but, and is being impacted more than ever before. 

Going one step further, it’s critical to understand that the demand for healthcare is actually way more elastic than anything we realized or expected. We didn’t understand why it was so during COVID. We literally did not see strokes, for example, at nearly the same volume before. I mean, you have a stroke. You’d think people would come forward with these symptoms. It’s alarming. 

That prompted some deeper questions about what was truly happening with our consumers, our patients. That consumer focus and trying to understand their needs is what’s really and hopefully driving for us what we’re trying to take apart. 

Q. Given those priorities, how are you, as Chief Digital Transformation Officer, directing your investments? How are you factoring in these significant differences in your populations and their expectations from a digital technology enablement standpoint? 

Tarun: One hundred percent. Within the priorities in our Digital Transformation Office, I will quote a formula that we stole from someone who we know stole from somebody else. I’m not exactly sure where the true origins lie but that formula is: NT+OO=COO. Memorize that formula because it continues to keep our standards. 

What does that mean? New Technology + Old Organization = Costly Old Organization. 

We have a budget for digital transformation. If it was as easy as buying a technology, we would have all transformed at this point. But if you simply just buy technology and you wire it in to the existing organization, basically you’ll just be an expensive version of what you were, previously. 

And if we were previously good at what we were doing, then why are we doing the digital transformation? Yeah, we try to spend a lot of our time from our priorities on understanding the operations and where lies that mismatch between what the consumer is truly asking on one end and how we provide it today. Then, we see what are the ways we can transform. 

With regard to my title, Digital Transformation Officer, I would say the T in that title is the capital letter. What is the transformation that has to occur? Where does digital come into it? Where’s the operational change as a company? Sometimes it’s going to be a real problem and at others, the digital is ready while the operations is not, for the transformation. Sometimes the operations may be ready while the digital isn’t. That match is crucial. We spent a lot of time asking, “Is it ready?”, and that’s where we’ve been successful, so far. 

Q. Can you cite examples of how you’ve implemented this thinking in practice at Virtua? Where do you start – with a journey map or company research or something else — before you eventually land the technology? 

Tarun: I don’t think I have one very good answer. In fact, rarely is there a right answer. However, there are usually a few wrong ones to start with. If you must, try to avoid the ones that are pretty clearly wrong. That helps you call the field and then, you just have to pick something and go. 

In some cases, yes, you do your consumer research, get focus groups, and get data back. But don’t get paralyzed by saying, “Okay, I need more data.” Get it, make an educated guess, and get a prototype out there. Then, get feedback and do the five iterations into it. That’s when you actually start to realize that’s what the person’s after.

This concept of agile design in software has been around for 20 years. Agile design doesn’t happen in an integrated delivery network. If we, in health care, can specifically start thinking along these more rapid iterations, it’s very uncomfortable for us because as physicians by training, one part of the Hippocratic Oath in our statement agreement on the theory, says, do no harm. You’d never hear that in a software development company. They’re completely fine with it being, “No, that was a bad idea.” We, however, have to find a balancing act. To me, it was a bad idea. But it was safe. However, that just didn’t make the mark. One example would be online scheduling. 

We’ve had online scheduling technology but what we realized as we started digging deeper is that there was a complete mismatch between what the consumer was seeing and what the doctors and our medical groups had in their schedules. The analogy I’ll give you is if you called the office saying “Let’s use an airline,” and if you called say, American Airlines, the ticket agent would see all the seats on the plane if you were physically at the ticket counter. But if you went to the website, you’d only see rows three and four. 

How is that online scheduling? This could be described as one of those moments when “it was on, but the operational piece had not evolved.” So, what we went from is doing around 13,40,000 online scheduling appointments per year to doing 13,14,000 per month. That’s within about 12 months. Thousands of phone calls and people making their own appointments had a downstream impact both from a revenue and a cost perspective and it’s been enormous. 

Q. Online scheduling is a fantastic use case. What were the challenges you had to overcome? 

Tarun: An analogy I’d like to use is, the fear factor. Do people necessarily resist change because they don’t see the promise? No. Most people will say, “Yeah, I can see the promise.” But the question is, I can also tend to see and specifically, having worked with physicians it comes down to our residency training, it’s gladiatorial training. You do X, Y, Z, QW5. Patient survives. 

Now we’re saying, “Hey! Listen, skip a couple of things. Don’t go through this convoluted path. Just go from here to here. It’ll be fine.” I know if I do this every single time, I’ll get a good outcome. The question then, comes down to trust. 

For us, with our clinicians, we say, “Okay, help us understand what makes you worried about putting your schedule online?” The biggest fear over and over was, “I am worried that the wrong appointment is going to get booked.” What that means is, it’s a brand new patient who’s put into an established slot. With new patients, clinicians need half hour, 45 minutes longer. With established patients, perhaps it’s a 50 tweet I’m behind already. That happens first in morning. I’m catching up all day. 

That was something we could work towards. If you get in with it, you always want to have your early adopter folks. You just let them go. Your late adopters are going to be really hard, but you can get the momentum in between. That’s where it is and that’s just working. We say, “Let’s do a couple. Turn it on for a day. It’s not a big bang approach. Just turn it on for a day.” We ask “How’d it go?” and then, just turn it on for two more days. 

It sounds painful and iterative, but the reality is that’s how change happens. I just sit back now. It’s like an Atul Gawande article — slow ideas — everyone wants everything to go viral, and when they do, it’s wonderful. 

But some things don’t go viral and you’ve just got to work with people and meet them where they are. 

Q. Let’s touch upon the technology enablement aspects. What challenges did you have to deal with when you implemented the tech, the data, or the infrastructure? 

Tarun: I had put this in my LinkedIn profile. I don’t know if I came up with this de novo or sublimely, I stole it from somebody else. But I’d heard the statement “Culture eats strategy for breakfast.” If that’s the case, then, workload eats technology for lunch, dinner, and dessert right here. You ask someone to swivel between screens, and I already know the impact of what I want to get if I swivel to another screen, to another log in, even if it’s single, sign on. I already know the voltage drop is going to be enormous. 

The other question we try to ask is “So what?” Maybe there’s a nicer way to ask it, such as “If I do this technology, what am I going to get for it? What’s the proposed return?” 

One of the things our team uses — whether you use a balanced scorecard or you have smart goals — are OKRs (Objectives and Key Results). We ask, “What are my leading key results? What are my lagging key results?” 

If I put this in, one of these numbers has to move. The other thing we do from a technology perspective if it’s not moving, is, check “Are you prepared to rip it up?”

Yet another thing we also do is for every one thing we bring in is, we rip out at least one or two others because it just cannot be this. I think about this poster from the 1980s — He who has the most toys wins . That’s not a viable solution for us in this space. 

Q. There are literally thousands of solutions to pick from once you’ve designed the experience. Right from the native EHR system and nimble young startups to enterprise class tech firms and everything in between. How do you make that choice?

Tarun: Especially given that the frothiness of the investment market has normalized for now, I can certainly give you a framework. We look at different things that are important for us — not everything can be transformational — and incrementalism is not necessarily a bad thing. 

So, we go, “Hey! Listen, we just need to get a little bit better at this.” We need to constantly iterate and I would think of something like order sets. You have to make orders better. I’ve got to make some of my other functionality within my EMR better. That’s incremental and important. You can’t stop that. That’s not where our sharp focus is. We try to focus on five or six major transformational things and we have to stay so. 

One of the problems we had and one of the mistakes we made early on is we didn’t say “No” enough. I am trying to say “No” a lot. If you really want to do this as an operational owner, you have to prove to me what you’re prepared to do, to do this. I can’t make the change for you btu I will make the change with you. It’s how we think about it. 

When we look at technology, I think we look at it as “Is this a problem that one of our existing solutions can either solve today or in the next 18 months? Somewhere in that window?” It’s a little bit different depending on the problem. 

If it can be solved today with an existing solution, then, to go outside of that world, you really need to have a really good explanation for why someone would want to go with a tool outside of that. 

If it can be solved but not today; and if one of our existing tools has a good road map to get there in the next 18 months, then, it’s a decision around the severity of market need. What’s the market demand on that one? 

Then if you say no, we feel pretty confident it’s not on the roadmap or two years out. Then, we’re open to go looking with a startup or a partner. We’re trying to answer this question that states very transparently that we don’t sign ten-year contracts. 

You have to constantly keep proving yourself because the reality is, one of those native systems that we had on our native platforms eventually is going to catch up. It’s probably been on offer for a fraction of the cost of what the startup is. For example, video visits. We were paying hundreds of thousands of dollars for video visit solutions. Now we’re paying $0.28 for one video visit. Purely click as you go.

So as the commoditization happens, the startups have to continue to say, “What is the problem I am trying to solve?” You may have a good contract right now but you have to work out the assumption in three years. That’s a problem someone else may have solved for cheaper. It’s been commoditized. However, take the learnings you’ve had by partnering with the health system to say, “Okay, what are the problems? I’m going to help you solve that.” That’s an approach that I think of when we look to partner with folks. 

Q. What’s your advice to startups who are listening to this? 

Tarun: What is the reality of the world? I don’t think there’s anything I’m saying on the health care space that’s any different than any other space. Everything in health care is side-aligned — you got the big five in their respective areas. 

When talking to startups, I ask, “What’s your exit strategy? Between being lean and being acquired by Optum.” That is literally when half of the store doctors go, “Yeah, that’s our only choice.” 

With some of the startups that I’ve seen and worked with, once you get acquired by Optum, you get pitched and pulled into that space. It changes the dynamic of the original relationship because in some cases we want to work with people who are independent and outside of the ecosystem. 

In some places, it just makes sense for it to be part of the ecosystem. It’s important to be mindful of and check, “Am I sitting in a space that benefits me being somewhat separate from the big ones or complementary or eventually tied in?” That’s because I think there’s a big misnomer in health care I.T. that the health systems are flush with cash. 

If you think that’s the case, you can look at our P&L record. They’re all wrong and almost all not-for-profit. We’re talking low single digit operating margins. So, it was a bloodbath – though that may be a strong word. It was very difficult and tight. 

Each day you have 10,000 people leading the commercial insurance world where that pays better compared to the Medicare world. So, it comes back to that value proposition of what you’re truly bringing. 

Q. So that obviously begs the ROI question Are you making a lot of digital health investments? Is there a rubric that you use when it comes to building a case for a new solution where there isn’t adequate data for you to say whether it’s going to work or not, especially in a margin constrained landscape like health care providers?

Tarun: I wish I could say, we put data into an Excel spreadsheet and a formula comes out and scores 99. We go with it and it comes out with a six. We don’t. I will tell you though that, there are some gut calls you’ll get at times. We won’t leverage the house on a gut call. But I think one of the things we’ve stated, though, is our investment in digital and our thesis is very clear. Any incremental investment has to help us gain consumers who want to be part of our health system, retain consumers who, if we don’t offer this, are going to find another solution that meets their value proposition. And then, it has to be real, tangible savings. 

You can’t be this soft. Sometimes I look at some of the valuations and the ROI calculations people come up with. It’s like, “We’ll save you half a day in the hospital, which will then, lead to $10,000 of savings.” I think “Yeah, maybe you’re off by like two decimals there.” It has to be hard. Tangible.

Q. You’ve been in this role now for two or three years. If there’s something you’d like to share with your peers listening in, what would those be? 

Tarun: I’ll give two. I think they’re probably the same thing, but maybe slightly different way of saying it. 

I mentioned I was in a startup, and when I first came out of training, one of my mentors gave a statement that one of his mentors gave him, and that is, “no one ever went out of business because they focused too much.” Now, you may not be the biggest business. You may not be getting on the speaking stages, and you may not be on the cover of X, Y, Z magazine, but you’ll still be in business. 

A corollary to that is a term we use in our organization. Specifically, my team is called Coldblooded Execution — There’s a lot of cool, a lot of talk, but at the end, those who execute will win and there will be winners and losers in this space. We’ve seen it over the last couple of years and it will only continue to accelerate. That is relatively new for integrated delivery networks. There are integrated delivery networks who are essentially either are going to get acquired or in some cases shut down because they did not thrive in this business. But cold, hard execution ideas are wonderful. Execution wins. 

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Disclaimer: This Q&A has been derived from the podcast transcript and has been edited for readability and clarity