Building a Balanced Model for Healthcare: Rasu Shrestha, MD, Chief Innovation Officer, UPMC — Full Transcript

Dr. Rasu Shrestha on Creating a Perfect Mix of Innovation and Empathy at UPMC

In this episode of StartUp Health NOW, Rasu Shrestha, MD, Chief Innovation Officer, UPMC, chats with Unity Stoakes, president of StartUp Health, about the innovation strategies at the University of Pittsburgh Medical Center, and how these new technologies and capabilities are creating a newer and improved model for healthcare.

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Key takeaways from this episode of StartUp Health NOW can be found here.

[00:03] Unity Stoakes: I thought we’d start by digging into all the exciting things you’re doing on the innovation side at UPMC.

[00:09] Rasu Shrestha: Sure.

[00:10] Unity: So the world knows about you.
[00:12] Rasu: Well, it’s pretty simple. We’re just reinventing the future of healthcare.

[00:15] Unity: Just that.
[00:16] Rasu: Just that, just that. So what’s really interesting Unity, is, as you know, UPMC is a large payor/provider system, right? We have 3.5 million lives that we cover on the payor side and continue to grow. But on the provider side, upwards of 30 plus hospitals, over 4,000 physicians. Overall, with 8,000 employees. 16 billion dollars in annual revenue. So we’re a large, significant health system.

[00:45] But what’s even more significant than those numbers, is the fact that we’re really integrated. This ying and yang of the payor/provider, I believe really, is a model, a template, for the future of healthcare. So we’re not just talking about, let’s say, value-based healthcare. We’re living and breathing it on a day in, day out basis. So we are essentially a couple of years ahead, with the rest of the

[01:06] Unity: Right.

[01:07] Rasu: marketplace is. And what better place than that to use as a living lab for us to create the types of innovations and companies that we would use, not just at UPMC, but would then be able to take out to market with the right types of entrepreneurs and startups and companies as well. So that’s what we’re doing, is we’re actually reinventing the future of healthcare.

[01:26] Unity: For the last few years people are talking about this shift from fee for service to value-based care but that’s already baked into your model.

[01:34] Rasu: It is. It absolutely is.

[01:36] Unity: So as you think about new innovations, how does that change you’re, sort of, mindset as you’re evaluating?

[01:44] Rasu: So it doesn’t change it, it adds to it. Right? So, mindshift is really the keyword here. Mindshift and mindset. Because at the end of the day the biggest challenge that we have, really as an industry, not just at UPMC, around innovation and around these new care models, really is culture. Right?

[02:04] We’ve got a culture of going with tried and tested and evidence based guidelines and best practices and clinical protocols, and there’s nothing wrong with that. As a clinician by background that’s how I was trained to practice medicine. But that culture clashes with innovators and entrepreneurs and start up companies that are coming to you and saying, “hey, this is a brand new way of doing things. Trust us, it will work.”

[02:30] Unity: Right, right.
[02:31] Rasu: Right? Like, hello, what is the evidence behind this?

[02:33] Unity: Right.

[02:34] Rasu: Where’s, so, what we’re trying to do is to really play to that reality that exists in healthcare today. This culture class that we’re really choosing to ignore thus far. We’re saying alright, leveraging the very principles of design thinking and human centered design, leveraging agile development methodologies, how do we turn this disadvantage into an advantage?

[02:57] Right? So, we’re engaging end users, clinicians and patients, in the design of the strategies that we’re putting together, where, before a single line of code is written for any of the things that we’re doing, we have these end users engaged with us and starting, first and foremost, with empathy.

[03:13] Unity: RIght.

[03:14] Rasu: Right? When was the last time that a solution was created, starting first and foremost, with empathy. So these are the types of principles, you know, Silicon Valley-esque type approaches that we’re trying to bring to healthcare. But at the same time we’re saying look, the future of healthcare isn’t really going to be built in a sterile room away from a health system

[03:31] Unity: Right.

[03:32] Rasu: Like ours where, you know, we’re living and breathing these pain points on a day-in and day-out basis. So we bring in real data, real expertise, real scenarios, but at the same time, we’re also bringing in real money. Real capital, right? We’re putting our money where our mouth is and significantly moving the needle in adopting these technologies and capabilities. Not just creating them and saying, “Alright, it’s end of 2nd quarter, where’s the revenue?”
[03:56] Unity: Right.

[03:57] Rasu: But we’re implementing these solutions, we’re co-creating, iterating these solutions and perfecting these solutions before the solutions get taken out to the market. So I think it’s a model that, you know, has worked consistently well over time and now we can continue to perfect and push it out there.

[04:12] Unity: So, there’s a lot of, that’s evolved of the past few years. What’s your take on where we are today as an industry, compared to, say, just a few years ago? And, how do you feel about where we are, the state of the industry, so to speak.

[04:27] Rasu: Yeah, the state of the industry. Oh my goodness. Yeah, so I think we are at a, and I call it an inflection point. 2017 today going into 2018, we are at a really interesting inflection point. You know? And there are like three dynamics that are coming at us, if I can call it that.

[04:41] One is, this wave of digitization. And it’s amazing, right? This adoption of electronic health records gone through the roof, because of, you know, the federal incentives and everything else that’s been in place, right? From 7, 8% to 90+ % adoption. That’s amazing, lots of zeros and ones. So that’s good.

[05:02] The second, really, is we’re seeing this movement, as I discussed earlier, of volume to value, it’s not just talk. People are moving towards that, right? We’re looking at quality, we’re looking at outcomes, we’re looking at, in all of these parameters that define value over volume based widgets, which is what we’re doing.

[05:19] And then this third wave, which is, I’d say technology whose time has come. Right?

We have machine learning and AI capabilities that we just didn’t have some years back. And the refinement in terms of, like, natural language processing and specifics of what we’re doing around blockchain and Bitcoin type capabilities that we are bringing in that might have specific implications on how we free the data, how we truly enable consumerization, how we look at information securely and cyber security and cyber threats.

[05:49] So with technology, whose time has come. And with all of those dynamics we’re at a really interesting place right now in the industry, right? But the winner will be the entities that will really be able to leverage those dynamics. Leverage that inflection point, turn it around and really capitalize and taking this to the next level. Challenging the status quo and saying, all right, here’s how we’ve done it thus far, but for us to really win, here’s how it needs to be done.

[06:14] Unity: And, this might be a silly question, but from your perspective, is it the integrated models that are more likely to, sort of, advance in that scenario and be able to, sort of, bring those three different things together?

[06:27] Rasu: It’s not enough that you’ve got payors and providers coming together. I think it’s really important to look at those algorithms, look at those incentives, look at those trigger mechanisms that really define how risk shifts from the payor to the provider and starts to shift to the consumer. How you manage and mitigate that risk.

[06:45] Unity: Right.

[06:46] Rasu: And at the same time you look at this second wave of risk, which is really around disease burden. Right? The risk for a population. Or a patient, an NF1, to develop up a certain disease, right? You’re managing that risk as well. So, it’s really the integration of claims data with clinical data, with outcomes data with performance data, with cost data.

[07:07] All of these different silos. You know, we’re like, all right, you know, we have all that data, but how do you put it all together and create those right niches. Because of the end of the day it really is about behavior change.

[07:18] Unity: Right.

[07:19] Rasu: Is what we’re talking about.

[07:20] Unity: Another trend we are seeing a lot of is more clinicians becoming entrepreneurs. We call them doctorpreneurs.

[07:25] Rasu: Sure.

[07:26] Unity: You’re a doctor yourself.

[07:27] Rasu: Sure.

[07:28] Unity: What are your thoughts in this regard? Is this a good trend?

[07:31] Rasu: When I got into health IT, from being just a clinician 20 years ago, when I say just with air quotes, right? I got in because I was really passionate about this space. I became a radiologist so that I could save lives and help people. That’s the reason I became a clinician. [07:51] And what was really interesting, was after I got my informatics training and all of that, I said, you know, I could do this at scale. I could work with other innovators and entrepreneurs and really do this at scale so not just impact one patient at a time, but hundreds of thousands of patients at a time, which is really remarkable.

[08:06] And then, obtained a business degree and all of that as well, which helps solidify a lot of the concepts that we were trying to pull together. But, you don’t really have to have a white coat and a stethoscope around your neck to save a patient’s life.

[08:18] Unity: Right.

[08:19] Rasu: You could be a data scientist, you could be a programmer, you could be a developer, you could be a designer, and you could still save a patient’s life. And I say this because we are competing with Google upstairs and Bakery Square, which is where we’re located in Pittsburgh.

[08:33] We’re competing with Uber down the street because they’re, you know, hiring data scientists that are creating the next, you know, autonomous driving vehicles. There’s Facebook down the street in Pittsburgh with their acquisition of Oculus Rift, and they’re headquartered right there in the burg. So, we’re competing with all of these players, our competition.

[08:52] Unity: Because they’re new entrance into healthcare.

[08:55] Rasu: New entrance. Our competition isn’t the health system down the street. Our competition is them lot. Right? So how do we make sure that we are able to find the right talent, is a big challenge that we have. Right? Because what we want are the best and brightest minds out there, but the best and brightest minds who are also motivated to make a difference in the life of that human being.

[09:16] Because there’s no other pursuit I think that’s more noble than this pursuit of healthcare. So, I think it’s great that clinicians are getting more into this. But at the same time it really is a team sport. It really does take people from, including people from outside of healthcare working with people who have the subject matter expertise from inside of healthcare to really reinvent the future of healthcare.

[09:36] Unity: So, advice for entrepreneurs. For innovators just getting started. If they’re trying to solve a real challenge at UPMC or organizations like yours, what should they be thinking about? What do they need to know at the earliest ages of what they’re doing and building and thinking about?

[09:59] Rasu: I’d say the number one thing, really, is don’t get blinded by buzzwords. Right? It’s so darn easy in this day and age for us to just get blinded by buzzwords. I’m going to create a platform, I’m going to put it on the cloud. It’s going to be patient centric. Right? It is next generation, it will be transformational.

[10:18] So, what do you have? You have an app. Okay. Alright, let’s start there. And what are the algorithms, and what’s the outcomes, what are the specifics of the business model. Who’s going to pay for this? Right? So, don’t get blinded by buzzwords. It’s not the buzzwords you’re after. It’s the specifics of the complexity that you’re trying to obtain. Healthcare is filled with complexity. I talk about how complexitie’s a mouse in health care. And design thinking really is the cure.

[10:45] Unity: With all the extraordinary technology Innovation, science innovation, business model innovation, we need more design innovation.

[10:53] Rasu: Sure.

[10:54] Unity: Because a lot of the challenges are just around poor design. So it really does need to have that holistic, sort of, view as you’re creating. So, how do you analyze founders coming in, startup ideas coming in.

[11:11] Rasu: Yeah.

[11:12] Unity: You must get barraged with people trying to get in to UPMC. How do you know whether or not they should be given a trial, given a pilot, given the on ramp?

[11:25] Rasu: So, we are very cautious not to enter into the realm of “pilotitis”, where, you know, you get inundated with pilots.

[11:32] Unity: And that can crush the start ups, too.

[11:34] Rasu: Absolutely. It’s a double-edged sword. So, we’re less focused on the pilot. The pilot will come. We’re focused, first and foremost, really on the strategic fit with that person, that entrepreneur. With the talent that that company might have. With the passion that that entrepreneur or that company would bring to the table.

[11:55] So, that’s really important. Because culture will make or break a business. Right? And then we looked at other things like technology. Is it solid? Right? Does this actually do the stuff that, you know, it’s supposed to do?

[12:08] And then there’s product, there’s market, and all of that. But, that comes later because at the end of the day, we’re not looking for the perfect pitch or the perfect technology, or the perfect entrepreneur, or the perfect business plan, or the perfect time. We’re, in many ways, looking for the perfect imperfect. Because we are strategic. Right? Yes, we bring in the funding. But in addition to the co-creation, in addition to the co funding, there’s also a co creation element.

[12:35] Unity: Right.
[12:36] Rasu: Right? And that’s where we’re able to really have at it and create the next set of product attributes, or the next iteration of the company, and we can have a lot of fun doing that.

[12:46] Unity: Right.

[12:47] Rasu: Right? So, we need to be able to add value to that company as well. Right? And we then implement that solution at UPMC and add additional value to it. So, it really is a mix of all of those things that I mentioned earlier. And, it gets to be really interesting because, you know, we see all sorts of opportunities come through.

[13:08] But we also have to have a strategic fit with what we’ve identified as key unmet needs, clinically, operationally, within the health system at UPMC, because we believe that might be emblematic of what might be required in the rest of the marketplace and then we can add even more value back to the company.

[13:27] Unity: So, we’re here in the heart of Silicon Valley right now. One of the things we talk a lot about at StartUp Health is the rise of the rest, these emerging innovation hubs all over the U.S., all over the world. Pittsburgh has extraordinary assets.

[13:41] Rasu: Sure, yeah.

[13:42] Unity: You know, what’s going on in your region, what are some of the things you’re most excited about?

[13:48] Rasu: We just concluded what’s called the Thrival Festival. It’s like our version of

[13:52] Unity: I saw that.

[13:53] Rasu: South by Southwest.

[13:54] Unity: Yes.

[13:55] Rasu: When the organizers came to us a couple of years ago, we’ve been sponsoring it since its inception. I jokingly called it Mid by Midwest. But yeah, it’s basically where we, you know, said, all right, we’re going to take time to celebrate the successes around innovation. So with two days of tremendous design challenges, and keynotes, and panels around innovation, and then two days of music concerts, and we just have a lot of fun celebrating Pittsburgh and everything that we’re about within the region.

[14:27] But what’s really interesting is, you know, when I moved to Pittsburgh 10 years ago from Los Angeles, it was not the city that it is today. Right? But I could see the makings of it. Especially within UPMC as a payor/provider system. But today what we have is a city that really has reinvented itself. Especially in health IT, but beyond that too.

[14:47] There’s lots of activities around machine learning, around design, around banking, so there’s a lot of money, within, you know, old money, within the Pittsburgh region as well. And then, Academia. You know, there’s Carnegie Mellon, the University of Pittsburgh. The University of Pittsburgh is top 5 in NIH research funding.

[15:05] Unity: So, you have all this talent that’s around.

[15:07] Rasu: Yep, all of this, right? So, you know, there’s this old adage that, you know, software is eating the world. Right? And, I’d like to say that if software is eating the world, then Pittsburgh’s the kitchen. You know? Where we’re putting all these ingredients together into this delectable entree, right? Because it’s just perfect the way that we’re mixing it together, in terms of the passion that we have as a payor/provider system.

[15:32] Pittsburgh is ground zero for accountable care. In our competition in the area, there are payor/providers, well, there’s no other activity to that level that you’re seeing in the Western Pennsylvania region, so it is ground zero for accountable care. The things that we’re doing at UPMC enterprises around investment, and innovation, and entrepreneurship, I think we’re second to none in our approach, really, across the board.

[15:55] And then leveraging the rest of the other ingredients that exist across Pittsburgh. So, we are really trying to push that forward. But then it’s not just about Pittsburgh, it’s also about bringing in talent from Silicon Valley, and from Boston, and from Israel, and from other areas as well. But then, really trying to perfect that stew, perfect that mix, and make sure that were able to bring the best out of these innovations that, again, like I said, will reinvent the future of healthcare.

[16:18] Unity: So where should entrepreneurs, innovators, go to learn more about what you’re looking for or to try to get in the front door, so to speak?

[16:26] Rasu: Yeah.

[16:27] Unity: Just go to the website?

[16:29] Rasu: Yeah, so our website is UPMCenterprises.com. We are also on Twitter @UPMCEnterprises. I’m on Twitter @RasuShrestha. You can follow us at #UPMCinnovates. So, there are a number of different ways that you can get at us,

[16:43] Unity: There we go.

[16:44] Rasu: Through the front door and, you know,

[16:46] Unity: And, hopefully, you’ll be at the StartUp Health Festival, so

[16:49] Absolutely.

[16:50] Unity: They should come there and come meet you in person.

[16:51] Rasu: It’s a not to be missed event.

[16:52] Unity: Yep. Well, thank you for everything you’re doing. You know, the impact you’re making at UPMC. And, you know, it takes more leaders like yourself and your entire organization to really have this mindset. Because I feel like if we do this industry-wide, it’s going to make a significant impact. So, thank you.

[17:11] Rasu: Thank you very much. Thank you. Thank you, Unity.

Resources:

• [00:03] UPMC (University of Pittsburgh Medical Center)
• [00:45] Value-based Healthcare
• [01:26] Fee for Service
• [04:41] Electronic Health Records
• [05:19] Machine Learning
• [05:19] AI (Artificial Intelligence)
• [05:19] Natural Language Processing
• [05:19] Blockchain
• [05:19] Bitcoin
• [05:19] Cyber Security
• [06:46] NF1
• [08:19] Google
• [08:19] Bakery Square
• [08:33] Uber
• [08:33] Facebook
• [08:33] Oculus Rift
• [13:48] Thrival Festival
• [13:48] South by Southwest
• [14:47] Carnegie Mellon
• [14:47] The University of Pittsburgh
• [16:29] UPMCenterprises.com
• [16:29] @UPMCEnterprises