Commercializing Health Tech in Underserved Communities — Full Transcript

Transforming healthcare for low-income high-need patients takes compromise. Explore how a startup and a nonprofit are working together to help the populations that need digital health the most.


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

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Steven Krein: [0:05] Welcome to “Startup Health Now,” the weekly show celebrating the healthcare transformers and change makers who are reimagining healthcare. My name is Steven Krein.

Unity Stoakes: [0:12] I’m Unity Stoakes.

Steven: [0:13] On today’s episode, we’re going talk to an entrepreneur and a policy expert about the opportunities for entrepreneurs to focus on underserved communities. This is gonna be a great episode.

Unity: [0:24] Stick around.

[0:25] [intro]

Steven: [1:04] Welcome back to StartUp Health Now, the weekly show celebrating the healthcare transformers and change makers that are re‑imagining healthcare. We’ve got a special episode today that’s focusing on “Entrepreneur’s Opportunities in Underserved Communities.”

[1:17] This is part of a program that we’re doing from a grant provided by Robert Wood Johnson Foundation, trying to highlight all of the opportunities that entrepreneurs have in bringing their innovations to the underserved communities, and hopefully helping stakeholders in underserved communities understand the entrepreneurial opportunities by engaging with innovators.

[1:37] On today’s episode, we’ve got Stan Berkow, who’s the CEO of Sense Health and Rachel Davis, who’s a policy expert from the Center for Health Care Strategies. It’s great to have you guys here, thanks for coming.

Stan Berkow: [1:49] Thanks for having us.

Rachel Davis: [1:49] Thanks so much.

Unity: [1:50] Let’s start with what is Sense Health, and what do you do?

Stan: [1:54] At Sense Health, we’re working with healthcare organizations who are at risk for the health of their patient populations, whether it’s NACO, patient‑centered medical home, groups that are at risk for those patients and are starting to employ newer healthcare providers, like care managers, social workers, health navigators to work across large patient populations, support them with their health.

[2:18] What we do at Sense Health is help them in two capacities. One, there’s a big resource crunch for those healthcare providers, with limited funds to only hire so many care managers and health providers to work with those patients. At Sense Health, we try and increase the capacity so they can work across larger and larger patient populations, as it’s becoming increasingly important to manage them.

[2:40] Secondly, the difficulty is inherent in helping patients manage their health better, prevent future chronic issues and manage immediate chronic conditions. Our technology is designed to drive the behaviors that are necessary to get people to start living healthier lives.

Unity: [2:55] That’s interesting. How did you guys first get connected? What did CHCS do? How did you guys first connect?

Rachel: [3:01] Sure. CHCS is a policy resource center, we’re specifically focused on publicly financed healthcare, the Medicaid, Medicare space. We do work with a variety of stakeholders, we do a lot of work with states and their Medicaid departments, healthcare plans that work with publicly financed populations, providers and community groups that work with this population.

[3:28] We also, work with across the gamete of this population, from children to adults with complex conditions to dual eligible, folks who are elderly and have Medicaid and Medicare. I am a mentor actually, on Startup Health, I connected with you guys and was pleased to able to join your mentorship program.

[3:52] Stan, I think you just found me online, reached out and asked if you could give me a demo, I was pleased to hear from you, it was great to get more information about your product.

Steven: [4:04] The reason we asked you both to be here today. Obviously an entrepreneur who is building a business that has a focus for its early customer base, maybe even it’s long term customer base on bringing your solution to underserved communities. Rachel, because you’ve become an expert over the last several years, your organizations an expert nationally around helping stakeholders understand the innovation and the technologies that they can take advantage of to help their communities.

[4:32] There’s an interesting conversation that I want to make sure that we have today. The goal of today’s episode is to make sure that we inspire entrepreneurs to think about, and maybe even focus on bringing their solutions to under served communities. I want to open up the eyes of stakeholders in underserved communities to realize there’s lots of Stan Berkows…Oh, only one Stan Berkow.

Stan: [4:50] Only one Stan Berkow.

Rachel: [laughs] [4:52]

Steven: [4:53] These people like Stan Berkow, out there that have innovative solutions, that can be brought to the community. That’s the goal of the episode. I want to come back to Unity’s first question, understand more a little bit more about what you do. What specifically are you doing in underserved communities? Give me an example of how you’re working with hospital, or an organization in an underserved community and helping them.

Stan: [5:16] The dynamic that we’re tapping into, is a lot of high needs patients in underserved communities, or outside of them, are assigned healthcare providers to work with them, support them, help manage their needs, coordinate their care.

Steven: [5:30] We want to make sure we define for them an underserved community. Who are we talking about here?

Stan: [5:35] Generally speaking, if you’re looking at who’s paying for them, we’re working within the Medicaid population. In terms of the provider systems that are supporting them, it really varies. It could be fairly qualified health centers, there is emergence of health homes being implemented, which are similar to patient center medical homes, and their approach to patient care, but are specific to Medicaid recipients.

[5:57] You can work with certain hospital systems, that might be more situated in underserved areas, thus have a larger percentage of a Medicaid population. The actual provider systems varies across the board, but often times, we’re always touching on more community based health systems, and those types of provider systems.

Steven: [6:20] OK. Let’s go back to how you’re helping them though?

Stan: [6:24] Ultimately, those systems are tasked with something incredibly different, which is they have a ton of patients that are high needs, and may not have the best understanding of how to manage a whole suite of chronic conditions.

Steven: [6:36] Give me an example of one that you…

[6:38] [crosstalk]

Stan: [6:39] The two biggies in this space that we’ve been dealing with recently are mental health concerns, and substance abuse issues. Those would be two areas that are very prevalent in this population, but those in conjunction with the usual suspects on chronic conditions with diabetes, hypertension. Those types of conditions.

[7:00] With those patients, they are often assigned care managers who are working with 50‑150 of these patients at a time, and responsible for supporting them. Helping, insure that person understands what they’re doing and going where they need to go.

[7:14] What we’re finding right now, is there’s a greater emphasis on supporting these patients with their conditions. That the case loads for that health provider, that care manager entity are growing.

[7:25] It’s creating unrealistic expectations to efficiently, or effectively support these patients when you’re working with 150 people at a time. That test was a great opportunity for technology to step in, say, “The work that these providers were doing when they are working with 30 patients at a time was incredibly effective.”

[7:44] They were able to work with them, support them, and get these patients to manage their health. Now, suddenly when you’re doubling that, it’s unrealistic. The healthcare organizations in this space don’t have the money to double their staffing of care managers. It’s coming to how do you develop technologies that can augment, or increase the capacity of that provider. That’s where we think it is a great opportunity in the space.

Steven: [8:09] What are you doing to help them double their workload, or how it handle the doubling of their workload?

Stan: [8:14] Ultimately, where we…

Unity: [8:15] He wants to give them more work.

[8:17] [laughter]

Stan: [jokingly] [8:18] Yeah, I double their…No. Where we’re finding they’re spending a ton of time, is they’re more reactive than proactive. When you have many patients, you can only respond to the needs as they’re coming in, as opposed to trying to get ahead of it.

[8:30] Where our company’s background comes into play is our behavior change, how do you develop interventions to get people to start changing their behaviors and managing their health on their own.

[8:40] What our technology does, is helps them proactively set up a support plan that automatically gets delivered from that provider to their patient. It’s tailored and individualized with the goal of helping that patient start to learn how to self‑manage what they’re doing better while the provider is there, able to respond to the needs that are always going to require that human support, and that actual provider entity.

Steven: [9:02] You’re a mix of both human and technology together.

Stan: [9:07] Absolutely.

Steven: [9:08] It’s not just technology.

Stan: [9:09] Right. One of the biggest things that when we started in this space, an independent of underserved communities, but it’s particularly important part to that.

[9:19] We find a lot of the digital health tools that are touching patients, working with them, and helping them, need to be connected back to a provider. Otherwise, people aren’t going to follow them.

[9:29] There’s, in the skits, like an interesting area to talk about in the space, but with the Fitbits, the app craze, and all of that, there’s this idea that you can build something cool, that people are inherently motivated to use their Fitbit, and want to track their steps.

[9:46] You go to the populations where people need these types of tools, and no one cares about how many steps are taken. They’re not motivated to look at that and do then.

[9:54] Where we find there’s the greatest strength, and ability to reach someone is getting them to feel that they’re cared for. With these providers already in place doing that, if we can strengthen that connection, that’s what we think is important in technology.

Steven: [10:08] That’s a very important point, and this is a question for both of you, what are some of the special needs in circumstances? I know you operate in all 50 states in terms of where there’s vulnerable populations. What are some of these special needs that are out there?

Rachel: [10:26] First of all, I thought of statistic, something that we refer to a lot, is the EHS. That’s the 5/55 rules, we call it. What we see in the Medicaid space is that five percent of Medicaid beneficiaries account for 55 percent of the cost, so the program as a whole.

[10:42] What that shows, or tells us is that there’s small percentage of low income folks, Medicaid beneficiaries who are struggling to manage our health conditions, and are showing up all the time in the healthcare system, because they can’t get a grasp on the healthcare conditions.

[11:00] Stan alluded to a number of the challenges that these guys experience when you talked about mental health and substance use issues. We definitely see those compounding. How complex it is to deal with chronic conditions.

[11:16] More and more we’re hearing the term “social determinants of care” thrown around. It’s self‑explanatory, but the idea behind that is all of these folks are operating in a social contact that is very different than typical digital health consumer that we’re used to right now.

Unity: [11:34] Does technology still play a role? Do people still have cell phones?

Rachel: [11:38] Absolutely. I’ve seen a little bit of research out there from Pew. It shows high ownership rates of cell phones. It’s somewhere along the lines of 53 percent of low‑income populations own a smartphone.

[11:59] 43 percent own a basic feature phone. One of the things that Stan and I have talked about is, assuming that those ownership rights of smartphones are going to increase over time as the technology gets cheaper and more pervasive.

[12:15] I saw some interesting research from a former colleague of mine, Maria Raven, out of the University of California, San Francisco, where they gave basic cell phones to 50 of their most expensive patients.

[12:29] Then, they went through the phone records and tracked how are they using their phones? Were they calling their relatives? Were they having phone calls and conversation with friends?

[12:42] They found that these folks are using even basic features phones to coordinate their care. A lot of the calls were for appointment management and setting up appointments to get benefits put in place.

[12:58] Folks in this population have access to, maybe not the most sophisticated cell phone technology out there, but they do have access to it. They are already using it as a tool.

Steven: [13:10] From the entrepreneur’s perspective then, given these circumstances, how do you go about building your product? How do you go about commercializing with some of these circumstances?

Stan: [13:22] To your point about, people are already using these technologies to work on their health. The best way of building a product is tapping into something that’s already happening.

[13:32] It’s something that we also saw working with the care management groups that we’ve been working with. That their patients are already texting that health provider.

[13:39] They’re already communicating through text right now to help, feel supported by them. Being able to build a product around an interaction that’s already occurring, was a nice approach to take as opposed to jumping in, saying, “You might be working this way, but we now need you to work in this capacity through this new app or something.”

[14:00] Which isn’t an interaction that’s happening. Tapping into what already exists and using that as a jumping off point to then innovate on how interaction’s occurring is important.

Steven: [14:10] You’re not changing behavior, you’re not changing tools?

Stan: [14:15] Absolutely. Tapping into behaviors that are already occurring to then tweak behavior, is critical. Just behavior change 101. Take smaller steps then bigger steps. If you come in, say, “I’m going to need you to start doing some different things and doing it in a different way.” All of a sudden, it’s too much.

Rachel: [14:33] Or with a different tool.

Stan: [14:33] Exactly. Being able to tap into what’s happening I think is really important. To step back for a moment, I feel a bit like a fake here. We actually didn’t build our product initially.

[14:47] We helped support people through text messages. We didn’t start doing that based on wanting to directly work with the underserved at the outset.

Steven: [14:58] That doesn’t make you a fake.

Stan: [14:59] Stop. I know.

Unity: [laughs] [15:00]

Steven: [15:00] That makes you an entrepreneur.

Stan: [15:01] Right. It’s interesting. What we were looking at, which then led us to work with underserved communities, we were looking on the behavior change side. Texting being very effective. We were also looking at a lot of research that was happening.

[15:14] We talked about this. In third‑world countries, where people have very limited access and texting. A lot of studies have been done around that. That made it natural to gravitate here in the underserved communities.

Unity: [15:26] Would you recommend other entrepreneurs, they go about their initial product development this way? What could they be doing to be thinking about some of these opportunities in a different way?

Stan: [15:41] The best thing that we did, which was in part circumstances, but a part how we approached it. We won a pilot health tech grant a year ago and finished a clinical trial with the Montefiore Medical Center.

Steven: [15:53] I want to backup. Tell me about the pilot, because it’s a very innovative program New York City’s doing.

Stern: [15:56] Yes, it’s a great program. I can’t speak highly enough about it. The city had about a million dollars in funding that they broke up into 10 $100 thousand grants.

[16:06] The goal of the program was to match large healthcare organizations with early‑stage technology companies to test a new technology.

[16:14] It was very much focused on testing something that has not commercially used yet in a large healthcare organization. We were the recipient of that in 2013. We’re working with the Montefiore Medical Center through one of those grants. One of the greatest things that helped us with that. There are two things around that.

[16:34] One, when we started working with the Montefiore Medical Center we had just finished building our very, NPR, initial products. In terms of where we were from a development standpoint, we’re very early stage.

[16:47] Which made us vulnerable to being able to catch up to all the needs of a large institution. At the same time made us super agile in evolving our product based on how an institution works.

Steven: [17:00] I want to stop right there, because we’re talking earlier, Rachel, about the unique opportunities that stakeholders in underserved communities have, whether it’s providers, or others who can take advantage of what you just described.

[17:12] Not being a large organization, it takes a bold stakeholder, a person and an organization. An organization to embrace a company that’s got a minimum viable product, and that doesn’t have the big, funded, profitable, large company behind them.

[17:29] Some of the things that are coming out today, are being started by one, two, three people that get together, or entrepreneurs who start a company. In the early stages a helping hand and being willing to work with an organization where you were a year ago even took a lot.

[17:45] Can you talk a little bit about the difference that you’re seeing, the kinds of organizations and people that are willing to work with someone like Stan and Sense Health like Montefiore did last year?

Rachel: [17:58] Sounds like you were very lucky with your match with Montefiore. One of the things that I’ve heard you talk that I haven’t necessarily seen widespread is leadership from the top down at Montefiore.

[18:11] Sounded like you had buy in from the head of IT, from major departments getting behind the idea that you wanted to integrate.

[18:20] They wanted to integrate technology into their work, to the point where they supported purchasing, I believe, smartphones for their staff to be able to use your tool.

[18:31] That’s key having leadership that understands that this can be a way to extend the capacity and the efficiency of the healthcare staff working in any safety net institution.

Steve: [18:44] Are you seeing a shift in the number of organizations out there that are in that position where there’s support from the top down?

Rachel: [18:52] Slowly. There’s an organization out in California called the Center for Care Innovations. It does a lot of great work directly with safety net organizations and hospitals, FQHCs.

[19:05] [crosstalk]

Steven: [19:06] FQHCs, what are they?

Rachel: [19:07] I’m sorry. Federal Qualified Healthcare Centers. These are not necessarily hospitals, but more of clinic type settings that work with underserved populations. Center for Care Innovations is leading the charge and somebody is pushing technology out there. One thing is important for entrepreneurs to understand when they think about how to break into this market.

[19:29] If they’re looking to break into the delivery systems side of things, they’re the hospitals and FQHCs, I suppose to recommend the plans. These systems are incredibly resource draft. You are somewhat able to take advantage of this, these are system if you as an entrepreneur able to set up a piloting partnership and offer them the products for free initially to show them what the value proposition is. That’s a great way to get off foot in the door.

Steven: [20:10] How would you recommend an entrepreneur startup begin that process? Who would they contact in the organization? How would they even identify these organizations?

Rachel: [20:21] It’s a great question. I’ll take us out to that. You might have some thoughts on it. An obvious place to start from my perspective is looking at these organizations and seeing if they have care management programs that they’re running. One big initiative that is a federal initiative, all states have decided to opt into it as something called the Health Home Initiative, which is a program states are tailoring it designed on exactly what their needs are.

[20:50] The point is it’s targeting high needs Medicaid population.

Steven: [20:55] Can you just talk about health? I’m sorry to be…

[20:56] [crosstalk]

Rachel: [20:57] No, that’s fine.

Steven: [20:58] You having lot of things impassionate, should people understand. Talk about health home.

Rachel: [21:03] Again, as I mentioned, this is a federally funded initiative. The feds have agreed to match for eight quarters, 90 percent cost of the program states are interested to have a plight to it not every state. The country has a plight to it. I’ll dive deep into New York Health’s Home to give specifics of it. New York has a very, very ambitious health home up and running.

[21:28] Stan, you have done more quest of them, Montefiore is actually a health home. Their program is designed to integrate physical and behavioral health needs for high cost high needs Medicaid populations. Pull in community based organizations to make sure that they are engaged in the management of this population, because what we see is the delivery systems are fairly effective at managing the needs when the patient show up at the hospital, or clinic.

[22:02] So much of what affects the overall health outcomes if these populations that happens out in the community, in order to be effective at proactively managing these patient’s care giver. You have to be partnering with the community‑based organizations. The health homes have that holistic approach there.

Steven: [22:21] Excellent. I want to step back. We want to try to make sure that we cover today. If you were to talk about the characteristics of an organization that is leaning in to working with entrepreneurs, what would you say besides the support from the top‑down?

[22:37] What else do these organizations need to think about or do, in order to begin engaging with the startup community and the entrepreneurs that are innovating in this sector? I’m going to fit it back to you by the way. You can answer this, but I was going to say when did you hear your answer to yourself?

Rachel: [22:51] I’ll let you start, because you learned a lot from your experience.

Stan: [22:56] It’s an interesting question. I don’t know that there’s a great answer to it. We did not have buy in all levels when we started. In fact, at the very top levels we had a lot of skepticism. That balance of building the internal champion, and focusing where we had a champion within Montefiore was something that organically happened with us, but it did not start that kind of top level for us.

Steven: [23:23] Where did it start?

Stan: [23:25] There was a researcher who was working with us, who is one of the heads of the program that we were working under within their health home. That person became a huge advocate to them, start speaking to the person above them, and then start speaking with Montefiore at large.

Steven: [23:42] Sounds like traditional sales.

Stan: [23:44] Exactly. Then, there’s nothing unique about it. You need to find the champion to bring this around of what we’re trying with the product perspective. The quickest way that we built a champion independent of whether it’s underserved, or not was getting them to see how quickly we can execute. That, as we were talking about the greatest strength you have as an innovator is execution.

[24:07] All of these groups are very unfamiliar with a technology company coming in, saying, “Every six weeks, we launch something new.” They don’t buy it for a second. They’re dealing with epic implementations that are taking five years of billions of dollars. Being able to put the [chuckles] product for what you’re saying was important to us.

Steven: [24:28] You think one of the biggest events is the ability to not just say speed, but deliver very quickly.

Stan: [24:34] Absolutely.

Steven: [24:35] Did that scare them now, or did they love that?

Stan: [24:39] It was something that I don’t know that they bought into when we started working with them.

Steven: [24:42] Once they saw it happened.

Stan: [24:44] It gave a lot more confidence to when we said. We did a lot of work. You talk about working with the decision makers, or more of administrative side, versus the users of your technology. You always have to tow that balance of insuring that the administrative side understands the value in what you’re doing, and it’s valuable to them.

[25:06] The users are using it and find it valuable on their day to day, which is another issue given the complexities there. We did a lot of work with bringing both groups together. Have the administrative side bring in the actual users and understand both needs.

[25:24] As we started with those focus groups, if you want to look at it that way, then they could see two months later a huge product shift, that gave the administrative side more confidence to then continue helping us get the feedback we needed to deliver a better product.

Steven: [25:40] You started delivering data, proof, validation, and it’s working within a couple of months so you gave them and built your case for them.

Stan: [25:49] Absolutely.

Steven: [25:51] Going back to the question of the characteristics. It seems like the willingness by this person to become your internal champion was key. Do you think Montefiore as an example had any special characteristics related to being ripe for working with a startup…

[26:06] [crosstalk]

Stan: [26:06] Absolutely so. Yes, it comes down to the individual person and the organization. As an organization Montefiore is known for being incredibly innovative, particularly in population health management so that was critical.

[26:17] There’s a number of large institutions, which I wouldn’t be the best person to speak to, but I know there are certain academic medical centers that are way more innovative than others, so I would not approach the less innovative ones.

[26:29] Second thing is even with an innovative group there are people who don’t buy into the startup mentality, build fast, and you’re not going to be able to convert someone who doesn’t buy into that. Finding someone where there is that chance, someone who believes in this and has an interest in this is also critical.

Steven: [26:47] How do you think you sniff that out?

Stan: [26:48] Honestly, it’s an evolving process. I don’t know that I have a silver bullet for that.

Steven: [26:56] Just a gut check that you had in your meetings with them that they had got it and saw the opportunity to work with you?

Stan: [27:03] Yeah. From a gut check perspective to get them to the point of committing to submit a pilot application for the pilot health tech program was a step that someone wouldn’t take unless they were willing to commit.

Steven: [27:16] How long did it take to convince them to do that?

Stan: [27:19] That process probably took two months of just submitting the application, then there was a whole slew of, which we could get into, legal issues around this population and all of that stuff, but it was not a straightforward path, by any means.

Steven: [27:35] What advice would you have just to other entrepreneurs that are trying get their first customers, trying to maybe even get their first pilot so they can get that data to validate your product? What advice would you have to your fellow entrepreneurs out there trying to get started?

Stan: [27:55] You made a really great point. Two things. One is the ability to offer something for free. I know that’s a contentious issue in the startup space. There’s the mantra of if someone’s not going to pay for it upfront, they’re not going to pay for it down the line, and that you should always get paid for what you’re doing.

[28:14] There are then certain approaches to balancing that balancing act. In this space new technologies are so new that offering it for free is something that’s important, even as you’re getting paid customers being able to offer something for free to people who can afford it.

Unity: [28:32] Use that as a mechanism to then translate into a real customer?

Stan: [28:36] Absolutely. That gets at how you offer something for free. Going in with unclear metrics as to what this costs at the outset is…

Steven: [28:46] So you’re putting a price on it, but you’re giving…

Stan: [28:47] Exactly.

Steven: [28:49] You’re being very clear of the value of it even though you’re giving it for free.

Stan: [28:53] Even in doing something for free making it clear that at this time if we see this, then this is becoming a customer, because even if someone doesn’t commit to that you start to learn from an organization perspective, even if they don’t work with you, what would they need to see at a sixth month point of adopting a new technology to make them reshuffle their budget to pay for it?

[29:14] That process at the outset is never fun when you’re trying to move fast and get people using it, but I think is a critical piece, because we’ve made the mistake of not doing that at the outset of certain groups, and you find that there certainly are organizations that don’t have the funds to do it who are really trying something.

Steven: [29:30] Even being successful you’re never going to get money from them, even if it’s successful. So you’re sniffing that out as well.

Stan: [29:35] Right.

Rachel Davis: [29:35] Can I just…?

Steven: [29:36] Yes, please.

Rachel: [29:37] I just want to add in one point, go back to this 5/55 rule that I mentioned. Thinking about a value proposition this 5 percent that’s responsible for 55 percent of the costs are hugely expensive. We’re talking 70, 80, 90, hundreds of thousands of dollars a year.

[29:54] If you have a technology that can reduce one of these patients inpatient admissions by one admission, or two admissions a year, we’re talking $50,000 like that.

Steven: [30:03] It’s a massive savings. Right. You don’t need to make a…

Unity: [30:05] You’re creating resources.

Steven: [30:06] I’s not a volume…

Rachel: [30:07] It’s there. That to me was one of the interesting things about this market is that…

Steven: [30:11] Would you put that up there as among the top reasons why one of the things and the reasons we were so excited about this grant from Robert Wood Johnson Foundation was, because we feel like many entrepreneurs are ignoring the opportunities in this market. They’re going to the typical…

Unity: [30:25] They just don’t even know that they’re out there.

Rachel: [30:26] Yeah.

Steven: [30:27] They’re either going to the traditional academic medical centers, or the large hospitals not in the underserved communities, and they’re not thinking about it. Whether they’re ignoring it, or they don’t know about on purpose, what’s…?

Rachel: [30:40] There’s a lot of challenges for entrepreneurs in this space. I’m not an entrepreneur, but I can imagine trying to think about if you have a product, and obviously you need it to be financially viable, low‑income populations are not one of the first reasons that come to mind as a customer base.

[30:56] I would emphasize that there’s money is this space. There are health plans that are getting money from Medicaid. There’s hospitals that are totally looking for ways to manage their costs of these patients.

[31:08] In some ways, this population I see as the market that the payers have the most to gain by investing in technologies, or purchasing technologies that can save them money.

Stan: [31:21] One thing that everyone, particularly in New York right now, is talking about is a program called DSRIP, which is the Delivery System Reform Incentive Payment program.

Unity: [31:32] Wow.

Steven: [31:33] Say that three times fast.

Rachel: [laughs] [31:34]

Stan: [31:34] Let me say it backwards. You can correct me if I’m wrong on the details, but the way that we look at that very simply is New York State focused on redesigning Medicaid so they have to, “How are we going to redesign Medicaid?”

[31:50] One of the programs that came out with that was Health Homes so, “How can we coordinate care better for these patients in need?” As a part of that redesign New York State saved a fair amount of money, and they ordered $8 billion which they are now reinvesting back into the delivery systems, that are supporting the underserved population.

[32:08] What you are seeing now, is the status running programmes where they’re taking applications for how these health providers who are working with the underserved, are going to build sustainable models to work with these patients long term. That $8 billion being infused right back into those groups, to have them invest, try new technologies, measuring and finding better ways to do that.

[32:32] In terms of opportunities today, a month ago, or something, the initial applications for getting some funds to start developing a comprehensive plan, were those plans were awarded. Now these delivery systems are working on putting a plan together through the fall, to how they are gonna address this and looking for technologies how they are going to do that and how they are going to use human resources. That’s like a protocol opportunity right now.

Steven: [33:01] That’s a wake‑up call to entrepreneurs to think about. The opportunity to go into this market, you mentioned New York. New York is for a lot of reasons of an innovative state as a company when it comes to health care and health care guarantee after services.

[33:16] What are the states to go to you…Maybe you don’t, because you spent so much time with in New York doing pilot program and other things, what states are among the most active in the country…?

[33:26] [crosstalk]

Rachel: [33:28] We see Washington state doing a lot of innovative work and system redesign, health care system redesign. 25 states right now who are participating in something called State Innovation Model which is another huge federally funded projects that’s looking to align payment incentives more closely so folks can coordinate across the Medicaid delivery spectrum.

[33:55] Washington is the one that is coming to the top of my mind. I don’t know if you have worked on another states that you see.

Stan: [34:02] The thing I’d say [laughs] as we talked about funding innovative people, institutions, now talking about innovative states which is funny, but New York is innovative, to your point of health homes. We’ve looked across the country different states who are implementing health homes, New York by far has worn the best infrastructures and bringing….

Rachel: [34:20] Also the most complicated.

Stan: [34:20] Right. Bringing down to practice from an entrepreneur’s perspective so the states done these thing through the ACA. There are these health homes, how do we get a hold of them? There’s literally a health home white pages that we went down, contacted every person and have to contact name for them.

Steven: [34:36] It’s so great, in fact let’s see if we can get that up in a research center.

[34:43] [crosstalk]

Steven: [34:43] We have a research center startup option matter. Yeah, startuphealth.com/makeanimpact. We’ll bring together all the resources for entrepreneurs, they want to focus on, digging, and bring new innovations underserved communities . Talk about the white pages for the white pages for health homes.

Stan: [34:59] Because New York state is so centralized and has a great research center themselves, if you go on to, whether up against New York state, and cover one hand, you’ll find the medicaid area. They have a whole list of counties in the areas implementing health homes and who the point person is for those health homes.

[35:16] That was a great target for us to start reaching out to people, and when we talked about other states so then looking at other states, so we started looking into some of other big states for health homes like main North Carolina, Ohio, you find that the infrastructure at the state level to find contacts is not as good.

[35:36] Given that there’s enough going on New York state we’ve focused here for now, but that’s an interesting thing to also in terms of geography, where do you have those types of resources.

Steven: [35:47] As an entrepreneur, you’ve clearly made a decision to focus a lot to your early customer development, commercialization on serving underserved communities, and focusing on digging up opportunity here. A lot of people talk about the affordable care of being attrition to have opportunities for entrepreneurs, because there are so many different things to solve and get involved with and there’s lots of money flowing in different organizations for different reasons.

[36:09] If you understand a little bit, less, or it’s evaluable . How committed are you to using underserved communities as your initial customer focus, it’s called for the foreseeable future and how much are you balancing without that traditional underserved communities?

Stan: [36:26] In terms of outreach and active work that we’re doing it is all focused on the undeserved right now. I see that being the case definitely for the next six to eight months in terms of how were…

Stevenl: [36:37] You’re going to say 68 years.

[36:38] [laughter]

Stan: [jokingly] [36:39] 68 decades actually.

Rachel: [laughs] [36:41]

Stan: [36:44] That’s certainly where we focus those efforts. One of interesting things, I’m looking at these models that are emerging. You mentioned the 5/55 rule of how you ever you want to break apart the cost and that. What was the article? There’s an article about the work done in Camden, New Jersey by Jeffrey…

Rachel: [37:02] Brenner.

Stan: [37:02] Was it “Hot Spotters,” or…?

Rachel: [37:03] The Hot Spotters are called in the New Yorker.

Stan: [37:06] What has been seen particularly in underserved communities, and then in general, is that when you have these super high cost people, putting together a care team around them, of a number of social worker, a nurse, whomever, to work with them, has been effective at reducing costs and working with those people.

[37:24] That model generally speaking is what’s happening in the the health home infrastructure, where let’s branch out and focus on just not the five percent, but let’s say the 20, 30 percent of high cost people, then with that many patients we can’t have this whole care team around them.

[37:42] That human resources, that model around high needs patients is something that’s very particular to underserved, but we’re seeing it everywhere. When you look at building a product for the underserved, we often view this as working with commercial populations, who have the high needs, high cost patients.

Steven: [38:03] That is an interesting point? What are some of the other myths of working in underserved markets? You mentioned earlier that there is money in underserved markets for solutions, you just got to think about your solution. What are some of these fallacies, or myths that maybe startups, or entrepreneurs aren’t aware of, because they’re thinking about the way they think it is?

Rachel: [38:30] I’ll just jump in. We, with funding from Kaiser Permanente Community Benefit, were able to run of series of focus groups last spring, I believe. Where we interviewed subsets of high cost, needs populations. I was surprised at how agile these folks were with technology.

[38:52] We gave them a questionnaire around, “Are you familiar with computers? Do you know how to use the Internet? Do you know how to use voice mail? Do you play video games?” I was just surprised at…These were older adults for the most part. I was really surprised at how comfortable they seem to be using technology. That’s one lesson out there from entrepreneurs.

[39:15] This isn’t a population that just completely living in a bubble and not aware of the technology that’s out there. The other thing is that they were eager. They saw opportunities for technology to help them.

Steven: [39:27] They wanted access.

Rachel: [39:28] They were coming up with….They were like, “It would be awesome, if something could help me manage my appointments. I could have something to store my records on.”

Steven: [39:36] You basically have a hungry customer. You’ve got a big need, in a big population, and you have a lot of money attached to lowering the cost, and helping. It seems it’s almost the ingredients from an entrepreneur’s perspective of a perfect target customer, if you now have, especially the government playing such a big role in helping with reimbursement and other benefits to bring the cost down. It seems you got a lot of raw ingredients that a lot of entrepreneurs are missing.

Rachel: [40:05] Yeah.

Stan: [40:06] It was mentioned it before, I want to reiterate it, because it’s something that comes up time and time again that these groups do have access to technologies, you will work with a program, and come in, say, “This is what our technology does.” They’ll tell you, “No our patients don’t have cell phones, or they don’t have text messaging capabilities.” It’s actually not true.

[40:31] You find time and time again, that not only do these groups have texting plans, government provided cell phones, all of that. They have smart phones and access to that. There is the access point, there’s the understanding that they know how to use these technologies, and there is that interest. It’s kind of this myth that like there’s just a certain group of people who don’t care about their health.

[40:52] I don’t think that’s true. There is a certain group of people who can’t focus on their health, as much as they would like to, given other circumstances. Particularly in this population there’s that idea that it’s just someone who is not that motivated to work on their health. That’s false.

Steven: [41:07] Love it. That’s great. What about the myths on the other side, for innovators, stakeholders, and other large organizations in underserved communities about working with entrepreneurs, what are some of the myths we can bust up there?

Rachel: [41:18] I don’t know, if I would call this a myth, but there is a huge cultural divide between the startup culture and safety net delivery system. This idea that you are so comfortable rapidly iterating, working on the fly, and changing things is so different than how health care delivery systems typically work.

[41:41] Particularly in a large scale hospital these are huge institutions that can’t turn on a dime. One of the things that’s been interesting for me to think about in my past life of what it was like to working in a hospital and how we ran systems there, now becoming familiar with this startup culture and ideology that you work with.

[42:05] In order for it to be a successful partnership between those two bodies, you need to get to a point where you’re speaking the same language and have the same set of expectations about timeline.

[42:18] On the startup side understand that things might take a little bit longer than you’re used to and it can be frustrating. Getting to a commonplace of understanding about what those two cultures were like is key.

Steven: [42:30] What would you point to if you’re talking to one of your partners, one of the companies, or organizations you work with, what would you say to them to encourage them to take a chance in working with the startup?

Rachel: [42:45] Again, going back to this idea of low cost, or no cost pilot, it’s a win‑win proposition. What do you have to lose if it ends up improving care, helping your workforce, reducing cost and utilization? Amazing. You have access to a tool. If not, you got the experience of working with a startup company and hopefully, it gave you a sense of the world of possibilities that are out there.

Stan: [43:10] Yeah, I will suggest to play the opposite side that we deal with is that I do think that thinking is in part what scares a lot of people, is that idea that like, “What do you have to lose? It’s free.” That type of thing, because from our perspective, you need the organization to buy in and spend…

Steven: [43:32] Authentically buy in.

Stan: [43:33] …and spend time trying a new technology. There is a cost independent of money around trying to push a new technology. That does take time and resources. It’s an interesting balance of, on some levels, you’re like, “What do you really have to lose?” At the same time, given they’re trying to catch up to where they need to be now, trying some new technology that might get them ahead.

Steven: [43:59] That would be the case at any organization where you’re trying a new technology.

Stan: [44:03] Absolutely. In this group or at least what we’re seeing is there’s so much that’s changing right now, and scrambling that’s going on. It’s even tougher to get them comfortable with, “We’re going to try something new amidst you purchasing a new EMR. You having new payment systems for the patients you’re managing.” You built all of that.

Rachel: [44:26] I was going to say that speaks to the point of as an entrepreneur understanding the needs of this population so that when you’re approaching a potential customer, you’re providing them with a product that fits the needs of what their patients are struggling at. I would say that a product has to take into consideration the needs of this population in order for it to be useful.

[44:51] You can’t just say, “Oh, we’ve got a diabetes management product. This will be great for your population.” No. If you want this delivery system to pay attention and really think about buying in, you have to understand what the patients are dealing with.

Steven: [45:03] What’s your answer to that? What would you say to the stakeholder at the hospital, or the health plan to get them to take a chance in working with the startup?

Stan: [45:13] One thing that’s been important to us is we spend a lot of time on the design of our platform used by the providers. That’s a tough value from a product perspective, the design of it. When you can come in to an organization, talk about these great things it will do and show them something that visually and intuitively, it’s very clear how that can accomplish that. It’s not some new system with all of these fields that’s going to confuse the users and be tough to work with.

[45:42] That actually helps make them more comfortable with trying something out. We’re not Apple, but Apple is all about simplicity and they do a great job with that. In these organizations where you’re dealing with a lot of complicated systems, if you can simplify what needs to be a complicated technology on our end, that is worth the time it takes from a design perspective and a product perspective, because it does reduce friction in getting it in the door and getting people use it.

Steven: [46:10] Is the question almost what are you going to do if you don’t do this, try to leverage this technology. It’s almost like without a plan and without any engagement in innovative technologies, the organizations have no hope at being anywhere different a year from now, or three years from now.

Stan: [46:28] What do you…?

Rachel: [46:29] I don’t know if they are thinking that honestly, because this is a segment of the healthcare delivery system that hasn’t quite caught up to the fact that there’s so many technologies available that could potentially help them with their efficiency. You could make that argument, but I’m not sure that they would go there immediately.

Stan: [46:49] They’re just putting together their basic systems to manage their patients with the basic requirements let alone thinking ahead. Understandably, because things have changed for them and they need to update accordingly, I don’t fault them for that.

Steven: [47:06] Are you both optimistic? How are you guys feeling about the next couple of years in terms of more startups working in underserved populations and communities?

Rachel: [47:18] I’m really excited. You are doing great work. The funding that you got from RWJF? Fabulous. That speaks to this growing awareness that there’s a real viable intersection between technology and startups in this population. As time goes along and people like Stan, Sense Health, and these other companies are able to prove an ROI, it’s going to gain more traction on this space.

Stan: [47:48] Obviously, we’re optimistic that we wouldn’t be in the industry, but we think it’s a big data…No.

[47:52] [laughter]

Stan: [47:53] We’re super optimistic. From a trend standpoint, one of the things that makes a super excited, again as we’ve talked about, is the access aspect. It’s only continuing to grow the access to technologies that all groups are having, their comfort with technologies and in terms of whether it’s plans around those technologies for data, texting, or voice.

[48:18] All of the costs around those are coming down, down, and down. That’s critical to be able to have the most channels available to work with patients. That’s exciting particularly in a group where access has not always been the best.

Steven: [48:31] As a wrap up, and we appreciate you guys spending the time with us, because it’s such an important area. We’re just getting started. This is the early days of everything in terms of the re‑imagination of healthcare especially the underserved communities.

[48:45] What do you wish you knew when you started Sense Health, whether it’s something you wish you had known that you did differently, or something that you would have liked to go back and tell your prior self when you were getting started?

Stan: [49:00] The biggest thing is we’re still figuring out is on the policy side. It’s so complicated. The dynamics of where money is coming in, the different people who are touching that money, who’s responsible for patients, healthcare is complicated in general with who’s paying, who’s receiving services and who’s providing services…

Steven: [49:23] Who’s approving the pay.

Stan: [49:23] Exactly. In this space, it’s even worse. I remember from our work with Montefiore, one of the head of the program we’re working with, I was continuing to ask him a ton of questions trying to figure things out. One email is like starting to be a pain, like I’m slow to pick up on this stuff. He’s like, “I don’t understand it.” [chuckles] The people that are behind this are still trying to figure that stuff out.

Steven: [49:46] Turn things up.

Unity: [49:47] We’re going to do a future episode just on policy in underserved markets. That will be one in the future episodes where, Steve mentioned this earlier, putting all these resources up at startuphealth.com. Where can people learn more about both of your organizations? Your sensehealth.com…

Stan: [50:08] Sensehealth.com is where you can find out all about us.

Rachel: [50:13] Www.chcs.org. We’ve got a resource center of our own up there. We put out a fair amount of issue briefs and information up there. We’ve got potentially some good information up there for folks who are just trying to get a read on the policy aspect of things for this population. I encourage folks to check out our website.

Steven: [50:36] Fantastic. We’ve got links to both of those resources on startuphealth.com/makeanimpact which is the research center that we built with the grant from Robert Wood Johnson Foundation.

[50:48] We’re going to continue plugging away at shining the spotlight on underserved communities from both an entrepreneur’s perspective so they can understand what you described today. It’s such a wonderful opportunity to make a difference and make an impact.

[51:01] Also, for the stakeholders that really are trying to understand which startups, which innovators, and what it means to embrace early‑stage innovation. We want to thank you both for spending so much time with us today.

Rachel: [51:11] Thank you so much

Steven: [51:12] Opening up people’s eyes and being such a wonderful resource not only to other entrepreneurs and to organizations around the country about tapping into this area. It’s going to be impactful when we look back a decade from now, look at how much it’s different and how much it’s changed over at the past decade.

[51:29] Thank you for joining with us. Thank you for joining us for another episode of StartUp Health Now. Please join us not only on startuphealth.com/makeanimpact, but also on future episodes of StartUp Health Now where we’re celebrating the healthcare transformers and the changemakers that are re‑imagining healthcare.

Unity: [51:47] Thank you.

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