Lessons from Andrew Arruda, Flexpa, on enabling access to patient healthcare data

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Welcome back to the Pear Healthcare Playbook! Every week, we’ll get to know trailblazing healthcare leaders and dive into building a digital health business from 0 to 1.

This week, we’re super excited to chat with Andrew Arruda, CEO, and Co-Founder of Flexpa, the fastest way for your digital health app to connect to new Patient Access APIs.

Founded in Jan 2021, Flexpa allows its customers to support linking data sources from Medicare, individual & family, and employer group plans from Unitedhealthcare, Anthem, Humana, and more.

Before founding Flexpa, Andrew led policy development of one of the world’s largest COVID machine learning government response initiatives at the University of Toronto. For eight years, he was also the CEO and Co-Founder of ROSS Intelligence, a legal research engine that uses AI to automate legal processes. Andrew received his JD from the University of Saskatchewan. With that, we’d like to thank Andrew for joining us here today.

In this episode, we learn about Andrew’s unique journey into healthcare entrepreneurship as a confluence of the pandemic, love, near-death experience and friendship, the changing landscape of healthcare data regulations, and running a solid fundraising process.

In June 2022, Flexpa announced an $8.5M seed round led by General Catalyst.

If you prefer to listen, here is the link to Apple and Spotify!

‎Pear Healthcare Playbook: Lessons from Andrew Arruda, Flexpa, on enabling access to patient…

Andrew’s obsession with data from his first startup in legal to now in healthcare.

• For Andrew, it’s always been about data — his first startup, ROSS Intelligence, focused on opening up access to legal data. Once he saw what was happening in the medical world, he became excited by the legislative changes.

“What got me excited about becoming a technology entrepreneur is the ability to build tools that millions of people could use, eventually hundreds of millions and billions of people.”

Flexpa was founded on the confluence of pandemic, love, near-death experience, and friendship.

Flexpa’s founding story revolves around four pillars:

1. The pandemic. At the beginning of the pandemic, Andrew helped start a think tank at the University of Toronto. He and the think tank’s founder Gillian Hadfield were looped into a project where they were helping create a policy to enable machine learning and data science on the health data of everyone in the province of Ontario. “That got me knee-deep into medical data — the IT, the policy, the political, and the competitive challenges- and really put the Cures Act on my radar.”
2. Over the last 5–10 years, the Cures Act has declared that people should not only be able to access their health data from their insurer but also sync and authorize that data into any application they want — Enter Flexpa, which stands for flexible patient access, the solution to drive this access.
3. Love. Andrew’s wife is an ICU pulmonologist at Stanford, and he shares that her experiences in the pandemic gave him a unique insight into healthcare. He heard how important interoperable data was on the front lines.
4. Near-death experience. Andrew was cycling, and ended up waking up in the hospital and had no idea how he got there. When he needed to get his health data for insurance purposes, he had to go in person to the hospital he had been sent to. After traveling hours away, Andrew had to take the service elevator to the records department.

“They asked me if I wanted my records on a CD ROM or printed.”

1. Friendship. Andrew lived with his co-founders, Josh Kelly and Tom Hamilton in college. Josh had built-in health tech before, Tom also had a legal background, and everything came together for Flexpa.

Flexpa is the easiest way to sync patient health data and insurance information in your application.

• Andrew explains that currently, there are APIs that payers have been federally mandated to provide if they’re delivering on a CMS plan (Medicare, Medicaid, etc.). Flexpa also has commercial coverage through some of its insurance partnerships.
• Flexpa delivers clinical data and claims information: past medical procedures, active medical procedures, immunization records, previous claims, etc. Andrew shares that this helps provide a more personalized experience for an individual customer, which has helped Flexpa gain more traction.

“We came out at a time where health itself is going from strictly brick and mortar to click and mortar. Some people are engaging with the health system in different ways… and want their data to travel with them between all these different sources.”

• Beyond the patient motivation, Andrew shares that providers, payers, and employers are also looking to access data that will give a complete picture of the patient.

“Think of the dreaded clipboard with the elastic band connecting the pen, so you don’t steal it at a doctor’s office.

Imagine a world where you never have to do that, and everywhere you go, your health data and your claims information follows you.

It’s essential to clearly delineate who calls the shots on what parts of the business.

• Andrew’s advice to solo founders? Consider searching for an additional co-founder.

“There’s a cliche here: if you want to go fast, go alone. If you want to go far, go with people.”

Find a co-founder that complements your skillsets but also things you care less deeply about.

“That means not only are they good at things you’re not; they care about things that you don’t fully care as deeply about.”

• Andrew believes it’s essential to clearly delineate who calls the shots on what parts of the business. As an angel investor, he’s seen many issues with early teams that initially experience excitement but struggle later on. You have to have the right idea and the right market, but the right co-founders are essential.

“Once you start meeting adversity, often we revert to habits and things about ourselves that aren’t so great — it becomes almost like a marriage. At Flexpa, we always talk about how our co-founder relationship is like a marriage; we’ve all married each other, and we’re in it for the long haul.”

To speed up the co-founder dating phase, reference checks to vet co-founders:

• Andrew recommends doing reference checks with potential co-founders’ friends + families, and he would also open up the offer on his side.
• Being upfront about your habits and how you deal with stress allows for mutual understanding in the future.

“It’s famously asked — have you all worked together on a project before, and I think the reason is that you do in some ways need to go through live fire… I don’t think there’s anything more foolproof than going through and working on things together ahead of time.”

• There is no silver bullet, but calling references and being honest/upfront is worth it in the long run.

GTM strategy: entering the world of patient data access

Timing is everything: spot the opportunity and move quickly to enter the market. It can be an advantage to be an outsider and an insider.

• Andrew shares that the new patient access rules were fundamental to Flexpa’s success, but the co-founding teams’ backgrounds were also essential in spotting that timing.
• Josh Kelly, Flexpa’s CTO, was already building in health tech in 2013. He created quantify.io, an open source project to share and sync health data from emerging APIs like your FitBit — not only was Josh already passionate about health APIs, but he also launched Ticketmaster’s production fan OAuth service.
• Tom was employee #1 at Andrew’s last startup. Not only does he understand how startups scale, but Tom was also formerly a corporate lawyer who understands how to navigate complex regulations.

“Being able to read the law and understand what was coming, then build a product from a tech standpoint was something I think was the right team at the right time.”

You don’t need to achieve your full vision at an early stage. Try to find a subset of what your solution will be able to solve and solve that well.

• One of the biggest hangups Andrew observes in early-stage founders is that they want to build the perfect product upfront and believe that that will bring traction. They attribute a lack of traction to an incomplete product, which is often not the case. In his opinion, it’s worth it to pursue an early product even if you can’t charge the full amount or it isn’t 100% representative of how it’ll work at scale.
• One of Flexpa’s first customers is Budgie Health (also a Pear portfolio company!), which helps employers with personalized plan selection. Andrew shares that they didn’t have comprehensive commercial coverage yet, but they made it work with employers offering plans via their specific payers. They were able to build something, get it live, and have real users — something Andrew calls going from 0 to 0.5.

“If I could say something about 0 to 1, I think the 0 to 0.5 is actually really important. Sometimes people forget that.”

• Flexpa has a ton of coverage now on the CMS side (Medicare, Medicaid, etc.) because that’s where the patient access rules were targeted. Andrew shares that they’re excited to work with payers and startups in the CMS space.
• Flexpa aims to provide personalized care synced across payers and brick-and-mortar providers. They’re currently working on integrating into large hospitals so patients can see what they’re eligible for, get things auto-booked, etc.

Barriers to tech progress in the healthcare industry

• Andrew believes that data interoperability is the main issue propping up most of the challenges in the industry. There’s often no interoperability between providers; the data flows don’t occur, so patients are constantly entering the same information.

“If you could only integrate with one EHR, regardless of how big that EHR is, you’re still tying into that particular provider as well. It’s an EHR problem but also a provider walled garden problem.”

• With better data interoperability, you get better insights, which means you can do more in these apps. Andrew believes there’s an opportunity for MyChart to provide more than just information you’ve entered yourself — even further, provide recommendations and insights that understand you as a patient.

How the Cures Act will affect open APIs:

• Flexpa can already serve anyone on a CMS plan and has commercial coverage across some prominent players like Kaiser, Humana, etc. Andrew believes the significant shift that’s coming is that provider data is also being federally mandated to come onboard via Open Access APIs, potentially giving Flexpa more depth of clinical data.

“Generally, what you see in this space is what happens in CMS happens in commercial; it usually takes a bit of a lag of 2–3 years.”

• Andrew shares that Medicare Advantage is a growing business for many of these payers, so they’ve already had to make these plans available via these new APIs.

“I believe we’re going to see a world where everyone, whether you’re on an individual plan, employer plan, or CMS plan, is going to be able to access your data and sink it into any application via Flexpa.”

• Beyond sharing medication history with your doctors, Andrew shares that the possibilities for Flexpa are endless: trainers giving you personalized plans given your hip replacement surgery, meal delivery services avoiding certain meals based on your health needs…
• Andrew predicts health data will evolve quickly like Plaid enabled the fintech world. Connecting your bank info to a mortgage application was intuitive, but health players akin to the Robinhoods, Coinbases, and Vanguards of the fintech world will start to appear.

Go at fundraising with a well-thought-out plan, don’t let the process drag out.

1. Make it explicit what dates you’ll be raising within and have your intros occur early. Andrew shares that Zoom pitches have made more pitches per day possible, which, while exhausting, expedites the fundraising process.
2. Andrew emphasizes putting in the effort upfront to avoid a long fundraising process. “When you drag a fundraising process out, you’re not doing what matters most: talking to prospective users and being engaged in what you’re building.”
3. Don’t get sidetracked on the no’s — take that feedback, iterate through your process, and update your pitch if necessary. Andrew shares that it’s a more active process than people think and takes more than just a good idea to achieve.

“You don’t want to sell your product to someone who’s not going to be helpful to you, especially early… Capital is probably the least helpful thing a good investor provides you.”

1. Pick investors who have the right expertise, not only in your field but in adjacent fields. In the case of Flexpa, Andrew encountered many people who weren’t up to speed on the new patient access rules and the Cures Act. He met investors who weren’t caught up on how the regulatory landscape had changed, which helped them weed out people who might not have been a great fit for the team.

“I think many founders think of when you hear a no, it’s bad for you, but I like it. It means that that person’s like they disqualified themselves from jumping in and being part of what we’re building. That also doesn’t mean they might not be a great fit for a future round when they get up to speed on the space and start seeing traction.”

The way Andrew and his co-founders thought of investors is that they wanted to have the right mix of folks with health tech backgrounds and fintech, given the similar disruptions within both fields. Andrew shares that he thinks he could have saved more space for angels.

“Try to save for really awesome angel operators, because oftentimes they’ll help you with the day-to-day grind of what you’re doing.”

Lab data: the next frontier for health data access

• Lab data is one arena where APIs don’t have a straightforward approach to get that information given LabCorp and then smaller regional entities all use their own software. Opening more and more subsets of data will build the rails for health tech and digital health at large. Andrew is excited about what people build on top of those rails: better-personalized care, better plan selection:

“A world where we’re going to have more decisions and more personalization.”

• Another vertical Andrew’s interested in is products that loop and connect all these APIs — for example, a wearable that sends information from when you’re on a run into the EHR.

The craziness of private markets in the last year mirrored public demand.

• The craziness of private markets in the last year was a mirror of public demand. Optimistically, Andrew is excited for what’s to come in health tech — the excitement in the private markets the previous year is fertilizer for scaling new health tech companies this year. He predicts more talent and deals in health tech because you can’t build anything without capital.

“At the end of the day, we’re all in health tech to improve overall care for individuals, which is highly motivating. If we could even improve and save a small percentage of people’s lives and improve outcomes, I think it’s a wonderful thing.”

Interested in learning more about Flexpa or joining their team? Learn more on their website, Twitter, and LinkedIn.