Lessons from Vijay Kedar, Tomorrow Health, on scaling a full stack home provider solution from zero to hundreds of plans and providers
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Welcome back to the Pear Healthcare Playbook! Every week, we’ll be getting to know trailblazing healthcare leaders and dive into building a digital health business from 0 to 1.
Today, we’re excited to get to know Vijay Kedar, CEO and Co-Founder of Tomorrow Health, a technology-driven healthcare company changing the way individuals and families manage healthcare at home.
Tomorrow has partnered with over 125 health insurers and provider organizations to coordinate and deliver home-based care for their members. Tomorrow Health is a fully integrated solution that matches patients with suppliers spanning 40,000+ products and services and tracks every step in delivering at home care.
We talk about the founding story of Tomorrow Health, iterating and scaling the product based on customer feedback, and tips on selling to health plans (coming from a team that has sold to over 125 health insurers and providers).
Founded in 2017, Tomorrow Health most recently raised a $60M Series B led by Bond Capital along with previous investors such as Andressen Horowitz and Obvious Ventures.
Prior to founding Tomorrow Health, Vijay was the Senior Director of Care Innovation at Oscar Health and drove Oscar’s case management strategy and operations. Vijay earned his MBA at Harvard Business School and BA in Government and Economics from Harvard as well.
If you prefer listening, here’s the link to the podcast!
Vijay’s journey to founding Tomorrow Health:
- Vijay grew up in a family of physicians, but ultimately, the inspiration for Tomorrow Health came from his experience managing his mother’s home-based care as a Stage 3 cancer patient. She’s thankfully in remission now, but while undergoing treatment, spent months in the ICU and three more months after that on a ventilator battling lung disease as a result of chemo. Afterwards, she needed a year of intensive home-based healthcare: 14 liters of oxygen, ostomy and wound care supplies, mobility and respiratory equipment, physical and respiratory therapy…
“Despite growing up in a family of physicians, despite being in the healthcare industry myself at that point, navigating that was so much more challenging than we expected. We were coordinating across nearly a dozen different home-based care providers, driving out to what felt like mom and pop shops off the side of a highway with medical equipment scattered everywhere.”
- It took 6 weeks to get everything his mom needed, and in that time period, she had to be readmitted back to the hospital twice. It was extremely demoralizing after she had worked so hard to leave the hospital — this was an eye-opening experience for Vijay as to the status quo of home-based healthcare.
- When Vijay eventually went back to his role at Oscar, he kept noticing the inefficiencies of home-based care. While Oscar was launching new markets in Texas, he found that in every market, they were contracting with hundreds or thousands of local home-based care providers. Later, when Vijay was driving Oscar’s care management efforts, he found himself borrowing the phone from a nurse case manager negotiating with some of these home-based care providers.
“The combination of those experiences from different vantage points just made clear that while so many of us believe in the vision of healthcare at home, the technology and operations infrastructure to enable that reliably and at scale was simply lacking. That was ultimately the inspiration for Tomorrow Health: the vision to leverage technology to coordinate the breadth of the medical equipment, supplies, clinical services that patients need to ultimately restore the home as a patient’s primary place of care.”
- Vijay always had the entrepreneurial bug and started a few small companies in college. At Oscar, he had the opportunity to learn what it took to build and innovate in healthcare, as well as see a wide breadth of problems across the healthcare ecosystem. Because Vijay’s mom received her diagnosis a week after he started working at Oscar, this particular problem around home-based care stood out. He initially explored ways to solve these problems within Oscar, but it soon became clear that it had to be its own business.
Constructing the right team:
- Vijay co-founded Tomorrow Health with Gabe Flateman, previously the co-founder and CTO at Casper. They’d known each other for 6–7 years at this point, and Vijay had witnessed Casper’s journey of scaling and transforming the ecosystem. Gabe became really passionate about the problem Vijay wanted to combat and their skill sets complemented each other: Vijay had experience in the sector, and Gabe had experience leveraging technology to transform archaic industries.
- When it came to hiring their first employees, their focus was “less about capabilities than it was about conviction.” Vijay shares that they were looking for passion for the mission, a well-rounded breadth of strategic thinking, and the mentality that no job is too small. The first ten hires came through people they’d worked with or knew previously, and many of those early employees are still at Tomorrow Health today.
Why now?
- Vijay believes that Tomorrow Health is more necessary than ever with the acceleration of care shifting to the home. Through COVID, under 1 million Americans were homebound and 70% of them were managing at least one chronic condition or recovering from a post-acute episode.
- Especially in the home care space, Vijay believes that a core problem is how esoteric the industry is. In medical equipment and supplies alone, there’s thousands of products and plans and insurers and Medicare codes. Upstream, that creates a huge amount of operational complexity.
- Against that backdrop, Vijay shares that they identified the missing link in the ecosystem was technology. The status quo wasn’t working: incentive structures with providers weren’t oriented towards higher quality care, many home-based care providers were smaller organizations operating off legacy infrastructure, etc. Ultimately, the people who paid the brunt were patients caught in the middle.
“We ultimately felt technology had to be the solution to take manual operations and to digitize them to take a complex web of millions of permutations of clinical and administrative data, and to stratify them in a back end data model with robust machine learning capabilities to continue to optimize and improve with every patient transaction that was fulfilled.”
The product: Tomorrow Health is insurers’ one-stop-shop to coordinate and streamline medical equipment, supplies, and home-based care services for their members.
Tomorrow Health’s model today is B2B2C.
“We work with large enterprises, health plans, and provider organizations, and by partnering with them, we earn the right in some ways to serve the patients whose care they steward.”
- Tomorrow Health provides a holistic solution to this space so that stakeholders can avoid a bespoke set of partnerships and gain more visibility into the care patients are receiving. This is meant to help drive better patient outcomes and therefore, save health plans money in meaningful, value-aligned ways.
- Vijay shares that many of the suppliers on their platform have grown around 300% because Tomorrow Health is able to streamline otherwise complex operational processes. Greater scale, lower costs.
- Vijay shares that the product evolution has almost entirely been driven by customer feedback. They’ve continued to deepen these partnerships over time in order to understand what they’re looking for
“There’s nothing like sitting with a hospital discharge manager as she clicks through an EHR to order medical equipment and supplies for a member or to sit with a group of health plan executives.”
- The biggest evolution has been the scope of Tomorrow Health’s platform: moving from directly serving patients to now driving value across four stakeholders.
Tomorrow Health started full stack home-based provider and evolved into a more holistic solution
If you’re solving a problem for patients, work backwards from the patient journey.
- Vijay and his team believed that in order to impact the patient journey, they needed to have full accountability and own each step of the process. They initially built a full-stack home-based care provider for medical equipment and supplies after talking to thousands of patients. They wanted to understand their workflows and work backwards from the ideal end state, digitizing the most manual steps. The team created a technology enabled supplier that had broad capabilities to deliver 40,000 types of equipment and supplies across the country.
- The initial plan was to launch in August 2020, but COVID accelerated that launch to May.
“With a lot of the patients that we were engaged with, we saw a tremendous amount of challenge in getting the medical equipment and supplies they needed because this was an industry that typically had run through retail healthcare organizations. When many of those shut their doors during COVID, the access problems were really exacerbated.”
- Because Tomorrow Health was a technology-driven model, they had the capacity to distribute broadly across the country to a tremendous amount of demand out the gate. Vijay shares that beyond patients, they formed a partnership with the New York City Mayor’s office to be the preferred provider for city seniors; they also saw demand from health plans, provider organizations, and health systems to coordinate care for their members.
- Based on feedback from health plan partners, Tomorrow Health evolved to be a holistic solution that touches and creates value for four stakeholders (patients, payers, providers, and suppliers) — in order to scale their impact more meaningfully.
Get out there and start building. Your best learnings will come from testing solutions with your customers.
- Vijay acknowledges that enterprise is challenging; sales cycles are long and you need your first major design partner to learn what you need to build at scale. He shares that in hindsight, the team gained a tremendous breadth of knowledge from building the initial full-stack product that paved the way for a much bigger platform solution.
“Startups are learning machines. The pace at which you can move is a function of how quickly you’re able to learn what your customers need.
What are the products and the solutions and the features that ultimately drive value?”
- While some of how you learn is by asking experts, Vijay believes that asking customers is even more important. They learned so much in the first year of building that not only informed the solutions they ultimately built, but gave them much more depth on the ecosystem of the space they wanted to rewire.
“That is lived experience that’s hard to emulate.”
Selling to health plans and ecosystems
Keep the patient at the center to 1) align incentives with payers and 2) drive patient impact.
- Vijay shares that because healthcare is so enterprise-driven and you have to serve so many stakeholders, it’s easy at scale to lose sight of the patient. Keeping the patient at the center is what aligns their values and has helped them reach a 95 NPS score.
“Our first value as a company is to fight like hell for patients.”
- At Tomorrow Health’s weekly all-hands meeting, they always review a patient story from a patient they’ve worked with. They index on what the platform could provide the patient, what the patient’s needs were, how they were able to support them, etc. In each one, they ask themselves, what could we have done better? How could we have delivered and driven more impact?
- An example of aligned incentives is keeping patients healthy at home: it’s where patients want to be and it saves money for health plans when treating a patient for the same condition at home is less than 1/10th the cost of doing so in a hospital setting.
Four key factors when selling to health plans or health systems:
People often ask, is the juice worth the squeeze? Some of it is maximizing the juice, but it’s also reducing the squeeze.”
- Align with their priorities.
Vijay shares that the biggest challenge selling to insurers is that they’re incredibly busy with different initiatives. Build long standing relationships so you can align with their priorities as they change dynamically.
2. Have clear, meaningful, and attributable ROI.
Be able to quantify your results with realized outcomes and demonstrated outcomes. Whether you get things off the ground through an enterprise partner or from serving patients directly, you need data to be taken seriously by enterprise customers.
3. ROI not only has to be clear and meaningful, but also clearly attributable.
In healthcare, there are so many different stakeholders working with a patient — how can you demonstrate that your solution is driving the value?
4. Demonstrate that your solution can scale.
Many of these insurers have tens of millions of members, and they’re looking for solutions that can scale to meet that need. Vijay encourages that you have a path to resourcing appropriately to be able to deliver on your promise to scale.
5. Have a seamless implementation process.
“Some of the best deals die from painful implementation.
Vijay encountered this problem at Oscar — be crystal clear about how you’ll minimize the implementation burden.
Vijay believes value-based pricing is necessary for a few reasons:
- As health insurers look to appropriately align interests and move towards value, they have a value based expectation for new partners. Vijay shares that any earlier growth stage organization is always going to have resourcing challenges. You always have more things you want to do than things you can invest in or prioritize, so having your interests aligned with the customer’s is extremely valuable.
- Aligning interests is your biggest conduit to growth and improving customer outcomes.
- Vijay shares that in the enterprise world, tremendous growth stems from “clear repeatable quantifiable outcomes for your first couple of customers”. Having at-risk components can be extremely valuable.
What’s next for Tomorrow Health to get to Series C:
- Vijay’s focus in today’s market is sustainable growth. They’re strengthening the quality of their product, investing in technology, team, and partnerships, expanding to new markets, and focusing on driving value to their partners at a greater scale.
“Many frequently comment that we’ve gone from a growth-at-all-cost mentality to one that’s much more rationalized. Broadly, I think it’s a healthy level of discipline for companies and for the market.
Ultimately, to get to the level of scale that all of us aspire to, in terms of the impact that we want to have, the only way to do that is sustainable. Inefficiently burning venture dollars can only get you so far, even in a hot or frothy market, and so it’s a level of discipline that is necessary to really incentivize companies to invest in the things that are scalable, that are repeatable, and that will get to that level of scale.”
- Vijay shares that their vision is to provide a holistic breadth of home-based care support for the patients that they serve. A patient like his mother won’t need to work with a dozen different home-based care providers, but rather one streamlined, affordable partner in Tomorrow Health. They’re investing in components of their platform that allow them work with a wider degree of partners on all sides of the ecosystem.
What’s next for the future of healthcare:
- Entrepreneurs have built impactful businesses through all go-to-market channels: consumers, providers, health plans, pharma. Vijay’s view is that the most scalable solutions to healthcare will come on the enterprise side, marrying innovation with partners that have distribution.
- This entails identifying ways to align interests with those healthcare strategics or incumbents that have scale, but need better solutions for their members. Not only will you build incredible partnerships, but your impact can scale tremendously.
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