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 Today on This Week Health.

(Intro)   that's an interesting point because it does get back to this labor shortage. It's like, well, if you're gonna take over something, you can't just help someone who's You have to take on the whole piece of that work  

Welcome to Newsday A this week Health Newsroom Show. My name is Bill Russell. I'm a former C I O for a 16 hospital system and creator of this week health, A set of channels dedicated to keeping health IT staff current and engaged. For five years we've been making podcasts that amplify great thinking to propel healthcare forward.

Special thanks to our Newsday show partners and we have a lot of 'em this year, which I am really excited about. Cedar Sinai Accelerator. Clearsense, CrowdStrike,. Digital scientists, Optimum Healthcare IT, Pure Storage, SureTest, Tausight,, Lumeon and VMware. We appreciate them investing in our mission to develop the next generation of health leaders.

Now onto the show.

(Main)   📍 all right, it's Newsday and today we have a lot of interesting stories and I am joined by Andrea Thomaz, CEO and co founder for Diligent Robotics. Andrea, welcome to the show.

Thanks, Bill. Thanks for having me. Great to be here.

Looking forward to the discussion. I actually had to look up Diligent Robotics.

Why don't you tell us what you do? And the minute you say what you do, Everyone's going to know the company.

Yeah, we're Diligent Robotics. We build a product for hospitals called Moxie that is a transport robot. We do a lot of transport tasks inside hospitals for pharmacy, lab, service, other service departments in support of clinical teams that need to move things around the hospital.

Yeah, I remember the first time I saw that, I think it was at UCSF and it wasn't Moxie, but it was like the old tugs, they were just moving around the hospital. I thought, man, that's amazing. But yours don't look like the old tugs anymore. They actually almost have personalities.

Yeah, we like to say the next gen of robots that really are meant to work in close proximity and kind of side by side with busy teams of people. That's our vision is people plus robots make really the best teams out there in the workforce. And Moxie is a great example of that kind of taking on some of the low level transport tasks that we don't really want people spending their time on.

And which, gets us straight to our first story, which is Kauffman Hall report Workforce issues remain key challenge for hospital performance, and we'll get to the story. But, there's a push within health systems try to figure this out.

The amount of labor that gets done below somebody's credentials, below their capabilities is pretty vast. And that used to be tolerated, but now it's it almost can't be, there's too much pressure on the workforce and not enough people to go around.

Yeah, that's right. What I think is interesting is that the whole, so my background is not in healthcare, it's in robotics. I was a professor of electrical engineering before starting this company. And one of the reasons I went into healthcare with our robot product is because of exactly this. We Surveyed a bunch of healthcare leaders back in 2016 and learned this term top of the license, they were all talking about even back in 2016, 2017, top of the license, top of the license. And so what I think is interesting is that problem that's been persistent in healthcare and like a looming problem is these days just front and center for every single hospital leader.

Yes, some of the things from the Kauffman Hall report, 98 percent of respondents are pursuing one or more recruitment and retention strategies. We've seen that over the year. 90 percent have raised starting salaries or the minimum wage, and when you're talking about transport, is that minimum wage or slightly above minimum wage jobs?

So,

it could be a minimum wage job, but what we're seeing in hospitals across the country is that they're all coming in at the lowest level of pay in a hospital is higher than minimum wage, I would say, in most of the regions of the country that were talking to.

And so, and that's really something that's happened post pandemic or in a post pandemic world is, people are paying more to get people to work in hospitals.

66 percent report that staffing shortages have required their organization to run at less than full capacity at some time over the past year.

That's an alarming stat. Like you can't bring in more patients just because you do not have the manpower to do so.

That's right. I think we see this statistic with all of our clients looking at ways to augment the staff that they do have.

I think that you're Thank you. Where you're starting to see health system leaders getting creative about, like, how do we actually offload some of this work to software systems that can do things and robot systems like Moxie and other operational changes so we can just, like, take some of the.

Burden of the processes that we have in place are maybe not the best ones that we're having people do, and how do we get more efficient with the people that we do have? I think, another thing that people are looking a lot at is the, care model mix, like the skill mix of people that you need to keep bed staffed.

Is it, how many nurses do you need, how many LPNs, how many techs, and then maybe how many virtual nurses? And how many robots like, so if you think of it as like a mix of resources that you're bringing to bear, I think we're starting to hear more and more health systems talk that way about it as well.

Your background is robotics. So, we're seeing, clearly we've had robotics for many years and it's transformed the manufacturing industry on these lines and whatnot, but this is a little different. We're starting to look at these autonomous units that are moving around.

They're not on rails, they're not sitting there in front of a, an assembly line, if you will. There's a lot of complexities that go along with these autonomous units that can move around. we're seeing AI come out and we're seeing all sorts of advancements in AI. is robotics and AI coming together?

to really make a lot smarter units? Yeah, I think,

It's a little different. So, the advances that we're seeing in AI is, 100 percent making its way to robotics in different fashions. But there are some aspects of dealing with specific physical world I'm a robot, I'm in this particular hospital in Dallas.

There's some models that you have to build and some things you have to know about, that particular hospital, not, hallucinating some generic hospital and trying to think about what you should get done. But these things are coming together and starting to expedite, a lot of the, ways that our robots are perceiving the world are changing more dramatically and faster than they were last year even.

Are we just training them on the blueprint of the building, or are they actually using computer vision and those kinds of things at this point?

Yeah, so Moxie robots are trained on the environment, so we call it our approach is learning from demonstration. So you bring the robots into the hospital some of our implementation staff will drive them around for about a day or so.

You drive them around and just show them everywhere that they're going to work, including any doors that they have to open or elevators they have to ride and. So there's some specific kind of learning sections around like the map of the environment itself and all of the things in the environment that the robots need to manipulate.

And then once those models are built, we have like our kind of core technology is a software and control system that operates with the expectation that there's going to be people around and that the environment's going to change. And, just because I, built this map yesterday of this hallway, today I might see a wheelchair over here, I might see a bed over there, and that's okay.

And so the robot knows these are expected things to happen in the environment. And all of that kind of perception is something that has to happen. Models have to be built in advance, but also it has to be perceiving in real time everything that's going on.

I remember my first Roomba.

My first Roomba, I used to just smash into the wall, smash into the wall, turn turn, and clearly we've moved beyond that because that wouldn't work for autonomous driving, smash into the wall, smash into the wall,

bumper cars out there. Yeah.

With your background, and this is outside of healthcare, but with your background, how hard is autonomous driving?

It's gotta be incredibly hard.

The long tail of error cases that you have to be able to handle and side corner conditions. And I think that's the, like, being able to solve the core problem of autonomous driving in, sunlight and everything's going as expected. Like, that's, some may even say solved, but to be able to say, yes this car is going to be able to handle every side situation.

And just the stakes if you're, Having to deal with a situation on the highway and a mistake could be a deadly mistake. That's, I think, the hardest part about, why it's going to take so long for us to really have fully autonomous cars in every single situation.

We're going to see autonomy in a lot of different situations before you see the point at which you're not asked to hold your hands on the wheel anymore.

next we're going to look at this is a Bain Company report, 2023 Healthcare Provider IT Report Doubling Down on Innovation. And it intimates, let's see, U.

S. healthcare providers continue to accelerate their spending on IT and software. That's nearly 80 percent of healthcare executive respondents in our new survey. Increased spending. materially over the past year. Revenue cycle management is high on the list. Clinical workflow optimization is high on the list.

Providers continue to express a preference for fewer vendors with nearly two thirds saying they look first to existing vendors. While almost 6 percent of health system respondents have a generative AI strategy today, about 50 percent are actively developing one. And this report has a couple of interesting things.

Obviously, we already talked about revenue cycle and clinical workflow optimization are priorities. it goes on providers seek simplified tech stacks growing interest in artificial intelligence, sentiment remains mixed. And I I'll look for accelerated IT investments.

The partners I've talked to this year have essentially communicated that it's been a tough year to sell into healthcare. Everybody is, if not pulling back, they're at least slowing down to see if we will ramp out and what the ramp out of what I would call a multi year negative.

They're waiting to see what it's going to look like before they come out. That's not to say that they're not millions and billions of dollars because healthcare spends that kind of money, but they're not spending it at the rate they were, say, five years ago.

That's right. Yeah. I think, the words that we've heard a lot are, this is a year of financial recovery for a lot of health systems and they're really trying to get their ducks in a row.

And then we've seen that there's two sides of that coin because in some ways, investing in automation and technology that's going to be, helping with some of this optimization can be seen as really helping with that financial recovery especially if you're not on the extreme end of that financial recovery.

I think that was the article that was also talking about interest in offloading full services to automation or technology. And I think that's an interesting point because it does get back to this labor shortage. It's like, well, if you're gonna take over something, you can't just help someone who's You have to take on the whole piece of that work in order to actually have, a hard kind of ROI of that technology.

And so, we're definitely seeing that in robotics. And I think, that's where the generative AI piece is coming into is being able to provide full services with software, not just a helpful service.

finding that organizations that have a clear value proposition. Tied to some aspect of efficiency or efficiency growth, essentially are getting a good, solid hearing at the organizations.

And then if they can prove that out there's an acceptance for it if the ROI is under a year, it's , yes, let's go. Let's start. If it's two years, there's a conversation that needs to happen. If it's three years, that goes through the normal long.

Conversations and gyrations it normally does in a health system, which for startups like yours has to drive you nuts. Cause I've talked to a lot of people that are just like, man, the sales cycles are still so long in healthcare. Like you have to. Just when you thought we're ready to go, it's like, well, could you come in and talk to this group of people one more time?

And you're like, okay, yeah we'll,

I'll be there tomorrow. Yeah, I think, for us, it really has been a journey in learning to tell that hard ROI story because I think there's so much about what. A robot like Moxie provides that, frankly, a number of CFOs at hospitals we talk to say, well, that's just a soft ROI.

And one of the bigger ones is, the things that we hear from nursing leaders and pharmacy leaders is the joy that the robot brings to the workplace and the ability to offload some of the tasks that Moxie takes on. really does increases people's job satisfaction. They are no longer doing some of the grunt work that they were asked to be before.

And so unless you can on top of that also point to a cost savings or cost avoidance or All of those steps that the robot is doing that, people aren't doing means that you can, operate your pharmacy or your lab with, you can do more with less is your, people are looking for both sides of that coin, for sure.

I've seen your robots are really well designed. They look really fun. I don't know, I don't know if they are fun. Can they play cards or anything like that? No they're a very specific robot.

We actually tell people, like, specifically, Moxie's not gonna stop and chat with you.

Moxie's got some work to do.

at a children's hospital, I would think They're fun to have around. Yeah.

So at a children's hospital, we do sometimes get tasks for the robot that are specifically distraction visits or wellness visits. We haven't done it yet, but there's one medical director that wants to have the robot scheduled for some of the ambulatory units to do like around, just take laps around the unit and convince the kids to get up out of their bed and walk around

that's interesting. Alright, I wanna close with this story. Four ways investors are thinking the health tech world will change in 2024. I'm gonna do this I'll just start with this now. I'll come back to what I was gonna say. So this was a conversation that happened at the health conferences four things services.

As software will emerge as a new category for healthcare AI, as gen AI and large language models get more advanced, a new category of AI tools are emerging that deliver a service as a final product, rather than providing a workflow tool where the end User completes an action. This new trend flips the SaaS model on its head.

Gara pointed out, SaaS isn't going anywhere, by the way. This is a new category that's emerging specifically for AI companies. The reason I keep reading is I'm trying to figure this out. When you think about the output of an algorithm, it's not going to be a workflow tool that a user is interacting with to enable them to do work on the software.

It's going to be. the work itself. It's interesting because at This Week Health, we're using GenAI pretty extensively. When we finish this conversation, it will go into a tool that will do the transcript. That transcript will then kick it over into an API. That API will then go through the entire transcript.

and create the show notes pull out the five, key quotes from the show, bunch of bullet points, all this other stuff. And then it will also create a thousand word article from the conversation. That will be 15 minutes after we finish this conversation. Now, if we gave this to an intern, that would be, I'll have it to you by Friday kind of thing.

I think that's what they're talking about. They're talking about the AI actually delivering.

That's like the value prop and that hard ROI that people can point to. Because that is. Time that you did not have to have any of your staff focused on a thing, but you get the output of that as if you outsourced it and as a service, but it was done by AI.

And we hear the same thing about robotics, like some of the nursing leaders that We've talked to about augmenting their staff. They talk about, other companies that are bringing them kind of services to, try to, help with staffing with a, some really great staffing software or some, other kind of like software tools that we're going to somehow help their staff be more effective.

But, what we heard, time and time again about robotics is like, well, but robots, you're actually doing some of the work, like that's actually, taking things that people no longer have to do. And so that's different than augmenting their job or changing it and making it a little more efficient with a tool.

And so we're seeing that with AI and robotics pretty dramatically. And I think that is, if you can quantify. The work that's being done by the AI or the work that's being done by the robot. And that ends up being like a lot of our business cases to hospitals is helping them think through like, well, what would that, but, how, what would that work that the robots are doing cost you in the old model?

And, how do we talk about the value that you're creating with automation?

a couple more points and then we'll close out. So healthcare payment companies will have to align incentives between providers and payers. That's key. If you want to sell tech to providers, you may need to rethink your distribution model.

And then finally, the biopharma value chain must become more efficient. It's interesting, following the health conference, we had the announcement. Olive AI, actually, two hours ago another fallen unicorn, Olive AI, sells assets to wind down. They sold portions of it.

To Waystar, and a couple other companies. so 4 billion valuation down to sold for pieces a number of years later. This could just be a timing thing. It could be a market shift thing. How do you stay ahead of this as a CEO, a founder of a health tech startup, how do you guard against this kind of thing?

Although you would, I'm sure you'd love to be a 4 billion valuation right now. Yeah,

that would be great. But it's been a interesting couple of years to really navigate the market dynamics. I think we do what we can to stay ahead of it in terms of, so we just, we announced a new round of venture capital funding recently.

And, I would say, we probably. Started going after that round of funding at least six months earlier than we would have two years ago. So things like that, or we're just being extra conservative in terms of, making sure that we have the capital to do what we need to do. And I think remaining Laser focused on a scoped set of things.

We always get asked, like, could Moxie do this? And could Moxie do that? And it's like, yes, 100 percent Moxie could do a lot of different things. And we have a roadmap of ideas for you, but we're going to market with this product and we have to, make it a success before we let ourselves focus on other things.

So I think that's probably the two biggest ways that we. Try to stay ahead of it.

Fun times for sure in the health tech space. Andrea, if people want more information about the products that you take to the market where would they get that

information? Yeah, we can be reached on our website, diligentrobots.

com. And I would love to hear from people.

Thanks again for your time. It's great talking to you.

  📍 And that is the news. If I were a CIO today, I think what I would do is I'd have every team member listening to a show just like this one, and trying to have conversations with them after the show about what they've learned.

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