January 19, 2022: You can't navigate a broken system. Navigators today spend 20% of their time talking about bills. Meet Transcarent. The future of health companies. They don't even have bills. Glen Tullman, CEO shares how they’ve invested millions of dollars to create the highest quality care experience possible that challenges the confusing, complex and costly state of the industry. To really address consumer’s needs, Transcarent are focusing on four areas; prescription costs, surgical costs, care at home and complex care.
00:00:00 - Intro
00:01:40 - Every single day, people aren't getting the care they need
00:02:00 - Healthcare is more confusing, more complex, more costly than ever before and getting worse
00:07:10 - A lot of people don't realize that health systems represent 5 of the top 10 largest employers in every state
00:19:35 - Money means access. When we lower the cost, when we eliminate co-pays, we're giving more people access.
???? Today on This Week in Health IT.
You can't navigate a broken system. Navigators today spend 20% of their time talking about bills. We don't even have bills. Navigators spend time trying to figure out where you should go. We've invested millions of dollars to come up with algorithms that help us figure out what is the highest quality experience we can create. ????
Thanks for joining us on this week health Keynote. My name is Bill Russell. I'm a former CIO for a 16 hospital system and ???? creator of This Week in Health IT. A channel dedicated to keeping health it staff current and engaged. Special thanks to our Keynote show sponsors Sirius Healthcare, VMware, Transcarent, Press Ganey, Semperis and Veritas for choosing to invest in developing the next generation of health IT leaders.
Today we're joined by Glen Tullman, CEO of Transcarent. Glen welcome back to the show and congratulations on the raise.
Thanks. Well, it's great to be back with you Bill. And great to be back so soon.
It's kind of amazing. I mean I'd really like to ask you about the urgency. The pace at which you guys are moving right now is really incredible. The obvious first question in this interview is did you take a holiday break? Cause it seems like you worked straight through the holidays to raise what is essentially $300 million in about a year, a little over a year, I guess. So talk to me about the urgency. What's the urgency to the work that Transcarent, that you guys are doing in the industry?
Well, I think there's two ways to answer that. One is about the funding and the other one is about the urgency of the work itself. And the reason that I started Transcarent was because we have an urgent problem in healthcare today. And that problem is that every day people aren't getting the care they need.
They're paying too much for the care. We're denying care. We have a broken healthcare system. And as we've discussed before, if you ask people about their experience, they'll tell you that today healthcare is more confusing, more complex, more costly than ever before and getting worse. We know factually that the single largest cause of bankruptcy in the United States, personal bankruptcy is healthcare costs. And you can specifically trace that to co-insurance. That is people are getting surgeries and treatments don't understand their personal obligation. So all of this is going on. Meanwhile, we have some of the largest payers in the country making record profits and denying a record number of claims. So this is an urgent situation and the backdrop is we've got a pandemic going on. So every day matters relative to the funding itself. We were mid December, I think it was December 15th. We had an unsolicited term sheet come in to say, we'd like to help you. We'd like to invest in the company.ere going to raise capital in:o it in the last two weeks of:
Glenn, the raise is such a strong story. You have investors that were involved at Livongo investing in the vision, which I think reaffirms their their confidence in the leadership team and the vision itself. But you also have three health systems, sizable health systems, Northwell, Intermountain and Rush Medical Center coming on as investors. And in the case of Northwell Michael Dowling CEO noted not only the investment but the partnership that he expects and anticipates with Transcarent, this would signal an affirmation to the value that providers see that you're bringing to this ecosystem. So talk a little bit about the value to healthcare providers that Transcarent is bringing.
I think at Transcarent, we've talked about a new, different and better system of health and care that creates a new kind of experience. And that's not just for our members and for our clients, many self-insured employers and government agencies, but it's also for the providers.
Now, when I think of healthcare, I think of two sides. All of us as health consumers. And on the other side the people provide us care. And that surgeries and that's everyday care and that's the prescriptions and all of that. So I don't want to pay or doing surgery on me. I want a surgeon doing surgery.
So our ideas, how do we connect all of us who need care with the people delivering care. And in doing that, we've created a unique model for health systems and for providers. And that is for surgeries, as an example, we pay them in advance. And we have a bundled price so they know what they're getting paid.
They know they have to deliver a high quality experience and they do it. And that's the way the model works fast. So people like Michael Dowling and other visionary leaders, who've been invested in the company, see this, and they say for the first time we have someone who's valuing the high-quality. Work that we do and willing to pay us upfront for that work.
So we don't have to fight for it. We don't have to negotiate for it. We don't have to have hundreds of people fighting with payers and we don't have to wait months and months to get paid for work that we did all reasonable requests. And that's what we're delivering. So that new model extends not just from the experience that we create for our members, not just for the unique savings and quality that we provide for our clients and self-insured employers, but also for the people who do the work. And that is the surgeons, the nurses, the doctors. All the health professionals who deliver things like behavioral health. They all have a different way to partner and buy into the system.
And by the way, a lot of people don't realize that health systems represent in most cases, five of the top 10 largest employers in every state. And so they're also becoming customers of Transcarent. So it's a win all the way around the horn and and we're pretty excited about it.
So could we see other healthcare providers participate as investors and partners in the foreseeable future?
Oh, I think we will. I think we will. This happened so quickly that a lot of the interested parties simply couldn't kind of turn around that quickly, but there's tremendous interest in building this new, different and better system of payment or care along with delivering that care experience. And we've also, I've often talked and you, and I've talked about the two most important words in healthcare.
One is experience and that's the experience we create. The other is alignment and that alignment is getting the right parties aligned. And so we want to make sure that our experience is aligned with the people paying for care. And that's both all of us as individuals, but that's also the businesses that employ us, but we also want to make sure we're aligned with the people delivering.
We have to take care of them as well, because they do the work and they need to get treated fairly. So that's why this is such a disruptive and exciting idea.
I'm so much more impressed right now with Northwell, Intermountain and Rush because you started this fundraising round, what, like two weeks before Christmas and you completed it right, just before JPM and they were able to get it done. I mean, I just know how, that had to have an awful lot of I dunno just exposure at the highest levels. And they just had to believe in it right, right out of the get-go. I guess most of these conversations, at least at health systems I've been involved when they end up being three-month conversations before you could get a term sheet done.
Yeah, I think, look, this is across the industry. We know the terrible impact of the pandemic on the loss of life. The economic challenges, the behavioral health challenges, I think on the other side, if there are positives that you can have, we always have to figure out how do we learn some lessons from this one was we demonstrated that digital health actually works.
Second, we demonstrate how quickly when pressed, when it's important that health systems and everyone else could move in three months, we essentially converted our system from in-person to fully digital, a hundred percent. Now we knew that wasn't going to be good long-term. Healthcare will always be a blend.
But we showed how quickly we could move. We showed the resilience of both the system but also of that digital infrastructure. And so that I think spurred people to say, we can move really quickly on good ideas when we need to. And I think that's going to spur a tremendous amount of innovation over the next few years.
Glen, I went back and listened to our previous interview this morning. And as I was listening to it, there's a couple of things I want to come back in and touch on with you. One is talk to me about where you're at with employers. In the first interview you were a little bit cryptic. You were working with a couple here or there. I assume you made a lot of progress or people wouldn't be looking at this going. Actually, just talk about the progress in general. I mean, I would assume there's been a fair amount over the last year.
Well in the last year, let's think about what we did. We started with an idea. We hired a world-class team, absolutely world-class team and I think maybe the best I've ever built. And I've been fortunate enough to build some really terrific teams and work with some really terrific individuals. So first to build the team, second, you build the product and that product was not only building a product. It was then integrating an acquisition. So team. Product. Acquisition. Then we did a strategic relationship with one of the largest companies in the world, Walmart. And then finally we brought it to market. And we had customers live three months ago. So those clients were live up and using it. And then all along, we were explaining what we were doing and selling to the market.
So in the next few months, we'll start to, on a pretty regular cadence. And now some of the largest clients in the world. Some of the largest self-insured players in the world. Some government agencies, some unions all of the above are getting on board and now our challenge is onboarding. And so that's the next thing.
So you want that challenge, that problem sets teaching. First can you hire great people? Second, can you build a great product that creates a different kind of experience? Third, can you do the right kinds of. Integration and work with the right companies. Some that you acquire some that you partner with next.
Can you build on very, very strategic relationships that help validate what you're doing? That would be Walmart and last but not least, as they say in venture, do the dogs eat the dog food? Do people like what you brought to market? Do they like it at scale? And we've seen that the market is very excited about what we're doing on both sides, both the people who consume healthcare, all of us and the people who deliver the health. And that's health systems. ????uip you and your staff in the:
And we're going to have experts from Semperis and Sirius Healthcare. And they're going to walk through the lessons they've learned from years of response and recovery experience. Your active directory can be the most vulnerable part of your organization. Protect your system and community from bad actors.PM Eastern time or:
In our last interview, you use this phrase using technology and data science to make it easier for us to navigate care and keep people healthy or some aspect of those words. Talk about that a little bit. So in what ways are you using technology and data science to inject that into your products that at this point?
Well, I don't think I would have used the word navigate care because I have a
I was surprised because earlier in that interview you told me we're not navigation, but
I might've done it. Sometimes we default to what was the standard? And the only challenge with that is. You can't navigate a broken system. So navigators today spend 20% of their time talking about bills. We don't even have bills. Navigators spend time trying to figure out where you should go. We've invested millions of dollars to come up with algorithms that help us figure out what is the highest quality experience we can create And that means a few things.
One is the care necessary to begin with, to where's the facility. Is it a hospital? Is it in the ambulatory care center? Is it at home? Where should the Caribbean deliver three? What's the quality of the people delivering that care. So all of that goes into this experience and then four and most important.
Now that we have all that data, we don't tell you what to do. We ask our members what they would like to do based on the choices that we've given them, all curated, all prepared, very, very different than kind of navigating you here. I'll show you the way. No. What we're doing is we're putting health consumers in charge of that experience.
We're giving you all the unbiased information, know. We're giving you trusted guidance because nobody is paying us to send you anywhere, not taking rebates from not taking fees. We're simply providing you the best options and then last but not least when you choose we're making it easy for you to get that care.
So that could be, Hey, I have a question. It's the middle of the night. I just want to text with a physician 60 seconds later. You're doing it. In normal systems, it takes you five minutes to sign up or 15 minutes and you got to give them your credit card. Then your, all of that we've basically made it easier to stay healthy.
The same goes for booking appointments. The same goes for second opinions and on and on and on. Even all the way up to very complex care like cancer, where we want to connect you with someone who's dealt with your very condition before many times before and get you the best quality care, not focusing on cost or price focusing very simply on how do we get you back to healthy?
Yeah, you made it clear to me, not a navigation company. Broken system, and that story you gave me, which I love shattered glass all over the floor and a navigation company just makes a little path through the glass and never picks it up. And what you're doing is orchestrating and experience from end to end that works for the employers that works for the for the people receiving care as well as the providers for that matter.
Yeah. You've seen that. You referenced it. The fact that we got providers joining it to the company, I mean, that's the validation of why would they do thatunless they believe in the model as well. And I think and you saw that quote from Michael Dowling. He's already done that locally with Northwell Direct. But now he wanted to help accelerate it nationally. And he's been such a great leader in terms of doing what's right for the industry, not just for north as well. So we, we very much appreciate his support as well as the leadership, the visionary leadership at rush. And the same is true in Intermountain, all organizations that are focused on really fixing healthcare.
So Glenn, everyone wants to know how you're going to spend the money. And, but here's what I'd rather do. You identified four areas of focus for your work in terms of really addressing the consumer needs and the costs. And those were prescription costs, surgical costs, care at home and complex care as the four areas.
So let's talk about those things. Prescription costs. You talked about their strategic alignment with Walmart. Will we see more activity in that area of prescription costs?
Absolutely and it's not just Walmart, but Walmart is our key partner. And let me give you one or two examples. One, we know there's situations where people are paying more, both in co-pay than they need to be paying because in some organizations, they actually charge you. If you have a co-pay and it's higher than the actual cost of the drug, they charge a co-pay. That's wrong, shouldn't be happening, but we're going to make sure that we identify those situations and either eliminate the co-pay completely or have you paid the lower of the two costs? Second, we're going to identify situations. Insulin's a great one. We have customers who tell us, they're paying $200 for insulin. Walmart sells it. It's $69. And right there, we can save everybody a lot of money. And remember, it's not about the money. Money means access. And that is the lower the cost, when we eliminate co-pays, we're giving more people access. When I was at Allscripts years ago, and we were processing hundreds of millions of electronic prescriptions. We knew a direct correlation, the higher the co-pay, the less that got picked up. And so this is an equity issue. We have to make healthcare more affordable.
So we're going to see a lot of activity, but that's only one piece of it. The other piece is situations where, for example, we're using the biologics like Humara $35,000 per person per year to treat something like psoriasis. And we have companies, one's called Zerido. We're an investor in that company just to be clear, but they have a connected light therapy device that people can use at home at work, wherever they are that has better results and costs a fifth of what it costs to use the medication that has both side effects in some cases.
And in other cases, compromises your immune system. So we have a variety of solutions that we're bringing to bear to again, address our goal of better health care, higher quality healthcare and lower cost.
The prescription costs things is interesting to me because you're almost getting a platform effect that is happening here. The more data you get, the more data science you can do, the more you can identify those, those distinct areas, where the numbers can be addressed. And they're so out of line and you can, you can go in there and you can either partner or you can, make a strategic acquisitions which just based on your history, I saw what you did at Allscripts. It was hard to keep up with all the acquisitions at Allscripts. Livongo you made a few key acquisitions as well and here you've already made one. I don't want to ask the broad question because I think you're going to tell me, Hey, we may partner. We may buy. We may you know we're going to hire more staff. You're going to tell me the normal answer. So let's go on to the next one, which is surgical costs. How will we see this one evolve for Transcarent?
Look, we were very fortunate to be able to merge with and I say merge with, because while it was an acquisition, we were a brand new company. They had revenue. We didn't. So saying we acquired them, I think we really tried to put the companies together, but with a company called BridgeHealth which was far and away the leader in size and in quality in the whole surgical solution space. We used to be called center of excellence space. And so we learned a lot from 10 years of experience that Bridge had about how to deliver and offer people higher quality care options at a lower cost.
And we all know this situation. Sometimes if you go to the busiest organization, You get higher quality and lower costs. That's true in surgery. And so we now give people the option, local options of high-quality providers and different site options. Some cases you don't have to go to the hospital, you can go to a surgery center and they do a wonderful job of half the infection rate.
So because they're experts at it. And in other cases, we'll actually fly people out of market to get them the quality that they need. So, again, these are all new choices and options, but we talked about costs. I want to make it very clear. First and foremost, we are focused, always on quality. And this is a company that my own family uses and w i ll use. Every friend that I have, I would put through it. And thats because I actually trust that our people will always put quality first and there may be cases where quality costs more. So be it. We think on average across the board, that quality actually pays. It's the right thing to do.
And it ultimately results in lower costs. That's our belief that's that we're making and that's what we practice every day. So, so that's really important for us, but we'll see that playing out. We're seeing it today with some of the top companies in the country who are already using this every single day. Folks like Target. Folks like Delta airlines who are already using either all of our product or parts of our product and have been using it for years with great results.
And we're coming up to the hard stop on this. I did want to ask you about Carrot Home though, because that the right care venue is so important to controlling costs and getting people the right experience that they're looking for. Can you touch on that in the last couple of minutes we have here?
Sure. Well, there's a number of great companies already providing these services. Dispatch Health, Med Alive. And in many cases, we're partnering also with local health systems. The real idea is that today we deliver a lot of care in hospitals that could in fact be delivered at home.
And if you ask people all of us and you say, would you bill rather this care be delivered in the comfort of your home and safety of your home not requiring any travel. Or would you rather travel to the hospital, wait, be exposed to viruses and everything else. Almost everybody says I'd rather be at home. And then they say, I couldn't afford it.
Well, it turns out on average, with delivering this care, the same care with a private health professional at home costs something like 30% less and it's safer and it's exactly the same or higher quality. So what we're doing is, again, we're giving people more choice, more options for higher quality care and what a surprise, it turns out to be less because you're avoiding a hospital facility. And many of the most innovative hospitals our partners are actually very comfortable with some of this care moving to home. And they're actually in the business of doing so, but nobody knows about it. So we're giving people better information, leads to better care. And that's what makes us really exciting.
Glenn. I want to thank you for your time. Every time you talked to me about this, I get more and more excited. I understand why you raised 300 million because it's just going into all the gaps that we've seen. And we've all commiserated about around the table and you're putting the right leadership team together, the right partners from a financial standpoint, health systems coming in. It is really exciting to see this. And again, I just want to put my plug in as soon as you can offer it to a five person company. I want to be your first phone call.
You're in. Thank you so much for the time today. It's always great to talk to you Bill. Thanks so much.
Thank you. Take care.
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