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Saul Marquez:
Hello everybody! This is Saul Marquez, and I want to welcome you back to the HLTH Matters podcast. Really appreciate you tuning back in, and I want to remind you all to make sure you subscribe to the podcast, to make sure you get all of the amazing interviews that we’re doing with these outstanding leaders in healthcare. Today, I’m joined by the outstanding Dr. Ali Parsa. He’s a British Iranian healthcare entrepreneur and engineer. He’s the founder and CEO of Babylon, The Revolutionary Artificial Intelligence and Digital Health Company. Babylon’s mission is to put an accessible and affordable health service in the hands of every person on earth. By combining cutting-edge AI technology and the best available medical expertise, Babylon gives people 24/7 access to affordable, holistic health services. The company is home to a large, passionate team of scientists, clinicians, mathematicians, and engineers, all recruited from over 60 different countries. With over 3 million users, Babylon is transforming the way healthcare works across Europe, North America, Asia, the Middle East, and Africa. Before Babylon, Doctor Parsa created Circle, which became Europe’s largest partnership of clinicians, with some 200 million of revenue, 3000 employees, and a successful IPO. Then Independent Healthcare Awards presented Dr. Parsa with an entrepreneurial achievement award for establishing Circle. He was given the Royal Award for the Young Entrepreneur of the Year for founding his first business, V&G. And so with that introduction, I want to welcome you to the podcast. Ali, thanks for joining me.
Ali Parsa:
Thank you for having me.
Saul Marquez:
So, you know, we’ve been covering so many great things at this conference, and I’m so excited to have this time with you today to talk about what you and the team at Babylon is doing to make healthcare more accessible and more scalable. Before we jump into that, I’d love to know more about you. What is it that inspires your work in healthcare?
Ali Parsa:
I was a … scientist. I was a failed scientist. I was a physicist. So that’s part of who I am, and then the other part of who I am is I’m an immigrant. I was a refugee. I arrived in United Kingdom, actually at the age of 16, and on my own. I’m one of the people that many countries want to keep out nowadays. And being that outsider and being the outsider who’s always curious as a scientist and being somebody who has been rich enough and then became very poor and is now rich enough again, being very young and now is old, being an outsider and then becoming an insider, what I’ve seen is it really doesn’t matter if you’re an insider, outsider, immigrant, native, young, or poor, rich, people everywhere have the same needs, they have the same desires, they just have different opportunities. And therefore, I think what keeps, should keep most of us getting up every morning is how do we give more opportunities to more of us in life.
Saul Marquez:
I love that. Thank you for that, Ali, and I couldn’t agree with you more. There’s this set of fundamental values and needs that we all have, and I appreciate you highlighting those. When we talk about social determinants of health, for example, we all have them. It’s not us versus them, it’s we. And so talk to us about Babylon. What is it that Babylon does and how does it add value to the healthcare ecosystem?
Ali Parsa:
So it’s really interesting. You just called it the healthcare ecosystem and you interviewed many people. Tell me who is in the business of healthcare, Who makes money in this industry when you are healthy? This is not a healthcare sector, this conference should not have been called or this podcast should not be called HLTH, it should be called SCK without I.
Saul Marquez:
SCK?
Ali Parsa:
Exactly, because that’s what this sector is, it’s all about waiting until you get ill and then fixing your illness. It’s about management of crises and emergencies, and like any other crises and emergencies is a very expensive business, and it’s a business that is always chaotic and it’s always in crisis. It’s like, I’m older, I remember 25 years ago, that’s a quarter of a century ago. I used to drive my car until it broke down, and when it broke down, I took it to a garage who fixed it at a little fortune, basically, and it took its time to do so. Today, my car doesn’t break down. Why? Because we buried so many sensors in that car that is continuously monitoring, it is alerting me when something is going wrong and we fix it. We’ve done that with every factory. We’ve done it with almost with every asset we have in our possession. You can’t insure your computer unless you have put preventative cyber security software in there, and yet the most valuable asset we have in our world we don’t do that with. We wait until it breaks down and we hope to fix it. So what we need to do and what Babylon does is try to challenge the problem at its root that we should not wait until we have crises and then get a lot of money to fix it, but why don’t we continuously collect from our body the data they generate, analyze it in real time, be able to stream that thing, monitor it continuously, and be able to alert or reward people and then intervene early where we can, and that is the way to increase accessibility and affordability of healthcare, not to try and figure out how do I save a few percentage point on this drug prescription or another few percentage point on this surgery? I mean, that is just, that is like if I was in the automotive industry, that would be just like saying, hey, I am going to make petrol cars more efficient by just cutting the emission by 5%.
Saul Marquez:
Sure.
Ali Parsa:
Just put the battery in the damn thing.
Saul Marquez:
I love that. And so, Ali, how are you collecting this data?
Ali Parsa:
Slowly, and it’s difficult because, as you know, in healthcare, data is everywhere, it’s often in very old databases, not connected, so you need to rebuild the entire infrastructure. So you need to be able to not only take the data from where it exists, but actually understand what is the data that matters. For instance, if you have a mental health issue, yes, it is interesting that I look at your previous data and I see that maybe you have been hospitalized once or twice or you have gone to a hospital three years ago for a checkup, but what is far more interesting, if I know you have depression, is if I have your phone data and I can see that you have, you are leaving home every day, I can see that you have activities happening every day, I can see you are going to parties or whatever it is that you do. We know that if you are depressed, that you have depression, and we know that if you stay at home for three days or more and you look at your phone significantly more than normal, you are 80% more likely to attempt suicide, and yet nobody is watching that. So these things are not hard. They are, like when you build your home or you redecorate your house, it’s about consistency and persistence of knowing where you are going and not giving up until you get there. And that’s, what in Babylon we are trying to do is to create an ability to take a population, manage their health proactively, to make healthcare more accessible and significantly more affordable to them. Are we there yet? Absolutely not. Are we going to get there? You bet.
Saul Marquez:
I love that. I love your passion and vision, Ali, and your way of simplifying it is inspiring, so thank you for that. What are some of the most prominent issues in the healthcare industry as a whole grappling with right now? And how does digital healthcare pose a potential solution?
Ali Parsa:
The problems we are facing in healthcare industry is not incidental. A lot of people say, agh COVID, and now we have staffing problems, inflation, we have cost problems, this, that, or the other. But we had staffing problems before COVID, right? We had cost of healthcare going through the roof before the inflationary period we have now. Actually, we had 7% inflation in average in healthcare when the inflation for the rest of the society was 7%, 1 to 2%, right? Because none of these issues are incidental, they are structural. They’re structural because we created a system that on one hand deals with the crises and emergencies of sick care, as I described earlier, but on the other hand, is actually super-rational. People say healthcare is broken, it is not, it’s far from it. Sick care is very live and it’s very trivial. You created them, we created in sick care an economic incentive that says when a sick person, wait until somebody gets sick, they come to you and then charge them as much as you can. They have a headache, give them an MRI, give them a CT …, that’s how you get rewarded, payment by activity. Any rational capitalist organism will do exactly what their incentive is for. They optimize around that and that’s what they’ve done, and they’ve been so successful at it that through time they’re now almost 20% of the economy is one of the fastest growing parts of the economy. How can a sector that is been so economically successful be called broken? So the problem with the structure of the problem we have is twofold. One is we created the wrong incentivization in healthcare, which is all about fixing the sick and doing so as expensively as possible. And the second is that we have the just the wrong approach to healthcare, which is waiting until something breaks down and fixing it, as opposed to trying to maintaining that at the top of their health. So if you solve those structural problems, the incidental symptoms of that problem will fix themselves.
Saul Marquez:
Well said, and we have that opportunity, and today I feel like the COVID pandemic was a catalyst for a lot of innovation, right, in virtual care, and now many looking at hospital-at-the-home. There’s going to be a shift from sick care to wellness, and so I think the timing couldn’t be better for a technology like yours. Talk to us a little bit more about this structure and where you think it’s going to go.
Ali Parsa:
So I think that you’re right. This is the direction of travel, but nothing in life is inevitable. Just because you know you can do something, it’s not going to happen. We have in the United States alone a 3 to $4 trillion industry-around sector. That’s 3 to $4 trillion of vested interest to keep the system as is. It is not as if what we’re discussing or talking about, it’s rocket science or it’s so difficult, it’s so innovative, or so, it’s amazing that nobody had thought about this, it’s common sense. But why is it in the last at least quarter of a century that we knew how to do this, we haven’t done it? So we have to be realistic about the forces that very intentionally like to keep the system as is, try to change anything in the system, and see the lobbying and the regulatory forces that come around you. So we need to be very conscious about the fact that this is not that, what we’re trying to do it’s hard, but trying to get anything done in a society that has significant amount of momentum in the other direction is hard to do, and therefore we need to be realistic about this. Having said that, you also said, what it is about digital health that excites me? I actually don’t think this is about digital or analog. I think this is about sick care versus healthcare. This is about you could be digital and you could be a telemedicine company that waits for people to get sick and fix it that way. Nothing exciting about that, right? You could be digital and just, I don’t know, make money out of the digital delivery of modern medicine, right? Nothing interesting about that. What would be interesting is how do we use the technology that is available to us today, not just in sensors, but in artificial intelligence, not just in digital only, but in the ability of connecting digital with virtual, with physical that makes this work. Today, when we look after our people, 40% of all our interactions include no human being in the loop. When we do include human beings, we try to do, a lot of what doctors and nurses used to do with care assistants, and now what care assistants do, we try to digitize through time by watching through the interactions and saying, how does a machine does it? When you need to see a doctor and a nurse, in 90% of the cases we see you remotely. One in ten times alone, you go to these shops, clinics, physical infrastructure, the legacy that everybody is setting up. So I think there is a lot that technology can do today, I just think that we just need to get on with it and do it.
Saul Marquez:
Love it. And I do like your distinction, Ali. It’s not digital versus analog, it’s sick care versus healthcare, well care, right? I mean, that’s just the bottom line. So you mentioned AI, how can AI, data analytics, and digital tools help improve the system at scale?
Ali Parsa:
So there is two things that artificial intelligence or technology can do. One is prediction. AI is good at looking at a huge amount of data, making sense of it, and predicting where that data is going to go or pattern recognition. So that’s the first thing, it can do that and that’s what it should do. The other thing that a AI, is another word for automation, right? There’s quite a lot of things that happen by humans that we can look at the pattern and automate it. We now allow for your conversation in a chatbot can be with a machine without you even knowing it’s a machine. Of course, you should know that it’s a machine, but it’s a chatbot. So when you look at the shortage of staffing, that is the crisis of today, tomorrow it’ll be another crisis, but crisis of shortage of staffing, the AI has a very big role to play in that because on one hand it can do the menial work, or technology can do the menial work and it frees human beings to do the more human work. But on the other hand, it can actually monitor a person and watch it and see how that person can avoid to get to the crisis that you need, the rare nurses and the doctors that we have today.
Saul Marquez:
Thank you for that. Yeah, it’s a big promise that AI can give to us. And so can you discuss specific monitoring tools that could help patients better engage with their health? How does proactive monitoring save costs for patients?
Ali Parsa:
So, I mean, that is obvious, right? I mean, no, nobody, very few people should die of a stage one cancer. The reason people die often is because by the time we catch the cancer is a stage four, it’s too late, the, unfortunately, there is nothing we could do. There is almost nothing that your body doesn’t send some kind of signal on. We should be able to see it, we should be able to analyze it, and we should be able to know it. Like even if I am getting a cold, my, and I’m just waiting my watch and it’s monitoring my resting heart. My resting heart, check it out yourself, your resting heart will be higher than normal for a day or two before the symptoms of that cold comes. Why? Because your heart is already fighting the virus, right? So why are we not monitoring this? And why are we not acting early? It’s something we can do today. Now, the infrastructure is not there. The old databases wouldn’t work. You need proper data graphs. You need to be able to not leave it in the data lakes, but you need to be able to continuously monitor, stream it, while you’re streaming it, you need to build the AI agents who is watching that data for particular moves so that it can alert it. You need to make sure that those alerts are clinically valid. You need to make sure that when two things interact with each other, the interactions of those comorbidities are clinically work. So it’s work in progress, I’m not saying that it’s going to be easy. The biggest challenge we have is not the challenge of science or the not the challenge of what we do, the challenge we have is all of this cost, money, and today that money has dried up. Capital markets have shut down. Investment has become a bad word. Innovation technology has become dirty things to do, right? And everybody wants you to make money and be profitable overnight and that doesn’t happen. That’s like asking Tesla to make a profitable car when they were set up in 2003 and we are seven years old by, say, 2010, right? That doesn’t happen. You need, to do something big, you need to make the big leap. Andreessen Horowitz the other day wrote an article saying the biggest company in the world is going to be a healthcare company. I couldn’t agree with them more. But what they didn’t say, that’s not going to happen on a few tens of millions of dollars or hundreds of millions of dollars of investment. To build something that is worth a trillion dollars, you couldn’t expect to spend $2, $3 Billion and then have a 500-fold return on your investment, that’s very rare. You need to spend the kind of money that went into every other trillion-dollar company in order to build this. And unfortunately, that money is not there. It’s not even the flavor of the month for it to be there. So I think that innovators today need to learn how they are going to slow the pace, how they’re going to survive, and how they’re going to thrive. And we can talk about this, but I think the current environment, as much of a threat is for many, it’s also a significant opportunity for those who survive.
Saul Marquez:
Thank you for that, Ali. And I couldn’t agree with you more where we’re at today. Capital has dried, valuations have plummeted. There’s no money left, and a lot of entrepreneurs are thinking about partnerships or M&A as a way to potentially weather the storm. You’ve provided some great guidance here for many, many of us to think about. So thank you for that, and you can’t expect ridiculous returns. I mean, that’s just the bottom line.
Ali Parsa:
I’m just got to say, you said that with a smile as if that’s such a silly thing, but you’ll be amazed how many people genuinely believe they all want to see the next Google where the capital that went into it was so little and the return was massive. The reality is most companies who produce massive return are much more like Amazon or much more like Tesla, which means you have to create sustained long-term investment to be able to get the return you want. But let me just use this as an opportunity not to finish this on a negative on this thing about investment, because I also think there is a massive opportunity. You said that there is a lot of M&As happening. What is that? That is a lot of investors who don’t have the patience anymore and the entrepreneurs who are not really, can’t do it anymore, are getting out of the market. Who are they selling to? They’re selling to big companies that by and large have a reputation and have a track record for destroying these businesses. They put some average manager on top. A few years later, the business is dead right and the innovation is gone. A lot of new companies are coming into the market, if they were not true believers like kind of fad entrepreneurs, they will go back. We used to call it in 2001, B2B and B2C, back to banking, back to consulting, then go back to the big companies. I heard in this conference that many innovation centers, digital centers of the incumbents have shut down. Why? Because those Luddite managers turned back and said, Hey, I told you so. That never is going to work, let’s go back to the old. The reality is Albert Einstein used to say, the old, we cannot expect to solve the problems that we have with the thinking that created those problems in the first place. I think in a less polite moment, you also said the definition of insanity is to keep doing what you do and expect a different result. That’s what we’re doing, we’re all going back to what we used to do. Now, those of us who keep going, who can survive this environment and can keep innovating, they will end up in an environment shortly. It will come back two years from now, three years from now, it doesn’t matter, where all the pretenders, all the other competitors have gone on away. The need hasn’t gone anywhere, if anything, it has been accelerated, and this is when we can thrive. That’s exactly what happened to Amazon in 2001. Everybody else pulled out. Borders gave Amazon their books to deliver. Target shut down their e-commerce business. Two years later, Target’s came back to Amazon, paid them $700 million three years later to build their e-commerce capability and Borders was bust. That’s our opportunity, entrepreneurs, today, stay the course, do the innovation. At the end of the day, your rate of success is determined only by one thing, and that is by the rate by which you innovate.
Saul Marquez:
Love that, Ali. I love your passion. And you mentioned thinking, right? Different thinking. What do you do for thinking? Like, what habits do you have or rhythms do you have for thinking differently?
Ali Parsa:
So as I said, I’m failed scientist, so I spend a lot of time reading.
Saul Marquez:
What do you mean by failed scientist?
Ali Parsa:
Well, I was a physicist. I didn’t, I wasn’t as good a physicist as others, so I didn’t say in academia and I stopped doing physics. But one thing I learned is very simple. We are inventing at a rate of two, doubling of knowledge in humanity, by a rate of every 2 to 3 years, we are doubling. So that means, so what we need to know today is half of what we know in three years’ time, is a quarter of all we know in five years’ time, is 1/10 of what we know in ten years’ time. And yet vast majority of CEOs, vast majority of leaders, vast majority of people are spending vast majority of their time on that 10% that they know. The solving the problems of the 10%, that’s where their mind is, that’s what they’re doing. That’s why a 20-year-old kid comes and does Google, another 20-year-old kid comes and does Facebook, another 20-year-old kid a couple of decades earlier came and did Apple and they came and did Microsoft because those kids are not burdened with the past and they’re looking at the future. So one of the things I try to do is not be as distracted by all the burdens of the past. It’s my job, I have to do it, I spend a very big chunk of my time like everybody else, problem-solving, but I also try to carve up enough time to say that where should I go? What is possible today? What can be done? And sadly, sadly, it is very rare that I meet a peer who’s doing the same. They are all trying to figure out how do I quickly make money under current situation and hopefully I’ll luckily sell and get out of it before somebody finds out that I haven’t solved the real problem. That legacy thinking, I think in the long term will always fail. And what we hope for is to find the kind of long-term investors who can back long-term thinkers and long-term executors to create the future. When that happens, everybody comes back and says, wow, it was obvious from the beginning, but there was nothing obvious from the beginning for Tesla. Everybody, remember three years ago, everybody used to call Elon Musk mad today, still some call him, but like him or not, he did this Space X and he did Tesla and he did it because he’s got a superpower, which is to think out of the box and also to be able to a mass the kind of capital that it needs over a continuous period of time to deliver those. And thirdly, to bring together amazing people who can bring his vision to life. Those of us, as entrepreneurs, who can do so, with setbacks, but over time persistently, will create outsized value for our investors, but much more importantly, will create better services for our users. And in healthcare, that will translate into better, more accessible, more affordable, and more high-quality healthcare, not just for the few, but for every person on earth.
Saul Marquez:
Love it, Ali. This has been an incredible discussion. I want to thank you for it. On the one hand, to learn more about Babylon. On the other hand, the passion you have for entrepreneurship and doing the right thing first and foremost is inspiring. So I want to thank you for the time today. If people wanted to get in touch with you or learn more about Babylon, where can they go?
Ali Parsa:
They can always get in touch with me through LinkedIn, Ali Parsa at Babylon. I’m not on Twitter because I just don’t have the time to read bots, but they can always get in touch with me that way. I’m a huge believer in exchange of ideas, in all of us working together to find a better way, so love any conversation. But above all, thank you so much for giving me this platform to talk to you today. It’s been an absolute pleasure.
Saul Marquez:
It’s our pleasure, Ali. And folks, make sure you check out the show notes of this interview with the Doctor Ali Parsa. You’ll find all the links to the things that we discussed, including his profile in LinkedIn, Babylon Health, and all of the amazing resources we discussed. Ali, thank you so much.
Ali Parsa:
Thank you for having me.
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