Finding Affordable Quality Healthcare with Kevin Krauth, Co-Founder and CEO at Orderly Health

: Hey Outcomes Rocket friends, thanks for tuning in to the podcast once again. As a leader in health care, you have big ideas, great products, a story to tell, and are looking for ways to improve your reach and scale your business. However there’s one tiny problem. Health care is tough to navigate and the typical sales cycle is slow. That’s why you should consider starting your own podcast as part of your sales and marketing strategy. At the Outcomes Rocket, I’ve been able to reach thousands of people every single month that I wouldn’t have otherwise been able to reach if I had not started my podcast. Having this organic reach enables me to get the feedback necessary to create a podcast that delivers value that you are looking for. And the same thing goes if you start a podcast for what you could learn from your customers. The best thing about podcasting in healthcare is that we are currently at the ground level, meaning that the number of people in healthcare listening to podcasts is small but growing rapidly. I put together a free checklist for you to check out the steps on what it takes to create your own podcast. You could find that at outcomesrocket.health/podcast. Check it out today and find a new way to leverage the sales, marketing and outcomes of your business. That’s outcomesrocket.health/podcast.

: Welcome back once again to the Outcomes Rocket podcast where we chat with today’s most successful and inspiring health leaders. Today I have the amazing Kevin Krauth. He’s the co-founder and CEO at Orderly Health. Kevin left his role as the Senior Product Manager for Electronic Arts. That’s EA as many of you are aware digital platform team to help found Orderly. Prior to EA, Kevin was working as a Product Manager at a mobile analytics startup called Upsight in San Francisco. His clients included Blue Mobile, Tender, Jack Threads, and Kaiser Permanente. Obviously the organizations you all have heard about. Kevin can trace the roots of his interest in health care back to early childhood memories making rounds with his dad at the time a physician in Denver. Originally enrolled in the premed program at Duke. Kevin shifted his focus to the business of healthcare choosing instead to study health care policy as a public policy economics major. When he’s not in the office, you could find Kevin’s skiing, rock climbing, or running, usually while listening to podcasts like this one…

: That’s right.

: On health care and technology in the mountains of Colorado. So Kevin it’s a pleasure to have you on the podcast. Glad you could join us.

: Thanks so much for having me. I’m excited to chat with you Saul.

: Hey me too. Now did I leave anything out in that intro that you want to share with listeners?

: One part of my story that I do always like to share is it mentions that I started off in a premed program at Duke. But what really ultimately sealed my fate in terms of not going into health care as a clinician or a physician was a conversation that I had with my dad. It was 2001 and my dad had been a practicing physician for about 30 years and ultimately one of the things that we talked about was how much the health care industry had changed and how many physicians really didn’t love their jobs anymore. You know they got into health care in order to practice medicine and it was so bogged down by bureaucracy and politics that they ultimately ended up either leaving or telling their kids to not go into the profession which is a really common trend. So I am one of those health care defectors and I guess by happenstance that I make my way back into the health care industry.

: Well it’s in your genes my friend even though you’re not practicing as a physician you’re still impacting health so excited to dive into some of those things and yeah you know this physician, physician burnout is a real thing. Lack of satisfaction is a real thing. So looking for ways to improve those elements are great business idea for those of you looking for ideas to get into health care. But diving into some of the experiences that you’ve had, what would you say is a hot topic that needs to be on every medical leaders agenda and how are you guys approaching at Orderly Health?

: Yeah and I have to apologize upfront because I think that I am just about to drop a bunch of buzz words but I know it’s a little cliche. I do think that there’s a lot going on in the health care space around the things that we’ve been hearing about for years things like big data, machine learning, artificial intelligence. All of these things in my opinion, there was a lot of promise for the last 20 years or so and we’re now starting to see that promise come to fruition and what I mean by that is you know with big data technology we’re starting to see more and more analysis of claims and outcomes and how that can improve the number experience with machine learning. A good example there is how computers are effectively being taught how to spot and recognize imaging radiology images, x rays, and stuff like that and are doing a better job of analyzing breaks and maybe cancer cells or something like that before a trained physician can. And then the last part with artificial intelligence, humans are prone to bias and there’s a lot of different ways that they can get stuck in their ways and not be able to be quite as agile or capable as these algorithms that we’re teaching computers how to recognize. So I think in a number of ways the confluence of these three trends is coming together. And what we do is I actually think is pretty lightweight compared to some of the heavy hitters on the clinical side things that I mentioned related to spotting cancer cells or analyzing claims and outcomes. We’re leveraging existing technologies in the AI space specifically using natural language processing technologies to create a platform that allows people to interact with the health care space as though they’re interacting with a human when they’re actually interacting with the software. So I can’t take credit for a lot of developments that have been made in this space where as they say we’re standing on the shoulders of giants at Orderly Health. But I do think that being able to spot these trends and leverage them has really been a foundation for our success and we hope as a foundation for future success as well as we’re making it easier for individuals to navigate the health care space.

: Yeah I think those are some great insights. So maybe you want to tell the listeners a little bit about Louie and what your service does?

: Yeah sure. So in a nutshell what Orderly he has done is we’ve created a chatpad that helps people, individuals navigate the health care space. And you know I’ll talk a little bit about Louie which is the name of our chatpad but also about where we’re going because I do think it ends up I think diminishing the value of our platform if we just chalk it up to just yet another chatpad. Effectively what we found when we were trying to start this company was individuals wanted an advocate there and a lot of companies out there that do specific things very well. For example if you want to find a doctor covered under your plan there’s a number of different companies that are out there that will help you. Not to mention your individual insurance company but you could use better doctor or health grades or Zak Doc or a number of others that will help you try to find a doctor and even schedule for you a somewhat plan year on what we’re doing is enabling a platform that brings multiple of these different single source or single use case providers and bring them all together into the form of a chatpad so you can ask a question like, “What’s the best pediatrician covered under my plan?” And we can answer that using our API partners and data and service providers. But we can also help you navigate to at home care using a partner of ours called Dispatch Health or let you know that you can order your medications online instead of going to your local Walgreens receive yes using our online pharmacy partner and the big innovation that we’re bringing to the table is that by bringing all of these different solutions into a single platform. When you chat with our chatpad Louie, you’re actually chatting with effectively 20 different apps that you would download onto your phone and through a heavily compliant back and were able to share some demographic and contextual information with these different service providers so that the handoff tends to be very seamless. It ends up being making for a much better use case and then we sell that to insurance companies so that you no longer have to deal with the dreaded portal or wait on hold for your insurance company for hours on end to answer a simple question about your benefits or finding a telemedicine provider or something like that. So we’re just getting started but we have a few enterprise customers and we’re really excited about the progress that Louie has made in the last year or so.

: Well I think that’s really interesting Kevin how you guys are sort of aggregating all of the different apps and giving consumers access to them. So are you guys working from the space of business to consumer or are you going to be working through payers and employers to offer this?

: Yeah I mean we actually take a hybrid approach. I think that for most people who are developing in the health care space the idea of B2B2C business to business to consumer is fairly common because consumers as we all know it’s a trend that is starting to change. But for the most part consumers are not the ones at the core of their care and we’re really trying to change that we’re trying to make consumers decisions more seamless and more informed with the data they need when they’re making those decisions. So we are focused on selling to insurance companies, payers, third party administrators also known as TPA’s, and other players in the healthcare space that provide their services to the individual patient or member. We like to think that as a user because we’re trying to get away from the nomenclature of thinking of people always being sick and when you have it when you put everybody uses patient effectively you’re already assuming that the person is sick. So we’re trying to change that a little bit but we do have a consumer facing side. And what’s great about that is we can go directly to our consumers with Louie. So our platform is actually white labeled many times a user of Orderly may not know that they’re using Orderly the way that it works as an insurance company will offer Orderly to their members but they might rebrand it as their own chatpad. So you know…

: Got it.

: Cross blue shield we’ll call it something different but if you go to the Orderly Health website you use to be able to actually sign up directly. And this is where we run experiments and try to improve the member engagement and experiment with different functional use cases that individuals can try and that’s actually how we improve our member experience for these insurance companies.

: Well I think that’s pretty cool and sounds like you’re tackling a little bit of both sides. The consumer as well as the business side of it. So as you think through some of the more recent use cases can you think about an example that you’ve improved outcomes or or improve the overall health care process. Can you maybe share an example that for us?

: Sure yeah. I mean I think that the things that we do best and this is something that we figured out from our consumer facing application and people signing up just on the web and testing out Louie is we help people find doctors that are helped them manage their medications and then we help them with answering questions about their benefits. So the statistics that we always bring up is that we have about 70% onboarding process or 70 percent conversion rate when it comes to people on boarding which is incredibly high in the healthcare space. But more importantly we’re seeing 20% month over month retention on Louie. So people sign up interact with Louie and then they’ll come back to one in five of them will come back the next month. And that’s really important. That 20% number is really important because the standard in the healthcare space is somewhere around 1%. Often you’re seeing much lower. The reason being that most people don’t want to consume health care. But if we’re able to make it engaging and fun then we’ll actually see we can get away from what I was talking about earlier. The idea of health care being sick care right it’s the idea of naming all of your users patients and assuming there’s something that they need. Well with that 20 percent we’re seeing people come back and ask questions about when they can schedule an appointment and whether they’re covered for an annual physical. And we’re still early but we really are bullish on the idea that by getting that engagement up we’re going to be able to see a lot more users being proactive in managing their care so that it’s not secure that it actually is health care. They’re ordering medications when they need they’re making doctor’s appointments when they need they’re getting the care that they need to be preventative rather than reactive. And I think that that’s really important.

: Think that’s a really great call out. And Kevin what would you say at a time or an example where you had a setback and what did you learn from that setback?

: Yes sure. Well what is the quote. I think it’s I don’t know if it is or it might be. What is the word I’m looking for that it’s misappropriated to Obama. But that success is not a linear path. So Fred Wilson said the job of the CEO is to do three things well it’s articulate the long term vision of the product. Make sure you have enough money to keep the lights on and hire and inspire a talented team to execute on that vision. One of the things that I’ve really tried to do is have my series of failures be learning experiences but to avoid that major failure that’s going to sink the company. And we’ve done okay without so far. But what I will say is that the hardest to take failure as a CEO is when you make the wrong hire. We actually got on board and early we never. It was kind of our tech leader early on and that was a tough decision for us because we’re always shooting for that unicorn engineer tech person who’s going to solve all your problems but ultimately you as a young startup you really have to get a little bit lucky and inspire people at the right moment. And I think that what we found is that the longer you keep on people who are a bad fit the more dangerous it becomes the company. So you asked what the failure was I mean we’ve made a couple failures when it comes to hiring. I think that what I’ve really learned from that is and for anybody who’s thinking about starting a company out there I can’t stress this enough. Whatever your fears are in terms of the worst possible outcome imaginable it’s not as bad as you think it is in your head. You think the reason that we hung on to employ is a little long is I was always afraid that by making this decision to let somebody go or moving on with another decision that we were going to somehow sink the company and that it was going to be the end of orderly. And I think that what you realize is once you’ve made a decision you remove that burden from your mind space and it just allows you to be much more clear and move ahead. So it’s it’s like leaving off an anchor even if you have no tech talent or you make a decision to go into a different business unit and you have no experience in that business unit, there is a clarity that comes from making that decision that allows you to move ahead so much more quickly and in a lot of ways it’s very liberating. So I think that that’s been the greatest experience that I’ve had from failure is just how freeing it can be to not continue to worry about the failure. Make it. Accept it. Move on.

: I had such a great message and yeah hiring is tough. I’m a firm believer that you just have to hire slow and if you need to, fire fast. I had an open role recently and I wanted to fill it quick but it took me eight months. Kevin it took me eight months but I’ve got the guy for the job and he is just going to do amazing had some great candidates overall. But yeah I mean it just it’s worth waiting.

: Absolutely. And during that eight months I can only imagine the level of doubt and fear that creeps in. We’ve had that same experience you just want it to be over. But in the end it’s worth it. I agree with you.

: Yeah that’s awesome man. So what would you say one of your proudest leadership experiences in health care has been to date?

: Kevin this might seem kind of minor. Again we’re still pretty early. We’ve been around for about three years but we actually have made a couple pivots that has slowed our product development at times. But I’ll never forget this. We were demoing at some angel investor pitch event. An investor who is also a physician came up and started to talk to us and he was asking about our application and whatnot. And he was looking for a doctor and he was testing it and he was comparing our product side by side with his insurance company’s data and it turns out that he found a doctor that was covered under his plan on our system that his insurance company didn’t have. So what was so interesting about that is that little window for us turned into a contract not as an investor but with another company because we had a company that found out about us through the fact that our data was better than theirs and it started a conversation. Well how are you doing this. What’s powering this on the back end. And we explained to them that we use all these different data partners and kind of mashed together that data. So in a lot of ways we can have more than one angle for where that data comes from. And they were only able to use their own internal Provider data set. So it ended up being just this it was a long process. But what started off is this really minor when in a moment of pride for me turned into a contract for one of our first enterprise customers.

: Kevin so you know what? What a great example and what you’re saying is just so true. You know today the direction that our industry is heading it’s going to be the companies and the people that can actually make insights with data and better control manage and clean data so that it’s useful that are going to be the most successful. Look at companies like Amazon for instance right. They’re doing a phenomenal job of managing this data. And to your point you were able to do it in a way that was better and got this contract out of it.

: It was super exciting. It is such a thrilling moment as one thing I will say is when you’re starting a company and people don’t talk about it enough I know that there’s plenty of material out there about how hard it is but it is also just a string of setbacks and failures that you just have to push through. And all those moments of just little reward that that makes you beam like a proud parents and ultimately they keep coming back.

: Yeah that’s so cool that Kevin did you have an insight here where you’re like man maybe the actual value we could provide is different than we thought at the beginning?

: What a great question because I was hoping a Davidge to talk about this anyway but this is something that we’re working on and this is really an extension of that contract that I was telling you about. So again we have a system that does some interesting things and it brings together all these different sources of data. But on the backend we’ve been working on trying to figure out a way to make that data more valuable so that it’s not just a pass through and this was in some ways a bit of a eureka moment but it also took a lot of work because we knew we needed to dig in and find the skill set necessary to really pursue a product out of that one little insight. So what ended up happening was we spent nearly two years recruiting a head of data science and we ended up finding an incredible candidate and now we’re really investing sort of doubling down on that one insight where we’re now taking multiple different sources of data and rather than just saying okay what we can do is you ask a question we connect you with the best data source and pass that data source through unchanged. All we’re doing is developing software on the back end that can take multiple different sources of data and then compare specifically around provider networks. So we can compare what data is available for each physician or clinician or whatever it is on the web. So I kind of joke like it’s a little bit like the analogy in Jurassic Park when there’s gaps in the DNA they fill it in with a frog’s DNA. Well I’m sure you know many listeners know many times network data is patchy and incomplete or incorrect altogether. Yeah Rick you can take multiple different sources of data for the same doctor or clinician or dentist or whoever it is. And even though it’s not entirely consistent what we’re working on is actually mashing all that together to give one unified look at this information so that it’s accurate and predictable based on what source it’s coming from and other contextual factors like location specialty that sort of thing so this tiny insight let us down this road of developing something a lot more sophisticated and we’re super excited about the progress that we’re making on that tool.

: That’s awesome. Kevin congrats on that. And yeah like you said it’s those little insights that turn into the real aha moments and even lead you to a product that actually is desired and needed by the market.

: Yeah absolutely. And it’s something that you constantly have to. Again we’re kind of we’re rehashing a number of cliches in the startup space but you do have to constantly have an open mind listen to the market. There’s the concept that the market always wins. You really don’t know what you’re building until you put it out into the wild and you see how people react to it. There’s just countless stories right. RMBMB started off as an aha moment during a conference in San Francisco. Instagram started off as a check in app right people what the best entrepreneurs do is they take something they get it into the market early and then they see how people respond to it and they really chase down the opportunities for where their success and what they’ve built.

: Yeah I think that’s a great message and you’re doing just that Kevin. So kudos to you and your team and and keep up the great work man.

: Well thank you very much. I always say don’t confuse activity for achievement but we’re well on our way. We’re trying hard.

: That’s awesome. Now let’s pretend you and I are building a medical leadership course and what it takes to be successful in the business of healthcare. It’s the one on one of Kevin and so I’ve got four questions for you lightning round style followed by a book that you recommend to the listeners. You ready?

: Yup.

: All right awesome. What’s the best way to improve health care outcomes?

: I think listen to the patient. You have to put the consumer the individual at the center of health care. Otherwise it’s never going to work.

: What’s the biggest mistake or pitfall to avoid?

: Don’t think that you know the answers I think you really need to kind of like what we were just saying take your failures in stride learn from your mistakes and really listen to the market so that you understand what the market is demanding.

: How do you stay relevant as an organization despite constant change?

: I feel like I’m being a little bit of an old broken record here but I just think you have to keep an open mind and never assume that you’re right. Otherwise you get into thinking that you get into a closed minded attitude and you narrow your viewpoint and it never works.

: Love it. What would you say the number one area of focus that drives your company is?

: I think it’s all about the consumer. We’re trying to make the consumer at the center of health care. So anything that we can do to improve the consumer user experience and it really starts with us even using our own products right. Understanding what we would want out of our system helps us understand what other people would want as well.

: What book would you recommend to the listeners?

: My favorite startup book is A Hard Thing About Hard Things. I think it just has such a good job of capturing the startup experience. But if you’re talking specifically about health care there’s a great book called The Healing of America by T.R. Reid. And I think every American should read it because we have this weird American exceptionalism that says that nothing that works in other countries can work in America and that’s just simply not true.

: Love that. So Kevin this discussion has been great. We’ve talked about changing the direction of your company. We’ve discussed consumer versus business to business. I mean we’re covering a lot of great things. What will be the one thing that you like to leave our listeners with as a going away point? A closing remark.

: Yeah I mean I just think that in all of the mainstream media you hear so much about health care costs going up and how health care is such a political football. I want to leave with a message of optimism. I think that people often think that health care is 20, 30 years behind and it’s so complicated that you can’t change it. But if there’s one thing that I’ve learned from my experience thus far trying to create Orderly it is hard but there are a lot of really smart people out there doing incredibly cool things in the health care space. And I just want to encourage anybody out there who’s even on the fence about joining health care because maybe like me they were a little worried about the bureaucracy or just how hard it is. You can’t do hard things unless you try. And I think we need more smart people in this space. Any innovation or any industry that’s a little behind means that it’s rife with opportunity. So I take it are really optimistic viewpoint of the future and I’m excited to be living in a time when we have so much change all the time and technology and I’m just really excited about the next 15, 20 years and where that can go in the health care space.

: Great voice of optimism there Kevin. And what would you say the best place that the listeners can get ahold of you or follow you would be?

: Well I am on Twitter. My Twitter handle is at kevinkrauth. You can also follow us our thoughts and musings on health care at Orderly Health, we have an Instagram and Twitter but I’m pretty available so if you ever want to just reach out to me directly in my email address is just kevin@orderlyhealth.com. I’d love to hear from you. Love to hear your thoughts and inspiring stories in health care space.

: Outstanding. Hey Kevin this has been a true pleasure. You’ve left us with a lot of great things to think about and consider. And I really appreciate you jumping on the show.

: Thanks so much Saul. And thanks all the listeners who are listening out there.

: Hey Outcomes Rocket friends, thanks for tuning in to the podcast once again. As a leader in health care, you have big ideas, great products, a story to tell, and are looking for ways to improve your reach and scale your business. However there’s one tiny problem. Health care is tough to navigate and the typical sales cycle is slow. That’s why you should consider starting your own podcast as part of your sales and marketing strategy. At the Outcomes Rocket, I’ve been able to reach thousands of people every single month that I wouldn’t have otherwise been able to reach if I had not started my podcast. Having this organic reach enables me to get the feedback necessary to create a podcast that delivers value that you are looking for. And the same thing goes if you start a podcast for what you could learn from your customers. The best thing about podcasting in healthcare is that we are currently at the ground level, meaning that the number of people in healthcare listening to podcasts is small but growing rapidly. I put together a free checklist for you to check out the steps on what it takes to create your own podcast. You could find that at outcomesrocket.health/podcast. Check it out today and find a new way to leverage the sales, marketing and outcomes of your business. That’s outcomesrocket.health/podcast.

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