Focusing on the area that matters most – the consumer
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Keeping the Consumer at the Center of Healthcare with Jody Holtzman, Member of Advisory Board at Solera Health was automatically transcribed by Sonix with the latest audio-to-text algorithms. This transcript may contain errors. Sonix is the best way to convert your audio to text in 2020.
Welcome to the Outcomes Rocket podcast, where we inspire collaborative thinking, improved outcomes and business success with today’s most successful and inspiring health care leaders and influencers. And now your host, Saul Marquez.
Saul Marquez:
Welcome back to the Outcomes Rocket. Today, I have the privilege of Jody Holtzman. He’s a recognized thought leader on health innovation, especially that of relevance to the aging population. Currently member of the advisory board of many companies, including Solera Health. He has mentored and advised startups and growth-stage companies on their growth strategies for the past 14 years, preceded by a career in strategy consulting. He has led and consulted on strategic planning processes in global firms such as PwC and smaller companies. He created the concept of the 7.6 trillion Longevity Economy, which will cover in a bit of a detail here in this podcast and build the innovation at 50+ ecosystem; a network of VCs and strategic investors resulting in new business deals and investment of over 200 million and thirty five startups plus six exits. His work and thought leadership have been recognized in Bloomberg Businessweek, CNBC, Financial Times, Forbes,Fortune, Market Place, Information Week, New York Times, among others. It’s a privilege to have him here to discuss really the forefront of aging, but also keeping the consumer at the center of everything we do. Jody, what a privilege to have you on. Thanks for joining us.
Jody Holtzman:
So happy to do it.
Saul Marquez:
So talk to me. Jody, what is it that got you interested in health care?
Jody Holtzman:
Well, I think like everybody else, you grow up. You go to the doctor. So, you know, you’re starting with a familiarity about the field. But it’s very much through that personal, personal lens. When I joined AARP back in 2005, AARP is really focused on economic security, health security. And so it was a natural direction to start to look at and understand one on the contextual side of things. What were the dynamics that were helping either improve or or not the health of older adults. The eligibility age for AARP is 50. So we were dealing with boomers. Now they’re dealing with leading age Gen X as well as the greatest generation. So just being at AARP, that kind of set part of the aperture of how we looked at at the market. But the other part of that research really gave me beyond my personal experiences with my own parents and relatives. But just a deeper and broader understanding of the challenges and realities and opportunities, most importantly, that are presented by the demographic wave, particularly by the aging of the boomer generation, of which I am a member.
Saul Marquez:
Fascinating. And you know, it’s interesting that your career started with AARP. We had a chance to chat about, you know, before we started recording social determinants of health, how important those are to how we’re approaching our strategies to improve health care. I was telling you, I was in Chile last week and on the way back, I saw that movie Going in Style. Have you seen that?
Jody Holtzman:
Not sure if I have. Who is in that?
Saul Marquez:
So it is Morgan Freeman, Michael Caine, Alan Arkin.
Jody Holtzman:
Oh Yeah, I could see that.
Saul Marquez:
They rob a bank.
Jody Holtzman:
They rob a bank. Don’t they go to Vegas or something?
Saul Marquez:
Yes. So, yeah, they rob a bank. And the sad part is that one of the guys is losing his house. The other guy, his kidney is going out. But the thing that that really hit me, man, is like this social determinants of health. You know, the money stops because their pension got stopped. They sold the company and they were taken into Europe or wherever. And this very real American situation that really hit home with me, too, man, because my grandfather lost his home. Just, you know, his pension got frozen as just say, wow, is this a story of my grandfather Right.? But I think a lot of Americans probably felt that way. And I think it’s cool that, you know, you’re focusing here in this area that matters most, the consumer.
Jody Holtzman:
Well, first of all, there are numerous myths about older adults. The first is the whole, nobody in Washington, D.C. will put it this bluntly. But I think this is a an accepted assumption actually on both sides of the aisle that each of each side of the aisle will take a different reactive position. But I think the underlying assumption is in common, and that is the belief that we can’t afford all these old people that this demographic wave is going to bankrupt society, etc., which is what led me to create the concept that the Longevity Economy and because economic claims were being made about the impact of this generation and having done my graduate work at the University of Chicago and political economy. My reaction was, OK, well, where’s your economic evidence? And the evidence would always be regardless of who it was. Well, look at Social Security and Medicare. They’re unsustainable. And the the light bulb went off. The aha moment was then I realized that that was a complete bait and switch response. So they’re making an economic claim, but the evidence supplied is how two programs are designed. I could design either one of those programs to be self-sustaining. There are levers to pull and you could do it may not be politically feasible, but just from a design principle, you could do it. But it begs the question, well, what are the economics? And it turns out that a third of the American population, over 100 million people who are over 50 years old in this country generate 42 to 43% of total U.S. GDP. They told it when they go and buy things and that consumer spending whines its way through value chains and supply chains and and has multiplier effects that kick off through the economy. That’s 53% of total consumer spending, which generates not just under 90 million jobs, one point a trillion dollars in federal, state and local taxes. By the way, Medicare costs are only in the six hundred and fifty billion dollar range. So it just begs the question and the assumptions that are being made and provides economic data to show that no, actually that’s wrong. So the soundbite that I came up with was that it’s only in Washington we’re serving the needs of over 100 million people’s called them unaffordable cost and financial burden in the private sector, serving the needs of over a hundred million people, it’s called an opportunity. Let us get at it. And it really has a different impact on the conversation, depending on which door an assumption you walk through the opportunity door versus the unaffordable cost and financial burden door. And you see not just large companies trying to now understand where the economic opportunities are, but you see innovators in amongst entrepreneurs who are starting to realize not only can they do good, but by doing good, they can do well. That approach of social entrepreneurship is really has just blossomed over the last 10 years.
Saul Marquez:
So Jody, what would you say needs to be on the minds of health leaders listening to the podcast today? What is it that is that and how are you approaching it?
Jody Holtzman:
So I think there are a bunch of things that that need to be on on people’s minds and you’re starting to see as a result of the the changing orientation. And most importantly, changes in the incentives and reimbursement of different services. This whole wave from volume to value, from fee for service to risk faring and and taking an approach that says if you allow us to be creative, we’re willing to take on that risk. And by doing so, we will have better health outcomes, which will in turn save the system money. And so I am fully behind that thrust, that overall shift. The companies that that I’ve been advising through my company, Longevity Venture Advisors, are companies that are all addressing significant needs with possibly a point solution. One example of that would be a company that that I advised. You know well Saul, that has a smart insole. The purpose of which is to prevent diabetic foot ulcers. So right here you have a focus on prevention, early identification of problems, because the typical path for somebody with diabetes who ends up with ulcers is very often they become gangrenous, gangrene leads to amputation, leads to a whole series, you know, negative outcomes for that person’s life, for their family’s life, etc.. In fact, the founder of that company kind of created it in response to learning about a business partner who ended up having his leg amputated and having to close his business. Another company that I’m advising is called Mentia, which has created a dementia friendly virtual world. And you see it on a tablet. Well, all of a sudden, people in memory care facilities or being cared for at home have a way to engage these individuals and bring out moments of lucidity that were there before, to bring out conversation that wasn’t there before, to bring out the need to saying that wasn’t there before. And we don’t know yet what the economic upside is, but we can already start to see anecdotally the absolute benefit it has on people. And another company, you know, is Solera Health, which I just recently joined the advisory board of founded by Brenda Schmidt, based down in Phoenix. And Solera is a growth stage company, joined an advisory board of amazing people like Kathleen Sebelius, Esther Dyson, John Madison and others. And Solera did something and is doing something that nobody else had figured out how to do. And that is, how do you bring scale to organizations that are on the ground, to startup companies with digital therapeutics that have proven to have efficacy and to create a network and they now partner with Medicare Advantage plans, other payers. And the whole point of it is to start to address social determinants of health at the individual level by leveraging this network, which previously did not exist. And so I see all of those three companies kind of riding this wave of the need to take a preventive approach, an approach that speaks individually to the needs and interests of the patient and their families, as well as to start to recognize that a zip code can be that of your health outcomes and how to start to turn that on its head.
Saul Marquez:
Well, you know, all these companies that you mentioned start with the consumer at the center, the patient, the consumer, and definitely see your North Star. Is that and that consumer, the need to challenge what is thought to be conventional wisdom all at the center of how you’re doing things and challenging the status quo, Jody, what would you say is an example of maybe a setback you’ve had and what you’ve learned from that setback to help yourself or any of the companies you advise do better?
Jody Holtzman:
So when I first started the initiative at AARP, we were initially very much focused on aging in place technology and the whole issue that, you know, in all of AARP surveys your research surveys over years consistently well over 90 percent of people when asked do you want to age in place, do you want to remain in your home or do you want to go to some type of a facility, independent, living, assisted living, nursing home, etc? Well, over 90 percent every year, year in, year out said they wanted to remain in their homes. We now know that that is actually the venue, the location where the most effective health care can be provided as well as the cheapest. But back then, we were just focused on on this. And so we were looking at all of these technologies that were remote monitoring systems, systems to recreate and tweak the physical environment of some’s home, someone’s home, whether it’s a Wide Bay doorjamb, so a wheelchair could get through or making sure things are on one level more like whatever it was. And we were hammering entrepreneurs to go direct to consumer. We looked at the numbers and we said that’s where the need is. And when you look at these numbers and the money that could be made. Our initial thought was you have to go direct to consumer. That’s the opportunity. And what we learned as we worked with these entrepreneurs over a couple of years was that was really bad advice. And it doesn’t change the fact that, yes, that is where the greatest need is, but the door to it so fed a company, a startup, could actually have the cash flow to sustain itself. That that was a really heavy lift just from the beginning out of the gate. And we pivoted and realized that, you know, it’s the classic. Do you sell one thing a thousand times or do you sell it one time for a thousand users? And this was something also that was kind of beaten into us by the venture capital, capital folks at that we knew and worked with. And I would say that that was the biggest thing. So for entrepreneurs, my advice these days is where is that larger institutional relationship? Are you selling to payers? Are you selling providers? Are you selling to life insurers? A company I used to be an advisor to Neuro Track, which has a technology and non-invasive vision based diagnostic to determine whether or not someone has Alzheimer’s disease and they can determine whether or not somebody has the disease up to six years before symptoms show. They just partner over about a year ago with Dai-ichi, a life insurer in Japan, the life insurers have an interest in you staying alive right now. They only pay out after you have died. And so all of a sudden there’s another category of player out here that you’ve never previously would have thought of as a stakeholder in one’s health. And so starting to look at that, that says to me that there are other nontraditional partners out there who are stakeholders. And now it’s it’s a matter of, you know, finding those that have the ability to be a buyer, a user or a channel to numbers of people that make the economics of the business work.
Saul Marquez:
I think it’s a good call. You know, while the services that we will offer in health care ultimately do reach the consumer, that B to B to C format is sort of how our pay structures are set up. So this is a great tip being shared by Jody here today. Take that home, take that to the office and make sure that you’re considering a broader perspective on who you could reach. I mean, does life ensure you just would never have thought about it? Just take a step back and think about the stakeholders more broadly and how you could potentially offer value to them. And if the answer is, I don’t know, then reach out to them. Right Jody?
Jody Holtzman:
Absolutely. One of the things I have found is that two things. One, people are willing to talk, but you have to make it easy. Know, one of my favorite quotes is by J.W. Woolworth. And I don’t know if you remember Woolworths, but the stores. Yeah, Woolworths was the first Main Street department store. And you had a little of everything in there. And the quote is, Woolworths said, I am a terrible salesman and therefore I have to make it easy for people to buy. And I think that that that that kind of that lends that orientation carries over into how you as an entrepreneur approach companies. You have to make it easy for them. You have to go where they are. And so you have to hit the conference circuit. You have to become a conference rat. You have to go where they are. And again, grab somebody in the hallway for five minutes. That’s very different than trying to get through their executive assistant to get time on their calendar, etc. The calendar gets changed. You, the poor entrepreneur, take it personally, which you never should. And so how do you get in front of those players? Well, you know, the conference world is is one of them.
Saul Marquez:
And it boils down to feedback. Right. getting that feedback. And gosh, what a great way to do it. Just to be in front of the folks that are in the buying chairs and that feedback will. Maybe some, like Well-worth said, you know, it’ll make it easy for you. Easy for them to buy. Easy for them to buy, right?
Jody Holtzman:
Exactly.
Saul Marquez:
I love that quote. Am I hearing it? Yeah.
Jody Holtzman:
Yeah. No. It’s a great quote. And it kinds of it kind of goes hand-in-hand with the Churchill quote. Well, if you have a point to make. Give it a mighty whack them. Give it another whack and then come back and give it a third whack.
Saul Marquez:
Awesome.
Jody Holtzman:
It’s kind of the predecessor of the advice that so many speakers get. Tell them what you’re going to tell them. Tell them what you told them. And that repetition, that bang the drum is absolutely something that entrepreneurs have to figure out. Now, the lexicon visits your elevator pitch, whatever terminology frame you want to give it. Yeah, get to the value proposition right away. And it’s the value proposition for whoever it is you’re speaking to. It’s not the general value proposition.
Saul Marquez:
There’s no blanket value prop Right.. And so, Jody, what would you say is your proudest leadership experience in health care?
Jody Holtzman:
I would say the biggest is what I created and was able to achieve when I was the senior vice president of Thought Leadership. And then the senior vice president of market innovation at AARP where we created this this program, innovation at 50+, that really put the issue and the opportunity of this aging demographic on the table for the innovation ecosystem to see, touch, feel and start to get comfortable with. We did that in a multifaceted way. We created the first and produced the first market forecasts for the revenue upside of innovation. Targeting older adults would be in digital health. There was a study we did called Health Innovation Frontiers. Listeners can download that on the AARP Website. It’s still there. We updated that three times. We did another study called Caregiving Innovation Frontiers. Those two studies provided data. And again, you have to make it easy for people to buy. You have to go where they were. I went to the National Venture Capital Association PAC and BO was probably twenty eleven or so. And I said to them, we’d like to sponsor your annual event. And they looked at us like we were from Mars. It was like, what are you guys doing here? You’re a y you have what you’re talking a venture capital, you know. They just didn’t get it right in the head and connected the dots yet at all. And so what we had to create was basically a two by four to whack people upside the head. And what is it that VCs respond to? They respond to a story and they respond to data that shows the size of the potential market. And that’s what we did. And the phrase was, one, you’d have to be an idiot to turn your back on the only humungous growth market that exists. And then followed by the question, what’s your 50 plus strategy? And just posing questions, the right questions forces people to think if, you know, you assume this is a curious, intellectually curious group. And so you’re kind of putting these little hooks in the water. People bite them. And but again, you have to make it easy for them to buy. And then after a day of taking abuse, because everybody that got on stage felt the need to tell an old joke, even those who were older, you know, they came to me later in the day. So you’re gonna come back next year. Right. like we should subject itself to this abuse. Why is that? Because everybody’s talking about you. You’re the only ones that are talking about the next growth opportunity. And we came back. I was then asked to write a couple articles for venture capital review. And I would say getting back to question the other way, my team and I put this on the table for the venture capital community, for entrepreneurs, for larger companies. I worked with Terry Clark at United Healthcare and we created the Longevity Network, which is a Web site was a Web site that was a destination for entrepreneurs and investors and industry and media. We created this pitch event over six years that attracted eleven hundred applicants from which we plugged 70. Half of which, as you pointed out, raised well over 2 million in venture capital, six exits. And then I was you know, I was recognized by NPR. Next staff knew, you know, as an influencer, as a top influencer or an agent. And so all of that together gave me a perspective on the supply and demand of this marketplace.
Saul Marquez:
Well, I think it’s it’s it’s really neat and also shows the power of of being hyper focused and hyper niche done a particular group or disease state. So kudos to you, Jody, for really doing a great job for AARP, but also the people that they represent and the entrepreneurial economy as we get close to the end here. We’ll probably have to do a part two because there is a lot more that we can cover. I don’t want to part ways without having you tell the listeners a little bit about what you call the Longevity Economy. Tell us a little bit more about that.
Jody Holtzman:
So as I said earlier, the longevity economy as a concept grew out of a couple of things. One, we were searching for a phrase that wasn’t the silver tsunami, the imagery of which we rejected. And the phrase itself spoke to the fact that people view this aging demographic through a negative lens because there is nothing positive about tsunami, a tsunami. It is destruction writ large. So first and foremost, it was like, well, what’s a better phrase? And we started playing with the boomer market etc. And my colleague at the time, a fellow, Jeff Methow, who worked on my team, he came up with this. We were just throwing things at the wall. So what about the Longevity Economy? Well, like I said. My background, you know, my graduate works in political economy, and so that really set my wheels thinking because an economy is larger than a market. Right. and it speaks to the need to understand the the dynamics, the interactions, the multiplier effects. In looking at this in a holistic in a holistic way and I I hired Oxford Economics to put numbers on it. No sweat. And the question was, well, if this standalone macro economy had all of the attributes of any national economy. It could be the US, it could be Britain, could be France, it could be China. It could be Barbados. All economies have certain common characteristics and buckets by which you decide. Is the economy doing well? Is it not doing well? Economic growth in GDP is the measure of economic growth. But you’re looking at job creation, capital formation, you know, all the innovation, creative destruction, all the all these different things. And I said, well, if this was a standalone economy, how big would it be? What would the GDP of that economy be? And when Oxford Economics punched the numbers, well, it turned out first time we did it back in 2013, the number was seven point one trillion dollars. Couple of years later, we did it again and it had grown to 7.6 trillion dollars. Well, that makes this economy the third largest economy in the world after the US and China well over 3 to 4 million larger than Japan. So right there, that’s an eye opener. And and what it allowed was then a conversation with the private sector to start to explore how you bring that twenty thousand foot observation down to really practical needs, opportunities and actions. And so that was the thrust. But we want to date as a push back on the myths, on the negative stereotypes, most importantly, that, you know, this very widely perceived assumption, regardless of politics, that this is a demographic that is going to bankrupt the country. And and we rejected that philosophically. And then we rejected it with economic data.
Saul Marquez:
Love it took great way to do it. You know, I thought about that. You know, the silver tsunami, I’ve heard it at meetings and yet does have a very negative connotation. I love the Longevity Economy. You’ve put the numbers. It’s significant. And so with that, we’ll leave it to the listeners to wonder. And we’ll we’ll be back for more. Jody, if you’re up for it for around two.
Jody Holtzman:
Sure.
Saul Marquez:
Awesome. I love that you offer that. And if I were to leave today, I do want to hear about what your favorite book is. And then we’ll part ways with the closing thought from you to the listeners.
Sure. So I was really pressed to think about this. There’s so much good literature, fiction and nonfiction out there on the fiction side. I’m a big fan of historical novels. And Alan Furst, F-u-r-s-t is one of my favorite authors who writes about espionage in the antiwar years, and one of his early books is called Dark Star, which isn’t just great character development. I would absolutely recommend that on the nonfiction side when the other fiction, he goes back to My Youth, a book that I actually got my 10th grade English teacher to use as one of the novels that we read. And that’s Stranger in a Strange Land by Robert Heinlein from which the term grok originates. He wrote that book back in nineteen sixty one. And you know, you go around Silicon Valley these days and the word rock just rolls off of people’s tongues. I don’t know that they actually know the origin, but stranger in a strange land together with two other books that I’ll mention, had the benefit of just forcing the reader to think and question underlying beliefs and to expose hypocrisy, particularly in organized religion. And the other two books that kind of go with that are two nonfiction books. One is by Christopher Hitchens, who died a couple of years ago. And it’s a book called God is Not Great. And he takes a look at all three monotheistic religions one by one, and really starts to get to what is underlying these religions and poses questions as to, well, how could you believe X, Y, Z? How could you believe the parting of the waters and all of these supernatural things? But then you reject aliens, which is equally, at least from a scientific standpoint, equally either likely or unlikely. And then the last book is a book by Ashton Applewhite. It’s called This Chair Rocks Manifesto Against Ageism. And if you want to read just great writing, she I’ve only met her once and at a conference that we were both at and speaking at, and she just blew me away and this book blew me away. She’s just a great, great writer. She’s funny. She’s insightful. She’s just got such data at her fingertips. And I think, like, God is not great and even stranger in a strange land, it blows away myths and exposes myths and it exposes hypocrisy and it opens the eyes of the reader. So those would be some of my picks.
Saul Marquez:
Some great recommendations, Jody. And folks, you know, at the core, I think of Jodi’s message here is the opportunity rests in uncovering assumed beliefs. And once you do that, the value you could add is enormous. Jody, I really want to thank you for spending time with us today and definitely looking forward to part two.
Jody Holtzman:
I do as well. Thanks.
Thanks for listening to the Outcomes Rocket podcast. Be sure to visit us on the web at wwww.outcomesrocket.com for the show notes, resources, inspiration and so much more.
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