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Saul Marquez:
Hey everybody, welcome back to the Outcomes Rocket podcast. Saul Marquez here. And today, I am joined by a fantastic guest. His name is Stuart Hanson. Stuart is the CEO of Avaneer Health. He leads the team in building an inclusive workforce and network that solves the problem of interoperability by ensuring all stakeholders have equal and easy access to patient data when it’s needed most. Previously, Stuart served as the head of healthcare payments and served as senior healthcare executive at JPMorgan Chase. And so, Stuart, I’m super excited to be joined with you today to talk about what you and the company are up to. Thanks for joining.
Stuart Hanson:
No problem. Super excited to be here. Thanks for having me.
Saul Marquez:
Absolutely. Look, Stuart, one of the things that we like to talk to first is really, what is it that inspires your work in healthcare? Talk to us about that, and then we could dive into more about Avaneer.
Stuart Hanson:
Yeah, so it’s a good question to start on. My passion in healthcare comes from the same place a lot of ours comes from. We all share this common patient experience, right? I’ve had a long-time passion for improving the human experience and the patient experience in healthcare. We’ve all had our share of frustrations as patients or as family members of patients going to collect a CD-Rom to get a second opinion on an imaging file or something along those lines; surprise bills, delays in authorization, all those types of things. But I’ll say that two experiences in particular kind of stick out in my mind as the most impactful in terms of inspiring the work that I try to bring to every organization I’ve been at for the last 40 years. One is, early in my career in the banking sector, I got an opportunity to see the back office of healthcare from behind the curtain, right, and working really closely with care coordinators and health insurance companies, payment posters, revenue cycle staff within provider organizations, so I got to see kind of the human part of the experience behind some of those bad human or patient interactions. And so I felt the pain of the people that are in charge of administering healthcare in the US today, just despite their best efforts, despite their passion for trying to improve the experience of their members or of their patients, like how much clunkiness there is behind the scenes. So I got to see that from behind the curtain, and that inspired a deeper understanding for why it’s so complicated in our US healthcare system and why some of the results are not what we all expect or hope for as humans, as patients. The other thing is, during the time I was making a decision on leaving my past organization, so I really enjoyed my role and my partners and my colleagues in the organization I was with at JPMorgan, but I got really excited about what Avaneer was trying to build, because while I was presented that opportunity, I got to witness a really sad patient experience firsthand. I was in the office of an ophthalmologist getting an urgent eyecare laser thing done to avoid a detached retina, and there was an older gentleman with his son at the same ophthalmologist that had turned back after being there three days earlier, knowing he needed this urgent laser procedure to hopefully prevent a retinal detachment, and he was, he and his son were still struggling with getting authorization and proof of eligibility. So when you see those two worlds collide of how complicated everything is in the back office with how really unfortunate some of the impact of that is at a patient level, those two things really have been the big inspiration for me, and the common thread has been this lack of data fluidity, right? The right data being accessible by the right people at the right time. And for better or worse, I talked about having been at a bank when I first had that experience, you know, a lot of the last 23 years that I’ve spent in healthcare have been from the financial services side. So I’ve also seen the benefit of institutions or networks collaborating together to improve the financial journey, right? Or data fluidity for being able to withdraw funds in a foreign country, in a local currency from a US-denominated account in real-time, because those systems are interoperable, right? Or being able to send a peer-to-peer payment, to you, Saul, to pay for a shared meal or something in real-time and over something like Zelle. So I’ve seen the benefits of the collaboration and the real power of data when it’s unlocked. And I’m just, I’m really excited and passionate about bringing that to life in healthcare in the right ways.
Saul Marquez:
Love your passion, Stuart. And look, finance is a great example of getting data when you need it quickly to make decisions. Doesn’t matter what country you’re in, like the example you used, interoperability is a very, it’s table stakes, right?
Stuart Hanson:
Yeah, it’s absolutely expected, right?
Saul Marquez:
It is. So why can’t that be in healthcare? So that’s where your company comes in. Talk to us a little bit about the work that you and the team doing at Avaneer.
Stuart Hanson:
Yeah, so I think to elaborate a little bit more on your question, and there’s a lot of reasons that it’s very different in healthcare than it is in the financial services. But I’ll say that from a regulatory perspective, those two industries are probably the two most regulated industries in the US economy, right? Now, especially in the privacy and even also just from a general data security for all the right reasons. And usually, when you have that level of regulatory oversight or security or things need to be locked down, it makes that data validity more difficult … to solve it. So why can’t healthcare, is the easy question that people ask. The problem is healthcare is a lot more complicated than that, right, at least on the data flow and data management, and care coordination perspective. So the work we’re doing is to really bring that same premise to life in the healthcare ecosystem so data can fluidly move between payers and providers, or a care coordinator and a physician or a primary care doc and a specialist in the right moment of time, in real time, to be able to enable the experience that we all expect, but to do it in a way that’s as secure, as private as we all expect of our healthcare and our financial. So we’re building a new infrastructure for that to happen, and we’re doing it with the support of some big companies so that it can effectively be done from the inside out. Because our country has suffered for too long trying to force the industry to become interoperable and unlock the power of this data, but government regulations can’t solve it, an upgrade of an EHR platform across even every major hospital can’t do it, some collaborative efforts by startups have not been able to do it. So when I got really excited about doing this building, that within Avaneer, with the backing of some of the industry’s behemoths to really make it actionable and get it to scale in a relatively short period of time.
Saul Marquez:
Yeah, so let’s talk about the how, right? Because the what is apparent, we need to improve interoperability, it’s got to happen. I feel like we’re making steps forward. There’s actually positive momentum in certain pockets. Talk to us about what Avaneer is doing to improve that interoperability and availability of data.
Stuart Hanson:
Let me answer it a little bit differently, and then I’ll try to get around to answering the full part of your question, because someone asked me the other day a related question. And what’s interesting is the, maybe because I’ve been at this for the financial services healthcare side for 20 years or so, I’m also pragmatic and realistic enough to understand that there has to be a conceptual buy-in to do things a different way and to enable a new network to emerge, it’s about cellular networks or the ATM networks or whatever analogy you want to use. So the conceptual bite is, of course, we need that. The reality, though, is that making that actionable and making it valuable, and aligning the incentives of the participants is what’s been really hard in the industry. That’s why government regulation can’t necessarily solve it, because then the efforts are all focused on checking the box or meeting the specific requirements of the government regulations as opposed to being driven by a business need. So what we’ve been really focused on is solving for really low controversy administrative use cases that can create a lot of value for all of the stakeholders in the ecosystem, while creating a platform for all these other innovative companies to develop solutions that create even more value. So what we’re doing is we’re building a new infrastructure for some of that connectivity to happen in a way that’s very compatible. In fact, right in line with the long-term regulatory view for interoperability, all FHIR-based, all cloud, all real-time, all hyper-secure, HITRUST-certified, but doing it with some examples of use cases that can bring a significant ROI to the industry right out of the gate, so that there’s conceptual buy-in, but you also get like the CFO or the value proposition or financial bind. That’s important.
Saul Marquez:
That’s great. And so, how exactly are you guys doing it? Talk to us about the how, the mechanics.
Stuart Hanson:
Yeah, the biggest part of the mechanics is we have created an infrastructure that allows for every participant in the healthcare ecosystem, every payer, every provider, even an innovative company who wants to bring a solution and kind of plug it into the network, to have their own environment on the network. And it’s important that they have their own environment, but also that they have their own environment that is compatible with all of the other environments on the network. So we’ve developed a data infrastructure, a data fabric, and security protocols and collaboration services such that everyone’s environment has got exactly the same tooling version of FHIR, all those types of tools to manipulate data, ETL Translation, etc. And we’ve brought some use cases to life that can demonstrate the power of that network, enabling real-time transactions to drive down the administrative costs of healthcare. If you think about $4 trillion, roughly our healthcare costs in the United States.
Saul Marquez:
20% of our GDP.
Stuart Hanson:
Yeah, and 25% of that is spent on the administration of healthcare. So a trillion dollars a year, and we feel like we’ve got to focus on trying to drive 250 billion of that, so forth of that completely out of the equation over the next ten years, which is a big goal, but it could be more than that. And we’re just focused on these really low controversy use cases like eligibility, like coverage visibility, like claim submission, and we’re doing some things in real time that are demonstrating a significant ROI for the early participants that are using our platform.
Saul Marquez:
So, Stuart, is it about enabling a provider and payer organizations, operations, payments, the entire workflow, or what specific segments are you guys focused on?
Stuart Hanson:
The goal is to enable the entire workflow to either be able to leverage that dial tone, that 5G or ATM network, or other transactions that we’re not even playing a role in to be securely connected over the network. But I think the key is that we’ve got a line of sight to the, kind of the payment life cycle or the voucher to payment life cycle to where we think we can develop a couple of solutions, both as Avaneer, but also with some of our partners, but also more importantly, bring to life a cohesive model for how a prior authorization or coordination of benefits or pay an employer enrollment transaction to feed directly into that same data fabric so that as soon as my employment changes or as soon as my coverage changes or my deductibles …, the entire network has got access to that information to enable all of the administrative stuff to happen with real-time data.
Saul Marquez:
I love that. That’s the future. That’s what it needs to be.
Stuart Hanson:
That’s how you can withdraw money from an account in the United States in Euros in real time to get that automatically put against your balance. It’s how it has to happen, it’s how the industry has wanted it to happen for a long time. But candidly, when we first started to move to electronic transactions in healthcare before, after everything was paper-based claims or … and so forth, as the industry started to move towards electronic, the back-end systems, let alone the processes and the people, were not really ready for that. So the result was it created this whole need for the data intermediaries to sit in the middle of payers and providers or care coordinators and try to be the arbiters of the data in batch and latently across the network to provide at least a first solution to that need. Right now, the systems are so much better, like that data should just be visible to the right participants in real time out of the system.
Saul Marquez:
Yeah, that’s fantastic. I love that. This is very big picture, and you’re tackling a huge problem, so it takes a lot of courage, and I’m sure you’ve seen a lot and things that have worked and things that haven’t worked. From your perspective, what’s one of the biggest wins you’ve been able to achieve thus far?
Stuart Hanson:
We’re still doing this in really small parts of the market, right? But today our network is enabling claim transactions to be settled in 3.5 seconds so that if you’re in an urgent care facility, instead of them getting your credit card information and storing it on file or telling your, their after what they’re going to bill you. Today we’ve got 1200 facilities able to process claims in real time, which is 3.5 seconds, right? So as soon as your transaction is complete with your care provider, they’re able to offer you a checkout experience and tell you how much your insurance company is paying, how much you owe, and you can check out and be done with it, just like you check out with your prescription or you buy a gallon of milk. So we’re doing that about 2800 times a day in 3.5 seconds, which is, what’s the small piece of today’s healthcare ecosystem, really cool.
Saul Marquez:
But it’s happening, and so, 3.5 seconds versus what? What, like a month, 30 to 60 days, or what’s the difference?
Stuart Hanson:
Well, if you think about the entire cycle, including payment, yes. Today that’s usually 60, 75, 90 days, because consumers don’t usually pay that first bill that they get because they maybe don’t understand it, and maybe they want to compare it to the EOB that they received from their insurance carrier. But the reality is the 3.5 seconds also compares for, to batch EDI transactions that may take 3 to 7 days to verify coverage, to verify it again before a claim is submitted, to submit a claim, like all this stuff is processed today in days, not milliseconds, certainly not seconds.
Saul Marquez:
Yeah, for sure. And look, as we think about ways to embrace value-based care and influence behaviors, clinician behaviors, the work that Stuart and the Avaneer team is up to could be a catalyst for that type of change. Super exciting stuff, not just in the rapidity with which we could get funds transacted and people taken care of, but also what I heard you saying in your initial story, Stuart, is it’s also the vision to capture, am I eligible for this?
Stuart Hanson:
Do I have insurance? Where am I at with regards to my deductible? All of that information is table stakes to be able to say, you owe, $13, and right now, because you’re about to leave, and I may never collect it for you. And the other really exciting part of that, obviously, is consumers, like that’s where I started. My passion is like trying to solve that pain point for consumers. And consumers want to know, how much is this going to cost? Am I done? Am I going to get a surprise bill? They want to take care of that stuff, they also want their CD-ROMs to move in real time, right, for a second opinion from a virtual specialist somewhere else in the world. But the big encouragement point for me is that we’re already showing that for a claim transaction for a single encounter, we believe we can save consumers’ pain, but providers’ and payers’ money, right? $10 per claim is that, all in savings that we feel like coverage, eligibility, real-time claim submission, let alone real-time payment could unlock, and it’s easy to extrapolate that across the billions of claims that we have in our ecosystem and know that we’ve got like real indicators that the value proposition is starting to materialize.
Saul Marquez:
Big time, big time. And Stuart, like for you and the Avaneer team, who is it very important, understands your platform? What stakeholders do you want to speak to right now? So we make sure we’re speaking to them directly.
Stuart Hanson:
I think obviously on CTOs within payers, CFOs, revenue cycle directors within providers, that’s who this mission and vision and platform capability … to resonate. So payers and providers first and foremost, right? That is the core of our health system in the US, and that’s where so much of the administrative costs and frustrations. But there’s a secondary audience that’s at least as important as them over time to what we think we can unlock from a value perspective for the industry, and that is all the innovative companies doing really cool things around value-based metrics or carrier-ventured insights or drug discovery or clinical trials or care interventions that can be done at a different point in the care continuum. Those are the companies that are really going to create value for the quality of outcomes, right? And the quality of care that we’re seeing as consumers in the US and those companies desperately need better access to data, they need a reduced time to implement their solution. So being able to take a really cool algorithm for care coordination or cancer detection or something like that and plug it into a network and have that even if it’s an AI-driven application, like we feel there’s a lot of applicability to our network to enable AI to really create the deliver on the promise that it can have healthcare. In order to do that, we feel like it needs to run at the edge, right, and run right on the data that it’s trying to derive insights from. So I’m really most excited long term about all the cool things that we haven’t even thought of, and we’ll think about for a few years, but having a network that those solutions can plug into and immediately start to provide better outcomes for consumers.
Saul Marquez:
I love your vision, Stuart, and I love the amount of impact you could have to, not just payers and providers, but the innovators moving the needle on the way we need to move in healthcare. So thank you for thinking big. What do you think is the biggest thing, and the thing you’re most excited about?
Stuart Hanson:
But that hasn’t already come through. I’ve lost my chance to … I think the biggest thing I’m most excited about is that it’s really come to life. We launched the platform after 12 to 15 months of really tough discussions on how it would need to work to be able to scale and not threaten too much of the technology that needs to be connected to it, to get it to scale in the industry from an adoption perspective. So we launched that in November, and the past six months have really just been like revelation after revelation in terms of, hey, this could happen on our network, or hey, your network could be used for AI. So I’m just really excited about the things that we haven’t thought of yet because the last six months wouldn’t have been able to tell you half of the things that we’ve already done that have been exciting six months ago. So I don’t know what the next six months of exciting things are, but I know that the big barrier is, it’s hard for companies to change when you, we have providers tell us 70, 80, 90% sometimes of all of their IT budget and operational budget is spent on kind of keeping the lights on or running the business because of the, all of the data connections that they support today, all the old times that they’ve added to their revenue cycle or their EHR to do X, Y, Z. So when you have such limited budget to really be innovative, it’s hard for those organizations, unless there’s really compelling ROI, as I talked about before, to be able to actually commit and make the changes or fighting the status quo, but I think we’ve got some really exciting proof points to help demonstrate why the status quo isn’t good enough. The people know it. Nobody likes turning away, so they need the laser procedure to save them from the retinal tear because they can’t verify their eligibility.
Saul Marquez:
Like totally.
Stuart Hanson:
No physician, no nurse, no, no hospital likes to have, to be in a position to do that. That’s the exciting part.
Saul Marquez:
Yeah, man, that’s huge. That’s huge, but listen, I am excited for you and for the work that you and the Avaneer team are up to, to really create that network for all of us, to have that single connection where things could quickly transact and we could get what we need and move on with our life. So I’m excited for this work and appreciate you sharing it. What closing thought would you like to leave us with? And then, what’s the best place that the listeners could get in touch with you if they wanted to continue the conversation?
Stuart Hanson:
We’re easy to find. You can certainly go to AvaneerHealth.com, but I think the biggest thing that I will close with is, to the difficult point, right? Everyone can appreciate, like we’re talking about the ability for a network to solve all the stuff that we want to solve as patients. It does take a bit of vision and a bit of setting aside like some of the maybe strategic investments you’ve made in one platform or one solution to say, hey, there’s a better way. So I would just encourage people to think about this with an open mind and come at it from the sheer perspective of your patients, your members, your consumers, and recognize that there has to be a new way to do what we want to do for patients or members and our consumers, and that it’s going to take a bit of an open mind in terms of thinking about how you’ve done things in the past. Certainly, no silver bullet exists, definitely not in the healthcare industry. I don’t think, I don’t believe in silver bullets generally, but in healthcare, there’s no simple, easy way to solve all of the challenges that we have, and there’s a bunch of reasons always not to do so. But we’re encouraging our prospective clients to think about the way Cleveland Clinic and … and CVS are all about service, and … have thought about reinventing healthcare from the inside out and put the power of that.
Saul Marquez:
That’s huge, and if we’re, look, if you guys are being honest with yourselves, listening to this podcast or watching us, kind of, you’re wasting money. You’re wasting money on legacy systems that are not getting you any further than you’ve gone the last three years, let’s just be honest. And if you were to be courageous enough to take a step toward the right direction and try something like Stuart’s asking today, I’m willing to bet your results would show an ROI. So the call to action here is like a wake-up call, have courage, take action. And Stuart, look, I respect the work that you do, and it’s an uphill battle, but, man, I’ll tell you, it’s guys like you and companies like yours that are going to make healthcare better for us. So I appreciate what you and your team are doing and appreciate you being on the Outcomes Rocket.
Stuart Hanson:
You said it in a way better than I could. Thanks, Saul, appreciate it. Thanks for having me.
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