HLTH_Simon Gisby: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.
Saul Marquez:
Hey everybody! Saul Marquez with the HLTH Matters podcast, and I want to welcome you back to another amazing episode of this series recorded straight from the show floor at HLTH in Las Vegas, Nevada. I’m here with the amazing Simon Gisby. He’s a principal global leader of life sciences and healthcare at Deloitte Corporate Finance. He’s a senior corporate strategy and M&A professional with over 20 years of experience serving life sciences and healthcare industries. As well as founding and leading the life sciences and healthcare practice at Deloitte Corporate Finance, he leads the future of health for Deloitte Risk and Financial Advisory and Co-leads the Healthcare Strategy and Growth Practice. Mr. Gisby has advised on numerous strategy affiliations, partnerships, and M&A engagements. He’s currently focusing on facilitating partnerships across the entire life science and healthcare ecosystem. His clients include global pharmaceutical and medical device companies, health insurance companies, health systems, health information technology companies, and other healthcare providers. He’s a frequent contributor too, and author on articles and publications on healthcare strategy and M&A, and has been quoted in numerous national media outlets. Mr. Gisby is a member of the New York Security Analyst Society and the Association for Investment Management Research. I’m excited to be joined with him today and to dive into a really fascinating discussion, Simon, really grateful that you could join us today.
Simon Gisby:
Well, thanks for having me. I’m looking forward to it!
Saul Marquez:
It’s such a pleasure. You are doing such incredible work at Deloitte. You’ve done incredible work throughout your career. What is it that inspires your work in healthcare?
Simon Gisby:
That’s a really great question. What I like about healthcare is kind of the intellectual contradiction. We can all wax lyrical about what should happen in healthcare, how to drive outcomes, what should be done in a particular incident until it matters to someone you love, and then rationality gets thrown out the window and you just want them to have the best. So actually I enjoy working in industry where I know inherently there’s this intellectual conflict between what we know we should do until it matters to someone we love and then what we want to do, and so it’s a kind of interesting in yin and yang, that’s what I find. And also when it works, you can genuinely see the positive results, right? It has such a profound impact on daily lives and that’s what’s so exciting.
Saul Marquez:
I love that, and well, and you’re a physician by training, right?
Simon Gisby:
Actually, I wish I was, but I’m not. No, I just play one on TV every now and then.
Saul Marquez:
I love it. Well, listen, Simon, you’ve done incredible work. And Deloitte is really one of those companies that is a forward thinker and a leader in shaping the future of health. Talk to us about how you and the company are adding value in the healthcare ecosystem.
Simon Gisby:
Well, the great thing about Deloitte and look, there’s a bit of an advertisement, right, we’re the largest professional services firm in the world, we’re the largest healthcare practice globally, but what’s great about that is we’re able to see the complete ecosystem, right? What everyone’s doing 360, and that allows us to bring not only insights to our clients, but also to think around the corner, look around the corner, what’s happening? And what’s so exciting, like I’ve been doing this for 30 years and I’m having more fun in my entire career because right now we’re this really interesting inflection point, right? The transformation that’s occurring. Think about all the exhibitors here today, they cross healthcare, they cross-technology, they cross consumer, they cross fintech, entertainment, transportation. We’re suddenly realizing that healthcare is such a broad definition. What is health, right? We used to define it as a physical condition.
Saul Marquez:
I mean, okay, Instacart Health, Best Buy Health.
Simon Gisby:
Right, isn’t that fantastic?
Saul Marquez:
Like, I’m like, what?
Simon Gisby:
But the thing about that, the Geek Squad for the home. Think what we could do if we suddenly looked at the home differently and said, look, no one really wants to go to an institution for care. We all want to stay at home, we know this. But imagine if we could take the home and start saying, how do we tech-enable it, right? We’ve turned the home into an entertainment system. During pandemic, we turned the home into gymnasiums, right? What if we turn it into a healthcare setting and think about the players that need to do that, right? Yes, I need the healthcare players, I need the physicians, the nurses, and the home health aides, but I need the technology players, I need the consumer product players, I need the logistics players, right? Now I’m redefining what healthcare is all about, and I’m engaging with a whole bunch of different stakeholders. I can engage with family and friends in a care setting. So just think about, I got a home, that’s where I want to be, it’s where my loved ones are. And now it’s a healthcare setting. That’s just super cool.
Saul Marquez:
It’s super cool. And, you know. Simon, you’re, right, we’re in this stage of reinvention, and what is healthcare is the question that I think we all need to be thinking about.
Simon Gisby:
Well, that’s because, look, we, I believe, defined healthcare as sick care for the longest time, right? I had a condition, I’d go and get it treated. And now we’re starting to say, huh? What happened in the pandemic? People started saying, will your mental state of mind impact your physical condition? So now it’s starting to realize we should have a long time ago, in my opinion, the importance of mental health. And then we started saying, huh? Financial conditions impact, finances leads to stress, stress leads to bad healthcare outcomes, right? So now we’re redefining health to say it’s physical, it’s mental, it’s spiritual, it could be financial, and all of a sudden we start saying, huh, what are all these social determinants that are driving healthcare? Environmental, right? I live in New York City. The air quality in New York City is very different to other parts of the country. Does that have an impact on my health? Sure. The noise pollution in New York City is different. So it becomes a really interesting, what is health and how do we bring all those disparate influences into our lives?
Saul Marquez:
To make it happen, no, that’s a fantastic discussion. What are health ecosystems and how has convergence played a role in accelerating them?
Simon Gisby:
Well, the health ecosystem is something that we at Deloitte are working on, the tremendous amount of effort at the moment, it’s around thinking, how do we bring these disparate players, right, these disparate solutions, how do I bring a technology company to play with a consumer products company, to play with the healthcare company, to allow Simon to manage his health more effectively, right? If I think about that migration from sick care to healthcare to well care, to wellness, right? And if I do that migration to say, hey, how can I get to wellness, I’ve got to play with all these different companies, all these different business models, right? And that is what a healthy ecosystem is all about. And what’s so cool about it is you don’t own all of it. You’re creating networks, connections, right? And if you think about other industries, we’ve done this time and time again in other industries. The streaming services, there’s a connection between me watching something and the feedback I get or listening to some of the feedback I get, right? We disrupted transportation by thinking that, oh, look, there’s a car, I have a car, can it do something else, right? So if you take that into healthcare, that’s what this convergence is all about, thinking about your assets differently, thinking about how we redefine health.
Saul Marquez:
I love that. So these ecosystems, and I love that you guys are working on this and codifying the ecosystem, how does it pave the way to the future of the industry?
Simon Gisby:
Well, again, we’ve got to get ahead of sickness, right? Healthcare costs in this country were picking up about 18% of GDP when you go to 24% of GDP, right? It’s, we’ve all now recognized it’s a crisis. So the whole thing about the future of health is, I’ll leave it to others to do the moonshot to cure cancer. But if someone’s got cancer, can we prevent the progression? Can we make sure they get access to the appropriate clinical trials? Can they get access to the appropriate spiritual care, the support networks, right? If you think about another major cost in society, diabetes, right? Can they get people the appropriate education? Can I educate them about staying on the medication? Can I prevent the progression of the disease? How do I do that? That’s again, thinking about if we just treat sick care, costs going to continue to spiral. If we can treat healthcare and then we can treat wellness, then we can get ahead of disease, and that’s what a lot of these companies presenting here today, using data for predictive analytics.
Saul Marquez:
So, Simon, what happens to, you know, it’s 18, 20% of GDP, does that shrink in the new healthcare? Does that total, you know, representation of GDP shrink?
Simon Gisby:
We think it stabilizes.
Saul Marquez:
It stabilizes
Simon Gisby:
Because, look, we’ve got the aging population, life expectancy is going up, right? We got the baby boomer wave. Do we think it’s actually going to go down as a percent of GDP? No, but it’s going to stabilize, right? And by stabilization, we actually save money, because we’re not going to get to that point, that 25%, right?
Saul Marquez:
The rate of growth that we’ve had has just been.
Simon Gisby:
It’s been out of control.
Saul Marquez:
Unsustainable.
Simon Gisby:
Yeah, better control. So we think it’s going to stabilize, right? We think where the money is spent is going to shift.
Saul Marquez:
Oh, for sure.
Simon Gisby:
Right? And so you take it out of that sick care bucket on a relative basis and migrated into that wellness bucket.
Saul Marquez:
Man, I love this conversation. So let’s put the lens on of the innovator, you know, the entrepreneur. Tell me a little bit about the seismic shift from a pipeline business to a platform business, and how are you seeing that manifest in the healthcare industry?
Simon Gisby:
So pipeline business is a business model predicated on the fact that I grow through either expanding my geography, adding a new product, right, getting economies of scale, either through vertical or horizontal integration, but I’m owning everything, right, and I produce a product service, a solution, and I sell it to a consumer, that’s a pipeline business. So … information flow, right? A platform business, I still produce, I still create a product or service a solution, I still engage with the consumer, but the real value is the feedback I get from the consumer, right? What we call the network effect. So in the pipeline business, there’s very little feedback. Think about healthcare, right? I get sick, I go see a physician, physician writes a script, a pharma company produces the drug, send it to a retailer, I pick it up from a retailer, I might need a product. There’s very little connectivity between that. In a platform business, it’s all connected, right?
Saul Marquez:
It’s huge.
Simon Gisby:
The script becomes somewhat personalized, right? You start thinking about, do I need that medication or can I change my lifestyle? The value is not the product, the service, or solution, the value is the network effect, the creation of those relationships that allows everything to be faster, more accurate, and have a better outcome. That’s the platform business.
Saul Marquez:
So let’s dive in a little bit deeper into that idea. So the network effect, you’re running your business, you’re doing all the usual production sales expansion, but now you’re more focused on the customer and their feedback, and is that the essence of it?
Simon Gisby:
That’s basically the essence of it.
Saul Marquez:
So being hyper-focused on that.
Simon Gisby:
Hyper-focused on how my product is positively impacting the outcome of the consumer and getting feedback, right? We know there’s a great simple correlation, right? Loneliness leads to depression, depression leads to lack of medication adherence. If I don’t take my meds, I’ll end up in the emergency room. We’ve been treating the emergency room visit. Let’s treat loneliness, right? Now as a healthcare provider, can I treat loneliness? Maybe not, but a social community can, right? As a healthcare provider, can I treat depression? Maybe, or maybe I engage with other organizations that help with depression, right? But if I tackle the root cause, which is actually a social issue, I can prevent the hospital, ED visit, right? That’s the network effect, right? Am I engaging, right? I’m engaging with the loneliest, probably, so that’s where it’s pretty good.
Saul Marquez:
Hey, thanks for bringing it home. You know, I wanted to dig a little bit deeper there because I really am driving with this idea and it’s, folks, I just want to pause here and say, what kind of business are you building? You know, are you building a pipeline business or are you building a platform business where you’re communicating, getting feedback from your customers, and iterating? And then I guess the platform you keep adding things on that the customer needs.
Simon Gisby:
100%, right? And so the interesting thing about this is you can either convene the platform, right, or you can participate on it. And it’s kind of like you can start getting all sorts of different cliches, right? It’s like the old Russian doll or a jigsaw puzzle or cogs in a wheel, right, or something like that, but you can create one platform, right? One thing we’re working on at the moment is kidney disease, right? What is it about kidney disease and how you care manage for that? But kidney disease could be a subset of a diabetes.
Saul Marquez:
Totally.
Simon Gisby:
Diabetes is a subset of care management, right? So then you start having this interlinking so I can convene one platform and that can participate in a broader platform, right? And you scale it up like that and you’re 100% correct. Then when you get the consumer feedback, you start realizing what they need, then you add other solutions on top of it, right? So that’s great. That becomes, what, iterative?
Saul Marquez:
Yes, yes, awesome. Simon, this is great. And folks, I’m getting a lot out of this, I hope you are, too, but you know, what we’re focused on today is building businesses that add value. They add value in a way that resonate with the market, with patients, with the providers today, and that’s what’s going to stick, because the market was frothy for a while, there’s been a lot of correction in valuations, and if you’re not getting focused on what’s going to make your business a platform business, you’re going to lose.
Simon Gisby:
Yeah, great, one thing the pandemic taught us is I don’t need to go physically see a physician to get care, right? I could do FaceTime. Well, what a breakthrough, I’ve been doing, I travel a lot, I’ve been doing FaceTime with family and friends for ages. Now all of a sudden, it’s like, oh, I could FaceTime a doc. Wow, right? And all of a sudden it’s like, hey, maybe I could get care on my timetable, that’s pretty cool, right? And then all of a sudden you start saying, well, that’s a breakthrough, right? I can now engage with the healthcare system without a physical interaction, I could do a virtual interaction. I think about how much time that frees up for me.
Saul Marquez:
Oh, it’s huge, yeah, alright, so let’s marry these concepts, and let’s explore this. Ecosystems and platforms, how can ecosystems and platforms address key issues such as health equity?
Simon Gisby:
They can start really hyper-focusing on what are the key issues that create and can help and cure health equity, right? Again, something the pandemic exposed is the health inequality in the country, right? So I was meeting with a company last night focused on education. What are the benefits available to you? How do they do that through text messaging, right? Education to say, yes, this benefit is available to you. You can have this co-pay reduction, you can go and get your meds cheaper over here, right? That’s not healthcare, that’s education, but it’s education focused on the healthcare outcome, right, addresses it. The social determinants, right? Another one of my clients had an incredible number of patients coming in with respiratory distress. What do they do? They figured out they all lived in the same apartment building. They went in, they paid for cleaners and their HVAC units, right? It wasn’t a healthcare issue, it was an environmental issue, right? So you create that platform and you start looking for root causes and that’s data and then start saying, huh, why don’t we even pay for that, right? Lo and behold, cleaner apartments.
Saul Marquez:
Healthier people.
Simon Gisby:
Happier people. Less respiratory distress, less hospitalizations, and two really important outcomes, better outcomes, lower cost. This is the Holy Grail. This is what we’re going to do here, right? By changing this business model and thinking about what the consumer needs, we are going to drive toward better outcomes and lower costs end of the day. That’s the Holy Grail.
Saul Marquez:
Love it. Simon, this has been an insightful discussion.
Simon Gisby:
I appreciate the time.
Saul Marquez:
Yeah, this has been great. If you had one parting thought for the listeners, what would that be?
Simon Gisby:
Redefine health, stop thinking it as a condition that we treat. Start thinking holistically about what are all the different aspects that cause a health event, what are all the different aspects that create a better health outcome, and start thinking about how to deliver that to the consumer. We’re not patients anymore, we’re consumers, right, and everything is now healthcare. So redefine it, pick who you’re going to play with, and bring a different solution into the marketplace and you’ll be rewarded for it because platform businesses are the most valuable businesses out there.
Saul Marquez:
Boom, there you have it, folks. Simon Gisby, just an incredible opportunity to be with him. I hope you enjoyed today’s podcast. Simon, last question, where can people find you and where can they learn more about Deloitte?
Simon Gisby:
Well, we’ve got a booth out on the floor, obviously, like everyone else, I think we’re also a sponsor, so we should have a booth out on the floor. But no, guys, go to our website, click through it, find me, and on there we got to, we’d love to engage in the conversation, explain what’s going on, and just honestly just share the breadth of wealth, of knowledge and insights that we’ve been able to get from our clients who are just fantastic and helping us on this journey.
Saul Marquez:
That’s awesome. Thank you, Simon. And folks, just a reminder in the show notes, you’ll see links to Deloitte, to Simon, as well as all of the other resources that we’ve discussed on today’s podcast. Simon, thank you so much.
Simon Gisby:
Appreciate the time, thank you.
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