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Saul Marquez:
Hey everybody, and welcome back to the podcast. This is Saul Marquez, and on this HLTH Matters episode, I’m so excited to host three amazing leaders. First, I want to introduce Pete Micca to the podcast. He is a partner at Deloitte and Touche. With 30 years of experience in healthcare and life sciences, he’s worked with companies in the Health Plan, Life Sciences, and Health Technology, and Healthcare Provider segments. Pete is currently the national audit industry leader for health tech. He previously served as National Assurance and Enterprise Risk Services industry leader for health plans, and he also leads Deloitte’s national cross-sector go-to-market strategy around the emergence of health tech and health services within the industry. Pete is a frequent speaker and presenter on accounting and financial reporting issues for external organizations and we’re excited to have him here on the podcast today. And we also have Navid Farzad with us on the podcast. He’s a partner with Frist Cressey Ventures, a Nashville-based venture capital firm focused on improving healthcare by partnering with entrepreneurs, building transformative organizations. Prior to FCV, Navid was a partner with Morgan Noble Healthcare Partners, a Washington DC-based private investment firm, investing in companies determined to transform the delivery of healthcare. In addition, Navid was chief strategy officer at Continuum Health, a physician enablement company, and many other opportunities that he’s done, including serve on the boards of Dex Care, Clara Links, and many more. So I really want to welcome him to the podcast. And finally, an introduction to Marcus Osborne. He is the Chief Executive Officer at RightMove Health. Marcus is a leader in healthcare, having served in many positions that include 14, almost 15 years at Walmart, where his last role was senior vice president of Walmart Health, he served on the board of many companies, including Health Here, ZealCare, WebPT, and many others. And so really want to welcome these three outstanding leaders to today’s podcast. Welcome for yet another time here on the podcast, guys. Excited to start the conversation.
Peter Micca:
Thanks for having us.
Navid Farzad:
Thank you.
Saul Marquez:
So before we kick things off, I’d love to just kind of get an understanding of what makes you guys tick. What is it that inspires your work in healthcare?
Peter Micca:
Great Saul, it’s great to be back. Just a great environment here in Nashville. You know, ultimately, healthcare is about people. We all have a personal story of someone who’s been impacted and the impact that the healthcare industry has had in their lives, both positively and negatively, and so just being part of the innovation that helps instill that change is personally exciting.
Saul Marquez:
Yeah. It’s good to see you again.
Peter Micca:
Same here.
Saul Marquez:
Navid?
Navid Farzad:
Thanks, Saul. We revolve around a mission at Frist Cressey Ventures that we call Transforming Healthcare to Improve Lives. And it’s short and simple, but really executing on that is quite complicated, as we all know, and it’s hard, but that’s what makes us tick. And in particular, the improving lives piece that ultimately we look at, our companies that we invest in, because we’re not on the front lines. It’s people like Marcus that are doing the hard work and we’re there to support them, but we look at our companies to really have as much impact as possible, which means ultimately, you know, how many people can our companies touch? How can we maximize that from an efficiency perspective and have the most impact across populations?
Saul Marquez:
Love that. Thank you, Navid. Marcus?
Marcus Osborne:
Well, you know, for me it’s always about the customer, about the consumer, and so I echo Pete’s comments. But I would say the thing that really motivates me is this fundamental understanding that while the healthcare industry may be large, things aren’t done well or certainly not done as well as they should be, and that there is enormous opportunity for us to find new pathways to improve the health of individuals and better engage people around their health. And so I think that’s what keeps me motivated, is that as big as it is, we haven’t figured this thing out, and so there’s a lot of opportunity.
Saul Marquez:
And we need to.
Marcus Osborne:
Yes.
Saul Marquez:
Thanks, Marcus.
Peter Micca:
That’s a real testament, I think, to the fortitude of our industry. I mean, you think about all the great things that our healthcare system does for us and all the innovation and increasing people’s lives and the quality of their lives, but we’re still unhappy, right? We still want to do things better. And I think, I don’t think that’s negative. I think that’s a positive on kind of the future of health and the insight and impact that we want to have on people’s lives.
Saul Marquez:
Yeah, thank you, Pete. And so I’m really just curious, in this partnership, you guys are all here, we’re after the same end goal. We want to improve patient experience. We want to improve clinician experience. The quintuple aim, let’s call it, right? So talk to us about any unique perspectives that you might have in mind. And Pete, maybe we start with you around, how can we transform care so that we impact lives?
Peter Micca:
I really appreciate that. I mean, at Deloitte we’ve been on this journey for a number of years trying to provide our perspectives on the future of health. Our recent research would indicate that all the innovation that’s being created by well-funded companies from organizations like Frist Cressey and others really need to engage with existing market participants in the healthcare ecosystem in a way that perhaps they haven’t in the past. Our perspective is that traditional M&A, merger and acquisition activity, you know, it’s expensive, it takes time, there are people issues, things are just changing so dramatically from a technology perspective. So our perspectives are that this ecosystem of emerging innovative companies and traditional market participants will have to go to market together. We’ll have to find ways to align incentives. We’ll have to find ways to create the financial arrangements that support both of their initiatives, but puts the patient and ultimately the consumer on the front lines, as well as thinking about the clinicians that support this sector. I mean, it’s well documented that just the scarcity of resources in the clinical space, people getting into healthcare less and less each day, right? So anything that we do really needs to be put through the lens of the clinician and the physician and the impact they can have on the patient’s life.
Saul Marquez:
Yeah, thanks, Pete. And so you brought up the word market participants. In today’s landscape, it’s a really broad set of participants and I think it speaks to your comments around this shift beyond the M&A model. Navid, maybe you could comment on where you see things going on the collaboration front.
Navid Farzad:
I think, I agree with Pete. It’s so important. You know, M&A is not going to solve this. It’ll be a part of it where it’s appropriate. I think there are a lot of folks that mistakenly will think that is the solution, and I think it’s really just a piece of it. And it is that collaboration, and it’s the, as you said, it’s the new and the old new entrants and the existing legacy bricks and mortar. We invest a lot of our time in digital health, and digital health is a solution when it is great, when it’s appropriate. However, it’s not always appropriate. And, you know, it’s the cliche of it’s a hammer and everything’s a nail, you can’t approach it that way. And digital health can’t be successful without the bricks and mortar and the legacy delivery system. And I think where the magic happens is when those two things come together in an ecosystem, as Marcus said, you know, it’s very regional, but think of a region where digital health and all the constituents and stakeholders can come together. So much easier said than done, right? Everyone has to kind of come at it with that open collaborative mindset, and more times than not, that’s not happening. But when it happens, it’s really powerful. Where the legacy system integrates with the digital, with the purchaser, whether it’s a payer or an employer, and really though, with everything being sort of measured with the consumer or the patient. Like what does that individual need? What’s the best experience for them? I was talking to somebody earlier about the notion that I learned, when I was probably a kid, that the customer is always right. And it’s almost like, you know, we’re getting better, but that thinking doesn’t exist in healthcare nearly as much as it should. And it’s really interesting to be here with someone like Marcus, who comes from one of, or the largest retailer in the world, and the number of years you spent there where you’re kind of maniacal about the consumer and the experience.
Saul Marquez:
Yeah, Navid, thank you. And inconsistency and variability in the way that we collaborate is a problem. It speaks to the lack of process, the lack of reproducibility. Marcus, coming from the experience that you have, the retailer piece that Navid mentioned, there’s a lot of stakeholders in the field that need to be involved, as Pete mentioned. Talk to us about your perspective and how we can make these collaborations more of a consistent reality.
Marcus Osborne:
So I think there’s two sides to that. One is I think there is a flaw in the M&A model that is the belief that the best way to get sort of value in these relationships, particularly if you’re a bigger entity and you’re engaging with these innovators, is you’ve got to own and control them. The flaw that I have seen, at least my experience at times, is that through that attempt to control, you end up getting less of the benefit of the innovation and it ends up getting lost. And so I think the mistake of believing that you need to control everything and instead saying, how do you actually establish a very deep relationship that enables you to get the full benefit of that innovation and the power of it while still enabling your own business model? And I think the groups that have done that well have been very successful. I would also argue there’s the other end of that, which is groups who say this is just a vendor-buyer-supplier relationship and they view it just purely contractually. I think that’s also a mistake. I think what I’ve seen are the groups who come in and say, no, no, I was at Walmart or it doesn’t matter if you’re at United or if you’re at HCA or whatever it is, you may be the bigger of the two parties, but that you are equals when you’re sitting at the table because you’re both trying to together achieve an end. I think that’s creating a structure that enables you to get the most out of that innovator and enable them to be innovative, but then leverage the great skills that you bring in terms of your experience, sometimes your scale, sometimes your capital, or whatever it might be. I think that’s why this middle ground is a really attractive one because I think it’s where we’re going to be able to get the most from our innovation and innovators that are in the market.
Navid Farzad:
I’ll just add to that. I couldn’t agree with that more. And when I think about the companies that we invest in and support and the culture there, and I think about the legacy providers, and again saying this with the approach that we need them, they’re critical. However, that’s a culture clash, right? It is a startup with a DNA and the culture that it has to be successful and needs to be successful. And just making this up a multi-specialty group that they could work with that’s been around for 40 years, that’s like oil and water if you were to mash them together. And so you can get just, you know, one plus one could equal 4 or 5 if there’s a collaboration and there’s different ways there’s varying degrees of M&A, right? There’s ways that you could collaborate and align incentives that don’t have to be an acquisition.
Peter Micca:
We’ve interviewed, as part of our research, you know, Deloitte, many leads of innovation at integrated delivery systems, and universally they all said it’s just not all about the technology. They mentioned people, culture, even vocabulary, right? I mean, you made reference to kind of the vendor, vendor kind of insinuates a transaction, a one-time event. I mean, nothing gets done in a one-time event. It needs to be an ongoing arrangement. So I think the culture and the tone that you set as an organization on both sides I think is important. And it’s hard sometimes with a much larger organization, perhaps in an emerging company, to perhaps dominate the conversation or the room, but I think we all have to take a step back and say, okay, it’s the patient, it’s the clinician. We have to empower physicians with the tools and the information to do a better job and get better clinical outcomes and a better patient experience. And from our perspective in the future of health at Deloitte, the physician is at the center. The physician is the one constituent that can really impact change and our kind of outsiders looking in. We need to kind of provide that clinical expertise with the tools, the data, and the information to make those better and enhanced choices in an ever more complex healthcare ecosystem. I mean, every single day, right? There’s new technologies, diagnostics, there’s new supply, quote-unquote, of healthcare every single day. And healthcare doesn’t work like the consumer industry, right? The more you create, the more people want. And so why are we surprised if the unit cost goes up, right? Supply goes up, demand goes up. That’s not how other sectors work. So I think the technology, people, and those solutions to empower physicians really is the future of health from our perspective.
Saul Marquez:
That’s great, and great conversation. You know, as we consider what are the best steps to move the system forward, to transform, you know, one of the things that you said, Pete, was even the words that people use, like I just did an interview with an … here that’s doing, so he’s like remote patient monitoring. We don’t want monitoring, we want health. Remote patient management, that one word encapsules the data, the diagnosis, and then the delivery, the action. So you go from that one little word, right, with a partner that has the nuance to make a difference. A partnership beyond a vendor is much stronger. In the end, Marcus, like it’ll crush a company, right? You buy them and you could kill the spirit of that company.
Marcus Osborne:
And I would actually argue, not to kind of take us off track, but I would also say that you see, and I’ve argued this for many years, that I actually think there’s a huge amount of innovation occurring in large organizations in healthcare, and the fundamental issue is a lot of that innovation doesn’t sort of ultimately see the light of day. It doesn’t get to the kind of scale it needs because of some, as capable as those organizations are and as experienced as they are, they sort of can’t make it work. And so I also think one of these when you think about partnership, there’s another version of which actually reflects what I’m doing today, leading a new company, RightMove, which was a spin-off of HSF, which is the oldest Orthopedics hospital and best Orthopedics Hospital in the world, But it was a sort of recognition that they had innovated in an area and had created something that was delivering great value, but they didn’t know how to scale. They operate in New York, they operate in Florida, but they don’t know how to go to Texas. And they also when they think about consumer engagement, they’re a hospital, and they’re really good at what they do, and the way they engage people is great, but you think about engaging millions and millions and millions of people, that was not sort of how they operated daily. And so I think, also, some of this kind of concept of partnership is also about think, looking internally at yourself and your own organization and saying, where do we have innovation that has the potential to drive transformation and how do we actually free it up and partner with that innovation that we’re willing to sort of take outside but still stay connected but not need to, again, control it to enable it to be what it can be? And I think that’s what I’m actually really excited about. I mean, even walking around here, seeing a number of companies that have formed out of bigger organizations and the success they’re having, it’s tricky. But if you can do it and do it well and retain that kind of relationship and partnership, I think there’s enormous potential. And I think that may be where we’re going to see a potential kind of next phase of innovation in the industry is, it’s not the two people hanging out in Starbucks creating the business plan in the back of a napkin. It’s going to be they sort of started it within a big company, and the opportunity for those big companies to say, how do we create avenues to enable you to go take that thing and run but not be completely on your own, still be partnered and connected. And so I think there’s enormous opportunity there as well.
Saul Marquez:
That’s a really great perspective. Navid, I think you wanted to comment on that as well.
Navid Farzad:
Yeah, no, I think I just want to just say that it takes a special organization and really, at the end of the day, not the organization necessarily, but the leadership in the organization that has the vision and really the courage to say, we’re HSS, the hospital for special surgery, we have the clinical excellence. They’re not really under pressure like some others are necessarily, but to have that leadership and the vision that’s forward thinking that says we can take what we have in the clinical excellence and democratize it. And the courage comes because there is some risk in it, right? And it’s not just the risk of will that venture succeed or fail, but also to a degree, you’re disrupting yourself or you could be disrupting yourself. But if you’re smart about it and that’s where the world is going, and if you’re flat-footed, you’re going to get hurt, I think. Because at the end of the day, it’s going to take a long time for us to get to real consumerism in healthcare, but we’re going in that direction and it will, at some point, we’re all hopeful because it’ll end up with a better system that the consumer has choice. And it’s not just choice, but informed choice, so we’ve got a lot of work to do.
Peter Micca:
And there’s some lessons to be learned from other industries, right? I mean, you take a look, in the 1950s, Bell Labs was the Google of its time, right? And was creating many of the spinoffs that you were referring to, Marcus, right? And so I think looking at the technology industry, looking at the utility industries over the years, I think really is some of the roadmap and we’re kind of replicating that in healthcare. I mean, it took a little bit longer, but I think we are really creating a tremendous amount of innovation that’s extremely exciting.
Saul Marquez:
Couldn’t agree more. I’m super inspired by this conversation and I’m sure you guys listening to this are also inspired. Don’t stop at inspiration, take action. And so with that call to action, I want to invite all of our guests to close with a call to action for all of us to consider. Pete, why don’t we start with you?
Peter Micca:
Yeah, look, I think it’s about people. I think it really all comes down to people. More technology creates, it’s great, but process is important. We talked a lot about vocabulary, tone, culture. I think try to create an environment where the two parties can bring their best selves to the table.
Saul Marquez:
Thank you, Pete. Navid?
Navid Farzad:
Yeah, really think about collaboration and be open to collaboration. And it’s hard to argue against doing what’s best for the patient or the member or the employee, whatever hat they’re wearing. And if you really have that lens and multiple constituents have that lens that are stakeholders and are touching that individual or could be touching that individual, we’ll do great things together. That’s going to take a lot of people collaborating.
Saul Marquez:
Thank you. Marcus?
Marcus Osborne:
Yeah, so my call to action is action. And there’s a quote that I use a lot from an ex-CEO of Walmart, he was a guy named Greg Foran, who’s now leading the largest airline in New Zealand that always said, and it sounds a little sometimes hokey, but I love it, You get one point for talking about it and nine points for doing it. And one of the things that I have seen is there’s a lot of talk and there’s conversations about what’s possible. What I find is just get out there, right, things, I don’t need, great things. I don’t need good things. I don’t even need okay things. Sometimes a fair thing is better than nothing. And so I would encourage, particularly the larger companies that have this sort of innovation, as Navid said, don’t be afraid. You know, be bold, go out there, and act. Put the thing out there. You know, maybe some of the things won’t work, but some of them will. And even the things that don’t work, you’ll learn from them and they’ll create the next thing. And so I think our big challenge is we’ve got to do more action.
Saul Marquez:
I love it. Marcus, thank you. Folks, I hope you got a ton of value because that three minutes right there is full jam-packed. You better hit rewind and listen to it three times because, take some notes, some great actions you can take. Marcus, Navid, Peter, thank you all so much for the work you do, and thanks for being with us today.
Navid Farzad:
Thank you, Saul.
Marcus Osborne:
Thank you.
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