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 Thanks for joining us on this week in Health IT Influence. My name is Bill Russell, former Healthcare CIO for 16 hospital system and creator of this week in Health it a channel dedicated to keeping Health IT staff current and engaged. Today we are joined by Glenn Tolman, CEO of Transparent. Special thanks to our influence show sponsors Sirius Healthcare and Health lyrics for choosing to invest in our mission to develop the next generation of health IT leaders.

If you wanna be a part of our mission, you can become a show sponsor as well. The first step. It's to send an email to partner at this week in health it.com. I ran into someone and they were asking me about my show. They are a new masters in Health administration student, and we started having a conversation and I said, you know, we've recorded about 350 of these shows.

And he was shocked. He, he asked me who I'd spoken with and I said, oh, you know, just CEOs of Providence and of Jefferson Health and CIOs from Cedar-Sinai Mayo. Clinic, Cleveland Clinic and all these phenomenal organizations, all this phenomenal content, and he was just dumbfounded. He is like, I don't know how I'm gonna find time to listen to all these, all these episodes that I have so much to learn.

And that was such an exciting moment for me to have that conversation with somebody to realize we have built up such a great amount of content that you can learn from and your team can learn from. We did the Covid series, talked to so many brilliant people who are . Actively working in healthcare, in health, it addressing the biggest challenges that we have to face.

We have all of those out on our website and we've put a search in there. Makes it very easy to find things. All this stuff is curated really well. You can go out onto YouTube as well. You can actually pick out some episodes, share it with your team, have a conversation. We hope you'll take advantage of our website.

Take advantage of our YouTube channel as well. Today we are joined by Glenn Tolman, CEO of Transparent. Glenn, welcome to the show. Thank you very much. It's great to see you again. Yeah, I'm, look, I'm looking forward to this conversation. There's, uh, a lot of different ways we could, could go in this, but I'm gonna start with the present and work our way back.

'cause I do want to go back to your, your allscript days. I, I wanna talk a little bit about Livongo, but I, I wanna start with transparent. What is the challenge, what's the problem that Transparent is looking to solve in healthcare? Well, if we look at where healthcare has been over the last 20 years.

Healthcare really hasn't made the progress we all expected. And if you ask virtually any health consumer today, what they'll tell you is healthcare is more confusing, more complex, and more costly than ever before, and they're just satisfied with it. If you go to large self-insured employers, they will tell you that the cost of healthcare are out of control.

That they haven't made progress there. They'll tell you that they're frustrated that healthcare isn't working and they are increasingly being dragged into the healthcare business. In fact, there was a recent Wall Street Journal article that said the average large self-insured employer has between 14 and 20 different relationships to try to deliver quality care to their.

Employees and their dependents because the existing system isn't doing it, and yet they don't wanna be in the healthcare business. So they're dissatisfied. And frankly, across the board, there's no one. If you look at health systems, the actual providers, hospitals, and other healthcare facilities, they're unhappy.

Why? Because they're being mistreated by the payers. They get paid less than they should. They get paid, they get stretched out, they get payments denied. So everyone in the system is unhappy today. And as we look at it and after leaving Livongo, a lot of employers came to me and they said, would you do what you did at Livongo for the rest of healthcare?

That is, would you create a new and different kind of experience? That actually aligns our interest. And when they say our interest, they mean interest of you and I and all the consumers of healthcare and the people who truly pay for it. Large self-insured employers. Would you align our interest to together?

Because right now their interests aren't aligned with the payers. So from that perspective, that's what it was about. So we have to set the stage to say a lot of dissatisfaction. Somebody has to do something, and in this case it's us. It's an interesting concept. We started a direct to employer strategy while we were at.

St. Joe's in, in Southern California is similar to what Northwell's doing with Northwell Direct, but we found it was really hard to do. It wasn't really in our wheelhouse. We didn't do sales well. We had to stand up a bunch of services that were very different than our core business. It was very difficult for us to do.

I would think healthcare providers would look at this and say, this is a good way to sort of establish a competitive. Um, situation to the payers. 'cause the payers more and more are becoming providers. Well, they are. I think you have to, what's really starting to happen is the health systems, the provider, just as you talked about, you established some unique relationships where you went direct to large self-insured employers at St.

Joe's when you were there and you were kind of leaders of the pack in that respect. And that's what Northwell is doing. Put yourself, uh, in the place of a large self-insured employer. If you are national, you have to now establish those relationships in every state you operate in, and typically not just with one.

So even Northwell, as big as they are in New York. One, they now have to say to someone, you can only go to Northwell. That doesn't give the consumer choice. And then what about their employees in California? Northwell can't help 'em. So they can't. And that's why payers came into existence because they could give you national coverage.

The problem is that they haven't been doing that in a way that either reduces cost, improves the quality of care, or creates an experience that people actually like. So we're all grasping for straws, and I think that's why Transparent has been so well received. By health systems. There's one other advantage of transparent, and that is we've done this crazy thing, just like at Livongo, we gave strips away for free and people said, that's crazy.

How can you do that here? What we've said to health systems is, do you mind if we pay you in advance for the surgery? And they looked and they said what? He said, well, we're gonna pay you in advance. By the way, if I want to do almost any other. Transaction in our economy, I have to pay in advance for it.

And so if I'm dealing with heart surgery, shouldn't I pay in advance or at least part of it in advance? Of course I should. And so now that we've done that, they're saying this is truly different. It is new. It's a new kind of relationship. We wanna work with you 'cause this is a real partnership. Glen, this is really interesting from Transparent's perspective.

I wanna walk through the experience and, uh, from a different, couple different perspectives. Let's start with the employer. What's the employer's experience gonna be in working with Transparent? So the employer, first and foremost, this is truly a partnership. So we are aligned with the employer. We will never be in a situation where transparent.

Will or can make money when the employer doesn't, and today payers can make money and the employer is left holding the bag. So we start with full alignment, and that means we don't charge up front. We share risk. We're fully at risk. This isn't, we'll put 10% at risk. We're fully at risk and we're at risk for three things, providing a high quality experience.

To, if you're the employer, to your employees and their dependents. First and foremost, high quality experience. Second, providing measurable quality outcomes. We have to improve the health of the population and we need to be able to demonstrate that we're doing that. And last but not least, we have to do that at the same or lower cost.

And interestingly, it's not all about cost for them. They want quality care. Remember, if you're the CEO of a large self-insured employer, your own family is going through your health system. You want quality care. You want a good experience. You don't want your employees distracted by their healthcare. You want 'em to do their job.

So we have to do those, deliver on those three promises. And the way we do that is we make sure there's alignment. So we're always looking at it from a standpoint of how do we improve the experience? How do we deliver measurable results? Let me give you one or two examples. So today, if you're getting infusion at the hospital, we would ask you a simple question.

Would you prefer to have that done in the safety and at the convenience of your own house? And 90 plus percent of the people say, yes, of course I would. Then half of them follow up with, but I could never afford it. It turns out that it is 30% less on average to send a nurse to your own home to administer that treatment than it is to have you get it done at the hospital.

Think about that. You don't have to travel there. That's the single biggest reason people don't get healthcare. They have travel issues. You don't risk covid or any other infection being at the hospital. What could be more convenient, safer, more comfortable than being at your own house and yet 30% less?

Well, here's the problem. Who's gonna tell you that the hospital's, not the insurer's, not, they're all making more money when you spend more money. So we step in and say, listen, we have this new service. Let me give you another example with medications. If you go today to ACVS. You need a stat, and it's a generic.

If you walk in and you have no plan, they'll say, okay, it's $4 or $6, whatever the cost is. If you have a plan and you say, yes, I'm insured, they'll say, what's your copay? My copay's $20. Okay, it's $20. So because you're a member of this club, you now just got to pay $16 more. That's the most ridiculous thing in the world.

Who's benefiting from that? The PBM is benefiting. The payer is benefiting, but you aren't, your employer isn't. So we're gonna stop that. We're gonna say, that's ridiculous. We're not gonna allow these kinds of things to happen. And that's where the alignment comes in. So that's why employers love it, because the real simple question I want them to ask is, why would we not do this?

Yeah. Yeah. No, it's interesting 'cause when, when they formed Haven, one of the things they talked about a fair amount was the experience. They're like, look, a couple aspects of this, the experience for our employees is not good. We're tired of doing the benefits meeting. Every time we do the benefits meeting, we just get pummeled because it's like, yeah, we're gonna raise the cost.

And they're like, and what's better? And not much was actually better. So I, I could see that alignment. Now talk about the employee. 'cause as the employer, . We want happy employees. We want them to feel good about the coverage we're providing, but also the overall experience. I mean, my wife has to navigate all this information to try to figure out who to go to for care, should we get a referral, all that other stuff.

Is that part of what you're going to help in, in really navigating that entire experience for the employee? The sign of a great interviewer. You're hitting all my butts here. So first I'm gonna, I'm gonna step back and talk about Haven because a lot of people miss the fact that Haven was a wake up call for the industry, and I think the industry missed that fact.

When you have three of the largest, smartest employers in the world, Amazon, JP Morgan, Berkshire Hathaway, and they come to you and they say. You are so bad, we're gonna form our own company to do just what you do. That should be a wake up call. Instead, when they decided to not continue to move forward, we could talk a whole show about that.

When they made that decision, people said, see, I told you so. This is way too complex. The message was, there's not alignment. They're dissatisfied and somebody's gonna figure this out. I would argue then in part. Haven wasn't successful because Amazon wanted to be in the business themselves. There's a lot of other reasons, but none of those players are going away.

So now let's transition to the employee experience. You mentioned your wife is going to navigate or has to navigate through this healthcare system. Well, first and foremost, you know, let me use an example. If you broke a glass in a room in your house. You could create a little pain through the room of where there wasn't glass, and then every time a guest came over, you could walk with them and show them the path.

You could navigate the way through, or you could clean up the glass, you could fix the problem. So in healthcare, almost everyone viewing the show has received a bill and the bill says this is not a bill. Right? Did you ever get one of those? This is not so think about the thought process. Somebody said, everybody's getting confused.

We're sending them a piece of paper. They think it's a bill. They don't know. Should they pay it, should they not pay it? They're calling us. It's creating massive confusion. So let's redo this. And instead of fixing the problem and saying, should we send it at all or should we make it clear what it is? They said, let's print what it's not.

This is not a bill. So now everybody says it's not a bill. Well, what is it and what do I do with it, and why do they send it? So they're still calling. They didn't solve anything. What we've done at Transparent is we've said, what about we send no bills? Because if a doctor says to you, you need surgery, and we now have an expert second opinion that says, yes, you do need surgery.

By sending you a bill, by charging you. All we're doing is putting a hurdle up that some people won't be able to afford to get that surgery and other people are gonna go bankrupt because of that surgery, because of the co-insurance, the number one cause of bankruptcy in the US is healthcare costs. So why as an employer would I want my employees to go bankrupt?

If you need the surgery, we're gonna get you the surgery. So when you're using the transparent system, there's no co-pay and no co-insurance for your surgery, number one. And number two, you have a choice. So in the past, if you needed surgery and you were the CEO, you figured out the best place to go. If you were the janitor, you went wherever was closest where they told you to go, and it was on network.

If you had no say, was it a high quality place, you didn't know what it cost, we're changing that. We're saying whether you're the CEO or whether you're the janitor, you get world-class service when you're talking about surgery or other medical procedures. And by the way, the great companies out there, the Walmarts of the world, the Targets of the world, folks like that are already doing this even for transparent.

They're saying you can go anywhere you want, but we're gonna send you to Cleveland Clinic. We're gonna send you to Memorial Sloan Kettering. If you have cancer, we're gonna send you to the best places in the world. 'cause that turns out to be a good deal. We get the right diagnosis. We only have to do it once we have half the infection rate.

Sometimes they'll send you to a surgery center 'cause that's the best place you want. High volume if you're getting your knee done. They're already ahead of the game in terms of being smart. Transparent is about bringing everyone else along. So for your wife, we're going to provide quote unquote navigation services.

But the best thing we're gonna do is make it so easy. She doesn't need someone to help her navigate. You don't have someone who has to come to your house and help you use Google. You just use it. My son was playing a video game once and I wanted to be a good dad. And so I walked down and I said, I'm gonna learn this video game.

And I said to him, do you have the instructions? And he looked up at me and he said, dad, nothing smart has instructions anymore. You just start doing it. Think about that for our healthcare system. Imagine if it was so simple that we met you where you are. Whether you're at home, whether it's the middle of the, whether you want to schedule your appointment on a weekend, whatever it is, we meet you where you are and we put you in charge.

So that's why I don't call this consumer focused. It's not somebody else focusing on you. I call it consumer directed. You're in charge. You're giving the orders when you use Uber, the beauty of that is you're in charge. You tell them what kind of car do you want? You want a limo, you want a van, you want a small car?

You tell 'em, do you want it shared? Maybe because it's lower cost pre covid, or do you want your own car? You tell 'em exactly when you want 'em there, and literally within minutes, they're right in front of your house. 10 years ago, you'd have to be a millionaire to say, I'll have my fleet show up at your house exactly when I want it.

Today, everybody gets that. So consumer directed. So let me give you my wife's three hot buttons and let you address 'em. So number one, log into the website. So her question is always the health system's website or the insurance carrier. I'll say the insurance carrier. She'll log in. It is as confusing as can be.

That's number one. Number two, she then eventually has to get on the phone and she has to go through this. Maze, this crazy maze until she finally gets to somebody 1, 7, 3, 5. Yeah. And, and, and she's just praying that she gets that one person on the other line who is even remotely customer-centric who can help her.

Right. And I think the, the final thing is. Access to the doctor. I mean, at the end of the day, she just, she just wants to see a doctor and she has to go through all these things till she can finally go, okay, I got an appointment and it's two weeks from now, and here's a short pandemic story. So Telehealth takes off our insurance carrier, gives us telehealth visits as part of our insurance plan.

I mean, they're free, essentially. I mean, we pay for insurance, but they're free as part of our insurance carrier. So through United Healthcare. She started doing telehealth visits. She's like, this is the best thing ever. She goes, I, I could. She just went on there, had the telehealth visit, saw somebody immediately got a prescription, and, and away she went.

And she's just like, and why isn't the rest of healthcare like this? Yeah. Well, so let's, let's go through her exact example. So the first thing you do is log on, is as simple as you take your phone, you look at your phone, you're on. Second, we have 62nd access guaranteed to a doctor 24 hours a day. So you're texting with a doctor in 60 seconds.

And interestingly, by the way, most people would prefer to text today rather than see a doctor in video. It's the middle of the night. You may not be dressed, you may feel very bad. Last thing you wanna do is meet somebody new on video. I. Most people would rather text also, that means all the directions the doctor is giving you are documented.

So if the doctor says, take two of these and one of these, take this tomorrow and this the day after, it's all written for you. Now, if at any time you say, I want to do video, you say to the doctor, I'd like to do video, and it turns to video. If the doctor wants to do video, they have to ask you. They can't just turn it on.

Why? Who's in charge? You're in charge. So first and foremost, instant access, 60 seconds. Not to somebody who can help you to a doctor 24 hours a day, you're in charge. Second, and I will, I will admit our own people came to me and said, Glenn, when you dial us, we have to say if it's an emergency, do this. So we're gonna have a recording.

I said, no recordings. No recordings. We're gonna use this thing called the human voice and we're gonna answer the phone. They said, yeah, but we have to repeat it. I said, what do you have to repeat? And said, we have to say if this is a medical emergency, then you should dial 9 1 1. You have to say that by law every time.

I said, great. So that's nine seconds. What else do you have to say? 'cause I don't want press one. Press three, press seven. People call when somebody dials your cell phone, they wanna talk to you. When somebody dials us and it's a health issue, they want to talk to us. We're gonna give 'em a human voice, we're gonna give 'em instant access.

All they need to do is look at their phone and we're gonna let them talk to a doc. We're gonna put them in charge. So everything your wife wants is live today on transparent. That's, that's what the focus is. And by the way, you'll see TV ads today. Sure. You've seen 'em. There's a bank that's advertising it and says, when you call us, you get a real human.

Why are they saying that? Because all of us are frustrated with dial one, dial three, dial seven. When you finally get through, it says, that person's not available. Leave a message. You're so frustrated. And in many cases, and we learned this with diabetes, somebody's blood sugar is dangerously lower, dangerously high.

You can't wait for a callback. And that's why people jump in the car and go to the er. We're gonna be available to 'em instantly. People say, isn't that expensive? Compared to what? Compared to an ER visit for $2,000? No. And forget about the expense. Lead with quality. What do you want when your son or daughter, mother or father.

Is sick. You wanna talk to somebody instantly. That's what we're gonna deliver transparently. You just, uh, on a previous show, you just described exactly what I'm looking for because I was, for, my company was selecting an insurance carrier, uh, benefits for the employees. I'm like, look. It is, it's just a handful of things.

One is I want the best care that I can provide for them. They do great work for my company. I want, I want the best care that we can provide for 'em. That's number one. Number two, I never wanna receive a phone call about I. Healthcare or insurance coverage. I just want it to, to work first and foremost. I want them to, to feel good about it and, and then the other thing is I want it to be the best healthcare possible.

And I know that where I live, the best healthcare that's available for my employees would not be at a couple of the hospitals down the street from me. It would be at Mayo or it would be at . The Cleveland Clinic and you just, you just sort of hit all those buttons. You're giving us the easy button on navigating, on finding the right things.

You're putting us in touch with the person that's gonna help to do that, and you're giving us access to those things. So I, so I'm taking my businessman hat on. I'm putting it on right now, and I'm saying, how are you gonna scale this? I would think every employer in the country is knocking on your door right now.

I is there and you're talking about. Really a high touch kind of experience. Even though it's a high tech company, you do have a digital front door. How are you gonna scale this? Well, so you've, you've made a really important point, and that is people say we all want to do high tech, high touch. And as with a lot of things, I say, no, we don't.

We just want to do high touch. And you just made that distinction. It's really important. I'm calling it out for that reason because we want to use tech. We wanna use tech in the background to provide high touch. And a lot of people said, well, the tech is tech coming to healthcare tech's not coming, the folks coming.

The Walmarts of the world, the Amazons of the world, they aren't tech. They're actually, think about it, what is Amazon? It's a place you go to buy stuff. What is Walmart? It's a place you go to buy stuff. Do they use tech and does Amazon? Yeah, Amazon Web services. But by and large, Amazon's a shopping place.

Walmart's a shopping place and they've made it easy to shop. That's why 200 million people a week go to Walmart. So, so this is, they understand customers and experience. That's what we need in this industry. And that's really where, where again, we're thinking about focus. So how do you scale it? Well, believe it or not, you scale it by doing less, not more.

So when you don't have billing, if you think about the traditional navigators, which I think are gonna go away, 'cause the whole concept of navigator doesn't make sense. It says you've got something so complex, you need somebody else to help you through it. Make it simple about 20% of the calls into the normal insurance helpline and sometimes higher, or for billing.

Well, remember I told you we don't do billing, so we just eliminated 20% of the calls. We made it easy, and by the way, we made it really simple. Self-service. You pick your phone up and you press something that says, I want to talk to a doctor, and you're connected in less than 60 seconds. What's hard about that?

Well, it's not that hard. So what's hard is if you say, I want to schedule it now, we gotta get with you. You've gotta get with us. The schedule didn't work, but once I make it instant access. All of a sudden I made it easier, not harder. So great software eliminates the middle. Think about it, Airbnb, what they do is they connect you to the person who owns the place or travelocity you.

And I remember 'cause we're old enough that used to stand in line and wait for your ticket and there was a somebody up there and then all of a sudden you're two away and they go to take lunch and you just say to yourself, oh my gosh, how long is this gonna be? Now we've taught the whole country that it's really simple to just touch a screen, do it at home, do it on your phone.

You show up, and we made it simpler. Well, guess what? There's a whole bunch of people who are in the middle that we don't need anymore, and it's better. Travelocity gave us three things. We all want unbiased information. So they gave us everything. I remember calling our travel agent once and, and I said, there's a flight to New York that leaves tomorrow morning.

And they said, oh no, there's not. I said, no, no, I saw it. I saw it advertised. It was on Southwest. Oh, we don't deal with Southwest. Why don't you deal with Southwest? They don't pass commission. Wait, that's not unbiased information. I want all the . That's not good. That may be good for you. It's not good for me.

It's just like your example of saying right now we could, you and I or our families could walk by a high quality hospital with half the infection rate on our way to a place that our payer told us to go. And why are we going there? 'cause the payer gets a better deal, not us. The payer gets a better deal.

We're gonna say, look, here's the best places to go. And by the way, they may be local, they may be right in your community, you may have the best docs right in your community, but if you don't, we'll tell you. If you do, we'll tell you and you can make that decision. So, so again, this idea of scale, good technology makes it easier to get to scale.

I mean, think about what Amazon's done. By the way, it's fascinating. Amazon's figured out that it takes less energy to have this stuff delivered home than it does for each of us to go out and buy it separately. 'cause they can have a delivery truck. I don't know about you, but in the building I live in, the Amazon truck comes and it delivers 35 boxes at once.

So it's one gas trip, 35 boxes. Hugely efficient, better for the environment, the economy. Maybe the wrapping isn't quite as good. I haven't figured that out yet. But, so we think we can scale. We have tremendous interest, but we think we can scale because of that. Well, in the, in the second half of this interview, I, I'd like to ask you one question about Livongo and only one question 'cause it, it's been covered, uh, in, in just about every other venue.

And it's just to put my mind at ease. And then I'd like to go through the industry a little bit. The, the Livongo question is this, I, I saw an early version of Livongo back when we were at St. Joe's, and I didn't see it. I, I saw an interesting tool for managing diabetes amongst a thousand other tools that were just out there.

They were sort of there. Why was Lgo able to break out of the pack? I think, and by the way, your reaction is every major employer in health system that is, we wanted innovation. We gave it to you. And you're like, look, my job isn't to sort among a thousand different innovative companies. I have a real job during the day.

So every employer, every health system is feeling that way. Why did Livongo break out of the pack? I think it's really simple. First and foremost, member focus. We had a third of our employees who either had diabetes, which is where we started, or had a family member who did, they understood that the member had to come first.

We had to create this unique experience for the member. Everything we did was focused on how do you make it easier for someone to stay healthy? So how do you make it easier? You take away the copays on strips and you give 'em free strips. You send the strips before they need it. Why? 'cause you know how many they're using.

If they lose their meter, you don't give 'em the ninth degree, you FedEx 'em a new meter the next day. Nobody wants to have diabetes. Nobody wants to prick their finger. So if they're asking for another meter, give it to 'em, don't delay for a few days. How is that helping? And I can remember. With our insurance company, one of the large blues, saying my son is running out of strips.

And they said the answer was, we can send needles today, but we can't send you new strips for two weeks. I said, that's the craziest thing I've ever heard. They said, if it's an emergency, go to the ER to get strips. $5 trips. You want me to, or go to the local Walgreens or CVS. There the strips are $35 and I know they only cost $5, so we made 'em free.

So one member focused, relentless member focus and caring about the members. 'cause it was like every time I looked at it as if it was my son or president, Dr. Jennifer Schneider, she had type one diabetes, she has type one diabetes and she said, here's my, I'm using all of them. They were using, they were our quality control.

So two, create an experience, three, make it easier, not harder to stay healthy. And that's really, that was the secret and that relentless focus. And then we figured out that for type two diabetes, 70% of the people who had hypertension also had diabetes. And so there was a natural overlap. They didn't want two coaches, two devices to this, to that.

He wanted one app, one coach, and that's what we gave him. So it was a natural extension and that's how we built it. But relentless focus on the experience and the member. Well, Glenn, again, not to jump over Livongo too quickly. $18 billion exit was a pretty amazing, but even more amazing was the company that you were able to build and the people that you were able to serve.

But I do wanna take advantage of, of some of your previous experience and your broad view of the entire industry. Let's look at the EHR market. First time I met you, you were at Allscripts and the leader of that company I. I wanna ask you about the EHR market. Where does the EHR market go from here? Do we end up with like three players, four players running the entire operations of every hospital system in the country?

Or do you think we're gonna see something different emerge? Is there gonna be something that breaks out of the pack? Well, first of all, I would be remiss if I didn't say thank you. You were an early. Client of ours at Allscripts, you were great in terms of not just being a client, but you helped us make the system better, and so thank you for that.

There was a lot of innovation that occurred with us working together, and we appreciate that where EHRs are today. So first of all, I think that electronic health records were a necessary but not a sufficient condition. We had to get all of the information electronic. To take the next step, but the next step was about making the user interface much easier for doctors and other caregivers, and on the backend using all this new information to create insights from the data.

Just as we did at Livongo, the industry was moving along. We had a 20 plus billion dollars stimulus. Courtesy of the government, that allowed us to really accelerate adoption, which was critical because we had to get that information electronic to take the next steps. But then the industry kind of stagnated.

You saw a lot of the leaders, the most innovative people in the industry leave. And so today what you have is electronic health records that are fundamentally big, dumb data repositories. They aren't easy to use. I mean, think about having spent the last six years in Silicon Valley. If you said to anybody, your system is so complex that you need a scribe to help you enter the data talking about Epic, they would look at you and say, that's the picture child for bad software, that it's so hard to use that you need somebody else to operate it.

There's no other software in almost any other industry. It's so hard to use that we need somebody else to sit next to the terminal and use it. And so one, we didn't fix the front end and make it really easy for doctors to use and really valuable. And on the back end, we surely haven't used data science to say to doctors, here's three things about this patient to discuss with her, discuss with him, and here's the recommended treatments.

You still use your judgment, but we haven't served that up. Most doctors think of the electronic health record today as a necessary evil as opposed to a valuable tool. Like when we did e-prescribing at Allscripts, eventually doctors understood you should never write a prescription without drug to drug.

Drug to pregnancy. All the interaction data, knowing whether it's on formulary and you could send it electronically to be filled, so there were no handwriting errors and doctors grew to love that. It was challenging early on to pry their script pads out of their hands. But when I left, we were doing a few hundred million electronic prescriptions and that we knew saved lives and we knew improved the processes and so did the doctors.

They never had that same feeling about electronic health records 'cause they didn't make them better and smarter. So that's still coming. So what we're seeing is coming outta Silicon Valley, there's some leading companies. Commu happens to be one of 'em, and what they do is they sit on top of an Epic or a Cerner or an Allscripts and they are the apps layer.

So they make it easy to write apps, to interact, to do all the things, to do the data science. So I don't think we're gonna rip out the epics and Cerners, but I do think all of the innovation is gonna come around them. It's not gonna come from them. Yeah. It's interesting. I was, earlier this week I was talking to somebody about Google Studio.

It's that same thing. It's, it's, it's sits above it and says exactly the, the, the experience is so bad for the clinicians that we, we need a layer that's above it. And then the other thing I, I heard the ONC coordinators. For health it. They had all of them at the CHIME session and one of the things they said is, we started even before the stimulus money, we started with this intention of getting good data and have it be interoperable.

Then we had the, the great recession I. The stimulus money came in and it was like all that sort of went by the wayside and it was just digitize the record. And that's how we ended up with this in this mess that we're in. Uh, just outta curiosity, I know it's a really mature market at this point. There's very little movement or opportunity for movement, but if, if I were to make you the CEO of Cerner, 'cause Cerner was looking for a new CEO, what's the breakout strategy?

Well, I think the breakout strategy to turn, to do exactly what we just talked about. Maybe you have to partner with someone who knows how to do it, but make the front end unbelievably user friendly. For physicians and also for health consumers and on the backend, use real data science. When I was at Allscripts, we did a project with one of the leading cancer organizations in the country, and what would happen is I.

When someone checked in and they would put in their information, we would run that information against the entire history of the place and against all the literature, and we'd come back with a recommendation based on that history of a drug regimen and the like. It was kind of IBM Watson that worked and before IBM Watson.

And when we did that, the doctors would look at it and they'd say, this is hugely valuable. Well, we have to get there. I just, I was just getting a new car. And when I got the new car, an electric vehicle, what was great was it was integrated instantly with my iPhone. They had bought the technology from Apple.

It was all integrated. It would read my messages to me. I could, if I got a text message, it would read it. I could reply by voice, and it was great. Now, what happened was in, in that case, Chevy, it was a Chevy Bolt. In that case, Chevy said We could try to develop all this, or we could be smart. We could go to the people who know how to do this.

Put a front end on and make it unbelievably usable. That was much more important to me in the buying decision than understanding the engine, which I don't understand. But what I knew was that creature feature was really important to me. So if I was the CEO of Cerner, I focus on how do we make this so easy to use?

The doctors say, wow, this is so easy to use. How do we stretch it to the patient? To say when you're at home, when you arrive at the hospital, there's no check-in. All you do is use a QR code. Just like we've learned in the pandemic, we can do almost everything with a QR code to scan the QR code. You're done.

That's the check-in. Make it easier to stay healthy and on the backend. Use data science to allow our docs to do what they were trained to do. Practice medicine use, make really important decisions, deliver care, not fill out forms and do billing. Yep. It's interesting, again, my wife, when we were buying a car, two criteria, one easy for her father to get it in and out of, and number two had Apple car play.

I'm like, okay, well think about that. And by the way, years ago you may remember Lee Koka, he got to Chrysler and he said, I've gotta turn this company around. He asked two questions. Well, what's our biggest issue? Engines? How long does it take him to do a new engine at that time, five years to develop and get into a car, a new engine?

He said, I have a three-year contract. What's next on the list? Next on the list was cup holders. People don't have a place to put their cups. If you remember, Chrysler came out with the minivan and everything else, but tons of cup holders. It was really easy to be and it was just some people loved it. Oh, that's so funny.

And uh, and so nobody understood the engine. And in fact, if you remember for a while, Chrysler bought some engines from Mitsubishi. Again, they didn't actually care where the engine was. They outsourced what they needed to, and they solved the consumer problem. That's what we have to do. So your wife is very typical of everybody in healthcare.

Here's my issues. Solve 'em. Yep. All right. I have three questions, three minute answers. We'll uh, close this out in 10 minutes. So headwinds, PBMs, payers, providers. So PBMs talk about the headwinds facing PBMs. There's a lot of competition in that space at this point, isn't there? There's a lot of new entrants.

It's a perfect question for me because yesterday as a part of Seven Wire Ventures, our venture firm, we had as a guest speaker, mark Thayer, and Mark was one of the people who helped drive that industry forward, get it automated. and then ultimately merged, uh, catamaran into Optum and ran Optum's PBM. And there were two takeaways from that.

Mark basically said the current PBM model is fundamentally broken, and that was one and second that the value distribution of something like $50 billion is going to shift. More to the front end, and that is the people paying and more to the backend pharmaceutical manufacturers, if you look at it, you can't turn on the TV today without seeing an ad from Capsule or pill pack or GoodRx.

And all of these are multi-billion dollar companies now. So I think PBMs are under the gun. I think the industry is being challenged and you now know that the major PBMs are all owned. By larger insurance companies, larger payers. So I think that model is fundamentally gonna change. I think rebates are gonna go away, and I think it's gonna be good for the consumer.

Payer payer's, an interesting space, largely consolidated, but a lot of, I mean, self payers obviously going to someone like Transparent. Where's the competition come from for the large payers at this point? I think the large payers have to reinvent themselves. Many Aetna, of course, merge with CVF remains to be seen how that comes together and and how that works.

Cigna, of course, acquired Express Scripts, so I think you're seeing the first stage in that. But what big organizations do, we've seen this with some health systems, they try to get bigger instead of trying to get better. So they have to fundamentally redefine their relationship with consumers health, consumers number one, providers.

Number two, both health consumers and providers generally dislike payers, and it's hard to build a successful business long term if your primary suppliers and primary consumers dislike you. And that's where they are today. So they have work to do. Yeah, I see that on the trust surveys. They, they always come in last place in the healthcare arena.

Providers, where's the competition gonna come from? Where's the disruption? Where should providers be concerned about disruption? I think providers need to focus on a few things. One, they're going to have to figure out a way just as pharma needs to get out from under the thumb of PBM and go direct providers need to get out from under the thumb of payers, build direct relationships with employers and directly with consumers, and that's what they have to do because.

Today, the quality providers are actually penalized. They provide better quality, and all the payer wants is lower cost, so they have to change that equation. Transparent will help them do that. They should continue to focus on two things. One, do more of what they're good at, and you don't have to do everything.

Do more of what you're good at, and two, get a payment model that you can live with. And lastly, I should add, enforce your own quality. So if you aren't good at something, get out of the business or fix the problem. Don't wait to be told, because increasingly we can measure quality. So next question is for the entrepreneur.

So imagine you're speaking at Stanford, MIT, Harvard, one of the universities that's has a bunch of entrepreneurs, future entrepreneurs in the room. What have you learned about starting and growing a business in healthcare that you might pass along? Well, I think most important it's worth doing, and that is if you're going to commit your life, your time, your energy.

You do need to commit. You need to commit disproportionately to do it. Do it for something that's worthwhile. And there's nothing more important in this country than our health for us individually, for our families, for the economy. We've learned that from covid. So we have to fix our healthcare system. We have to build a better, more equitable system.

It's worth doing. That's number one. So whatever you do. Make sure it's worth doing. And number two, understand the consumer and the experience. And lastly, understand the ecosystem. Because we have a very complicated ecosystem, and I've seen so many wonderful entrepreneurs, wonderful products that don't understand how to navigate the ecosystem, an ecosystem kills 'em before they can even get started.

So you have to understand the ecosystem. Interesting because it's one of the things I'll take away from this is we spend too much time focusing on the tech and not enough time. Focusing on the world that we live in and the people that we're serving is one of the key takeaways I think I'll take from this.

Let's talk about students. I have a growing population of students that send me emails that they're listening to the show, if they're undergraduate going into college, or haven't really decided what to declare as their major yet. What should they be studying to be relevant as they step into healthcare or health tech market space when they plan to graduate in a couple years?

Well, I think that my advice to people is, one, study what you love to do, and B, study what you're passionate. You can learn about healthcare in a variety of ways. If you're studying healthcare, that's great. You have to have a technology component, but have you, as you pointed out, it's not about the technology.

Technology is a tool, but you need to understand it. So I think every educational experience ought to be one part what your major is. One part technology and one part fun. I took juggling as one of my elective courses in college, and the instructor said, this may be the only thing you use 20 years from now.

And he was right. Everything else has changed. So don't discount the ability to have fun to do interesting things, but make sure it's a blend. And the other thing is keep learning, keep reading, keep learning, keep listening to books on tape. And, uh, stay relevant 'cause everything's gonna change. I like to say that what happens in the next 18 months in healthcare, we'll determine the next five years.

And the next five years we'll determine the next 25 years. So we're in for dramatic change. It's gonna come faster than we ever imagined. And, uh, it's gonna be an exciting time, so jump in. Really. Wow. Can't wait to see that at the health conference. You juggling And Jonathan Bush doing whatever he does whenever you guys happen to, well, actually at the Health, so I'm a, a very, very amateur magician.

And they asked everyone to do something that they were gonna use as little clips. So I did do a floating ball routine that you may or may not see. We'll see what happens. You may or may not see. Glen. Thank you very much for your time and I I wish you the best of luck with transparent. I hope you are wildly successful and at some point.

Get down to serving companies of of my size. 'cause it sounds exactly what I want and I'm just gonna have to wait until you guys get down to the small and medium business. Not too long. Not too long. Thank you. Thanks for a great interview. Thanks for all you do. Really appreciate it. It's great to see you again.

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