#12 Navigating Healthcare with AI and Innovation with Shantanu Phatakwala - Leading the Charge in Value-Based Care

[MUSIC] Hello, I am Maje Modi and I am Asha Prasigian. Healthcare is often seen as an industry left behind. From lack of efficient process to AI. And there's a whole history of how we've gotten here. But we're exposing what is progressing and cutting edge from the eyes of leaders to excite the next generation of healthcare professionals. Ajay is the payer maverick and I am the provider maverick. And we talk with the mavericks who are changing how care, experience, and outcomes are delivered. Welcome to Mavericks and Healthcare. >> Big welcome. Today we are joined by Shantanu Fattakwala, who is a founding member of Qualified Health AI. Shantanu, you have an awesome and varied background. You've been at national payers. You've been at value-based care strategic organizations that are national. You've been the CXO of multiple unicorn startups from the CIO of passport health to the chief data and science officers of Haven. And now Qualified amidst a number of others. Tell us about your journey. How did you get to where you are? [MUSIC] >> First of all, thank you for having me here. Wonderful to be here and spending some time with you. It's been a very fascinating healthcare journey. And at each point in time, I have just tried to look for what makes healthcare better in America and found a great team to work and pursue that mission. That's the overarching team that you'll see in my entire journey. And of course, we can get into some of the details about what it felt like through that journey. But as you're right, I ended up spending time with payers in the clinical analytics space when they were not doing a whole lot of things in terms of looking at claims data and using data really to drive clinical programs and outcomes. And after that, I wanted to be closer to the care delivery or where the care was actually being delivered. And that led me to Evelyn Health, a leader in value-based care. Where we spent eight years working very closely with health systems and payer groups to enable value-based or unlock value-based care for these organization. And most recently, the third leg of the stool in my journey was large employers, large employers, constitute a huge proportion of healthcare spending in America. And I was very fortunate to work with an organization called Haven, which was founded by Amazon, GP Morgan Chase, as well as Berkshire Hathaway, who came together to say that how do we get better health outcomes, better clinical programming, better network set up for our own employees. So as I reflect back on my career, payers have spent a lot of time with payers and what their issues are, how to move where they were going or where they are going in terms of value creation, as well as the dynamics of health systems where so much healthcare is local and impacted by not the national trends, what CMS does, but what is happening in their own markets. And then large employers as well, who really want to take care of their employees and have a lot of complex relationship with payers and other entities to deliver that. And Shantanu, first of all, it's just so exciting to hear the journey you've been on, specifically tied to value-based care. And for our listeners, Asher and I've put out a few pieces around where we think the future of value-based care is. So love kind of the taking us back through the history. Maybe just a very direct question to you, is do you think we've actually been successful as an industry to bend the cost curve? If so or if not, what do you think is on the horizon for value-based care? Great question. So and it is important for us to reflect on where we have been and what has worked and not worked. The short answer to your question is it's mixed. It's not been the home run, some of us expected. It has not been the value creation and the alignment between payers and providers. We hope that would happen using value-based care. That has not happened. What we have learned is that the value-based care is complex. And we now have added a lot of complexity between for the providers to deal with different versions of value-based care for providers. And the idea, this is where, you know, often as you hear from startups, there are million ideas, but what it takes from idea to execution, there are a lot of steps. And that is where there are a lot of challenges. So a value-based care is difficult to execute. There is still the different aspects of providers are not fully aligned with payers. I'll give you an example. When you get into value-based care, primary care, specialty specialist, are they both aligned? And it is very difficult to execute that particular concept. These are few of the challenges that we have seen in value-based care. And as a result, it has the impact that we see on a day to day basis has been modest. There has been pockets, Medicare advantage has been a huge success. We have seen success with independent primary groups and smaller provider networks getting, being able to take more accountability of care. They have more tools and solution to be able to do that. Large health systems at AMCs, we have seen very little progress in value-based care. And some of it is based on the fact who they are and how they are positioned in their market. Your story arc is incredible. And the book ends from even your education. I believe you studied machine learning at Stanford, really before at the boom of where that is in healthcare now. And here you are now at Qualified Health, where you are driving collaboration with health organizations to build trusted deployed solutions and artificial intelligence. So as we think about where your story is gone, what are some of the lessons that brought you to where you aren't? Definitely. So in terms of my own story, it feels like it's coming full circle. I started on the technical side. I was trained as an engineer, ended up learning machine learning and artificial intelligence. Before it became mainstream as we all know today, and healthcare was frankly not ready for it. Healthcare was ready for or healthcare was focused on getting infrastructure set up around data and cloud infrastructures came along. And using the data for analytics and predictive modeling. And what we are seeing today is the boom around artificial intelligence. What I would emphasize is to the listeners here is there is a lot of opportunity in healthcare. What you are looking for is a mission driven team. You are also looking for advancement in either technology or you're looking for a major advancement in regulation, such as affordable care act, which we all know went into place about 15 years back. Those have been pivotal moments in healthcare and that always leads to a new generation of companies that can be created and pick the ball forward in terms of making progress in healthcare. As you might recall, affordable care act was has been late 2000s and was focused on increasing coverage and was early beginnings of what we've known as value based care. So both CMS as well as national pairs got more interested in paying for outcomes and launched a bunch of initiatives such as accountable care organization and different tracks and different variations of getting providers take more accountability of care to the patients. At that point, the opportunity that create was created. If you think about from a provider perspective was that the providers were very good at delivering care. That's what they did. They had optimized their operations, their infrastructure to support that. They were not geared towards looking at data in a broader way. They were not equipped to look at think about total cost of care. And they were not equipped to think about how to run and manage programs that impact cost of care that created a gap in the market where companies to come in and provide and build a set of solutions, which would enable some of these value based care initiatives. So that led to around that time. So between 2010 and 2015, about half a dozen companies since we have known have. even gone public, such as previous health, allidate, agilon, evident health included, and everyone created their unique angle to solving those problems. The key tenets of that was, how do you aggregate data and create views for providers to understand what was going on with the patient beyond the one-to-one interaction they had? So that was one capability that was absolutely needed. How do you identify, quote, and quote, "high-risk patients?" So additional support and services could provide, be provided to them. And how do you also manage the total cost of care from actual perspective, and all of those combined, created a set of capabilities that was needed for providers to be successful in that. So as that opportunity arises, as came a lot of these companies that provided these solutions to the providers. Shantanu, this is incredible. So technology is complex. Business models are changing. Consumer expectations are changing. And clinicians need to be positioned differently to best engage with expectations and where care and gap needs are right now. So enter qualified health. Tell us a little bit about that. Yeah, thanks, Tasha, and to bring it to the topic of AI, which is on everybody's mind these days. So just again, stepping back a little bit on what is happening in AI and what just happened in last two years. It's worth reflecting on that. So in late 2022, or early 2023, the World woke up to generate a AI. The World woke up to chat GPT. It became the fastest product to get 200 million users. And our lives have been different ever since. And most of the people I interact with are either using generative AI on a daily basis. They are definitely using them on a personal basis, very regularly, or getting a few things done over weekends and stuff that on a weekly basis. But as we think about this particular moment, this is an incredible time to be alive. And it would be a shame if we are not able to use this technology to impact the status of healthcare in America. And that is why we started qualified health. But the story of qualified health is three of us, two of my other co-founders and me. We wanted to interact with payers, providers. And also long-term care facility operators. We went on a quote-unquote tour to understand now that this technology is here, what, how are you going to adapt it? We all sense the benefit of it. We all can feel that this can be a huge improvement in some of the administrative work, documentation, as well as form-filling, a lot of boring administrative work, two more exciting work around differential diagnosis, and medication dosing, and things like that. So you have a spectrum of things that could be potentially made better using this technology. So coming back to qualified health, we went on a tour with some of the different constituents of healthcare ecosystem that I'm very familiar with. And started having conversation about what are your fears? What are the roadblocks? What are you testing? And one team that came up was, look, we love the technology, we believe in it, but can we trust it? How do we deal with hallucinations? How do we take care of biases that may be prevalent in these models? And how do we put it in hands of our employees, which includes physicians, which includes nurses, which includes front office managers, how do we include, how do we give access to these tools to a variety of our employees, but do it in a safe way. So that led to that led to creation of qualified health, where we wanted to build a platform, we are building a platform, where we are focused on governance, we are focused on testing these models before they are deployed. And here's the most important thing. Unlike the world in predictive analytics, where you build a model, you deployed it, these models are changing on a weekly to monthly basis. They need to be monitored, and we need real-time guardrails around these models, so that we can prevent unauthorized use, and we truly use it for the applications that they are meant to build. That's the thesis behind qualified health, and we are very excited to start this journey with some of our health system partners. So, Shantanee, as we think about qualified health and what you're doing in the AI space, are you developing solutions specific to use cases or are you more of the surround services around responsible AI governance piece that you mentioned? And specifically, if you could talk a little bit more about your client base, because it sounded like you were focused primarily in the long-term care space. Yes, so in terms of our focus in terms of our customers, as I mentioned, that we did have conversations with payers, health systems, and long-term care, where we ended up focusing on was health systems. For a couple of reasons, health systems are, they have a lot of employees who could benefit from this. There is a lot more of documentation and administrative work that can be improved with health system, and some of these health systems were ready. So, it's a combination of who wants to, you know, begin this journey that led us to narrowing our focus on health systems, though what qualified does is applicable to other sectors and segments as well. So, in terms of the second part of your question, which was really interesting and worth spending some time and thinking through, and this could be very, you know, interesting for the reader, the listeners to think about as well. At Qualified Health, we are building a platform around governance performance testing evaluation, which is a wrapper around, or which is an additional layer of services around use cases. And I think that some of the use cases and point solutions that we are seeing in the marketplace, we love the innovation that is happening in this regard. But you got to also think about where AI is going. These are the worst models that we have access to. This is only going to get better and smarter. Couple of days back, as you saw, Claude, which is the LLM product by Anthropic, released functionality, which allows users to build their own remote RPA robotic process automation solutions. So, the pace of innovation that is happening from a lot of these foundation model providers is so rapid that you have to be careful about if you are a point solution company, how it doesn't get incorporated in some of these foundation model capabilities. That's why we have taken a horizontal approach and want to be a layer between the users and LLM so that we understand the intent of the usage. We have very tight governance approaches. And governance sometimes is focused on a lot of processes and documentation, but our version of governance is focused on technology solutions and having a capabilities to monitor once these are deployed. Tell us more about that. How does that work? Yes. So, as you think about a health system, who is first of all, we are in early evenings of this. So, let me just share a couple of insights from our conversations with health systems. There is a lot of pent up demand, I would say, around getting access to LLM tools. A lot of pent up demand. And the health systems are in a spectrum of, yeah, let's not use LLM for anything, though we know that there is some under undercover use on using LLM for simple things such as summarization and all of that. Especially the residents, especially the students who are still who are just now exposed to this technology so early on, they are trying to use these technology as frequently as possible because it's safe stand. It actually benefits their day to day. So, what we are seeing from the health systems is that, regardless where you are, are there is there is an interest in trying and testing LLM models. So we are in the face one of this capability deployment, a lot of health systems want access. And a lot of health systems are wanting their own teams to build some of the use cases and point solutions. So what qualified health does in the first phase of deployment is understand the generative AI landscape. There's a lot of AI already being deployed in health systems. What we go and help with health systems is understand the generative AI landscape within these organizations. How them get started with access, help them get started with the foundational capabilities around governance and performance management. And we also help them deploy the use cases in many cases that they have themselves built. Fascinating. So where are you in this journey with health systems right now? Is this deployed? Are health systems part of the test and learn process? And if we're a health system right now and want to use your solution, is this live? Great question. Thank you for asking that. So qualified health was incorporated in December of last year. And since then, we have worked with six health systems. And these health systems range from your academic medical center to community-based organization to public safety hospitals. So we've got a wide range of health systems who we work with. We have set the company as a public benefit corporation a PBC, which has a dual mission of making money as well as having a mission to improve healthcare in America. So that's our company setup. The platform, fast-forwarding a little bit, the platform is live at two sites, at two of our health system partners. And we are thrilled to be in that position within the first year. And we have a roadmap to deploy this in many additional health systems. Fantastic. So listeners, if you are enjoying this and excited to learn more, not just about qualified health, but also the journey in which we got here has you well spoke about value-based care and others, please follow Shantanu on LinkedIn and learn more. So Shantanu, you've had the dream of many Stanford students. You graduated, you rode to the top of several unicorns, and you've made a difference with the technology that you serve. What advice would you give to Stanford students in rising graduates? Great question. I said, reflect on my journey. And something I said, the first thing I said as in this podcast as well, I think that I think students and people early in the career have to be deliberate about the decisions they are making. And I think two things matter the most, which is what is the mission, what is the purpose of a particular organization? And it takes a little bit of prodding and questioning to understand what the founders or what the leadership is focused on. And I urge listeners to spend a lot of time thinking about that. I also urge listeners to chalk to their peers, to talk to their mentors about the mission and the purpose of an organization that you are willing, that you are evaluating to join or to even start. The second and is about the leadership and the people you work with. And I think that some of the signs of culture as well as the trajectory of where the company might go becomes very evident early on. So I urge people to think about both of these things at the macro level. And what you'll see in as you are getting on a journey with a particular organization, the steps and the day to day will be dynamic, will change. You're going to pay worth. All of those types of things are going to happen. But when mission and the team has the right mindset, you're going to even enjoy the process. Even if things don't work out for the company, even if it financially underperforms, even if you don't achieve the dream that you had, or you don't achieve the goals that you had set out as a company, all of those things are possible. But the journey itself is going to be very fascinating and rewarding. So Shantini, you talked a lot about some of your great successes and where the direction of qualified health is going. Part of the journey that we all go through is learning from what could have been done differently or what could have been done better. Haven was obviously a big headline with the excitement around its founding and inception. Didn't quite pan out the mission. But what did you learn from that experience? And how do you think it maybe helped us as an industry? Yeah. As you remember, Haven was created by three large employers and right around the pandemic hit, the number of employees for, especially for Amazon, as we all know, increased tremendously. That put a lot of emphasis on health care benefits and how these things were delivered to the ultimate customer in this case employees. In terms of learning from the Haven set up, as you said, intention matters and team matters, which has been a recurring theme of my podcast here today. And it was a terrific mission and a terrific team all coming together. I also think that in health care, the progress is made in small increments as opposed to huge disruptions that we see on the technology side. One of the learnings from the Haven experience is it is still very challenging for non-healthcare leaders to come in and quote unquote, fix health care. I think that you need the right combination as one of the leaders in health care is that you need the right combination of suits and hoodies to make that happen. If it hills in one direction much more than others, the outcomes are a little bit expected. So if you are much more tech heavy, disrupt, fix it, mindset, you miss some of the nuances of how the health care is set up, how health care, how people in health care make buying decisions, and how they adopt technology and capabilities in that. You do miss a lot of that. On the other hand, if you are too much focus on having a veteran health care team, you are not thinking outside the box as often. And you are often geared to making incremental progress. So that's the space that you have to be mindful about. And I think that health care still today is the right combination of those two types of skill sets coming together for an effective organization. Shantanu, you're an inspiration. Thank you so much for coming today. Thank you. Thank you for having me. [MUSIC PLAYING] I love the conversation with Shantanu. He just wears his heart in the sleeve. And for a tech guy to come out just swinging on topics that were so deeply seated in business models and how value-based care works, how intention matters with what your company is doing and the team that you work with. And then just ending with health care has to be fixed within and his learnings from his career. It was just such a good conversation and good reflection on where he's been. Brilliant guy. And I cannot wait to see what he and the team do with qualified health. It's going to be a wild journey. And I speak for-- I think all of us are excited to watch. Well, listeners, thanks for joining us this afternoon. And please tune in next time. Cheers. [MUSIC PLAYING]