Town Hall Ventures to Focus on Building Companies Driving Higher Quality and More Affordable Care for Most Vulnerable Americans

Today, three health care industry leaders announced the formation of Town Hall Ventures, a venture capital firm that will seek to invest in health care technology and service companies transforming care delivery to America’s most vulnerable populations. The firm is being built on a foundation of broad and deep expertise in building companies to improve care in Medicare, Medicaid, risk-based care, complex conditions and in addressing social determinants of health. These areas of focus touch almost 120 million Americans and approximately $1.2 trillion in annual health care spending.

Giving Back and Gaining Perspective Olivia Akin, Senior Associate, Oxeon Partners and Margaret Rollins, Associate, Oxeon Partners

Spirit of Generosity is an Oxeon core value. At least once a month, team members work with organizations like New York Common Pantry, University Settlement, Friends of the Hudson River Park and other local non-profit human service organizations. But most days, we practice this value by living vicariously through our clients – Health IT and Services organizations committed to improving community and population health. (Really! It’s not just jargon.) Nonetheless, we all crave the opportunity to give back and get involved in a more tangible way. To meet the people we are helping. To hear their stories. To gain perspective.

A Healthy Dose Trevor Price, Founder & CEO, Oxeon Partners

A Healthy Dose I talk to people all day long. Every day. Without exception. By Friday afternoon, I want to withdraw from the world of Oxeon and talk to no one other than my wife and three kids. That withdrawal slowly lifts over the weekend and by Sunday night, I’m ready to start talking to people again.

What is interesting, coming from the guy who turns anti-social all weekend, is that from Monday through Friday, I don’t resent my work at all. I love all the conversations and find the people – and their perspective – beyond fascinating. In many (but not ALL!) of these conversations, I find myself learning, growing and being exposed to things I had never thought about. I truly enjoy hearing people’s stories.

Through these conversations, I've learned that it’s not your average executive who wants to try to tackle healthcare. These people have something special. They bring a unique look on life and a commitment to do something bigger than themselves. Again, not ALL of them. But most of them share something that is very, very different – and worth listening to.

I feel so fortunate to be having these conversations and really just wanted to share what I experience all day. As such, I decided to collaborate to start "A Healthy Dose," the podcast series we have launched with my good friend Steve Kraus, healthcare partner at Bessemer Ventures. A Healthy Dose will share the people, the experiences, and the insights that Steve and I are exposed to on such a regular basis.

And what a segue that proves to be. Why Steve? Well, there are many reasons but the first is that he is just a fundamentally great guy. I remember my son Charlie, who decided after years (he is 12) of being focused on sports, to audition for The Music Man, the middle school musical. Steve, who also has a son named Charlie (I’m 99.99% sure he convinced his wife to select the name in honor of our Charlie) talked to my son about how much he loved playing sports and acting and singing as a kid and that he could do both and do them well. As I was never a great athlete, but by comparison my acting and singing made me look like I was #1 pitcher in the Red Sox rotation, I had little experience to share with my son Charlie. Steve’s support meant a ton to Charlie and I both.

Steve loves his job and the companies that he works with. He also really cares about the companies that he gets to know and doesn’t invest in. I know because he often advocates for them, even from the outside of a deal looking in. Steve and I have worked together on search projects, investments, product work and even creating companies from scratch; we’ve shared many experiences and our areas of interest and strengths complement each other.

We also love to laugh, and even more than that…we love to bust on each other.

So with that, we decided to bring the great stories that we are exposed to into a bi-weekly podcast format and share them with people interested in healthcare transformation, entrepreneurship and investing.

We hope to have a steady stream of guests who will share their stories of how they ended up in healthcare. Both Steve and I are political junkies so I would expect that our conversations will get into healthcare policy and the politics of healthcare. We will definitely get into the stories that led to the creation of the most interesting healthcare companies, and get rare insight from the incredible people who conceive and build them. I hope that we’ll be able to effectively share our learnings about different elements of creating companies, building products or selling into health systems or different types of go to market strategies. I know we are going to try to make the podcasts both interesting and enjoyable.

It goes without saying, Steve and I are eternally grateful for our podcast team (James, Amy and Tiffany at Oxeon and Bessemer) and to Neil Diamond for allowing us to license the classic Forever in Blue Jeans. Clearly, both Steve and I love the tune; suckers for Neil Diamond. But the lyrics speak to us as we both are involved in for-profit efforts in healthcare; driving growth and investment returns for healthcare companies as a service provider, an investor or as the founding entrepreneur. For many of the people who typically focus on these areas, Money Talks. But in healthcare, there is something more important. The people. The mission to make people healthier. The relationships. Doing something bigger than ourselves. So while money may talk, it doesn’t speak to those things.

Money talks But it don't sing and dance And it don't walk And long as I can have you here with me I'd much rather be Forever in blue jeans

Thanks for listening and let us know if you have ideas for podcast topics and/or guests.

To subscribe to the podcast visit:

Trevor, the Founder and CEO of Oxeon Holdings, is committed to helping mission-driven healthcare leaders and executives build successful companies. In his A.D.D-fueled existence as an entrepreneur, Trevor has started or turned-around 10 companies. It was only in this most recent chapter of his career, in starting Oxeon, that he fully discovered and realized the power of a Mission and Values driven organization. It is no coincidence that this chapter is the most enjoyable one to date. Trevor is based in New York, NY.

When the White House Calls (a.k.a., Just Another Tuesday at Oxeon)Alissa Lash, Co-President, Search, Oxeon Partners

The White House Calls Oxeon Partners With every big bet, there comes that moment of truth. Is this going to work? Will it pay off? As Oxeon Partners passed its 4th birthday last November, we prepared to make one of these big bets: hang a shingle in Washington, DC and see if the company could fulfill the elusive promise of scale.

I joined Trevor and the Oxeon team back in February of 2015, hell-bent on assisting in this process of growing the business. In order to do so, we had to tackle several important issues, beyond the brick and mortar challenge of standing up a new office in a new location. Could we successfully transition to a broader leadership team beyond our founder-led history? Could we transplant our unique culture to a new location? Could we prove out the hypothesis that a local presence would give us better access to, and increased credibility in, that new market? And finally, could we document what we learned in the process – using our business as a lab of sorts, to lift insights and experiences that could then be shared with our clients in similar positions?

In addition to the questions we could anticipate, this experience has delivered lots of "firsts". Some important – the first new employee we intentionally hired into an expansion office, and some less so – the first 100K Amtrak rewards points credited to an Oxeonite! Probably the most exciting "first" however, was a curious meeting I had at DC’s most famous address last month.

In the course of our many networking calls for a biotech company COO search we're running, my colleague Annah (the aforementioned DC employee #1) had a conversation with a gentleman called Tom, who happens to be the Deputy Director for Science and Technology in the White House Office of Science and Technology Policy (yes - his title is very consistent with his department's raison d'etre). As my early-tenure and fearless team is inclined to do, she just called him up one day and asked for a chat. Why not?

For those of you not familiar with the culture of DC, it's very much a small town. Everyone knows everyone. There are only two types of people: those who participate in the business of the city (politics, government) and those who observe. The two groups don’t often mix. It's also important to note that in the insider crew, there are certain key people around whom everything orbits. Tom is one of these people. EVERYONE knows him. Or knows someone who knows him. And thanks to Annah, now we know him, too.

In the course of Tom and Annah's initial conversation, Tom became very animated about Oxeon's business model, and asked to speak to me to bounce a few ideas around. One thing led to another, and I found myself with an invitation to the White House. Tom wanted to talk about how the Administration could do a better job attracting talent for shorter-term project work that didn't fall neatly into scope for Appointees or the stability-craving careerists who make up the (stereotyped) group of government bureaucrats. A "third way" as it were, for sourcing government talent.

I arrived at the (heavily secured) entrance to the Old Executive Office Building (OEOB) a few minutes early. I snapped a few selfies, mostly just to try to impress my kids, and then fumbled the entry process spectacularly, needing several attempts to sync my passport and meeting badge. The Secret Service guys could barely contain their laughter. I've never felt more like a tourist in my own city. On that note, during my visit I did learn that we bought Alaska for $7M – $3M less than the budget for the OEOB renovation. Another story for another time.

Tom and I sat down for an hour-long discussion in his cozy, cluttered office. In an attempt not to look amateurish, I tried to keep my eyes from wandering, but I couldn't help but note the dozens of pictures of Tom with Presidents—both sitting and former—as well as many other famous government officials, only some of whom I recognized. This is the way it goes in DC. This is our version of star sightings. Who you know is the currency of power.

We proceeded to discuss many things. He asked me to explain Oxeon's search process, and our means of sourcing talent. He asked if we’d be open to "tours of duty" within the White House, to help train his team to be more proactive in recruiting talent. He also asked how they could create those same tours of duty opportunities for outside hires – quick turn, deep impact projects that were not born out of crisis. Yes!

He asked my take on industry-specific hiring, and how to be more focused in acquiring specific skills. And he asked what I thought about the value proposition of working in the White House—or in DC more broadly—for recent graduates, mid-career and longer tenured individuals. We talked a bit about other firms like ours (those who serve specific industries) and how Oxeon and the White House recruiting team might potentially work together in the coming year.

My takeaway: for all of my wide-eyed wonder at being invited to the White House, I was actually the one sharing best practices and imparting knowledge. I was the expert, and our firm was being held up as a shining example of success in attracting and hiring talent. The Administration was asking us how do we do this better? How do we operate more like you – building strong partnerships in the private sector and successfully attracting stars to our team?

Needless to say, I thoroughly enjoyed my day. I felt really proud that our new team was making in-roads in our new city. And I felt pretty sure I couldn't have asked for a better brand-building experience in the local market. There's still a ton of work to be done for sure. But I'm buoyed by our progress thus far.

PS. If you're wondering about your invitation to our DC office launch party, it's in the mail, as they say. We'll throw something together after the (slightly more important) "party" is decided on in November. Stay tuned.

Alissa is Co-President of Oxeon's executive search business. She joined the team after spending the last 20 years in the health care services business, working as a consultant and sales/marketing lead in firms such as McKinsey, the Advisory Board Company and Evolent Health. Alissa has completed CEO, CFO and COO searches, and is focused on leading the search team, building an office in DC, and expanding Oxeon's network into innovative and integrated provider systems across the country. Alissa is based in Washington, DC.

Mission WorksTrevor Price, Founder & CEO, Oxeon Holdings and Jacob Sack, Director, Oxeon Partners

Mission Works If we're not careful, our "recruiting shtick" for Landmark Health can roll off the tongue too easily. Too mindlessly. Too nonchalantly. A conversation with executives in the market usually goes something like this: "Yes...Landmark provides care for incredibly vulnerable patients, those with 6 or more co-morbidities...the frailest and most sick...compassion is most important..." And inevitably, later the conversation turns to "yes...they're backed by a leading private equity firm... typically executive compensation is base, bonus, and equity... they have one of the best CEOs we know in the industry." Then, there is an extended, pregnant pause as executives on the other end of the line process what they have just heard. This "double-bottom line" realization is a big deal.

Mission-driven health care companies are a big deal.

Landmark Health is driven by a clearly articulated company mission statement. In discussing their mission, Adam Boehler, CEO, shared "we are resolute in our delivery of high quality, comprehensive and compassionate care to individuals, wherever they reside and whenever they need it." At Grand Rounds, there is a very palpable mission, but it's more broad. Owen Tripp, CEO and Co-Founder of Grand Rounds, expressed a desire to "create a world where all patients can access expert medical advice to improve their lives." Oxeon's mission is to Make People Healthier, and everyone here embodies it on a daily basis.

While Grand Rounds is less explicit in its mission statement, don't confuse a lack of packaging for lack of rigor. Before every meeting, the company shares a story about a patient, reinforcing why Grand Rounds exists. Sometimes it is an employee who conveys the experience. Sometimes an executive. Sometimes the company brings one of its patients to the meeting to explain how Grand Rounds helped them. In every meeting, the company mission is powerfully reaffirmed.

In a recent conversation, Owen shared:

"You have to ruthlessly uphold the mission, especially when the dollars get bigger, and you start enjoying more commercial success. When certain executives make decisions that may be viewed as practical and expedient in other companies, those same decisions may compromise mission at ours. Employees are watching. They watch to see if your personnel actions back up your words; if your sales decisions back up your words. It's not enough to just launch with a great mission – you have to actively live and abide by it in all facets of the organization, every day and in every decision."

By all indications, from the way the company conducts its business and to the demonstrable success they've enjoyed, the mission at Grand Rounds is fundamentally understood by every single person who goes to work there. An employee once hung up on Owen to answer a patient call. Now it's common practice to cut internal meetings or conversations short to prioritize patients.

We asked Owen how the mission at Grand Rounds is embraced by the venture and private equity investors who sit on his Board of Directors. Our assumption was that most likely the mission at their institutional investment firms are divergent from the one present at Grand Rounds. Owen replied that "they are incredibly supportive of our Mission and the decisions we make... but I wonder whether that is because we have experienced great results from those decisions. I sometimes think whether it would be different if our results were different... less patience for mission-driven decision making. I find myself knowing that our results are BECAUSE of these decisions – they are inextricably linked and so I believe our investors will continue to be fully aligned with our mission and still fulfill their investment objectives."

Mission Works. Why? Mission helps attract great people to your company and gives them a reason to care beyond the company's financial performance. While mission attracts great people, it also gives them a decision-making framework that inspires them. It gives them something to go home feeling great about each night. (Side note: When Trevor's kids were younger, they thought he was a doctor. He would go home, and they would ask – as little kids do – what Dad did that day. He would say "We made people healthier." Ahhhhh, Dad's a doctor! If you know Trevor, thank goodness that's not the case...) Mission brings an entire organization together towards a common goal that is greater than any one individual, leading to an "engaged" workforce. This has been proven to lead to great companies that perform exceptionally well.

But a Mission has to be authentic. It can't be mandated from the top, and it can't exist to sell business. A well-conceived mission resonates because it works. And too often "bottom line" conversations are binary, leading to a distinction of whether the company is for-profit or non-profit. It's the wrong question and a meaningless distinction. A company's tax status doesn't drive its potential impact. Rather, it is the mission, leaders, business plan, creativity, and culture that matter. In fact, not only does Mission matter, but a mission-orientation gives a company an opportunity to be truly disruptive – a chance to achieve that "double bottom line," or in more relevant healthcare jargon, the "triple aim."

As you saw (if not, watch this!), purpose and meaning are clear drivers for Adam at Landmark Health and are motivating factors for the entirety of their team. Landmark Health exists to provide better, in-home care to the most vulnerable of patients. It's the reason a Nurse Practitioner responds to a 3 am house call; it's the reason the technology and innovation teams travel to remote areas to test new telehealth products. It's why client satisfaction and clinical outcomes are the most important criteria by which the executive team measures success. Net savings is a positive byproduct of this work, but more compelling is that Landmark is providing a fundamentally different—and more effective—clinical experience for patients.

At Oxeon, our mission to Make People Healthier was consciously conceived to be all-encompassing. That starts with us as individuals and as team members. This consciousness helps us identify, align and be part of our clients' end goals rather than just fulfilling a discrete part of their needs. On Day One of our new employee training, as we orient our people around how to think beyond being a service provider, investor or entrepreneur, we examine our mission statement and how it serves to align the work we do. In a recent employee engagement survey, 100% of Oxeon employees indicated that they completely understood our mission and values, and strongly agreed that our company lives by them in all of our decision-making.

As we expand and incorporate new business lines and add new senior leadership, we're working as hard as ever to keep our mission, our values, and our people at the center of what we do. We were recently given an opportunity to be deeply involved in a project that could have a substantial impact on patients who are newly diagnosed with breast cancer. The opportunity may negatively impact our operating income but profits did not factor into our decision to get involved. In fact, we consciously acknowledged the potential for loss and eagerly signed up to go forward in the name of our mission. While you are reading this article, 25% of our company is in a village in Guatemala delivering healthcare and building a clinic, all to Make People Healthier.

Mission enables us to do the "right thing," even when it does not appear to be the "profitable thing." These decisions empower us. Our employee engagement continues to grow, as we see in every quarterly culture survey. Applying our mission to every single person inside the company, to our clients and services, and to our investments and their objectives, is consistently aligning and empowering.

We call lots of health care leaders every year, and even if they're not interested in the role or the idea we're discussing, Oxeon's mission resonates. Landmark Health's mission resonates. Grand Rounds' mission resonates. And it's not just a catchy message up on the office wall. As companies like Landmark Health and Grand Rounds continue providing better care more cost-effectively, we all will continue to realize the power of Mission-driven companies, and most importantly patients will benefit from their care.

Trevor, the Founder and CEO of Oxeon Holdings, and Jacob, Director at Oxeon Partners, are committed to helping mission-driven healthcare leaders and executives build successful companies. Trevor, in his A.D.D-fueled existence as an entrepreneur, has started or turned-around 10 companies. It was only in this most recent chapter of his career, in starting Oxeon, that he fully discovered and realized the power of a Mission and Values driven organization. It is no coincidence that this chapter is the most enjoyable one to date. Jacob comes to Oxeon after working on the portfolio team at a national social venture philanthropy, and prior at a policy and research organization, committed to understanding what works to improve the lives of the most vulnerable kids and families. Trevor and Jacob are based in New York, NY.

Paul Roscoe, CEO of Docent Health weighs in on Healthcare's shift from transactions to interactions

"I think health systems are starting to transform the way they think about patients, to think about them more as consumers and start providing services to them as they might experience in other industries. These services could include online access and making easier appointments or referrals. Healthcare systems need more real-time feedback on whether they are doing a great job with the patient and the patient experience. Part of the technology we’re building helps them focus on that and helps understand the patient sentiment throughout the journey." - Paul Roscoe, CEO, Docent Health Read the article here >>>

Quartet Health, Omada Health, Bright Health Plan, VillageMD, and Aspire Health figure prominently in article on "How Obamacare is Changing the Startup World"

Oxeon clients Omada Health, Bright Health Plan, VillageMD, Quartet Health, and Aspire Health figure prominently in Ezekiel Emanuel's Fortune article on "How Obamacare is Changing the Startup World". Read the article here >>>

What Counts as Healthcare?

Sarah serves as a Senior Associate and has been largely focused on building leadership teams for high-growth Healthcare IT and Services clients including Health Leads, Accolade, Health Catalyst, Grand Rounds, The Chartis Group and Kit Check. She is currently on a tour of duty within Docent Health, the healthcare technology and services company that was built within Oxeon’s Venture Studio, backed by Bessemer, NEA and Maverick, where she serves as the Head of People & Talent. Sarah is deeply passionate about healthcare innovations focused on health equity and increasing access to value-based care. As I thought about how I would craft this quarter’s FWIW article on social determinants of health, CMS totally derailed my plan. I was going to start by hooking you with a lofty paragraph about my personal experience working as a clinical social worker in an under-resourced hospital in the Bronx. But then, CMS had to outshine me by announcing their $157 million innovation model focused on social determinants of health.

If you don’t mind, I’m going to tell you my lofty story anyway.

In 2011, I opened a yellow envelope that held my destiny - my internship destiny, that is. I soon found out that I would spend the next year of my clinical social work program at a hospital in the Bronx, rotating through nearly every unit in the hospital that spanned the lifecycle, from the neo-intensive care unit to hospice. During my year at this internship I learned two important things: 1) despite my expansive student loan debt, I had chosen one of the least lucrative fields imaginable, 2) (most importantly), there is a strong correlation - so striking, that it is visible to the untrained eye - between socio-economic status and quality of healthcare. Through my personal experience as an intern, as well as the research I soon dove into during grad school, I discovered that this under-resourced, inefficient, and uncoordinated hospital in the Bronx was the exact system positioned to serve the patients that needed resources, efficiency and coordination the most. For the first time, I caught a glimpse of the strong relationship between quality of healthcare and social standing.

You can only imagine my excitement when Oxeon began working with Health Leads – the leading organization moving to bring social determinants of health to the forefront. To put it mildly, I was giddy. Over the past year, we have partnered with Health Leads on their President, Chief Clinical Officer and Managing Principal, Strategic Partnerships & Innovation roles, and have been honored (to say the least) to support their innovative and relentless mission.

Research on social determinants of health (the conditions in which people are born, grow, live, work and age; shaped by the distribution of money, power and resources) is growing, and given its alignment with the incentives of value-based care, we are seeing health systems and healthcare leaders across the country begin to prioritize the integration of social and basic needs into their care settings. Scratch that – we are actually seeing health systems and healthcare leaders struggle as they try to figure out how to integrate social and basic needs into their care settings.

We’ve all known that social determinants are important in the context of healthcare, but for the first time ever, they are taking the main stage in the dialogue around the quality and cost conundrum. CMS’s $157 million, five-year investment in the first-ever innovation model focused on social determinants will focus on “building alignment between clinical and community-based services at the local level” and reducing healthcare costs by “providing intensive community service navigation” to meet patient needs. The connection between social needs and clinical outcomes has never been so clear.

In the healthcare IT and services space, we spend a lot of time thinking about how to solve the problems of a patient once they get into the healthcare system. There is a growing emphasis on starting this problem-solving process one-step earlier; before they enter the healthcare system. This begs the questions – where does healthcare start? And, what is the healthcare system responsible for solving?

Rebecca Onie, CEO of Health Leads, an organization that equips healthcare institutions with the knowledge, insights, and tools – screenings, workflows, training, analytics, customizable technology – to mobilize healthcare staff to work side-by-side with patients to access existing community resources, has spent her career thinking about these questions. As a leader in the social determinants of health movement, I sat down with Rebecca to get her insights into the social influences within healthcare, and how she and her team have thought through the process of minimizing inequalities and leveling the playing field for all patients. Rebecca commented,

The question around ‘what counts as healthcare’ is a big one. But the bigger question is, why have we chosen to draw the boundaries of healthcare where we have?, and how do we redefine those boundaries to make patients truly healthy? How do we redefine them to become boundaries that stand the test of time? People get overwhelmed by the idea of broadening our current construct of healthcare because it seems too overwhelming – we simply can’t carry the burden of being responsible for everything. But, the choice isn’t between our narrow definition of healthcare today and solving the war on poverty, it’s about finding the right sweet spot for the role healthcare institutions can play. The boundaries are simply too tight right now – why do we count diabetes and obesity under the healthcare umbrella, but not the challenge of having a refrigerator to store your insulin? Why do we know everything about our patients’ clinical comorbidities, but very little about their social comorbidities? We need to collectively find reasonable ways to assume more responsibility for these critical drivers of health.

So”, I asked Rebecca – “what does this CMS announcement actually mean for the market?” She responded,

Being concerned about social and basic needs is no longer optional. It’s now widely recognized that just 10% of health outcomes are attributed to medical care, while 70% are tied to social and environmental factors and the behaviors influenced by them. The announcement from CMS is a huge market signal – they are acknowledging the connection between social needs and care delivery in a real way. Social needs are a key driver of quality and costs. The healthcare sector needs to be thinking about how we bring expertise around this to our teams. This is not about expertise in poor people – let’s be clear - this is about expertise in data, in quality improvement measures, in bringing real rigor and thoughtfulness around how we integrate addressing social needs into our workflows to drive impact on outcomes and cost.

As we redefine Oxeon as a healthcare growth services firm, our job is to not just track where healthcare is right now, but truly track where healthcare is going. Unfortunately, social determinants of health isn’t going anywhere, folks. It’s here to stay, and it’s here for us to solve.

As I think back on my wild and crazy year at that hospital in the Bronx, I imagine what would have been different if each of those patients I worked with were supported with basic and social needs – what if the elderly man that was deemed “non-adherent” to his medication because he couldn’t get a ride to a pharmacy, was connected to a transportation service? What if the twelve-year-old boy with chronic and severe asthma who lived in an area referred to as “Asthma Alley” instead lived in an environment with clean air? What if the woman who came to the outpatient AIDS clinic didn’t have to choose between paying her rent and paying for her HIV medication?

I can only imagine that it would have been really, really different.

The Provider Innovation Trend

Lauren is a Principal at Oxeon Partners, working across the holding company and increasingly in the health system and provider technology space. This focus area has been honed over a variety of management, strategy, and operational leadership roles - starting at the Advisory Board Company and most recently from five years at the McKesson Corporation, where she worked in the Corporate Strategy and Business Development group before launching a new business line focused on clinical data interoperability, as well as the supporting industry nonprofit, the CommonWell Health Alliance. The night before the JP Morgan Healthcare Conference started in San Francisco, I had a dinner conversation about likely industry buzzwords at the event and for 2016. While some derivation of consumerism received the most votes, my suggestion of “provider innovation” got a lot of head nods once people thought about it. And I don’t think it was just because five minutes prior I had offered to angel invest in their future companies if I won that week’s $1.5B Powerball lottery.

Within the provider world, innovation has traditionally focused on tech transfer and commercialization - supporting and developing internally sourced inventions into intellectual property that can be licensed or sold to external parties.

While a handful of hospitals and health systems have more broadly defined innovation for more than 10 years, an increasing number of health systems have started dabbling in three other areas of early stage innovation as well:

  • Internal company development: Incubating internally generated ideas into externally viable products or services.
  • External partnering and anchor relationships: Establishing relationships with early stage externally developed companies, either as an initial anchor customer or marketing partner, in exchange for equity or a reduced customer fee.
  • Investing: Deploying health system capital into externally developed companies in exchange for equity.

In a sector that is stereotypically risk-averse, what’s changed?

My Oxeon colleagues and I talked with 20+ health system and corporate ventures groups inside and outside of health care to understand this trend better. We found four main reasons for the increased interest in innovation and growth: a previously lost revenue opportunity (e.g., absent a forum to support and develop a staff idea, the system had lost out on the upside of a new venture); a desire to diversify beyond the clinical core; an opportunity to drive brand value; or my personal favorite, good old FOMO – seeing their peers doing it and fearing they are missing out.

While the rationale for starting provider innovation groups were quite consistent, the ways that health systems have executed on them vary widely. Most innovation groups operate & organize to align with health systems’ strategic priorities – in fact, many groups prioritize clinical or mission value vs. financial returns. There are thus only a handful of leading health systems that are solely or primarily focused on venture investing. In these cases, they are typically deploying sizeable chunks of capital from their own health system balance sheet and/or on behalf of other limited partners into externally created early stage ventures across the health care space.

The vast majority of health system innovation groups though are trying to do a little bit of everything across the four areas of innovation noted above. And while trying to accomplish multiple types of innovation on one team is possible, the reality is that most of these groups are small and often struggle to execute myriad objectives. After all, wanting to be innovative does not automatically generate results. Ultimately the right ideas, people, and capital deployment are necessary to create outsized impact.

We thus saw several best practices that in combination can set up health systems for a higher likelihood of innovation success:

  • Clear mandate, strategy, and understanding of core competencies: Like any business, you need clear expectations, focus, and milestones to manage and track towards. Not every health system should be dabbling in every area of innovation or subsector of health care. Identifying and playing to your strengths is also more likely to attract the right types of investment or partnership opportunities.
  • Balance of C-suite/board support with autonomy to execute: C-suite champions help innovation groups maintain funding that requires a different lifecycle than a traditional hospital service line. However, innovation groups also need latitude to make decisions and move quickly in the non-clinical, early stage space – so a separate legal and compensation structure is structurally ideal.
  • Independent compensation structure: Incentive systems are ideally structured to build and support a culture of innovation across the health system. For example, health system employees that support the development or assessment of a new technology could receive equity or upside bonuses, without subjecting them to the traditional early stage venture risk. Employees that are dedicated to investing or early stage ventures though should be able to more directly experience the risk/reward upside, which is often challenging if entities are held to the same compensation structure as other health system employees.
  • Ability to run like a venture portfolio: Regardless of where a health system focuses in innovation, they need to approach it like an early stage portfolio manager and realize that not every investment or incubated company will succeed. Innovation and growth requires the discipline to manage a pipeline of ideas, converting them into a series of bets, and manage expectations that success is a mix of risk and returns, not a home run every time.

Speaking of investment home runs, I won $8 in that Powerball drawing. So until the next $1B+ drawing, I look forward to working with many of you and our other clients on making provider innovation not just a buzzword, but a sustainable trend in 2016 and beyond.

Emerging Applications for Telemedicine: Q&A with Clay Whitehead, CO-CEO and Founder, PresenceLearning

Recent Joint Commission requirement changes and tighter standards for stroke centers are creating partnership opportunities for telemedicine companies.  Alix Oliver, Director at Oxeon, had a chance to catch-up with Clay Whitehead, Co-CEO & Co-Founder of PresenceLearning, an Oxeon client and investment, a technology company that connects speech, behavioral and occupational therapists with patients in need. Telemedicine isn't new. In fact, physicians started experimenting with telephonic dissemination of diagnoses and treatment in the late 19th century. Nonetheless, the topic finds its way into the popular press regularly, as government and private payers expand coverage and providers find new and innovative ways to leverage telemedicine technologies in attempts to reduce costs, increase patient access, and improve outcomes.

Earlier this year, UnitedHealth announced plans to cover telemedicine services for 20 million members by January 2016 (Aetna and Cigna have offered some telemedicine coverage since 2011 and 2013, respectively). Just this month, Mercy Health in Saint Louis unveiled the nation's first-ever virtual care center to house over 75 telemedicine programs and 300 clinicians and support staff. The $54m facility will enable Mercy to monitor nearly 4,000 chronically ill patients across five states, in addition to other services.

Medicare Part B, which covers diagnostic and preventative services and supplies, currently includes coverage for "certain" videoconferencing services for beneficiaries in "some rural areas." Yet as the aging baby-boomer population's need for home-based care and monitoring increases, many predict/speculate that the federal behemoth will expand coverage for videoconferencing [coverage. Medicaid reimbursement for telehealth is broadly determined at the state level, but in September of this year Washington joined 10 other states in recognizing telemedicine as an "allowable mode" for delivering speech-language, occupational, and other therapies from qualified practitioners in school settings.

One of Oxeon's newest (and most awesome, in my opinion) clients, PresenceLearning is a San Francisco-based technology company that specializes in linking speech therapists with patients in need. With plans to add services in behavioral and occupational therapies, Presence is uniquely positioned to partner with schools, school districts, and now health systems, as Medicaid expands reimbursement policies.

I had the chance to catch-up with PresenceLearning Co-CEO and Co-Founder Clay Whitehead on the changing telemedicine landscape and the amazing work they're doing to enable students across the country to broaden their impact and push virtual care to its fullest potential.

Why did you and Jack decide to build PresenceLearning and the platform?

When I was in first grade, I was diagnosed with learning disabilities, ADHD, and dyslexia. Overcoming those challenges and turning it around was a huge part of my childhood, but I was lucky. I was gifted and had great family support. My co-founder Jack grew up with a cousin on the autism spectrum who is non-verbal.  We both knew the huge impact that complex mental, behavioral, and physical conditions can have on children throughout their lives, and wanted to leverage both our own experiences and our passion for technology to help others at a massive scale.

So, we developed a telemedicine marketplace for mental and behavioral health professionals,speech therapists, occupational therapists and other professionals to connect with patients from our enterprise customers, and a platform that allows them to deliver high quality services remotely. We have a full telemedicine solution that encompasses everything from the softer aspects of service to all the things that technology is great at, like workflow automation, billing, scheduling, and progress tracking.

We started PresenceLearning to give all kids a chance, and we're well on our way to doing that, having seen some fantastic growth. Now that we have five years of experience in providing high quality services at scale -- we're currently delivering over 3,000 sessions per day -- we are excited to expand our mission to helping everyone, and not just children, unlock their potential through telemedicine.

How have you been so successful in selling in the education market?

The number one reason we've been successful is the positive impact that we have on the lives of the children we serve. Every year, there are kids who abandon plans to commit suicide, say their first words ever to their parents, or leave their own house for the first time in years because of the care our clinicians deliver. It's things big and small, from the way that our patients are beating the national outcome averages to the way that many of them are now happy and excited about attending therapy for the first time. So, as families and institutions struggle with a massive national shortage of care professionals, we are increasingly being seen as a new, key part of our enterprise client's continuum of care.

But, obviously, a lot goes into creating that impact and getting those results at scale. We are maniacally focused on attracting and retaining only the best clinicians. In fact, we only have a 5% acceptance rate for clinicians. Beyond that, we think deeply about how we recruit, how we help foster professional development, and how we use data to continually improve.

From a technology standpoint, we break down each part of the experience of every one of our stakeholders -- patients and their caregivers, payers, and any supporting professionals -- and take a design-centered approach to developing elegant patient- and clinician-centric solutions. That approach shows up in our games, therapy tools, progress tracking, and other platform components, and it reflects our passion in bringing the best of Silicon Valley -- our home -- to the world of health care.

What are the most notable trends you’ve observed in telehealth since launching the company?

Attitudes have changed dramatically. As recently as 2013, when we brought up telemedicine with potential partners, they asked us what it was and openly wondered why their peers might use it. Now, not only is there an awareness of telemedicine as a category, but people generally understand the benefits. I think that this increased acceptance is a part of a cultural shift. We have all come to expect high-quality, high-convenience services with almost instant access in so many parts of our lives thanks to Uber, Instacart, and other services. In addition, video has truly become ubiquitous now that everyone has a smart phone in their pocket. Patients and decision makers feel comfortable with telemedicine now, and they both want and need it. It's easy to forget that this wasn't the case just a few short years ago.

Can you talk about your work with hospitals and stroke centers?

We have developed an incredible expertise in delivering online care, conducting over 3,000 sessions per day. That experience allows us to see a lot of new opportunities and to ensure that we have high-quality implementations with partners.

As a result of this track-record, we are increasingly being invited into stroke centers to perform speech therapy evaluations, among other services. Timely speech therapy evaluations are a critical, evidence-based part of treating every stroke patient, as swallowing issues can cause serious complications and even death. In addition, tightening Joint Commission requirements and stroke centers raising their own standards are increasingly driving adoption of telemedicine in this area.

We've seen a great deal of excitement from our partners, once they realize our scale and capabilities, to expand into other services and other settings, including outpatient.

Can you tell me about the new platform and the features and functionality you’ll be introducing?

Since our mission is to help everyone unlock their full potential through telemedicine, we focus our development efforts on three things. First, we focus on increasing access, and so, in our latest release, we halved our bandwidth and CPU requirements and redesigned our whole experience to be native on tablets. This means that the cost and infrastructure barriers to using our services are now next to negligible. Second, we focus on greater patient and clinician engagement. We now have a much more streamlined interface, better tools, and more engaging therapy content. Last, we focus on efficiency, so we also revamped our whole backend infrastructure, including scheduling, clinician matching and more, to equip us to provide ever larger numbers of patients at the the high standard of care demanded of us every day.

Can you talk a bit about your and Jack’s vision for PresenceLearning?

Our vision has always been the same: a global marketplace, paired with a best-in-class platform for the delivery of services, that ensures that everyone has access to the care they need when they need it. For us, that vision means that we will continually be entering new clinical areas and working with new populations. We've proven this model, starting out by providing just one service to schools, expanding to five, and now working with hospitals and stroke centers. We're excited to see this vision coming to life. We know that there is no shortage of hard work ahead, but wake up every day excited to make even more progress towards this vision.


What We’re Reading: Industry Leaders Talk Communication

APCO recently released a whitepaper with panel commentary on “Digital Health: Value Recognition” featuring Oxeon’s very own Managing Partner Trevor Price along with a suite of other industry leaders.  Among the topics of conversation were telehealth, consumer engagement, and wearables.  The panel unanimously affirmed the importance of better communication in healthcare.

One of the major themes of the discussion centered around the alleged tendency of providers to not consider their patients as consumers with the idea being that health systems are missing opportunities to better connect with their target population and make the care coordination process more inclusive.   Further, consumer engagement is critical to the profitability of any business.  Behavioral health companies are slowly giving people the tools to take charge of their health.  Gamification makes exercising and setting personal goals more fun.  Meal tracking apps help visualize consumer’s behavior.  Fitness wearables can aide in clear goal creation.  Similarly, consumers are starting to demand ownership of, and access to, their health information and history. The average person is seeking greater autonomy with regard to their health, and can have their decisions better informed by the wealth of information providers and physicians can share.  As Trevor puts it, “PR will serve its greatest purpose by getting the average consumers to understand how to engage in healthcare.”

Click here to read the white paper >>>

Mental Math: Adding Quality and Subtracting Cost through Behavioral Health Integration

A Look at Quartet Health and Landmark Health

Schuyler co-founded Oxeon Partners and currently serves as a Senior Associate. He has largely been focused on building leadership teams for high-growth Healthcare IT and Services clients like Evolent Health and Landmark Health. He is currently embedded within Oxeon client Quartet Health, a behavioral health technology company backed by Oak HC/FT, Polaris Partners, and Fidelity Biosciences, where he leads Marketing and Talent. Schuyler is deeply interested in businesses that create alignment between multiple stakeholders as well as those that accelerate the shift toward value-based care.

I grew up in a suburb of Denver, Colorado, roughly 50 miles from the Rockies. My town is known for many things: John Kerry was born here, we’re home to the brewery that took Gold at the 2006 World Beer Cup, and the Pope even visited once.

In 2012, we became known for something entirely different. Start to type “Aurora, Colorado” into Google today, and the search engine will suggest that you add “shooting” as a suffix. James Holmes forever put my town on the map in 2012 when he committed one of the worst shootings in state history, second only to the Columbine massacre.

Much of the coverage of the shooting focused on the gunman’s mental state—the psychiatrist privy to his homicidal thoughts, the clear signs of Schizophrenia exhibited in the months leading up to the shooting, the plea of not guilty by reason of insanity. Countless other news stories have focused on the same: Virginia Tech, Newtown, CT, Robin Williams’s suicide, the Lufthansa crash orchestrated by a severely depressed pilot earlier this year—the list, unfortunately, goes on. The idea here isn’t to be macabre, but rather, to point out the media’s increased focus on mental health. Many feel that the reduction of the stigma associated with mental health coupled with better access and availability of mental health resources could curtail future tragedies.

These stories I mention are easy to focus on. The impact is massive, and the cause, seemingly obvious. Often overlooked, however, are the countless instances of mental illness that impact the livelihood of millions across the U.S. In recent years, a great deal of evidence has emerged to indicate a very strong, bidirectional relationship exists between behavioral health (includes mental health and substance abuse) and chronic physical conditions. For instance, many of the health risk behaviors and psychobiological changes associated with behavioral health conditions such as depression increase the risk for chronic physical conditions, while biological changes associated with chronic physical conditions often precipitate depression as well.[1] In fact, 29% of those with a physical disorder have a comorbid mental health condition and more than 68% of adults with a mental disorder have at least one physical condition.

In the 1990s and early 2000s, the notion of a more integrated care model—where behavioral health and physical conditions are treated in concert—emerged and received a great deal of attention from the healthcare industry. One such model developed by the University of Washington called IMPACT is characterized by collaboration between a primary care physician and a depression care manager (often a nurse, social worker, or psychologist). As published in the Journal of the American Medical Association (JAMA), about half of the patients treated through IMPACT experienced a 50% reduction in depressive symptoms, compared with only 19% of those in normal care. Perhaps more impressive is the cost savings: over a four-year period, IMPACT patients had lower average costs for all medical care (which includes treatment for both behavioral and physical health conditions) by $3,300 than patients receiving care as they normally would.[2]

Health insurers and providers have started to take notice, and there has been a shift in the way the healthcare community is tackling behavioral health in recent years. Previously, the predominant method for addressing behavioral health needs was to “carve out” care to contracted organizations that specialized in treating mental illness. However it is often argued that this fails to treat the whole person. Treating behavioral health as separate from physical health, some say, is akin to having one physician treat the right side of your body and another the left.

Today, government as well as the healthcare community acknowledges the need to disrupt the traditional approach to behavioral health care delivery and many health plans have increasingly begun to “carve in” behavioral health (meaning behavioral health benefits are provided by the same organization or network of providers that addresses all other health benefits). One of the biggest drivers behind this shift is the recognition of the staggering prevalence of comorbidity between mental health and physical conditions. Studies suggest that 30-40% of the total healthcare spend is driven by members with comorbid behavioral health (mental health and/or substance use) and physical disorders.[3] Health plans have realized that the cohort of patients possessing some sort of comorbidity is a huge determinant of cost and quality and, they’re increasingly trying to figure out how to best care for this population.

Accompanying this paradigm shift has been the emergence of a number of companies that are enabling health plans to more effectively manage these comorbid populations at the delivery system level. Oxeon Partners works with, and has made investments in, two companies taking novel approaches to treating the whole patient.

One such company is Quartet Health, which allows better collaboration between behavioral health providers, primary care providers, and patients. The company has built a cloud-based platform that connects PCPs to the right behavioral health providers in a closed loop collaborative care model focused on specific comorbid sub-cohorts (i.e., diabetics with depression) as well as a comprehensive data engine that leverages healthcare claims and EMR data to generate advanced insights on utilization patterns driven by behavioral and physical health conditions, provider network quality, and at-risk members in the population. The company partners with payers and provider organizations seeking to improve quality and reduce the costs through a more connected approach to treating behavioral health conditions. “We’re using technology to scale proven models for at-risk populations,” says Dr. Juliana Ekong, Quartet’s Chief Medical Officer who is a psychiatrist. “Our goal is to optimize the existing network to help folks with behavioral health risk and comorbid physical health illness get evidence-based, quality and easily accessible behavioral interventions that achieve the triple aim.” Dr. Ekong previously led behavioral health for Anthem’s Medicare and Medicaid lines of business nationally and also held leadership roles in community psychiatry clinics. Quartet, backed by Oak HC/FT and other high-profile investors, has grown quickly over the past year and assembled a team of top clinicians and technologists committed to bridging the divide between behavioral and physical health.

Another such company is Landmark Health, a multispecialty provider group exclusively focused on delivering high quality in-home care to high-acuity, multiple-comorbid populations. One of the company’s earliest hires was a Chief Psychiatric Officer, Dr. Christopher Dennis, to develop, implement and execute a collaborative-care strategy to support the broader interdisciplinary in-home care model. “The Landmark ComplexivistTM model relies on technology and an internally developed EMR to connect the various caregivers, nurses, medical and behavioral health providers as well as other members of the interdisciplinary team who are actively managing patients wherever they reside, and whenever they need it,” says Dr. Dennis. “Because our patients have multiple co-occurring conditions, it’s important that we employ a model that can address both mental and physical health simultaneously.” The company currently partners with varied health plans and providers across the country.

Admittedly, there is still much work to be done to achieve true integration of behavioral and physical care. However, evidence-based care models and the companies like Landmark and Quartet that help them flourish are gaining significant traction. Health plans are grasping the incentives to adopt these models in order to improve quality and reduce cost, which is certainly a step in the right direction. My hope is that, as these integrated behavioral health models become more common, data will demonstrate a clear impact at a population level, and adoption will accelerate. This shift will benefit payers, providers, and most importantly patients dealing with comorbid behavioral health and physical health conditions.

[1] J. Katon W. Epidemiology and treatment of depression in patients with chronic medical illness. Dialogues in Clinical Neuroscience. 2011;13(1):7-23.

[2] Unützer J, Katon WJ, Fan M-Y, et al. Long-term Cost Effects of Collaborative Care for Late-life Depression. The American journal of managed care. 2008;14(2):95-100.

[3] Source: Quartet Health


What We’re Reading: Despite Gains In Advance Directives, Study Finds More Intensive End-Of-Life Cancer Care

Kaiser Health News recently published an article Despite Gains In Advance Directives, Study Finds More Intensive End-Of-Life Cancer Care, which discusses a study that found that, over the last several years, the number of patients receiving “all care possible” increased while the number of patients employing living wills or having end-of-life planning discussions changed in non-statistically significant ways. Shifting reimbursement models alter the care a physician can and will give to their patients. There is now talk about paying for end-of-life planning conversations with doctors, which could drastically increase the power a patient has to take control of, and make informed decisions about, their medical future. Which raises the question of: is providing all care possible ethical or desired on a contextual basis. The debate about a conflict between the Hippocratic oath and patients’ preferences, especially with regards to euthanasia, has long raged without a clear answer. Given the size and complexity of the palliative care industry, any tweaks to end-of-life care process will impact millions of lives for generations to come. Kaiser’s article serves as a jumping off point for discussion about the direction of such care. The reimbursement options will undoubtedly anchor these conversations in the immediate future and Oxeon is interested to watch the changing landscape. Regardless of the logistics, effective patient-doctor communication is essential and must be a focus of the industry moving forward.

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The XX Factor: Building Exxecutive Leadership Teams to Drive Multiple XX Returns in Healthcare IT

Lacking size, strength and the on-paper qualifications of his larger peers, 6 feet 3 inches and 185 lb high school senior Stephen Curry was passed over by Duke, UNC, NC State and all other big basketball programs recruiting their incoming class of 2006 prospects. Stephen’s dreams of playing in the ACC were crushed. Just as a basketball coach would be hard pressed to build his or her starting line up with five point guards, business leaders who are at any stage of growth look to diversify their teams with a range of functional skillsets to fill every position.

I asked Mary Tolan who, while serving as Chief Executive Officer, took Accretive Health public in 2010, what made for a successful team. She told me that, “the most successful teams with the right talent focus on winning and they are diverse and operate irrespective of gender, religion or race. They bring complementary skills and strengths to offset any potential imperfections of their teammates.”  In essence, truly differentiated teams in sports, business, or elsewhere, think bigger picture and are intentional about the qualitative pieces needed to mold a group that functions as a team, and not a smattering of individuals.

Although passed over by the Blue Devils, Steph led the Davidson Wildcats further than their North Carolina neighbors in the 2008 NCAA tournament, leading the team to the Elite Eight by leveraging his internal arsenal of hard skills (a wicked three point shot and speed) and soft skills (determination, innate intelligence, unflinching drive) and the assets and strengths of a team of lesser known athletes around him. Where he lacked traits beyond his control (like height), he could rely on teammates to fill in critical gaps.

Steph, now a starter for the NBA Western Conference leaders, the Golden State Warriors, was on paper an unlikely “candidate” for a basketball success story. However, within the right team framework at the collegiate and professional levels, he’s catapulted to both team and individual success and could very well be named the NBA’s MVP this season. Can you tell I went to Davidson?

As an industry ripe for disruption and undergoing an innovation revolution, healthcare is a particularly interesting lens to examine the opportunity for diversity on leadership teams—particularly with an abundance of companies in their formative stages, receiving significant capital and undergoing rapid growth.

As employee number five at Oxeon Partners, I’ve spent the last 3.5 years conversing with senior healthcare executives and consulting with start-up leadership teams on their human capital strategy. I spend the bulk of my day understanding the nuances that have made teams and businesses scalable, differentiated and prosperous. I leverage said findings to advise clients, on the precipice of tremendous growth, on talent and team composition.  And, while there are an infinite number of angles one can consider when creating successful and diverse executive teams, I have of course observed the all-too-often discussed gender gap in leadership teams.

This article is not meant to re-write Lean In from the Maura McGinn angle. I do not need to recount the statistics that (thankfully) have become a central piece of conversation over the past several years. I will, however, share some of my sentiments about a few of the prevalent arguments. To start, as there are fewer women in executive positions to date, one could argue that on paper, a woman candidate may be the less-qualified one, lacking the so-called “been-there-done-that experience.” They are often seen as higher gamble hires, burdened with extra-familial obligations and an inability to work around the clock, and are themselves perceived to be risk-averse.

Despite the all too commonly circulated figures that women outpace men in both undergraduate and graduate level degrees, of all the new and existing healthcare IT businesses that exist today, 93% of them have male CEOs and 6% have female founders. With $6.7B of venture capital invested in 2014, there are a tremendous amount of start-up organizations. Each team is a malleable blank slate in regard to people, values, systems and processes. There is a unique opportunity in this budding industry to change the conversation about executive leadership gaps.

Instead of lamenting the status of healthcare leadership trends and focusing on the disproportionate ratio of males to females on senior leadership teams, Mary Tolan strikes a different tune. Ever the “futurist” and an impressive female executive in her own right, she focuses instead on the insight and intrinsic value that women, if leveraged, can bring to healthcare management teams. “Healthcare is so close to the human experience as an industry, that having diversity on the board of a healthcare enterprise makes perfect sense. While women make up half of the population, they are more often than not the decision makers in the home.”

In fact, studies support that women are the largest consumers of healthcare, making 80% of family healthcare decisions nationally. Women make up 75% of family caregivers or informal caregivers in the home, and are largely representative of the healthcare delivery workforce, 78% of which is comprised of women. These figures alone suggest that a female perspective within the decision-making ranks of healthcare organizations is a no brainer - they bring real life perspectives as healthcare consumers and are well suited to both lead and represent a predominantly female workforce on the delivery side.

For the record, at no point in exploring this topic have any executives suggested that merely adding a woman to an executive team enables prosperity and success.

In speaking formally with Mary Tolan, Nancy Brown (Venture Partner Oak HC/FT) Alex Drane (co-founder and Chief Visionary Officer of Eliza), and Erika Bliss (CEO, Qliance), and informally to thousands of others executives, female and male, about fostering the right blend of characteristics to create high impact teams, there has been one area they all agree. Regardless of a company’s size or offering, the focus is always on soft skills: trust, collaboration, EQ, compassion, empowerment, drive, accountability, focus, urgency, and commitment.

Perhaps it is obvious that the focus is less about cultivating a team of broad functional skillsets, because no one in their right mind recruits a team of five starting point guards. But I’ve often observed that organizations and hiring managers looking to fill a specific role can become laser-focused on the functional check boxes, and lose sight of the collective fabric of the team and the intangibles that are so often described as the differentiators of successful teams.  Alas, here arises the adeptly named “accidental value,” a term that refers to organizations that find themselves with teams that look, think, act and breathe the same way. In these situations, founding teams are socially compatible, but unable to introduce different worldviews.  As organizations mature, this can damage their ability to hire individuals who exist outside of the norm: executives who might counterbalance the group’s “focus” with “compassion” and “urgency” with “thoughtfulness”.

Deliberately curating a team that counterbalances each other is important in any industry, and is significant when the stakes are high. Alex Drane and Nancy Brown both fondly described the periods of high stakes and fast paced growth as being rich with “heated debates and healthy debates,” with collaboration and teammates who “challenged the group to move collective thinking forward.” Both have seen first and second hand the potential pitfalls of creating an inflexible and homogenous leadership team: heads down execution that, although effective in the short term, hardly fosters cultural improvement and fails to challenge the status quo. It is critical to be intentional about creating checks, balances, and dialogue.

There is a strong argument that bringing female leadership to the table in healthcare, over other industries, makes particular sense. The aforementioned dynamic women bring track records of results, creativity, leadership, and other hard and soft skills, that make them phenomenal—and successful—executives. Point blank. However, they also demonstrate high levels of traits traditionally associated with women, including compassion, empathy, collaboration, and patience, which I argue make them particularly suited for leadership in healthcare.

There is no arguing that healthcare, despite its recent advances in technology and administrative improvements, remains a deeply humanistic and innately high touch industry. For these reasons, emerging and growing organizations focused on revolutionizing patient care delivery are still acutely mindful of the human elements that are critical to providing meaningful care and customer service. For instance, Iora and Accolade prioritize empathy as a core cultural value; Evolent Health has adopted “start by listening” as a value.

While these healthcare organizations are making concerted efforts to prioritize people-centric values in this humanistic industry, it should not be ignored that at executive levels, leadership teams have responsibilities to their employees. Management literature like Firms of Endearment and Drive provide evidence to suggest that businesses that underscore the importance of valuing all stakeholders: clients, shareholders, and employees, are ultimately more profitable and drive more significant returns.

Therefore, it is exceptionally important that leadership teams, tasked with collaborating at the early stage of an organization, strategically and tactically build the business, its infrastructure and value set, later nurturing, empowering and growing the often female employee base, all while delivering value to clients—who often times are women—within the healthcare industry are purposeful in hiring women executives. And while men can and do often possess the so-called female traits, the simple solution to ending the gender gap is focusing on hiring more women.

In many ways Steph Curry was a stellar prospect for the ACC schools of his dreams, bringing passion, energy, dedication, an unbelievable shooting percentage, and 18 years of coaching from an NBA veteran (his father) Dell Curry. That said, he was unproven in the eyes of college scouts.  And while it can be challenging for one to prove oneself without being presented with opportunities, it seems the tide is turning. In the last three years, I’ve witnessed and facilitated a strong wave of female executive hires, some proven and others with something to prove:

Rose Higgins as Executive Vice President & General Manager for SCIO Analytics, Connie Moser as the Chief Operating Officer of Rise Health, Margery Geers as Chief People Officer of Accolade, Carolyn Magill as the Executive Vice President of Payer Strategy and Operations and Beth Malko as the Executive Vice President of Clinical Delivery and Operations at Evolent Health, Linda Finkel as President of Avia Health Innovation, Carol Devol as Chief Operating Officer of Landmark Health, Stephanie Fenton as SVP Customer Success at Grand Rounds… the list continues. I’d be remiss not to mention the high powered female Chief Executive Officers we’ve had the opportunity to work with in the way of Allison Robbins at Imagine Health, Erika Bliss at Qliance, Stephanie Tilenius at Vida Health, Rebecca Onie at Health Leads, and investors like Nancy Brown and Annie Lamont at Oak HC/FT.

All of these women possess strong requisite functional and qualitative strengths that make them compelling for their given roles and within larger team-based frameworks. It is my strong belief that within this group of dynamic leaders, there are many “Steph Currys” who are strong both as individuals and MVP candidates. Perhaps their greatest strengths will be to collaborate in driving their teams to a first place finish - their efforts will not only benefit women executives looking for hiring managers to take a chance on them, but the entire healthcare workforce and industry at large.

Healthcare Transformation is a Marathon

The number of companies currently being founded and funded to drive the transformation of the healthcare system is staggering.  While I am known for occasional (or maybe even frequent) hyperbole, this is not a hyperbolic statement.  This comes as a surprise to no one as there is a convergence of regulatory, financial, political, and demographic factors driving this incredible rate of change and resulting innovation.  We are, after all, talking about an industry that makes up roughly 18% of GDP. The statistics are all out in the public domain and I’m not going to re-quote them here.  I will say that we measure the frenzy of activity in the HCIT/Services space by the fact that our firm regretfully declines far more searches than we have the capacity to take on.  If that is happening with our little 3.5 year-old “engine that could,” we also assume that is happening with other firms recruiting for healthcare companies backed by venture and private equity firms.  This comes as a result of lots of executive teams being required by lots of companies being backed by lots of investors. So for this edition of FWIW, I wanted to dive into two interesting trends we’re seeing with regard to investments being made in healthcare IT and service companies.  The first is the entrance of non-traditional healthcare investors and their impact on valuations across the sector. The other is the upstream movement of private equity investors toward investing in de-novo, built for purpose businesses leveraging complex business models and experienced management teams. While both of these trends are welcomed by all of us working in the space today, I thought I’d try to shed some light on why this is happening now and some of the implications that we’ve seen across a portfolio of 100+ clients and investments.

Venture capital investing in healthcare IT and services has always been an interesting space, or maybe it is better described as interesting in how it has historically not been a very interesting space.  Returns have been hard to achieve, timelines have been longer than acceptable for most VCs and the funds that have succeeded in healthcare IT investing have been a hearty few, often times with a strategic angle.  Traditional VC firms like Venrock and Bessemer have achieved VC-acceptable returns and strategic funds like HLM, Health Enterprise Partners, Sandbox, and Ascension Health Ventures have all done well. However, there are many who have quietly dissolved, unable to raise a new fund or justify mediocre returns.

Three years ago, when we formed Oxeon, we had very little reason to interact with Khosla, Greylock, Sequoia, Andreessen Horowitz and other tech-VC darlings. Today, we work with all of them in bringing talent to their healthcare portfolio companies.  They are making large and aggressive commitments to companies operating in the healthcare space, and see great promise for VC-type returns from the category. This trend is clearly reflected in the oft-published stats about the growth of VC investing in healthcare IT.

While it is great to collaborate with such accomplished investors from Boston and Menlo Park, there is a potential dark-side to this trend.  There are many reasons why VC-like returns have been hard to achieve in HCIT, most of which are not celebrated on Sand Hill Road, Winter Street, or in Cambridge.   To begin with, healthcare entrepreneurs can’t turn to generations of very wealthy and successful Facebook, Google, eBay, Apple, or Yahoo alums to serve as super angels and mentors. These seasoned execs often provide companies with credibility, lessons learned and early-stage “smart-capital,” thereby increasing the likelihood of success.   Also, it is really f’ing hard to sell software and services to hospitals, insurance companies, and large self-insured employers - unless you are EPIC, that is.  For early stage companies, sales cycles are often 18 months for relatively small enterprise software contracts and “pilots” are a frustrating norm. Without super-angels and faced with risk-averse Series A healthcare VCs, healthcare entrepreneurs have historically been left appealing to the mission/societal values of tech entrepreneurs or struggling to raise money from those risk-averse healthcare VCs who are looking for $5M run-rates.

So enter the tech-VCs interested in participating in the opportunities inherent in redefining 18% of GDP.  These investors have a lot of money to put to work and what results is a “froth” in the market, with valuations growing at a frightening rate; Castlight is everyone’s comparable. What we end up with are fancy new consumer insurance companies with values more typically held by hot software companies or high growth consumer tech businesses.

I was catching up with Marty Felsenthal who is a General Partner at HLM Ventures, a very well-known and well-regarded healthcare venture fund with a number of Strategic Limited Partners.  Like myself, Marty is getting long in the tooth having been around for a while and is notably showing gray hair.  He remembers the 90s and not just for The Macarena, Backstreet Boys and Wham but for a lot of money. In particular, new money chasing physician services and eHealth companies in two separate waves. Tech, med-device and bio-tech investors poured money into health care services and health care software, and he's of the opinion that, in general, they over-funded the sector, they funded many weak companies and then they bailed out of the sector - twice.  He’s quick to note that he can point to a number of successful investments that were made, but these new Kool-Aid drinking entrants often didn't provide value-add beyond their money and often provided advice that, in his opinion, was often not responsible or in the best interests of the Kool-Aid drinking entrepreneurs they were supposed to be helping.   Incredibly, of the 13 most recent HLM investments, 10 are already working with one of HLM's strategic limited partners and/or generating revenue from another relationship that HLM has helped facilitate. In "Trevor-speak" that means they are shortening the sales cycle and delivering the “mentorship/credibility” as referenced as being missing earlier in this article.  Proving he's not quite as unhip as he seems, he said the carnage that followed -- for many of the entrepreneurs and investors -- made the Game of Thrones seem like a children's show.  He thinks these new HCIT investors demonstrated a tendency to over-fund these businesses before the entrepreneurs knew what business they were actually in.  Marty believes that many successful businesses, healthcare or otherwise, morph between conception and scale – specifically pointing out the highly impressive (and capital efficient) work that Jonathan Bush accomplished from where Athena started to where they are today. He thinks many of these companies raised too much money before knowing how big the market they were attacking really was, before they knew if there was actually a profitable business model or before they knew if they could execute against the early-identified market.  Not only did this prove to be a bad ending for many of the investors, it was also disappointing for many of the hard-working entrepreneurs who were significantly or completely diluted by the capital.  He closed by saying he's trading in his Prius (poor man's Tesla) for a DeLorean.

So we are seeing some of this with healthcare and non-healthcare VCs fighting for deals and the resulting valuations leaving everyone scratching their heads. The bigger question is, will start-up companies lose the grit they required to accomplish enough on their meager angel funding to fight through 18 month sales cycles in order to raise venture money at the traditional levels? Further, will this “froth” in the market be justified through long sales cycles and will these high early-round valuations ultimately be a disincentive to great executives who understand that the likelihood of achieving the lofty prices is low and the probability that their equity is worth substantially more than the strike price on first day of employment is even lower.  Additionally, can the market generate VC-typical multiples and returns or will we have a bunch of tech venture investors using their own tele-depression/therapy platforms to cure themselves?  Population Health isn’t WhatsApp and SnapChat, you know what I mean?

I am personally concerned about the prospect of these HCIT companies struggling to scale at the same pace as the darlings of Sand Hill Road and the pressure it puts on the revenue organizations to justify the high prices, as I see the single hardest thing about scaling a HCIT company is bringing in great talent and fighting through sales cycles. If the valuations are crazy and ultimately serve as a disincentive for great executives and the sales cycles continue to be 18-24 months, what happens when the companies go to raise their Series B or Series C rounds? I wonder whether there will emerge a great market for “secondary VCs,” buying healthcare portfolios from tech investors, recapitalizing and executing on great ideas but with a different approach.

On the private equity side, another really interesting trend has emerged.  In many ways, as these things are often attributed, this trend might be seen to have started with Michael Cline and Accretive LLC.  A renowned private equity investor and entrepreneur, Michael and his team wrote and funded the original business plan that emerged as Accretive Health. As we know, Accretive Health had an unbelievable run from de-novo company to Initial Public Offering.  The industry watched the company grow at an astounding pace, with private-equity grade investment dollars used to attract and compensate a seasoned and accomplished leadership team who executed scale at a staggering rate. Accretive LLC went on to do the same with Accolade, Acumen and others; all companies with large, complex revenue models, risk-sharing economics, and professional-grade leadership teams.  Since that time, we’ve seen and/or had the pleasure to work with TPG in funding a relatively young Evolent Health, General Atlantic funding an effective de-novo in Alignment Health, Oak HC/FT fund XG and Candescent, and Welsh Carson support a fledgling business in naviHealth, just to name a few.

These are not businesses doing hundreds of millions of dollars in revenue, with predictable EBITDA - normally the sandbox of this class of private equity investor.

So what can we learn from these examples?  There are some consistent themes that are worth pointing out.

First off, these are all very complex, technology-enabled service businesses that operate in complex and mature environments.  Sharing risk on revenue cycle management, standing up health plans on behalf of hospitals, delivering care to the sickest of the sick in their homes, or taking risk on post-acute bundles are not simple “SaaS” business models. This is far different than wellness apps or cloud-based customer relationship management software. These companies are often signing multi-year, 8-figure revenue deals requiring a certain level of maturity and sophistication on the part of the leadership team. While many tech start-ups are launched by Zuckerberg-types in hoodies, the average age of a healthcare CEO for companies that last 5 years in business, is just over 40 years old.   When a CEO or CFO of a hospital system or large insurance company is going to contemplate a 5 to 7 year/$10M to $100M commitment with a new company, the CEO and leadership team must have a track record of success and a level of professional maturity that is more in line with the world these health system and payer executives live in.

Robb Vorhoff at General Atlantic is a spring chicken compared with Marty and I but he is wise beyond his years.  His venerable firm is also participating in this trend of healthcare private equity moving earlier stage into arguably riskier ventures.  In a recent conversation, Robb said “Taking earlier stage risk requires greater conviction in both the investment thesis and the quality of the team.  Alignment Healthcare represented an attractive opportunity to back a proven management team with a thesis that directly aligned with two of our top investment themes, and while the earlier stage represented greater risk, we had great confidence in the senior team’s ability to build a very special company.”

By taking capital risk off the table through large tranches of funding, private equity firms are creating welcoming environments for executives who have demonstrated the ability to operate at scale. The challenge is to find those same executives who do well at the earliest stages of a business. Take the case of an Oxeon portfolio client, a de-novo funded by a major private equity fund looking for a CEO. We identified an accomplished senior executive who had delivered great results within the health plan environment. It was his creativity, energy, passion, flexibility, and the willingness to do what was necessary that proved he would be an effective Founding CEO. Through the challenges of getting an anchor client secured, the executive repeatedly demonstrated these characteristics and proved resilient, successfully landing a massive multi-year anchor client that will launch the business on a largely unparalleled growth trajectory.  Now that the company will go from no employees, customers or revenue to hundreds of employees and hundreds of millions of dollars of revenue in almost no time, the executive team is ready to operate at this over-night scale because they have done so before.  Thus the model works by finding uniquely qualified “big-company” executives who lead from the front and can shift seamlessly from entrepreneurship to operating at scale.

The alignment of the equity models is also interesting. The incentives are structured in such a way that while the executives know they have the necessary capital to build a company, there is financial incentive to use only what is necessary ahead of a large anchor contract going live. If successful, they can end up with a handful of very large multi-year anchor contracts without the need to draw on capital.  When that happens, the executive team has an opportunity to build a big company and still own a great deal of equity, as happened with Accretive Health at the time of their IPO.

So what we are really seeing are private equity investors and non-healthcare VCs fighting for early stage companies that traditional healthcare venture capitalists have not aggressively pursued, at least historically. It is easy to think that the entrepreneur is the winner: they will get the sophistication of the private equity backers, the expertise and cache of traditional VCs, and more experienced healthcare investors will be forced to entertain deals that they have traditionally shied away from.  Even better, for the entrepreneur, all of these deals are being done at higher valuations and with more invested capital.

But with entrepreneurship at absurd levels and valuations at even more absurd levels, what eats at me is that transforming our healthcare system is a marathon, not a sprint - maybe more appropriately referred to as an Ultra Marathon. My enthusiasm in the near term is with these trends resulting in more companies being funded by great investors, creating well-capitalized homes for great executives.  At the same time, I’m concerned that we’re running a sub 7-minute mile in the 8th mile of a 100-mile ultra marathon.  If these two great classes of investors don’t see returns that justify their participation and pull their money out of healthcare IT and services, we will be left with a ton of innovation and none of the capital necessary to transform our broken healthcare system.

New Meaning to Personalized Medicine – A Consumer Approach with Linkwell and Jiff

Matt Dumas is a Partner at Oxeon with expertise in healthcare technology and big data analytics as well as consumer engagement leveraging over twenty years of relevant leadership experience driving product innovation and commercial strategy.  Prior to joining Oxeon, he served as SVP and Head of Marketing for WebMD’s consumer website, mobile solutions and magazine.  Prior, to WebMD, Matt led several start-ups in the healthcare big-data analytics space as the Founder and Managing Director of Nielsen Health (a former division of The Nielsen Company) and President of Ecosys Consumer Analytics (now part of Crossix Solutions).  Earlier in his career, Matt spent ten years at Procter & Gamble leading commercial expansion and turn around plans for several global brands in the US and abroad.  Matt started his career in employee benefits at Unum.   Industry analogs are transforming the engagement model for payers and self-insured employers, impacting both patient behavior and outcomes.

When it comes to personalized medicine, industry vernacular steers us toward the delivery of customized treatments based on various data points that describe a patient’s medical profile. Specialists in Oncology, as an example, are using patient-level genomic data and clinical information to tailor molecular cocktails designed to maximize treatment efficacy.  Each patient’s receptivity to treatment, researchers have found, is largely determined by their individual profile, and therefore, the more data about the patient, the more effective the prescribed treatment can be: voila, personalized medicine.  

This notion of personalization in healthcare today is going beyond life science applications and firmly into behavior change, showing substantial promise in driving improved outcomes through improved patient engagement.  As consumers, we see the impact of personalization in several mature industries that touch us every day, keeping us more actively engaged than ever, driving satisfaction and ultimately changing our behaviors.  Two obvious examples are the retail and consumer-publishing industries, which have seen significant market disruption and remarkable growth for those players applying innovative ways to personalize the consumer experience through data and digital technology.  As a result, online retailing and multi-channel publishing has transformed how consumers buy products and engage in content today, providing a more enjoyable and involved experience – all fueled by data that reflects individual preferences, interests and needs. While we have seen this phenomenon evolve over the past 15 years, since the arrival of the internet, new and highly innovative healthcare technology companies are accelerating similar applications of personalization in a much shorter period of time, by directly leveraging best practices from these success stories.

Take Oxeon client Linkwell Health for instance. Backed by HLM Venture Partners and Spark Capital, Linkwell applies the consumer publishing analog to membership communication for our nation’s health plans.  Fifteen years ago, the content we enjoyed as consumers was primarily accessed through television, print and radio.  Today, online and mobile applications have transformed how we feed our interests day in and day out.  Depending on our preferences, publishers provide us timely and highly relevant content in a variety of communication channels leveraging smart phones, computers, and television in addition to more traditional formats that remain important like print and radio.  So Linkwell asked an important question:  If payers are trying to engage with their members to provide them important information and content that can improve healthcare outcomes, why aren’t they taking a similar approach as consumer publishing does today?  How many piles of generic post cards, leaflets and envelopes have you received from your health plan?  How many went in the junk mail pile on the kitchen counter and how many did you actually enjoy reading so you could take better care of your health?  Linkwell confronts this challenge facing payers by leveraging a highly innovative multi-channel, digitally driven and highly personalized communication platform tailored to the complexities of healthcare that one would expect from a sophisticated consumer publisher.

Linkwell is led by CEO Gregg Michaelson, a publishing industry veteran and former President and Chief Marketing Officer of Health & Wellness publisher Rodale, Inc. (e.g. Men’s Health, Prevention, Runner’s World).  He is as tall as he is smart, with the passion needed to convince over 15 national and regional payers that a personalized approach to membership communication can change member behavior, leading to improved outcomes, and even (…gasp) an improved relationship between health plans and their members.  Payers are trying to engage specific populations, for example a cohort of high-risk diabetics, to educate them on how to live a healthier lifestyle while driving them to a certain call to action – i.e. taking a survey addressing adherence questions. The challenge, as Michaelson puts it, “is people typically are not paying attention to health plans pushing this kind of information unless it is packaged in highly relevant content that captures their interests and reaches them in the communication channel that they prefer, just like I did in the consumer world.”  Through a HIPAA compliant data integration platform, Linkwell produces personalized content and distributes it leveraging member-level data captured by the health plan. Depending on their demographic/clinical profile and communication preferences, the member can receive highly engaging, consumer oriented articles with important healthcare information distributed through a health plan branded mobile app, email newsletter, text message or traditional print magazine. Given the role of digital in our lives, health plans are trying to improve engagement through this channel, which Linkwell does in spades by leveraging highly sophisticated analytics and segmentation capabilities to drive personalization. Sound familiar?  While it’s still early to measure impact on outcomes, Michaelson points to several case studies with health plan clients that suggest members receiving this kind of personalized communication increases wellness program awareness by over 250% vs. standard industry approaches, with 52% more members claiming to “be inspired to make a change in their health behavior.” Returning to my earlier example on Diabetics, one study in particular showed that plan members informed and incentivized through the Linkwell platform decreased their sugar consumption by 50%.  Customized content and a multi-channel, digitally driven communication platform leveraging the personalization analog is clearly making an impact.

Another recent addition to the Oxeon client list is Jiff, a Venrock portfolio company led by James Currier, a well-regarded gaming executive based in the Bay area. When first introduced, candidly, I assumed it would be yet another gaming play with a “challenge” platform leveraging data from wearable devices and promising to improve individual health through behavior change.  I was dead wrong.  Similar to Linkwell, Jiff uses a proven analog from another space – this time online retail – in conjunction with gaming expertise to change how self-insured employers design benefit plans and ensure that employees use these benefits to improve their health. Jiff clients including Qualcomm, Red Bull and most recently, Johnson & Johnson are finding that “employees are more involved in making benefit plan decisions and actively engaged in using them throughout the year through personalization,” according to Derek Newell, Jiff CEO.  “The base case scenario facing most employers today is that they are spending millions on services that could benefit their employees, but that those employees never use them. Employees spend minimal time evaluating their benefit plans during enrollment and don’t have the means to tailor their healthcare needs and preferences (clinical and attitudinal) to what is being made available as a plan offering by their employer. The Jiff application engages employees post enrollment by personalizing their benefit design so they utilize it to the full potential of their benefits, in a proactive way to ultimately lower costs and improve outcomes.”

Jiff disrupts benefits enrollment and utilization by tailoring at the individual employee-level the specific benefit offering based on each employee’s clinical and attitudinal profile.  Similar to online retailing where our preferences and demographic profiles (in addition to other data, as we are learning) are captured to provide a more relevant and enjoyable shopping experience, Jiff takes the same approach to benefits, leveraging a far more complex data ecosystem driving personalization and in turn employee involvement.

Jiff serves as a technology platform on behalf of the employer, personalizing the benefit offering by integrating employee data captured through electronic medical records and healthcare surveys.  Based on their personal information, each employee is presented a benefit plan that is tailored to their clinical needs and attitudes toward self-care and wellness.   The level of personalization driven by the data impacts not only the benefit products offered to the employee at the point of enrollment but also the level of employer funded subsidies (i.e. pricing) needed to encourage specific benefit selections.  Jiff also provides the incentives necessary to achieve employee engagement throughout the year.  Again, sound familiar?  It makes sense that a young, healthy tri-athlete focused on prevention should be offered a different plan and incentives than an employee managing multiple chronic conditions and challenging motivation issues at home.   Bob Kocher of Venrock Capital sums it up well by saying in his blog, “We are not all the same. Yet health plans and employers seem to think so. They keep designing benefits programs and health plans in a one-size-fits-all approach. What each of us can do to be healthier and reduce healthcare costs for ourselves and our employers or health plans is different. So why is it that almost all employers and health plans offer exactly the same incentives to all people to be healthier and reduce costs? This makes no sense.1

Post enrollment, Jiff also creates incentives for people to use their benefits through gamification by collecting, in a privacy compliant way, utilization data for each employee. This ranges from standard benefits like medical and dental coverage through to case management solutions like Accolade, wellness apps like Lose It or even wearable devices and in-home diagnostic monitoring solutions.  Through creative and engaging employer sponsored challenges hosted by a highly intuitive mobile app, Jiff applies proven principles and technology from the consumer gaming space.  “Like a television mini-series, people want to see something new and exciting each month in their health plan challenge,” which Jiff does amazingly well, working closely with their employer clients.  Similar to Linkwell, it’s too early to measure the ROI on this kind of personalization in healthcare, but early research from their 25+ clients suggest significant advances in employee involvement when it comes to benefit selection and utilization throughout the year. More involvement will likely lead to improved outcomes.

As a former marketer and big-data purist in healthcare, I am intrigued by what Linkwell and Jiff are doing to drive “engagement” and “involvement” in an effort to change behavior, all key terms for successful consumer centric businesses in other industries.  Though success in this context is measured by outcomes rather than eyeballs or consumption, the principles of personalization seem logical given the challenges payers and employers are facing.  As a healthcare consumer myself, the promise of industry analogs shared today provides me comfort that we will one day look back at companies like Linkwell and Jiff as those that led the charge in personalizing healthcare — arguably the most important industry of all.


Kocher, Bob.  (2014, Sept 23).. We Are Not All The Same, So Why Should Our Incentives Be The Same? Retrieved from

Doctor Demand and Nurse Necessity: Shifting Roles in Healthcare

Liam Gallagher joined the Oxeon team this past summer after graduating from Williams College where he majored in Chemistry and English. Even having completed all the requirements necessary for medical school, he realized that he knew much too little about the industry of medicine. His work as an Associate across a number of Oxeon projects has afforded him an exceptional window into the evolving intersection of business and healthcare, as well as insight into the transformation of the medical profession. “I worked at Epic for a couple years after college, and now I’m in Nursing school at Columbia.”

I breathed a quiet sigh of relief. I’m new to dating, at least to what it looks like in New York City. On top of that, small talk is not a strength. So, when my blind date told me she was in healthcare, I was immensely relieved — talking to strangers about healthcare is my job after all!

But, not so fast.

“Oh awesome, I’m on my way to medical school!” I volunteered in response. Two raised eyebrows (not the good kind) let me know that I’d made a big mistake. It took the whole date and a couple of rounds to convince her that I was not, in fact, a jerk. This was my personal introduction to the often adversarial nature of the nurse-doctor dynamic.

I don’t mean to generalize this anecdote across all of healthcare. I’ve witnessed teams of doctors and nurses work beautifully together in the OR. But, as healthcare undergoes tumultuous, industry-wide reform, the reverberations are being felt at all levels. The driving question behind these changes: how can we keep people healthier, more efficiently? A corollary to that question is: who? – that is, who can keep people healthier, more efficiently? Is it doctors, public health officials, nurses, acupuncturists?

The reality is that what each of these roles means is changing, particularly for nurse practitioners (NPs) and physician assistants (PAs), or collectively non-physician providers (NPPs). One driving factor in these role shifts is a shortage of physicians; the AAMC predicts that we will be in the red by 130,000 MDs in about 10 years[i]. The shortage will be especially pronounced in primary care. Important, but a tad sensational, the AAMC’s prediction takes a very straightforward tack on the supply and demand trends. What it doesn’t do is account for the possibility that some of the big changes might profoundly impact the doctor-demand trend, specifically that the roles of non-physician providers will evolve to answer the unmet demand.

Healthcare is expensive, in part, because it is expensive to make a doctor. As a product, medical labor is tremendously costly to produce, and the way that the US goes about it isn’t terribly efficient either (this is the subject of a whole other article, or several). The educational path to becoming an NP takes about half the time and a twelfth of the cost as a doctor’s[ii].  Resistance to expanding the scope of NP roles, voiced primarily by physicians, warns of creating a two-class care system. These concerns seem valid in light of the differences in length of education and training. After all, who on his sickbed wouldn’t want his healthcare provider to be very, if over-, qualified? However, studies that have explored this question in the clinical data have found little evidence to back up this concern.

One such review that analyzed data from 37 articles published between 1990 and 2009 found that key metrics, including quality, safety, and effectiveness, were comparable for care delivered by NPs and MDs[iii]. There’s some evidence that patient satisfaction scores are actually higher for NPs, and we needn’t be too puzzled why. It’s not news that fiscal and organizational burdens placed on physicians are greatly limiting the amount of time they are able to spend with their patients. This lack of time is particularly harmful in the treatment of chronic and behavior-linked conditions, a particular area of focus in reducing healthcare costs. None of this is to suggest that NPs should or will replace doctors. In fact, one study found that outcomes were significantly higher for physician treatment in cases with high clinical complexity. If anything, the evidence indicates that we need to be more scientific in our decisions around who is best to provide care from both a clinical quality and cost perspective.

The place where NPs are often just as effective as MDs is primary care, precisely the field in which the doctor shortage will be and already is most pronounced. So, it’s good news that the vast majority of NPs practice as PCPs, roughly 80% of the 155,000 as of 2013[iv]. As healthcare has begun to focus and shift resources to primary care and preventative medicine, there has been enormous growth in a closely related field, urgent care. GoHealth, a rapidly growing urgent care company and new Oxeon client, is working to transform urgent care from a low cost alternative in a FFS world to a fully integrated part of our healthcare system. In doing so, they are leveraging non-physician providers to deliver the highest quality care while providing a phenomenal patient experience, and at a responsible cost.

One of the primary places where healthcare cost pressures are mounting is on the patient. The portion of the population enrolled in high deductible health plans (HDHPs) has steadily increased from less than a fifth to roughly a third in the last five years[v]. These plans encourage the patient herself to be cost-conscious in deciding where to seek care. The prevalence of HDHPs is even higher among younger, relatively healthy populations, who tend to utilize the healthcare system more episodically. The college student who sprains his ankle playing flag football or young professional with a mild skin infection is no longer likely to drive to the nearest emergency room. Beyond the endless wait times, it costs two to fives times more to treat such conditions in the ER than it does in an urgent care clinic. And, with a HDHP, those increased costs fall largely on the patient.

Over a quarter of all ER visits could be handled equally well in the urgent care setting, accounting for $4.4 billion in wasteful spending[vi]. Additionally, the kind of urgent conditions that do not require the ER tend to be those where non-physician providers can treat as well as MDs.

As with nearly all current transitions in healthcare, there is a utilitarian dilemma underlying the shift from the ER to the urgent care clinic: i.e. the rare instance when someone who needs the ER goes to a UCC and the clinical outcome is worse for it. There are a couple ways in which GoHealth’s model minimizes the likelihood of this scenario. The first is that, unlike many retail clinics, GoHealth clinics will have at least one board-certified physician, who will be able to identify such cases and take appropriate action. Secondly, the core of GoHealth’s model is integration with their health system partner, integration that will optimize referral streams and transitions from the urgent care clinic to more acute settings as well as longer term primary care providers. Beyond that, many GoHealth clinics will be positioned directly next-door to the overcrowded ERs of health system partners; essentially, this will provide a cost-saving layer of triage without adding any clinical risk.

‘Mid-level providers’ and ‘physician extenders’ are common terms that refer to nurse practitioners and physician assistants. They are becoming increasingly ill-suited for that task as NPs and PAs play more integral and more independent roles in healthcare. As our system becomes more sustainable and cost-conscious, perhaps the most important questions is “who?” Alignment, it seems, is the name of the game. There’s evidence that multidisciplinary teams – comprised of doctors, nurses, NPs, social workers – achieve the best clinical outcomes, especially for the highest acuity patients[vii]. So, ultimately, this question of ‘who’ really needn’t amplify antagonism in nurse-NPP-doctor relationships; instead, the right answer just might make it as much a thing of the past as white nursing caps.

Now, I’m just hoping that this team attitude can go beyond the clinical and help me out on our second date!


[i] Physician Shortages to Worsen Without Increases in Residency Training, American Medical Association, 2008

[ii] Education and Training: Family Physicians and Nurse Practitioners, American Academy of Family Physicians, 2010

[iii] J. Stanik-Hutt et al., The Quality and Effectiveness of Care Provided by Nurse Practitioners, Journal for Nurse Practitioners. 2013; 9(8):492-500

[iv] NP Facts, American Association of Nurse Practitioners, 2014

[v] Center for Disease Control and Medical Choice Network

[vi] Ibid.

[vii] M. Pinninti, Clinical Outcomes of Multidisciplinary Team Management in Patients Supported with Left Ventricular Assist Devices, The Journal of Heart and Lung Transplantation , Volume 33 , Issue 4 , S220

Culture Drives Scale – Lessons Learned from Health Catalyst and Evolent Health

So I ask you to picture yourself in the main room of an old lodge—a Boy Scout camp on an island on a lake in central Connecticut.  There is a big fire burning in the hearth, rag-tag furniture, throw blankets, bottles of water, cups of coffee and 25 people sitting around working out of three ring binders outlining our company’s vision and goals, a new system of KPIs and, I’ll admit, a few truly heinous slides contributed by yours truly (this really came to light when I asked my team to “take a look at the flesh colored circles” during one exercise). Powerpoint art is most certainly not my specialty! Welcome to the Oxeon Annual Offsite, a three-day event held in late September that brings focus to our mission, our culture and on insuring the continuity of what enables us to love going to work everyday.

Like corporate off-sites all over, we do team building exercises like building towers with dry spaghetti and a marshmallow, we learn about each other’s Myers Briggs type, we study income statements, and rollout new company initiatives. We conduct training and learning sessions, allowing ourselves to focus on the things we don’t have time to focus on while doing our daily work but that are crucial to our success as a company and enriching the young people who work here. For three days, our first core value of intellectual curiosity is on full display, as people are totally engaged with learning and contributing at each step along the way.

Our offsite is largely designed, planned, organized and executed by young professionals under the age of 30. Our culture is designed to enable them, has confidence in them taking risks and doing things they’d never do otherwise, and anticipates the failure that may naturally result at times.  A big part of that culture is due to our second core value of grit.  We value resilience, creativity in the face of adversity and an ability to pick oneself up after getting knocked down. For what it is worth, that core value of grit came in handy at this last offsite, as the Boy Scout camp is off the grid with no running plumbing.

Our third value of collaboration was tangible not only during the offsite process but each and every day at the Oxeon office. From designing the agenda, to planning the logistics, to delivering many of the sessions, multiple people on our team came together to do something they had never done before.  I’m not sure that many 26 year olds have executed a 3-day offsite for a healthcare technology and service executive search and investment company; to be successful, they worked together. Collectively, they achieved a greater result than imaginable individually, as with so many other things they have done to drive Oxeon forward.

To balance out some pretty serious sessions on income statements, our portfolio, and strategic plans for the end of year, our off-site also involves 80’s dance parties, silent karaoke, temporary Oxeon tattoos, and too much wine. A fourth core value—high emotional quotient—is well represented here, as every team member shifted seamlessly between substantive contribution and teaching to brushing up on Madonna’s dance moves.

As mentioned previously, both Oxeon and Cien Ventures, our sister company, share a common goal in striving to positively impact 100,000,000 lives through the companies we recruit for, we invest in, and start de novo. Not surprisingly, my personal favorite session was one that focused on our fifth core value: a Spirit of Generosity. It also underscored the essence of our organizational mission to Make People Healthier.   Nadia Danford, a 2012 college graduate, a Senior Associate and the 6th employee at Oxeon, led this session. She enlisted no fewer than six of her colleagues, representing a wide range of Associates and Senior Associates and led us in a discussion, taking an off-the-beaten-path approach to evaluating the success of our clients and investment portfolio.  Nadia and crew ignored the traditional measures of success—“how much capital has X company raised this year?” “How many new clients did Company Y add to their pipeline?”  Instead of focusing on sales, number of employees, venture-backing, BD partnerships completed, IPO timeline or new product releases, this session focused exclusively on the societal impact of what our clients do on a daily basis, down to the individual patient level.

We discussed the impact of a world class COO or CFO executing an innovative Direct Primary Care model at Iora or Qliance, the societal impact of Omada preventing Type 2 Diabetes, and the impact to the parents of a very sick child who gets a world class second opinion through Grand Rounds. There was a great discussion around what it means to have invested in Landmark Health, then recruited their entire leadership team, including their Chief Medical Officer Mike Le, who has designed an incredibly innovative clinical model to deliver home-based care to poly-chronic populations.

So, in an hour session, I watched great people, who happen to be young and the engine that drives Oxeon - talk with great acumen and pride about why what we do really matters.   I go to sleep that night- albeit with too much wine and 80’s music in my system- knowing that great people and great culture are intact.

But the challenge for Oxeon, and for many of our clients, goes beyond establishing this foundation. We must figure out how to maintain and grow culture and values in lockstep with the growth of the company.  Whether it is two to 25 people or 10 to 600 people, organizations have to not only maintain the values that enabled their original growth and success, but nurture and evolve them as the respective organization grows. The impact this has on the organization, the CEO, the leadership team and every last person hired presents a complex and interesting set of challenges for a growth-stage company.

A Powerful Realization

What I’ve come to realize, at the ripe old age of 45 and after a career of leading frankly ho-hum entrepreneurial endeavors, is that if you get people, culture and values right, you can get a lot else wrong and still get the whole thing right.  Honestly, I’m a bit bummed that it took me 45 years and 6 companies to figure this out but at the same time, I’m happy it finally got through my thick skull with a bit of time to spare.

Lately, my focus has been around scaling our business and taking it to the next level.  This is purposeful as we spent our first two years focusing on getting our model right, building a foundation of great culture and great people.  We feel good about those investments and earlier this year, at a leadership offsite, we had the opportunity to crystalize our vision for the company. We ultimately decided on a pretty lofty goal: to positively impact one hundred million lives. We’re already on the right course by working with incredible companies making tangible impacts on hundreds of thousands, maybe low millions, of lives. However, I know that to reach our goal, it means we must take this model we’ve worked out over the last few years and swing for the fences. To achieve the impact we are working towards, we have to scale beyond the 25 people at Oxeon Partners and Cien Ventures today, along with our operations and our products and services.

I have to admit that I am lucky as I study an issue like scale. Because of what we do at Oxeon, I am in the fortunate position of working with great leaders as clients, interviewing great executives all day long, and collaborating with amazing co-workers. So if I don’t take pages from all of their playbooks as we tackle this next phase for Oxeon and Cien, shame on me!

So, as I try to lead us through challenges resulting from our own scale, I have looked across all of these amazing organizations and leaders I admire and am struck by one common theme: an incredibly deep and strong commitment to culture, values and people. This is a common mantra at the earliest stages of a company and a consistent focus with the founding teams we work with. Moreover, what I’ve been fascinated by lately are the conversations I’ve had with leaders at companies like Evolent Health and Health Catalyst and their ability to maintain and even grow their foundation of exceptional culture and values during massive organizational scale - something that Oxeon aspires to accomplish as well.

Setting the Foundation

Dave Thornton, who is the Chief People Officer at Evolent Health, recently ranked the 4th most promising company in America by Forbes Magazine, was one of the first 20 people hired at the company. Can you think of any other venture-backed company that hired a Chief People Officer that early in their growth?  Dave believes it was a conscious decision by Frank Williams, Evolent’s CEO (recently ranked #1 in a Glass Door study of the most beloved Healthcare CEOs), who knew that if you invest early in the right culture and people, this foundation reinforces itself and becomes self-perpetuating during growth periods, ultimately reducing the long-term cost and impact of coming to this conclusion too late.  Less than three years later, as the company approaches 700 team members, the quality and potency of Evolent’s culture and people is palpable, engrained and self-perpetuating; the investment is clearly delivering an ROI.

I also recently interviewed Dan Burton, who is the CEO of Health Catalyst. Health Catalyst is the leading provider of enterprise data warehouse and performance solutions for large hospitals systems.  Like Evolent, he leads an organization totally committed to people, culture and values and it shows.  In 2013, with 80 employees, Health Catalyst was ranked #20 in the Modern Healthcare Top 100 Places to Work.  Amazing, in 2014 and having grown to 180 employees, they ranked 17th!  But in asking him to talk about the early days at Health Catalyst, he takes me to the days leading up to the first round of funding from Sequoia Capital when the company authored and collectively agreed upon a document they called The Things That Can’t Change.  Taking money from one of the most successful and well-regarded venture capital firms in the industry meant that certain things were absolutely going to change. But the organization committed that certain aspects of Health Catalyst were untouchable.   This has become the Health Catalyst Way and includes defining Core Cultural Attributes like being smart, hard working and humble.  No matter what lay in front of them in teaming with Sequoia, this wasn’t going to change.  Dan agrees with Frank and Dave at Evolent that these commitments at the earliest days of a company are foundational and pay huge dividends when the company scales.

The CEO’s Role

As Oxeon has gotten bigger, I have not shifted enough of my role as CEO to being more of a full-time proponent of great culture and developer of great people.

This hurt us.

But because we have always been focused on great culture and great people, the team felt like they could tell me this—and it is not easy to tell your CEO that he is inaccessible and acting like an a-hole. More importantly, they gave me an opportunity to react and respond, versus telling me all of this during their exit interviews. So I listened, took it to heart, hired an executive coach, and have been working on the things that the great culture and the great people said they needed.  I’ve learned that culture may be foundational at the start of any company—how could it not be? You are three people! But it is very easy—and I know from experience—for the leaders of an organization to get too busy “building the business” and forget to “build the organization.” Time and time again, this will chip away at and ultimately erode the entire foundation.

Dan believes that people and culture are the single most important responsibility he has as CEO.  It isn’t the setting and determining of the cultural values but it is demonstrating them and leading an organization that acknowledges and rewards them. He talks of the day when the company has 1000 employees and is helping 1000 hospitals on a global basis. If the values and people are what make Health Catalyst successful and great, he needs that to translate to the 1000th employee or that type of scale will not succeed.

The Impact of Making it Foundational and Organizational

Because we started with and have always been focused on great people, culture and values, when we made a conscious decision to scale and diversify, we had the ability to attract leaders like Matt Dumas and Hugh Ma to our team. Our foundation of great people and the eagerness from our young team to learn from great executives has enabled Matt and Hugh to step in and have an impact with very little friction.  The ability to seamlessly add leaders and drive scale reinforces why these early commitments are essential, and ultimately serves to further perpetuate those values across a company as it grows.

At Evolent, Dave said the “second generation” of leaders were “incredibly intentional” in driving values, culture and people. This comes as no surprise as we have had a front-row seat for their recruiting process. Week after week on our search calls, Tom Peterson, Seth Blackley (COO and President at Evolent, respectively) and Dave remained laser-focused on finding exceptional cultural and people fits over specific functional skill sets. By doing so, they ultimately were able to find executives who possessed both exemplary functional skills and interpersonal values.  As they brought in the next wave of people to Evolent, these new leaders consistently upheld the core values of Evolent to as high a bar as the three founders. This commitment has built the foundation for seven generations of hires. It should come as no surprise that they also see themselves as cultural keepers and hold themselves equally accountable in upholding the company’s culture.

This is not easy to maintain as you grow. At Evolent, this entire process is extremely deliberate and measured closely and quantitatively.  Using surveys, engrained processes around capturing feedback and formal review cycles, they are constantly assessing cultural fit, employee satisfaction and how the organization represents itself, both internally and externally.

At Oxeon, with each person we hired, whether the hire was a success or not, we have tried to continually evolve how we thought about people we bring into the organization. We have deployed numerous iterations to our interview process with different exercises, tests, screens and steps.  Our review process has continually evolved to better acknowledge or identify the cultural behaviors to reinforce or change. I guess that may seem obvious - we are a firm solely focused on human capital. But during times of substantial growth, it can be a real challenge, demanding constant review of the process with each hiring effort or review cycle. Ultimately I think it has paid off—we have gotten better at assessing great people who represent and reinforce our cultural values.

Great culture and values are not the exclusive responsibility of the Founders or the CEO. As we’ve grown, we’ve needed every person in the firm to take more accountability and responsibility for our people and culture. Every single person must represent our culture and values in everything they do and must expect themselves and the people around them to be great.  This is now explicitly emphasized in our performance reviews and we ask people to fight for it daily.

One consistent theme is that while organizations fight daily to defend their values, it is important to formalize the process of refreshing the company’s commitments.  Evolent has all employee meetings on a quarterly basis. With as many employees geographically distributed across the country, this is an expensive proposition- especially in the time allocated. But Dave believes that formally refreshing culture and values delivers a huge return on investment and this philosophy is not taken lightly. Per Dave, at the last all-company meeting, more than 50% of the entire gathering was spent on refreshing commitments to values and culture.  We are similar at Oxeon in that we have multiple days each year devoted exclusively to focus on non-search related growth, development, culture, values and mission.

Health Catalyst might even take it further. Dan commits to know every single employee by name and background and to have lunch with every single employee at least once a year. This was easy to do with 20 employees, right? But with 300, even knowing everyone’s name and greeting them in the elevator with “Hi Karen” is hard.  So what did they do? They hired two software developers to build an iPhone app that has different games and quizzes around identifying, knowing names and biographical information on all Health Catalyst employees. People score points and they have leaderboards and people use the app to test themselves, track those they get right and wrong and “train” themselves on the people they don’t know.  At the lunch sessions, Dan and another member of his executive leadership team ask for two things they love about working at Health Catalyst and one thing they’d change.  The proposed changes are brought, weekly, to the Leadership Team meeting and heard, prioritized and addressed. Their unlimited vacation policy - yup #17 on Modern Healthcare’s list - originated as an employee suggestion at lunch.

It is easy to say the company is too busy to do these types of things, but I am convinced that great organizations see it totally differently.

Why Invest in People and Culture

If you were to rank the healthcare technology and service companies most likely to have enormous societal impact, Health Catalyst and Evolent may not trade off the #1 and #2 spots, but if they don’t, they are not far off.  Is it a coincidence that they were both huge culture and value proponents at the earliest stages of the company? I think not.  I also don’t believe it is coincidental that they have invested so much in scaling culture and values while their business operations scale.

Here at Oxeon, in a totally different stratosphere from Health Catalyst and Evolent, the same lessons apply.  I am quite sure that if we had not focused on giving great people the opportunity to “get out over their skis” and had not transitioned people who didn’t live up to our cultural values, we would never be in a position to impact 100,000,000 lives.  I also know that when we do achieve that goal, it will be solely due to our people and our cultural values—and I understand that today’s people and cultural values won’t necessarily be the same as those in place when we impact the 100,000,000th person.  My biggest hope is that they won’t be too different, and that everything we do today will be a part of everything we do then. As I think about what it will mean to achieve our stated goal, I know no investment is too large to make sure that happens!