19 – Aspen Institute Health Innovators Fellowship Conversations | Podcast Collab with Portal Innovations

Marcus: [00:00:00] Welcome everybody to, uh, the kickoff after the kickoff of, I think our first Aspen Institute Health Innovators Fellowship reunion here in Chicago, Illinois. There we go. Uh, my name is Marcus Whitney. I’m a part of class six, the Sixers. There we go. Um, Uh, and, uh, and I also have a podcast called health further that this is going to be, uh, broadcast on, and we are so excited to be here in partnership with, uh, John and the team at portal innovations and their awesome podcast lab rats, unicorns.

John, thank you for hosting us. Uh, the food has been incredible. This building is fantastic. I know you’d take us on a tour if you weren’t recording this podcast.

John Flavin: So, so excited to have everybody here.

Marcus: Really awesome. Uh, and Tanya, thank you for being our fearless leader and putting this all together.

So, um, so we’re gonna, we’re gonna do two mini [00:01:00] panels, uh, featuring, you know, some of the, the amazing talent that is part of the, the Health Innovators Fellowship. Um, the first topic that we’re going to cover, we’re gonna really deal with what’s going on, uh, broadly in the environment from a macro perspective and how that is, uh, impacting, uh, healthcare innovation.

Obviously we’re very focused on innovation and health equity, but you know, capital really matters and what’s happening in the macro environment has a huge impact on that. And so, uh, we, we’re gonna. We’re going to ask our guests to give a quick introduction of themselves and then John, uh, you’ll, you’ll take over the, the question asking for this part of the session.

Um, but, uh, Anna Higui and, uh, Michael Gray, please just give a quick introduction of yourselves and then we’ll, we’ll jump in.

Anna Higui: Well, um, good evening, everybody. I’m so excited to see all of you in our beautiful city. I’m a, Fellow Chicago in, um, for the folks that are from Chicago. So excited to be hosting you all here.

Um, I’m part of class one and, um, whoo. Yeah, that’s right. That’s right. Um, the originals [00:02:00] and, um, by day I am an investor venture and growth stage investor focused on, um, value based care broadly in the shift towards, um, a more equitable, um, better outcome, better for everybody healthcare system. Um, I spent 13 years prior to joining my current firm at a firm called sandbox industries here in Chicago that partnered with the blue cross blue shield plans across the country, helping them make similar types of investments.

And, um, it’s been a great couple of years on my new platform called voucher. Thanks for having me.

Michael Gray: I’m Michael, oh, go ahead. I’m Michael Gray. I’m a partner at Neil Gerber and Eisenberg. We’re a law firm that’s based here in Chicago. I do, I’m a corporate lawyer. I do a lot of venture growth stage investing in M& A.

I do a lot in life sciences. I do, I do a tremendous amount also in healthcare, um, tech. And so it’s been really amazing to watch the environment change. [00:03:00] I also have a. It’s a bit of a non linear path in that I practiced law for about five years. I was then a venture investor for seven years and didn’t practice law.

And then through a very circuitous route, decided to go back and practice. And all of those decisions in retrospect were all good. And, um, you know, I, I love what I do. I love watching and being a part of, uh, innovation. It’s exciting and fun.

John Flavin: I’d like to do a special shout out to Michael and Neil Gerber Eisenberg.

They are the sponsors of tonight’s show and event and we’re really close with working with Michael and his team. They’ve done some amazing work for many of our companies, well known across the country of course, but certainly here in Chicago when it comes to healthcare innovation, startups. Intellectual property.

So thank you very much for your support. Yeah,

and maybe just a little [00:04:00] bit of, um, level setting as we get started, uh, with the Lab Rats to Unicorns podcast. Um, tonight’s episode, obviously it’s a live taping, but the focus is a little juxtaposed from the way that we typically are, uh, interviewing our guests. The story of Lab Rats to Unicorns is really about the individual behind the innovation that’s happening, whether it be in a biotech startup, in an academic lab, in a large company, anyone who’s focused, whether it be a business person or a scientist or anybody in between, that’s bringing innovation to solve important needs in the healthcare environment.

And most importantly, with the North Star being the patient and trying to. You know, bring solutions to patients in a transformative way. Um, the orientation of the show is usually around the individual to be able to humanize science and, and, and welcome a diverse set [00:05:00] of newcomers to the space that maybe not are, are not immediately identifying with a pathway in biotech life science or healthcare.

But by hearing the story of the individual behind the journey, And, um, aspiring to be like that person, we hope that we’ll welcome a brand new set of very diverse entrants, uh, onto the pathway to see life sciences as a very important and potential pathway for many different folks that, may not have otherwise thought about themselves being involved in the field.

But tonight, that juxtaposition is more around a specific topic, and we’re going to use the people here, these world class experts, to be able to provide perspective around the topic that we’re going to focus on tonight, which for this episode will be really macro trends, In healthcare innovation, and so we’ve got some, um, individuals here that are all playing different roles in [00:06:00] not only, you know, being a part of that industry and ecosystem, but are affecting it, influencing it on a regular basis, and we’ll hope to tease out, you know, some of the trends that are happening in, in the conversation.

Um, you’re here at Portal Innovations. This portal is all about trying to take great ideas coming from academic institutions, and we’ve got many here in the region, and focusing around innovators that have great ideas, but um, need to have an illuminated pathway to kind of. Pave what is currently a gravel road out of the university, um, into a more, uh, commercialized setting.

And so what you see around you is the physical infrastructure that’s required to be able to do chemistry and biology, those buzzwords CRISPR and, uh, RNA, mRNA, um, cell therapy, gene therapy, all those things are happening behind these walls here. And to be able to do that kind of work, you need to be working in an environment, um, that has that special infrastructure.

Okay. You can’t do that type of [00:07:00] work, you know, in your bathtub or garage at home. And so, creating the physical infrastructure is certainly a big part of what Portal Innovations represents. But again, to go after the, the individuals that are pioneering these new technologies, they need to be surrounded by money.

So, we provide capital, they need guidance, they need team, and that team is, you can’t be one, a one person show to get an idea in healthcare all the way from the bench to the patient. Takes millions, sometimes billions of dollars, many years to get to that patient at the end of the day. So, it requires team building.

And so, we create. So, The team and support the individuals at poor. That’s what we’re all about. And it’s really democratizing biotech to emerging ecosystems like Chicago that have great science but have been under financed. They’ve been under supported from the infrastructure perspective. So that’s the backdrop that our audience is in physically, and I’m trying to communicate, you know, the excitement and [00:08:00] the electricity in the room as we get underway with some of the questions that I have.

for our panelists to set the stage. So, um, why don’t we start with each individual, um, addressing the question around really just. So, you know, what’s, what’s going on, uh, at a high level from your perspective when you think about some of the healthcare innovation trends, whether it be, uh, in financing or breakthroughs in technologies and, you know, maybe introduce when you define healthcare, what you’re describing because healthcare has such a broad spectrum of different types of inputs that, and the modalities that can be defined as, as healthcare.

So why don’t we start with Michael addressing that question?

Michael Gray: So in, in terms of identifying healthcare, I guess, I, most, the vast majority of what I’ve recently been doing is in what I’d call healthcare tech, largely with an interface of using technology in [00:09:00] order to interface with consumers and all sorts of different, um, in all sorts of different sectors.

And, you know, what I’ve seen is most of these companies are venture backed. The venture industry is going through a really interesting cycle right now. Um, you know, 2021 was a banner insane year. Uh, that year is over. Now, um, you know, the, the 2022 year was a really significant down year. Of financings. We saw a lot of workouts, a lot of down rounds, a lot of really unpleasant things going on, frankly, a lot of companies, uh, You know, that we touched and or saw indirectly, uh, you know, went out of business.

I am now starting to, I’m still seeing some of that, but there is a really significant uptick in the [00:10:00] companies that are solving problems. And. Being innovators and and having great teams and I am seeing an incredible amount of new financings new younger companies getting funded and and and I I think the market is is is on its way to a recovery, I think we still have a decent chunk of Companies that are gonna struggle and not do Well, I think a lot of, you know, I’ve, I’ve also been involved, involved in a decent amount of kind of more private equity oriented healthcare, um, businesses and a lot of them are gonna have debt issues and those are gonna be, um, interesting as a lot of the debt becomes due.

But, you know, when you have these downturns, there’s an incredible amount of. Creativity and I’m, um, uh, this is my third cycle. I’m very optimistic about it. And I think most importantly, I don’t think there’s ever been a cycle where there’s more [00:11:00] capital on the sidelines that needs to be deployed. It is going to find a home with great entrepreneurs.

Great summary, Anna.

Anna Higui: Yeah, well, you took my last soundbite because I was going to say 2021 was also a banner fundraising year for all those that that manage private capital. And so, without a doubt, that money is going to find homes over the next two to three years, just because that’s what you get hired to do when when people commit capital to your funds.

And I would say, when I look at broadly the landscape and the ecosystem, the one thing that has It’s just sustained sort of drumbeat from both sides of the aisle and, um, sort of our country at large is, um, moving more and more of our healthcare dollars into aligned models that are actually delivering real health.

So, I would say as, as I’ve sort of evolved my view of what healthcare is in this country, um, in part from one of my fellows who has been banging this drum, Rebecca Oney, for as long as I’ve known her [00:12:00] and probably as long as she’s been alive, um, the idea that we think of healthcare as this transactional intervention in a clinical setting versus health more broadly defined as, Sort of waking up every day and feeling well in mind, body, and soul.

And so I think the models that actually are gonna sustain in this next innovation cycle are those that, um, are delivering across all those aspects of what people actually care about in their day-to-Day lives. And so integration of, uh, behavioral and. and medical care, social needs being at the forefront of how we sort of show up for patients and populations that are struggling, um, and using healthcare dollars to do that work.

And so those are a lot of the models that I think have seen sustained investment, um, over the last couple of years and will continue to attract dollars over the next couple.

John Flavin: So a rosy, you know, uh, outlook for the future. As you look at that tripod around the sidelines, fueling and being accelerated by new models, new technologies [00:13:00] that are advancing at a rapid pace is part of what I’m hearing you say.

Marcus, if you could, you know, provide your response to that same question and maybe also comment on with, you know, the downturn from 2021 to current date. Um, how has that affected innovation and where are we today and what are some of the negative implications, you know, of that, um, lack of direct funding into those, those companies.

Marcus: I play in the early part of the cycle. So precede seed series a, um, I think that the biggest sort of mindset shift for those companies is because there hasn’t been funding. And, and I think even still, you know, it’s, I don’t know, six to 18 months before the funding. Really, really comes back. They they’ve had to shift from a growth at all costs mindset to, to an actual, like be profitable or live on your own oxygen mindset.

And, um, I mean, I think [00:14:00] that’s a really big head shift. For, for a lot of founders to make, and it’s not the game they got into. It’s not what they oriented themselves around when they decided to, you know, put everything on the line and go do this company. And so shifting that mindset has been very difficult for a lot of early stage founders.

That’s, that’s the thing I’ve, I’ve mostly seen. Um, and I think when they don’t do it quickly, the, The way the math works is, uh, if you don’t cut burn quickly, you might as well not cut it at all because it’s not going to make an impact. And so if they are hesitant, if they are unsure about whether or not it’s the right move to make, that’s when you get graveyard companies.

And there’s been a lot of those. Um, I think also the shift towards value based care that, that, uh, Anna was talking about, um, that is shifting a lot. I mean, that, that is shifting. The stability of the companies that, that a lot of companies were trying to sell into, right? So if you think about just for [00:15:00] profit health systems, probably more nonprofit health systems that are largely, um, fee for service.

I mean, those are in, Those health systems are in a very, very serious place right now. There’s a lot of instability there. There’s a lot of uncertainty there. There’s a lot of cash on hand issues there. And so they don’t have a lot of bandwidth to talk about your new health tech idea right now. And so that’s, that’s extending sales cycles, and that’s creating a lot of problems.

So it’s a, you know, I, it is all going to work itself out, but on the ground in the, in the early stage, It’s a, it’s a crucible right now, for sure, for sure.

John Flavin: And what advice do you have to some of those companies and entrepreneurs, you know, as they need to innovate, if you will, to survive, um, what, what are some of the guiding principles that you offer to some of those companies as they’re moving downstream in this kind of, uh, Darwinian moment, I guess, you know, as we [00:16:00] transition to hopefully better days ahead, but at this point in time, it’s still working its way through the system, as Michael pointed out.

Michael Gray: I mean, I always feel like what you’re talking about in terms of capital getting scarcer is for most early stage companies, a huge benefit because I think a lot of companies raise money and the founder CEOs are generally incredibly good at raising money, but raising money can hide a lot of bad business models and bad business.

Decisions and if you really are forced to look at what you’re trying to do, the problem you’re trying to solve, how you’re spending. Every dollar. It’s when I’ve seen people not spend years of their lives and often tens of millions of dollars, never finding a business model, but being able to sell the next person on the sardines [00:17:00] that they’re going to open the sardine can of and it’s going to be rotten sardines.

Um, so I, I feel as though right now is a time when there’s going to be. a tremendous amount of really, really great businesses that are, that are born and that are, and problems solved by people with the lack of capital. So, I mean, I’m super optimistic about what’s going on right now. As we

John Flavin: move past the stench of the rotten sardines.

Exactly. I don’t like them when they’re fresh. Anna, your comments?

Anna Higui: Yeah, I mean I think Marcus hit on a, and Michael did too, the don’t run out of money and solve a problem someone cares about. And I think if you do both those things and then unfortunately, I’d say, you know, our healthcare system is not a meritocracy.

It’s still very much a relationship game and the sales cycles are long and it takes sort of those sustained relationships to be able to push, push [00:18:00] through, um, and, and sort of get, get proof of concept. Get some data points that allow you to then sell your next customer. So I think the early stage is tough.

Um, I, at Veltruist, so we live inside of Welsh Carson Anderson and Stowe, which is a, you know, 5 billion, um, healthcare and technology private equity fund. And, and so some of what’s been really fun actually about this role is I get to come in and partner with entrepreneurs and give them, um, a bigger check and more access.

And, and some of that is, um, you know, not so that they can, you know, spend money on ping pong tables and like the, the, the heyday of the, of the dot com era. It’s really about being able to step into real risk and show up as a true partner to these large scaled organizations that are trying to solve. Big things that are going to move their bottom line this year.

And so, you know, if our companies can show up and actually say we’re going to Manage your substance use disorder population [00:19:00] and take total cost of care risk and be accountable for engaging that population Getting them from a jail into recovery stable housing, a job, and then start working on their diabetes.

Like, that’s a real solution, and in order to show up and say that, um, which one of our companies, Wayspring, does to manage Medicaid plans, you’ve got to have a capital base to, to be able to do it. So, I think there is absolutely, um, in healthcare, especially in the services side of healthcare, you know, you’ve, you’ve got to surround yourself with the right relationships and the magnitude of capital to be able to, to sign up for some of the transformative stuff.

John Flavin: Well, Marcus, you mentioned that, you know, it’s hard to get attention, you know, to, you know, as you see these early stage companies looking to position themselves to get attention with the systems or the groups that they’re trying to provide those services to, are there any business models or technologies that are standing out that are getting attention, you know, as you look at the, um, faster moving, um, companies [00:20:00] that are getting funded or supported, um, as they try to move their, uh, platform downstream?

Marcus: Um, I mean, I, I think, Technologies, uh, and or tech enabled services that can prove that they can save money, um, are getting traction, um, and The ones that maybe do that incrementally are not, it’s, it’s, it’s pretty, it’s pretty straightforward. Um, you know, and I, I agree with, with, with Anna. I mean, depending on what you’re doing, you need a certain base of capital.

If you’re going to get into the services space, you need a certain base of capital. Right. So, um, like if I think about. Our portfolio right now, you know, the companies that have been able to get to what I would call sort of the, you know, the, the clear path of scaling fastest, they’re pure, they’re two pure tech companies.

Um, and then once it starts to get into the [00:21:00] services piece, and that’s a more of a blended business model. There’s a technology component to it for sure, but when the services are in there as, as well, um, it’s, it’s a little slower ’cause there’s a lot more. Building the relationship, proving it out, you know, through small population segments and then how you scale it from there.

So, um, yeah, I mean, I think, I think it depends on what the business model is, uh, and who you’re trying to help. If you’re trying to help payers, I’m seeing a lot more. And, you know, not just like a United, but also even a health system that happens to have a health plan. I’m seeing that move a lot faster than just like a pure fee for service provider.

Michael Gray: There’s just one thing I want to touch on for the entrepreneurs who are. Listening to this, I think too many entrepreneurs who are raising money at whatever stage it’s at often just look at the valuation and they forget about the terms and they forget about the relationships that can be brought to the I’ve had the [00:22:00] privilege of working with, you know, funds similar to yours, who’ve got, you know, institutional investors who are some of the largest insurance carriers out there, some of the largest pharma companies, um, behind them and the network and the value that, that those relationships can create versus just money.

You’re valuation with the right partner. If they’re a good partner, Um, and thinking about how they can help you build your business. And I think that point is for many entrepreneurs, just not. Seen clearly.

John Flavin: Yeah, no, I, I agree. We, we, we see that frequently, especially with first time entrepreneurs that their, their main focus, they think entrepreneurship is about raising capital and it certainly is a big piece of the puzzle, but raising the right partner, raising the right team.

the right board, all those things are really critical elements, you know, even at that very early stage and getting these ventures off the ground. And I would say just representing kind of the, [00:23:00] um, within the healthcare sector, you know, life sciences, um, we’re seeing a lot of the same, uh, trends, um, in the sense that we’re focused on the early stage.

There’s still a lot of breakthrough sciences happening. Um, we have to look downstream, where are the pharma companies looking? And interestingly, Um, to the point made earlier, a lot of capital has been raised, um, from limited partners into dedicated life sciences funds. Many of those funds, um, you know, are billion dollar funds, but, you know, I’ve seen a few press releases saying, um, billion dollar fund, we want to be the first 100, 000 in and the last hundred million before the IPO.

That’s a trend shift and a lot of that’s being driven, I think, by, you know, a need to get into the cap table early and then wanting to be Managing the destiny, you know, of that, um, company earlier on in the process. So you see a lot of historically late stage private, even private equity type firms going really early and similarly pharma companies.

That we talk to now on a [00:24:00] regular basis are looking for company co creation opportunities at the very front end of the process. So they’re getting more engaged with the universities. Obviously, we’re seeing a lot more of that type of interaction. Um, they’re looking for opportunities outside of the typical hotspots.

So the well, uh, worn hallways of MIT and Stanford and because this, you know, distribution of talent that’s happened, um, some of it through COVID, some of it through the university’s investing. in bringing in those Cambridge backable faculty to their ecosystems is distributing the landscape, and so there’s opportunities outside of those normal Hotspots, especially at the early stages, companies that are, I think, the most difficult and where we’re continuing to see challenge is the, the pre 21 group that was thinking that the normal world was, you know, you raise a a hundred million dollars a and then you do $150 million crossover round and six months later you, you do an [00:25:00] IPO and companies that had a platform but didn’t have a product and weren’t on the runway.

Set to go out in the IPO, but didn’t make it are really in a bad spot. So I think it, it all depends on where you’re at. And of course it depends on like what technology is being worked on, what therapeutic area, some really important breakthroughs have been happening, you know, with what we’re seeing, you know, with, with products and the obesity class that have applications in, in other areas, I mean, the rise of Eli Lilly success, you know, with a, with a, um, Uh, their, their product moving that direction, Novo as well, these are now some of the most valuable pharma companies, um, in the world and, and behind it, you see a lot more focus on neuro.

So cancer continues to get investment, but neuro is becoming a bigger and bigger part of the, uh, overall, um, platform of drugs moving forward. And of course, if you can make meaningful advances in those areas that are really unmet needs, that can [00:26:00] also be another way of delivering novelty and. Uh, value for patients.

If we switch gears for a minute and talk a little bit about the regulatory landscape, I’m curious. Perspectives on the Inflation Reduction Act, um, has there been any Negative impact or outcome on companies that you’re working at with in in in this regard for example in biotech Working on a small molecule is, um, more at risk than working on a modality that involves biology.

So I’m just wondering, are there any spillover effects of IRA affecting or pushing people more toward a given area of innovation in healthcare? Any comments?

Anna Higui: I can, I can jump in and, and maybe, um, not answer that question, but, um.

John Flavin: That’s a great, that’s an answer there.

Anna Higui: I mean, I think there were some pieces of [00:27:00] it around, um, continued investment in oncology and, um, mental health. which were which were great. But I think that similarly maybe in the same cycle we had and again, I’m a more services and um HCIT oriented investor and so the adjustments to how CMS is looking at risk adjustment and, and thinking about the underlying risk of the Medicare population and how People that are taking that risk in the private markets are going to get compensated and rewarded has been a big transformation because it’s moved from Really a game of sort of coding capture and understanding the risk to actually managing the risk and so that’s been a big boon of You know specialty care models and and lots of of really interesting, um, momentum, I would say.

Um, I would also say the, the sort of, um, Liz Fowler, again, one of my other, uh, fellow fellows has, has reiterated the, [00:28:00] you know, moving all of Medicare to risk by 2030. starting to look more seriously at managed Medicaid and man, Medicaid dollars. And so when the government does that, they’re attaching these baselines and these benchmarks per capita to patient populations across the country.

And so that’s like, uh, I think like a, like a beacon to entrepreneurs saying, like, if, if you can, Take that population and those dollars and spend them differently and get to a better outcome. There’s a reward. There’s a business to be built. And so I think again from a less again from the life science lens and more so broadly, just the general sort of regulatory apparatus that got a little bit, um, sort of dislodged in a good way during covid, um, to unlock some of these new models.

So I’d say You know, I’m again, quite optimistic that we’re, we’re sort of headed in the right direction with sustained momentum and some of these, these big trends that I think will, will drive sustained sort of investment as well as, um, creativity in the entrepreneurial [00:29:00] community.

John Flavin: That’s a great perspective.

As we wind down the lab rats episode, um, I’d like to ask each of you, if you could just very briefly, what got you onto the healthcare path to begin with? Just give me one North Star, one trigger, maybe one, um, inspirational person that, that affected your path to get you into the field of healthcare innovation.

Marcus, you want to kick it off?

Marcus: I mean, I’d have to say my, my, my partner, Vic, um, you know, he got me into not just healthcare, but he got me into venture capital. Um, and he was willing to teach a. Tech guy who just was a programmer, um, about this entire world. And, um, I’m fortunate I’m in Nashville, which is, you know, very much a healthcare town.

So you start building relationships and you can kind of get skilled up pretty quickly. But, uh, you know, my, my business partner, I’m pretty, pretty lucky. Cool. Anna?

Anna Higui: For me, um, I [00:30:00] am a very, like, efficiency oriented person. That’s my North Star as a human. And if you ask my kids and my husband, they would complain about it a lot, because it’s like, everything’s got to be orchestrated and well oiled machine.

But I just ended up getting placed in the healthcare group as a young analyst, and was, like, mind blown. With this industry and I was lucky enough, um, to be in an organization that had a lot of people who had lived through multiple cycles and we were in a, um, hospitals selling off provider practices wave and I just got like a, a bug and got to spend a lot of time with them talking about this industry and how fascinating it was and how well it looks completely inefficient.

It’s running exactly as it was designed to run. And so that just got very passionate about being part of changing the incentive structure.

Michael Gray: That’s cool. I mean, I, I guess for me, you know, my, my educational background was in math and physics. And so I’ve always loved science. I’ve always loved, [00:31:00] I’ve always thought biology in particular was also, um, incredibly cool.

And, you know, I just guess through my practicing law, I think to a great extent, I got lucky and stumbled into client showed. Curiosity and, you know, love and passion for the area. And look, it also happens to be about 20 percent of GDP. So, uh, you know, it’s a big, it’s a big area with a, with a huge swath of really cool things going on.

And so that’s. You know, kind of, it’s just my science background and curiosity and just there’s so many creative people in the area. It’s just fun to be in it.

John Flavin: Love it. Yeah. No, just touching on that. Just the people, the characters, you know, just the journey at the end of that process, the patient, of course, we’re all motivated by that, but the people that you get to interact and work with along the way, um, I think are key driving factors for, you know, why you stay on that journey and why through the ups and the downs, you know, you have the opportunity to really.

You know, [00:32:00] be part of a story, you know, part of an adventure, you know, to, to get there. And, um, so with that, I want to thank our panelists. It’s been inspirational to me. Very excited to, uh, have this episode, uh, wrap up with the Lab Rats to Unicorns. And so, um, with that, we’re going to transition. Uh, this panel out and we’re going to move into an encore and, uh, Marcus is going to, uh, take us forward now with his, uh, health further podcast.

So thank you very much.

Marcus: I will now, uh, ask doctors, Cameron Matthews and Kedar Mate to join us.

Kedar, Cameron, would you each, uh, just give a quick background on who you are and, uh, also what class you are in the, in the HIF program.

Dr. Kameron Matthews: My name is Cameron Matthews. I am a family physician, and I am chief health officer with CityBlock Health, uh, based out of [00:33:00] Washington, D. C., currently. Originally from Philly, and everything that that means, including I will be wearing my Eagles Kelly green on, uh, Sunday.

And I was very happy that the Chiefs lost. Uh, but, Part of the very, very dynamic sixth class of the Aston Health Innovators Fellowship.

Marcus: Six is in the house.

Dr. Kameron Matthews: Six is in the

Dr. Kedar Mate: house. I’m Kate Armate. I’m an internist, a faculty member at Cornell, and the president and CEO of the Institute for Healthcare Improvement, which is, uh, Boston based, uh, not for profit consulting company that basically focuses on healthcare quality, patient safety, reliability, and increasingly health equity, which I know we’re going to be talking about.

And I’m part of the Justice League, appropriately titled Class 3.

Marcus: Nice. Class 3, pretty deep. Alright, so, um, let’s just start with trying to define health equity. Um, I know that, [00:34:00] you know, Many people come at this from different perspectives, but it is literally in the description of what we are about as Aspen Institute Health Innovator Fellows, uh, that we are about advancing health equity in the United States.

Um, what does that mean? And it’s okay if you just say what it means to you. Um, but, but what does that mean? Uh, and, and John, I’m going to, uh, after we have the good doctors give their definition, I’ll, I’ll ask you to do the same. All right, Cameron.

Dr. Kameron Matthews: So we were actually talking about this in advance. We were chatting about this earlier.

And I’m going to first state that it is still awfully frustrating that we have to ask this question. That we still need to define this. And that there are still people questioning, um, what the definition of health equity is. That being said, I will follow suit.

Marcus: Thank you.

Dr. Kameron Matthews: Um, I get frustrated when a lot of people describe health equity, uh, with regard to access to care.

I actually think health equity is [00:35:00] about the equitable outcome of care. And I think those are two very different things. I think, uh, significant portions of the globe of Chicago, of the communities, uh, that, that I have served over the years, um, they may, at least on paper, have access to care, but their outcomes are still completely differentiated, uh, to the point of Englewood here.

I, I practiced here. Uh, I, I lived in Chicago for 13 years. Englewood here has cervical cancer rates, uh, equal to that of third world countries. I mean, literally on 63rd Street, where I would see patients extremely different from this wonderful. West loop beauty that we’re sitting in, um, just, just minutes away.

Um, but not minutes. If you’re talking about the bus rides that my patients actually had to take to come see me. Right. Um, [00:36:00] but I, I think, um, for me, health equity is about actually achieving equitable outcomes and not just putting options. online in the form of some new technology or digital health and hoping that others take advantage of it.

It’s not about just making sure that a clinic is available. Sure, this, this one provider may take Medicaid or, or, or some other expansion form, but yet if we don’t actually provide the communities that need it most, the agency to actually use that access, then we still have the outcomes that we’re seeing.

Dr. Kedar Mate: Yeah, I like that, uh, that notion that it’s about outcome and not just access a lot. I think there’s a way in which we could create very equitable access to very poor quality care, um, which in some cases is occurring in our system and that would result in very poor and inequitable outcomes. Um, I think a little bit about equity as, [00:37:00] uh, being focused on a sense of fairness, um, and justice.

Uh, to me, um, in many ways the pursuit of a more equitable health system, because I believe, I fundamentally believe that health is a, is a, is a human right. And to me, therefore, uh, the pursuit of more equitable care outcomes as you’re describing is really a pursuit of our shared humanity. So for me, the pursuit of the health equity objective is really the pursuit of our right to live, function, work, play as the CDC calls it, um, in a, in a, in a manner in which we wish to live.

Yeah.

John Flavin: Yeah. And building, building on that, but maybe looking through. The lens of trying to bring new solutions to patient problems, whether it be a new drug or a new, uh, med tech or diagnostic tool, um, answering the question, maybe through that lens, which is where we really focus our time and energy. [00:38:00] It begins really at the, at, at the front end of that process where you’re thinking about.

Health equity as it relates to who are the teams of individuals? Who are the entrepreneurs? What problems are they thinking about? And by having a more diverse set of founders surrounded by a more diverse set of investors, um, we believe that. And that’s where innovation is stimulated because there are new problems that are being thought about because there are patient sets that are currently being, uh, uh, uh, under met with their, with their needs.

So it begins with the innovator, the entrepreneur going after a new problem that has not been addressed before, but by virtue of where they’re coming from and seeing the need in the community that they’re part of, that they can, you know, make a difference, you know, in, in that environment bringing those types of modalities to the, to the patient.

Along the way, um, [00:39:00] then also being inclusive with the way that clinical trials are being run and how the trials are being made attractive and, uh, access being provided so that the patient set. that is participating in the trials is representative of a broad based diverse population. And so when I think about health equity, I think about it from the, from the beginning stages of when a drug gets discovered, what problem is it solving?

Is it going after a unique problem that’s not being addressed in diverse populations that have these needs that are not being thought about so far? And how. that begins, starts with the complexion of the team that gets it started and the patients that are being treated early on in that process. That’s how I think about health equity from the innovation perspective.

Dr. Kameron Matthews: Can I build on that? Yes. Thank you very much. Um, I, I absolutely love that. Um, I think it, [00:40:00] I think we need to be thinking as upstream as possible. I couldn’t agree more about the diversity of those who are involved in the innovation, those who are building, um, and, and providing ownership of the clinical trials.

I, I think it goes. The step beyond that as well, uh, as far as how that data and those solutions are disseminated, how they continue to be actually made accessible and actually lead to outcomes that actually benefit the communities that were studied. Uh, because I think at, at times, um, as, as we’ve seen across the globe that, uh, diverse participation in clinical trials alone is not sufficient, right?

Um, that we need to turn those into. actually executed solutions that actually benefit those same communities. Um, and I, I don’t see that as, as, as, um, prioritized as, as I think it should be. I think when we [00:41:00] discuss clinical trials often, it’s, it’s really just about participation. It’s not about the application of that information.

Dr. Kedar Mate: No, that that’s a fair point. And I was going to add to this so that, you know, it has to be more, not just on the R and D and on the discovery side of this, but on the commercial side you know we’ve got to see Uh, the, the equity considerations being applied to the commercial side of biotech, pharma, et cetera.

So that we’re, we’re seeing us not only make, uh, our medications that benefits the diagnostics and new technologies that we’re creating, that they’re not only more accessible in a generic sense, but they’re more frankly affordable to the communities that need to benefit from these, uh, therapeutics and discoveries that are being made.

Because otherwise we could study the problem, find a decent solution. And it will never reach the audience that we’re hoping to get. And we’ll never get to the equitable outcomes that Cam you’re hoping for. Exactly.

Marcus: Do you think that the move? Towards value based care, uh, positions us collectively to have a better shot at getting closer to, I’m not even going to say achieving, but [00:42:00] getting closer to health equity faster.

Like, do you think that the incentive model is a fundamental piece and say yes and no, and then, and then also maybe touch on some of the other things, especially from a policy perspective that are critical to shape, um, The right movement in the commercial landscape to get us there, right? Because we know at the end of the day, we have a largely privatized health care system, right?

And so if we’re looking for equitable outcomes, we’re going to need to find a way to make it, uh, exciting for the free, for the, for the free market. Right. How do we design that?

Dr. Kedar Mate: Yeah. I mean, I, one thing I’d say is that I think that value based care, uh, approaches, whether they’re full, you know, total cost of care or something short of that, uh, certainly incentivizes the providers and the [00:43:00] ecosystem as a whole to start working on things that are more upstream and more community driven and community oriented, which is likely to produce a more equitable care outcome.

Um, that said, I, I worry a little bit that we’re waiting for something to happen when there’s a lot that we can do now. Um, in spite of the fact that not everything is fully into a value based care arrangement, there’s a lot we can do today, even on current very fee for service oriented systems that are, uh, that it’s, you know, for me, it’s all about choices that we’re making about what, um, areas to focus our energies on.

Uh, what problems to prioritize and frankly, whether or not we’re making choices, uh, that result in more equitable care outcomes, uh, than, than not. So I, I just don’t want us to be waiting for us to get to 2030 when Medicare promises that we’re someday going to be in a total cost of care arrangement because there’s a lot we can do today.

Dr. Kameron Matthews: I think the accountability that [00:44:00] comes along with value based care is, is. I, I am fortunate enough to be in this space now and to really, well, I think at the VA in my former role, we were pretty much, uh, uh, as value based as they come as well, too. Um, I, I think the accountability of, of how we actually took care of veterans in the VA, of how we take care of the communities that we serve in city block is a necessity.

To address equity. I think, however, the incentive as we see across the marketplace is still not there to provide this tool to the broader span of communities. The fact that value based care and Medicaid is Being questioned as a business model. Um, the fact that, um, there can still be a, a, a, a generalized average approach to [00:45:00] populations when we’re talking about total cost of care, that there’s still plenty of opportunity for inequities to still surface in there.

I don’t think it’s the panacea. I think, yes, per your question. Um, it’s a tool to get us there. Um, perhaps more broadly. Um, but I don’t think it’s the complete answer. I think we need larger transformation and accountability. for all Americans. Let’s think about it just locally. Um, I think, uh, that doesn’t exist, whether it’s in the fee for service or value based care model, period.

Um, I think we need the diversity of the workforce, as we talked about. I think we need the diversity of the solutions. Um, and we need all out accountability across every community. That means having, um, health care. Accessibility as well as adequacy to use that in every community, Inglewood, as well as the West Loop [00:46:00] again, um, I think it means, uh, we also, uh, really need to think about, and I’m sorry, this might be the wrong audience, Marcus, but we need to think about the amount of profit that’s being gained within healthcare that’s taking away resources.

Uh, from those that are, from those communities, uh, that, that are still underserved. Um, so, I think it’s going to require more than just a. I think it is going to require a change in the financing system, without a doubt, but I think it’s, it’s going to take an all out different approach to the medical model, as Anna discussed, that we’re actually, um, addressing broader concepts of health, um, but that we’re also flat out addressing institutional racism throughout our society.

I, I think healthcare inequities are a reflection of larger issues within our society.

Marcus: And it sounds to me like you’re saying that accountability is not Cannot be left up to the free market like there has to be some policy in place [00:47:00] in addition to incentive models strong in order to drive that. Okay, I didn’t want to make sure I was hearing that correctly.

John, what are your thoughts? I

John Flavin: mean, to add on to this again, coming at it from the perspective of the kinds of companies that we’re seeking to invest in and support, we’re looking for any advantage that we can find. And the way we guide our innovators and the kinds of investments decisions we’re making are all about thinking downstream.

Will this product, this platform that can produce products make a transformative impact on a patient? And from, I mean, from, from every perspective of both health equity and, and good, you know, market making opportunities, those two things can go hand in hand from the perspective of if you don’t have a transformative therapeutic agent to go after this sickle cell disease, then you’re, you’re not going to make it in the [00:48:00] marketplace.

Um, how are we going to invest in those kinds of companies trying to find the right technologies at the right time to invest in those early in the process is increasing the chances that Health equity can happen by the time it gets to the to the patient. I am less involved in the application and the administration end of the process because we’re really at that early stage of identifying why are we going to take this product and this team forward in the first place.

So I think making good decisions early from the capital investment perspective is how we are guiding our companies and guiding our investment teams toward What are the kinds of things that we think are going to stand out to have a chance to be broadly applicable and across any, uh, disease population.

Dr. Kedar Mate: Mark is okay. If I ask, I was, I was

Marcus: about to jump in and ask you something. So go ahead. Yeah.

Dr. Kedar Mate: Okay. Can I ask you, what, what does an equity analysis look like for you? As you think about making [00:49:00] a bet on a company, how you stay, as you think about making an investment, what is it? How does equity play into or consideration around equity play into your, your thinking or your choices

John Flavin: were, we’re really focusing from the standpoint of, um, classic, you know, market size, what is the opportunity looking at the diligence around the technology?

Is it differentiable? What problem is it solving? Um, who is the team behind the science that’s bringing this solution to the marketplace? The characterization of The total addressable market is really the driving math that we’re doing. As we think about investing. In a company, you’re asking a really good question.

I’m giving you an honest answer That it’s not driven by the analysis around analysis around, you know, health equity per se It’s more just what is the market? What is the opportunity? What what’s an unmet need in the market? and Identifying [00:50:00] what those unmet needs are, to me, is a business opportunity that’s being unaddressed if you don’t have the right people in the chair thinking about problems that they’re affected by, that I’m not affected by, that I’m blinded to.

So, I think that may not be Um, a satisfying answer, but that’s how we think about making the investments. It’s, it’s the economic perspective of by the time it reaches the pace and is there a market on the health equity side by investing in companies that are going after in the portfolio, diseases that are not currently being addressed that are affecting parts of the population that are not white.

Is part of the analysis that we’re looking at in terms of where, where are we prioritizing our investment?

Dr. Kedar Mate: And I think this is where, to some extent, the question of what, what is the unmet need? And are we, uh, building a system that actually helps us meet that unmet need is where the policy question starts to come into play as well.

Because, you know, [00:51:00] The, the truth is that I think we have a, as you described, a structurally and institutionally racist system, uh, that disincentivizes the pursuit of some of the unmet needs that are present, um, in our system, and, and if we wanted to correct this, there’s an opportunity, but it is a combination of policy action, uh, to now create conditions that would make it more valuable to pursue, uh, innovation, uh, for communities that need that innovation desperately but for whom traditionally there’s been a divestment, um, uh, over time, uh, structurally.

And so that’s I think where this connection of if you’re going to do an equity analysis, you know, if you do the market analysis as is, you’re probably right that you’re not going to make the kind of investments that you might need to actually reduce the inequities that are present. And that’s where you’re going to need a policy suggestion or support to actually create conditions that are going to make that investable.

Marcus: Agreed, agreed. Yeah. I mean, when I was standing up my fund, [00:52:00] uh, as I was raising and, you know, we were focusing on investing in black founders. Um, there was a Just sort of a natural connection that people made with us being a health equity fund, and I sort of was pointing them to show me the health equity codes, you know, I know there’s Medicaid.

So if you mean focusing on Medicaid, okay, that that’s that’s viable, right? Because that’s that’s at least pretty clearly laid out. But you definitely see a lot of panels on conferences and a lot of press releases. And it’s why I asked what the definition of health equity was, right? Because I think it is fundamentally pretty difficult for the free market today to be truly competitive and a hundred percent focus on health equity.

Unless you are really just focused on Medicaid and value based care because there there is infrastructure there from a policy perspective. There is a lack of policy. There’s gaps. There’s massive [00:53:00] gaps in other areas. And you know, those gaps feel like today they’re they’re likely to be better served in a nonprofit model where you know, you can just get willing dollars to Go support those, you know, those efforts, but that’s not sustainable.

Of course not. Of course not. Yeah. Um, cater, you, you, you mentioned, uh, that there were things that could be done today. Um, obviously you’re with the Institute of healthcare improvement. You know, can you talk about some things that, that, you know, that you all are advocating or that you’ve proven out that, that, that are being done today that maybe, you know, someone who’s listening to this wouldn’t be aware of.

Dr. Kedar Mate: Absolutely. Thank you for the question. We, We started this, uh, work about 10, 15 years ago now at the Institute on, you know, having developed an equity framework for what, uh, our primary focus was on delivery environments, so healthcare systems, hospitals, uh, primary and secondary care environments that were providing clinical services, uh, at the starting point.

And in those starting points, there are lots of things you can [00:54:00] do. Um, I’ll give you one example. We had a hospital, a big system in the Pacific Northwest. that was treating patients with the same signs and symptoms of the stroke. Uh, black patients, white patients walked into the emergency room, exactly the same signs of a stroke.

The black patients got clot busting medications, uh, uh, less than half the time that the white patients did. Um, and when the emergency room doctors saw that information, I mean, apart from the initial reaction of that data is wrong, it’s not true, like this wasn’t ours, you know, whatever. Once they got past that and they were like, this is real, this is a problem, we need to do something about it.

They started to look at their data carefully, did the kind of root cause analysis work that you do when you find a system problem, and they went after it in cycles of iterative cycles of process change. They found delays in care at every single step in the clinical pathway from triage to And even before triage, making the choice to come into the emergency room, and, uh, to [00:55:00] getting the, the medications that the patients needed, and they solved every step of that problem, and by the end of it, they had not only, this is one of the things that we find over and over again, it’s a pattern in delivery systems working on health, health That what, they not only made care better for their black and brown patients, but they made care better for everybody.

Everybody got clot busting therapy faster in those emergency rooms because of this intervention. Um, and that’s the kind of thing that I think we see over and over again. Now, you can’t support that as a provider system independently of the rest of the ecosystem. It’s being done because it’s the right thing to do, the moral thing to do, you know, it’s, outcomes, uh, but you need a payment model to support that.

And, you know, in, in Massachusetts where IHI is based, we had a chance to partner with the largest commercial payer with Blue Cross Blue Shield to build a health equity incentive model. And that model, I think is a, you know, is my view is a national [00:56:00] benchmark model for What it means to start incentivizing provider systems like the one I just described to do exactly that kind of thing of examining their data, finding inequities, and then rooting them out.

And now we’re working with pharma and biotech to do exactly what you’re describing earlier, John, you know, diversifying clinical trials, the investigator groups, but also working on commercial. Because I, I, like we’ve talked about here already, I just don’t believe that all you can do is, as we’ve talked about, diversify.

The subject matter and not, um, actually make the stuff that we create more accessible to people that need it.

John Flavin: That, maybe that’s my follow on question to you as well, is just Are you providing guidance to biopharma and pharma companies on the, on the, we’ve, we’ve already agreed that policy is an important factor for, um, opening up new market opportunities, you know, that are not currently being addressed and happen to be, uh, those that are not, you know, fairly Being an [00:57:00] equity being applied across all disease populations.

Are there any best practices or new ideas that are being thought about there that you know an early investor can begin to think about as they calculate the opportunity for both the market and and the equity analysis?

Dr. Kedar Mate: It’s a good question about the on the investment side. So this is a good time for me to maybe say that we’ve created a coalition.

Uh, between provider organizations, payers, pharma, biotech, and regulators now. To try to find a way to do all of the parts of this equation that we’re talking about here That coalition is called rise to health. It’s co founded by ihi and the american medical association and race forward and genentech Actually is a biopharma kind of stakeholder group.

That’s been part of it Um, we haven’t focused on the investor side, but we have focused on the the The companies are actually doing the producing the new diagnostic therapeutic material.

John Flavin: Yeah, that’s great.

Dr. Kedar Mate: [00:58:00] Cameron,

Marcus: Cameron, we’re out of time, but I want to give you the last word to also share. Um, some things, some innovation that could be, you know, much more broadly applied.

Uh, the city block is, is, is bringing to the market and, and maybe just sort of a final word. We started with you and, and, and I think we’ll, we’ll end with you.

Dr. Kameron Matthews: Okay. Um, I, I’ll challenge this question as well. Um, I actually, what I actually think the innovation is that we’re actually offering the standard of care to communities that are not otherwise receiving it.

We have a lot of solutions. We have, especially for the chronic diseases that we’re talking about that are rampant in our communities, right? Diabetes, hypertension, obesity. Um, we have The solutions. Yes, there are more coming right and we need to make sure we work on access and adequacy, you know of that access, um, but we have the solutions.

It’s [00:59:00] about actually providing that standard of care to the communities that aren’t receiving it. So it’s about making sure that they have Again, the accountability of a primary care team, and that’s one thing we, we are, are proud to do in city block. It’s about making sure they have more than anything, the availability and the cultural fluency of a mental health team that actually can deal with their issues.

Um, uh, it’s about, uh, including opportunities to address the social determinants of health, right? These are all. solutions that we know that are equally as data driven as any other data point that we have out there, but yet we’re still looking for that special innovation from the sky. Let’s just get the solutions that we have now to the communities that need them.

So it’s the, the innovation here is really, thank you. I mean, um, it’s about [01:00:00] raising, it’s about applying the same standard of care that everyone else receives. So the people that don’t point blank, it’s, it’s not a difficult equation,

Marcus: but that’s pretty innovative.

Dr. Kameron Matthews: It’s yeah. It’s a sad point to make that that in and of itself is innovative.

Yes.

Marcus: Well, this has been fantastic. I’ve learned so much. Thank all three of you. And John, again, thank you and your entire team for hosting us and putting this all together and feeding us. It’s been, it’s been a great, I’ll, I’ll let you have the final word.

John Flavin: We’re humbled by your presence. We’re so happy to, you know, host, uh, all classes of the Aspen Institute fellows.

I’m agnostic in my application of that. Well, we are so happy you’re here. It’s been a wonderful conversation. And, um, I know that, um, The Lab Rats to Unicorns, uh, audience will really appreciate, um, all the perspectives that were provided, you know, across all the panelists today. So thank you so much for being here at Portal Innovations.

Thank you.

Marcus: Thanks

John Flavin: [01:01:00] everybody.