96 – Why Nurses Are Leaving & How This New Solution Could Change Healthcare Forever!

Marcas: 0:00

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Vic: 0:17

Hi, welcome everyone to Healthfur, the recording live here at the Nashville Healthcare Council sessions program. It's been a great session so far, and I'm excited today to have two guests with me to talk about really some of the successes out of bringing innovation out of the health systems into the real world. So. We have Merrill Inovec. He is a partner at 25M Health. And Sean Dasmulchi, who is the CEO of Gratia Healthcare. Welcome, guys. Thanks for having us. Thanks for having us. So before we get started, uh, Merrill, why don't you just give a little introduction of yourself and, and the firm, a little bit different strategy and approach to investing than maybe some people are aware of. So maybe talk about that as well as your background.

Merrill Anovick: 1:05

Absolutely. So, uh, 25M Health stems from. A belief within LifePoint and Apollo that the strategy of building new companies in partnership with operators can have a transformational impact on that company. And then it also stems from the belief from the 25 Madison side that that can be a way to produce outside returns and that some of the best companies in health care are built via this type of close kind of inside out collaboration. So that was really the thesis that led to this firm being created. I'm happy to talk more. Well, I think everyone in

Vic: 1:38

the audience probably knows LifePoint and Apollo, but talk about 25 Madison and like the heritage there.

Merrill Anovick: 1:43

Yeah. So 25 Madison is a, is a venture studio, uh, and it's founded by a few successful multi time founders, Steven Price, Michael Linton, Matt Fremont Smith, that have had success across a variety of industries and they were really drawn to this. Uh, philosophy of not just providing capital to new businesses, but providing wraparound services and in many cases coming up with the ideas ourselves and really starting those companies. And that led to a relationship with Apollo who was trying to build out their innovation capabilities when Mark Rowan became CEO. And, uh, one of the places that we thought the strategy could make the most sense was in the healthcare world. And there's obviously a, a long history of successful collaboration between healthcare systems and the venture community. And we sought to build on top of that success. And like a lot of good firms learn from the people who came before us and have been, have been successful and impactful. I think core to what we do is really about, uh, depth of relationships as opposed to breadth of relationships. So we believe that by focusing really intently. On LifePoint and Scion and building relationships, not just at the CEO level with our sponsors like David Dill and Aaron Lewis, but all the way down the organization's, uh, the VPs of physician services. The directors of population health, the leaders of the regional facilities, that if we spend a lot of time with those people, we can produce really interesting innovations. And then we combine that with concentrated capital. So we have the ability to not just come up with these businesses, but fund them for a long time until we're able to bring a board, awesome investors like yourself, Vic, to help them take the next step.

Vic: 3:19

Yeah. Yeah. And so for full disclosure, I was, uh, the first outside investor, I think, Sean, in your company. So give a little bit about your background personally, and then also Gratia. Yeah,

Shawn Dastmalchi: 3:30

wonderful. Um, so as for my background, I, I am part technologist and part serial entrepreneur. I have my PhD from UC Berkeley in area related to medical data analytics and modeling. But I've spent the better part of my career on the business side. I came up through the ranks of marketing and product management in a large publicly traded medical device company named Carl Zeiss Meditech, eventually rose to being the general manager of their informatics division. And from there, I, uh, went on to start a company and begin my entrepreneurial experience and. And in this 2010, when I entered into the, uh, into the startup ecosystem and I've since founded a few companies, uh, some successful, uh, namely a Pixio Health that, um, use big data to help Medicaid Advantage plans do a better job of revenue capture. Um, and some not, not so successful, uh, which obviously helped with my experience of learning how to be a better entrepreneur, better investor. And I also, uh, um, advise companies along the way. So my journey with Gratia Health started when Gratia reached out in, uh, in, at the end of last year, 2023, uh, looking for a CEO. And, uh, it really piqued my interest for one, because it was a workforce enablement solution for nurses. And my wife's a nurse, so it was very, very near and dear my heart in terms of what can be done to bring joy and stability to the profession of nursing. But also what also, you know, what piqued my interest additionally was the fact that there was this opportunity to start from. a wedge application that has been very successfully deployed by Gratia Health for workforce enablement to turn the company towards being a data company. One can deeply understand nurses at the individual level and really help improve their professional lives and thereby retaining them. And so here I am, very excited and having a lot of fun.

Vic: 6:06

Uh, two things I've learned in the first five minutes here. One, I need to start calling you doctor, and two, your wife, uh, is a nurse, which is great for the Gratia, uh, mission. Um, so Mera, I want to turn to you and sort of start with the, the founding origin story of Gratia, uh, and maybe relate how 25M Health. Thinks about building these concepts into companies and maybe use Gratia as a part of that.

Merrill Anovick: 6:36

Absolutely. So with our innovation model, broadly, I'd say there's two sources of ideas. One is inside out. So through our relationships with the operators that I spoke to, they often come up with really interesting ideas that will surface pain points that are top of mind for them that they haven't been able to solve. And they'll bring those to us. Seek help. And then the second way is outside in. So I'm naturally spending a lot of time in the entrepreneurial community, interacting with awesome founders like Sean and hearing what they're excited about and where they think the world is going from a, from a technology perspective. The best ideas, the best companies we build are often an overlap of those two. And I think Gratia is a good example of that. So Gratia really Uh, you know, going back to my first conversations, my first meetings with David Dill when I asked him what keeps you up at night, it really was about retaining high quality nurses, making sure that they felt that the life point hospitals were a place where they could have a lifelong career and that they would be on site to provide care for, for patients in the communities because there's such a critical role there. And I think in during the COVID times, there was obviously obviously tons of disruptions, but one of the major disruptions is that there was a huge. Spike in contract labor spend and these systems had to spend had to rely more and more on people traveling into markets to augment the existing full time workforce. And that was not great for hospitals from a financial perspective. It obviously was more costly than their employee workforce, but it also, I think this is more overlooked. It's not great from a, from a care perspective because you have people who are not as. Deeply ingrained in the community, playing a larger role in the care journey. And I think in many of the life point communities. The people who are providing care there, they know the people on the other side of the, of the operating table or of the, uh, you know, the bed and it's really, that adds to the experience of receiving care at a life point community. So we kind of broadly asked the question, which is how can we solve more of these gaps, these care gaps by getting people who are employed at the facility to. Fill and take those incremental shifts. And it's a simple, it's a simple problem, a simple question that is actually very difficult to implement in practice. So we kind of worked with a leader at a regional facility who had come up with a incentive program to encourage those employed nurses to pick up incremental shifts. It was a pen and paper process that was done kind of almost invisibly via their existing payroll solutions, and we tried to build on top of that, which was successful and turn that into more of a product. So the first permutation of the product was simply taking that instead of program and making it, uh, you know, interactable via text messaging. And then from there, uh, we have continued to build on top of that into a broader ratio platform solution, which Sean could talk more about, but we basically went from a single site that was doing this very well to three systems. When the ROI was shown there, we made the decision to roll it out, uh, starting with Scion to a large number of their facilities across the country. Um, and that was prior to Sean joining, uh, and then Sean has come in and as he alluded to has really kind of built out the more comprehensive

Vic: 9:48

offering. Yeah. And so I, I talked to, uh, David Dale of LifePoint yesterday and it really was striking how much he focused on the overall community. So, of course, there's the patient and the family, but, but the nurse and the caregivers broadly and the physicians, uh, especially in, in LifePoint's markets, but really in any health systems markets, it's the humans that are, that are caring for one another. And the nurse really is at the heart of that, the center of that. Course we need the doctors and the lab techs and all the different people in the health system, but the nurse is Uh, the most common person that the patient and the family sees by the bedside all the time, and it's a hard job, and it's a taxing job, and emotionally draining, and physically draining, and it strikes me that it was really, um, great to sort of take this open, open problem Adventure. Let's go learn about the nurses. Let's try to understand what they're focusing on. Let's find one facility with have had some success. And then I think I want to bring Harrison into this. He's not in the booth with us right now, but is the fat was the founder before John joined about sort of sending him in there and go talk to these people. What's working? What's not working? Try to take those stories, those individualized stories, and can we find commonality? So, is that fair? Did I miss things in that process? How would you translate that?

Merrill Anovick: 11:18

No, I think that's exactly right. And I think the part that we don't talk about as much is that the first permutation of our solution here completely flopped. So we, we built a kind of text based interaction engine for nurses to answer questions. Uh, mostly focused on new nurses as they were getting started on the job and things that they maybe would be too new. You know, afraid to bring to their, to their nurse managers. And I think what we found is it was just, it didn't work in the workflow. So we, we did that and we, we built a very lightweight tech solution. We put it live at a, you know, small scale on a, with a, with a pilot and it didn't work at all. Yeah. And I think we completely threw it out.

Vic: 11:53

And so we, we have in the audience that listens, we have sort of, uh, operators, healthcare leaders, in payers and providers. We have entrepreneurs and management teams and investors. And I think it's important to point out that the iterative process of bringing a product to market, that product market fit, we typically celebrate the end point, but the iteration, you always have less than perfect success early on. And I don't see that as failing. I think that is part of the process to get to the, to get to the product that fits with what the market needs. It's very natural. I'd say almost every product that I've been with has gone through those growing pains and fits and starts. And that is the entrepreneurial journey and you need someone like Harrison to to sort of be every day in there listening. Okay, why? Why does it not work? Or what? What would make it better or learn? And then there's a version two and a version three and a version four. And then you finally find something that it. The nurses start taking and all of a sudden they're not going to give back.

Shawn Dastmalchi: 12:57

Yeah, you have to feel fast and learn quickly.

Vic: 13:00

Yeah, keeping it low fidelity, low cost, low engagement so that you can learn quickly, I think is exactly right.

Merrill Anovick: 13:06

You also need to do what we like to call non scalable things. And I think Harrison was really the heart and soul doing that in early days where a lot of the early success of Gratia when we did arrive at this wedge solution, which took off and drove huge impact. A lot of that was because Harrison was there at these facilities is. Implementing it, winning over the hearts and minds of these nurses. I mean, anyone who's involved with a health organization knows that anytime you kind of pitch a new tech solution to a provider, whether it's a doctor or

Vic: 13:33

a nurse, they

Merrill Anovick: 13:34

glaze over because they've had so many things put in front of them that completely flopped, that failed to deliver on what they promised. So a lot of that early trust that opportunity to build something that is going to help them. It comes down to do they believe that you're going to credibly partner with them? And a lot of that is really just do they believe the person across the table? And Harrison did a lot of that in these early markets. Yeah,

Vic: 13:54

when you're trying to learn, let's, let's, let's, Double click on that non scalable. Like it may be something that, uh, you can only do with three nurses in an hour. And of course that would not be a business, but you can learn a lot from that and learn what pieces work and don't work. Is that, is that kind of what you mean by that? Totally.

Merrill Anovick: 14:10

Yeah. So I think, you know, non scalable, which is like, you know, now that Sean is bringing this to many, many systems and hospitals, the implementation process is going to look a little bit different than what Harrison was doing with our, with our foresight. So, you know, there's non scalability from an operations perspective. Then also the early product in and of itself being just text messages based. We could have easily decided to build a full scale application to get that out of the door. And that would have taken us a lot more time that would have required more capital. But it would not based based on what we heard from the nurses, it would have made at that juncture a huge difference in validating our core hypothesis, which is does this incentive program drive incremental shift? Yeah. And we were able to do that via text message. And now that we landed that wedge product, Sean, I think is built a really compelling vision for how that becomes a comprehensive workforce management solution.

Vic: 14:57

Yeah. And so I think John, one of the most important steps in a, in a startup's journey from just beginning to then a seed investment, when I come in to series a or growth, Is finding the right role for the founder, which is a really important role, and then bringing in someone who has the understanding of what it takes to scale a business and hire lots of people, bring in lots of capital, build a board, all those things. Can you talk about that transition and how you protect the value that Harrison brought with what you can bring, which is, you know, quite different.

Shawn Dastmalchi: 15:36

Right. Obviously, if you don't start with a good core.

Vic: 15:40

Yeah. Without the founder, there's nothing. Yeah.

Shawn Dastmalchi: 15:42

And founders don't just help, uh, start the company. The founders also carry Um, much of the culture, enthusiasm and the vision that the company needs to grow in the various stages of your growth. Right. And so both Harrison and Laura are key members of the team, and they both bring a lot of value and a lot of experience to the table. Harrison, operationally, is probably one of the best people I've ever worked with. You speak to him today about a thought. And it's already in action the next day. Yeah. And he's very, very impressive individual. Um, from that standpoint and many other standpoint, of course, he, he was instrumental in the early days of building the wedge product. that has produced phenomenal unit economics, also doing it in a very capital efficient way. Um, you're probably happy to hear that at half of the proceeds that, um, we, we raised in the pre seed, and this is prior to me joining the company, is still there in the bank, right? And so the company must have good capital efficiency, unit economics, and a valuable product to be able to do that. Also, Laura having both the nurse background, but also deep understanding of healthcare processes, has been instrumental in helping the company get started and to be where it is today.

Vic: 17:21

Yeah, and I think part of the culture, Uh, sort of intertwined in that is their, each of their personal egos, right? Cause it has to be about a mission greater than Laura and Harrison, or they would never step aside. And as much as Merrill and I might like yell at them to step aside, if the founders are not willing to, the company dies. And they were really, uh, open to, we need to make Grasha the best it can be really for the health systems, for the nurse population, because it's that important. And I think, so talk about stepping into that and how you now have broadened the vision or, or added to the product set and grown it a little bit.

Shawn Dastmalchi: 18:02

Right. So the spirit was there, the mission was there and perhaps something I helped facilitate a little bit in the early days. after I joined the company was to make sure that, um, we all really understand the mission and that whatever we do from standpoint of vision and where we want to go is always checked against that mission. So if we don't feel it and believe in it, then we're not going to do it.

Vic: 18:31

Yeah.

Shawn Dastmalchi: 18:32

Um, and then also I made sure that we have fun along the way. The, the startup game is a long game. Yeah. It's, it's a marathon that's done by a series of sprints, essentially. So you're sprinting and then you're resting, maybe you're sprinting again. And so you have to play the long game. And, and if you're not having fun along the way, it's Yeah, you can't make it. So I think we have a team that's really high on spirit. Morale, um, and low on, you know, ego, which a lot of times can get in the, um, when I joined the company, I said, look, we're going to be flat. I'm just another person. There's not going to be a hierarchy here. Um, we're all going to be working just as hard and we're, you know, we're, we're, we're moving towards the mission that we all love and want to, want to deliver. And so I think that has helped. Everyone get comfortable with their roles, but also they know that at every stage, all the roles are going to change. My role will continue to evolve and change as a CEO and their roles as co founders of the company will constantly evolve. In fact, uh, we're just in the midst of moving Laura to a different position VP of operations, but now she's going to be much more. Move towards, um, customer relations and also helping with future sales. Um, and so, and she's pretty excited about that and wants to grow with that.

Vic: 20:08

That's another piece that people don't usually talk about is that as the company grows, it is a good sign that you're hiring new people and roles have to change, but it can be hard on the individual. So talking about that in a very transparent, open way. Sort of having values that you can sort of ascribe to is really important in building that.

Shawn Dastmalchi: 20:28

Yeah, so all of our engineers and all the members of the team, customer success, everyone puts meetings on my calendar and they meet with me one on one. I encourage kind of the open door policy of, Hey, let's chat about life. Let's chat about what's on your mind. Let's chat about what may help you in your, you know, professional, you know, Uh, growth and ambitions and, and so we have those free communication lines all the time.

Vic: 20:59

Yeah, and is it, is it fair to say that that helps them certainly, but I would say it helps you too. You get information then from all different, uh, sides of the organization.

Shawn Dastmalchi: 21:09

Absolutely. I mean, at the end of the day, um, you know, I think information in today's AI world is becoming commoditized. Yeah. Absolutely. Um, you could even chat GPT to answer much of the questions that an experienced CEO or entrepreneur. Yeah. I'm not even, I'm not even

Vic: 21:28

live now. It's my agent. That's actually, that's right.

Shawn Dastmalchi: 21:31

So it really comes down to the team. It really comes down to, um, how motivated they are. And, and that's what I try to foster is really to bring out the best in them and, and bring that positive energy to the table and ultimately we're going to win. As a team, right? So, so yes, information is important, but I think if every individual in the company is an agent of change and agent of improving the company, whether it's processes or product, that's what, you know, I, I try to foster and that's what I try to, uh, try to do from sampling of management style and it's been, you know, It's been truly an exciting and joyful ride for me so far.

Vic: 22:18

Yeah. Excellent. Meryl seemed like you had a comment. No, I was just, I was

Merrill Anovick: 22:21

just laughing, reflecting on a leader who I admire, who, who I remain nameless. So he told me like, as you rise up the organization, the amount of people who are laughing at your jokes constantly increases. And it's very tough to get the truth out of people. And in order to do that, you need to go above and beyond to earn their trust and maintain a culture where that kind of negative information will flow to you in a. True manner so that you're getting a, you're keeping a good pulse of the organization. And I think Sean has done a, an excellent job of building a culture like that. Every person I talk to at the company, cause I still have good relationships with people who are there and they all, all speak glowingly about how Sean has been able to do that. So it's something I admire and I've enjoyed watching.

Shawn Dastmalchi: 23:01

Yeah. Thank you. And, and, you know, speaking to the vision of the company, the vision of the company existed, um, prior to me joining. And there's still. a lot of the components of it that keeps bubbling up, perhaps what I've brought to the table slightly is to try to create a cohesive strategy. So how do we, you know, get from where we are to that ultimate vision that we have?

Vic: 23:26

Yeah. So I wanted you to talk about going from the first wedge product, um, to the next product. So how did you think about that? That's really an important transition. Gratia might have lots of products eventually, but that second one and how it's framed and what makes that one the right one to do, where it's really important. So how did you think about that approach?

Shawn Dastmalchi: 23:51

I think we all agree that nurses are the backbone of hospital care. Yeah. And of course, beyond backbone of care delivery altogether. And in order for us to improve care, We have to pay attention to the nurses at the very individual level, not just as workforce as a whole, but really at the individual level.

Vic: 24:16

Yeah. So picking up an extra shift, although valuable for the nurses in the health system is just a very small piece of that.

Shawn Dastmalchi: 24:23

That's right. Right. So the wedge product that was there when I joined, essentially, incentivize nurses to pick up additional shifts and by doing so, they would achieve tier and get some reward points associated. These reward points are very meaningful. A top tier achiever can make as much as 1, 500 extra per month, which is really meaningful to their lives. It's a new car or house or, you know, change their life. Um, and so that's, that's very, very meaningful, but That's not the only thing a nurse looks for in their profession. Um, we all know about burnout, uh, being a problem in, in nursing. Um, and not all nurses, you know, make enough to be comfortable with their finances. And so there's, um, there's a lot of financial constraints on them. And so on one hand, we need to have incentives. that help with that and help them feel appreciated and help them, you know, feel that they can, they can contribute more and reap the financial benefits of it. But there's a lot more that goes into their career, including nurses want many of the nurses, particularly younger nurses, want to grow in their careers. And so you have to provide an opportunity, a path for them to grow. And so we also incentivize preceptors. to do a better job of precepting and incentivize, uh, preceptors. And in, and in doing so, we also do sentiment analysis on how the preceptee is doing and further promoting doing a good job of, um, doing workforce development and training. So that, that also helps. you know, keeping the profession, the profession, um, and their career ambitions on track. And so that's an important part. But the other important part is that nurses ultimately have a passion for patient care.

Vic: 26:38

Yeah. There's a calling or vocation. They, they, they felt drawn to it. Typically, if they go

Shawn Dastmalchi: 26:43

home, not feeling good about the work that they did that day. Yeah. Burnout is much faster, much harder. You can burn out. You could be looking for another job. And so we are now developing micro incentives that help promote better delivery of care, better outcomes, and better patient experience. And in doing so, not only are we putting spotlight on what care teams can do to improve care, but also just overall improve the morale and, and the pride of what nurses do on a daily basis.

Vic: 27:20

And is it possible to create this, uh, kind of virtual loop where you engage the nurses, you get their sentiment, you bring in more preceptors, then you learn more what they need and you can then build the next iteration of the product. Is that possible to put together?

Shawn Dastmalchi: 27:39

Uh, certainly it is, particularly nowadays with, um, the advances in AI, there's a lot you could do to deeply understand nurses at the individual level. And, and this is to help them to, to do a better job in their profession, reach their potential and reach their potential. And, and certainly all of that is, is possible. And we make use of AI and sentiment analysis to do that. And we believe that that's a key part of our differentiation and our unique platform. Um, In that the program, the incentive programs or various engagement programs where we roll out, we are doing it to really, you know, engage the nurses deeply in their profession and to help them achieve their goals. And what kind of feedback is,

Vic: 28:36

are there any results so far that you have, if this is working at all or to what extent it's working?

Shawn Dastmalchi: 28:43

Well, certainly we know it's working in the sense that, uh, we've been able to show that. Nurses who achieve tier with our, um, initial product, uh, that incentivizes the picking up additional shifts. There are five times more likely to stay through the next quarter with the organization. And retention obviously is a very big issue. Uh, on average in the U S, um, turnover rates are 18 percent across hospitals. And if you think about every. Replacement costs of a nurse costing 56, 000 on average. Yeah, the retention is huge. That's an 18 billion shock to the hospital market every year. Yeah, these are positive shock dollars. Well, it would be

Merrill Anovick: 29:36

a positive shock. If that's before accounting for any of the, the other effects, right? Like the, the drop off in care quality, the churn that that creates for patients, all of these other dynamics, which going back to your point, nurses, so critical to care that if you help them stay in the same place and they, you help them feel like they can achieve their career goals in the same place, all participants in the system benefit.

Shawn Dastmalchi: 29:57

That's right. And that's, that's the key value proposition that, that Merrill summed up for. Yeah. So let me just try to,

Vic: 30:03

um, make sure I'm following. So nurses are using the system when they use it and they achieve this tier, they get extra money and they also are, are being, are staying in the job, retaining longer, are you also able to, uh, reduce some of the traveler spend? So let's shift to the hospital side of the health system side. Is there any evidence that this is beneficial to them? Like a return on investment or savings

Shawn Dastmalchi: 30:31

or stats you

Vic: 30:31

have?

Shawn Dastmalchi: 30:32

That's right. So we, as Meryl mentioned, we have to deliver value back to the health systems who are our partners. Yeah, happy

Vic: 30:41

nurses are nice. And we also want a financial return, kind of both, both ends. To

Shawn Dastmalchi: 30:46

serve the communities, obviously we need, we need the nurses to be happy and do, uh, you know, deliver high quality of care. But then what, what is it for the health system? to want to actually license the Gratiot technology. And certainly the return on their investment includes, um, reducing turnover rates because there's a financial component. It's a very strong financial component associated with that. Also, for example, with our shift pickup programs and the program, uh, an additional benefit is that we reduce reliance on contract labor or travel nurses. and thereby helping the health system save additional dollars for that. And at the end, it's all about delivering quality, you know, of care. And so they benefit by, by getting, you know, a workforce that, that delivers better care.

Vic: 31:44

Yeah. So the nurses are more productive, happier, and stay longer. The health system reduces their contract labor, has higher quality of care. Do you have any status for us, for every dollar that a client spends with Grasha, they will get X benefits? Are there any facts like that or is it still too early? No, we, we

Shawn Dastmalchi: 32:09

actually take, um, a lot of effort to calculate return on investment for our clients. And we do that for every incentive programs that they roll

Vic: 32:24

out

Shawn Dastmalchi: 32:24

with

Vic: 32:24

us. Oh. So they can see, for this incentive program, I'm getting x return on investment maybe for a second one against, that's right. A different, a different benefit and a different financial return given,

Shawn Dastmalchi: 32:33

given that contract. Labor cost is different in different markets. Mm-Hmm. But on average, we're returning somewhere between 10 to 15 x, um, of every dollar. So for every dollar that the system spends with us. They get 15 back on average. Um, but as we rolling out more and more incentive programs, we'll have a better idea of where the return on investment for each one of those falls and, and thereby further strengthening our business model.

Vic: 33:04

Yeah. So it'll get stronger over time as you build out your portfolio incentive packages. But just to emphasize that for the listeners, cause they went by kind of quickly, if they spent 10, 000 with Grasha. they would have a 100, 000 to 150, 000 benefit. Yes. And what is the time? We like to think, well, they spend

Shawn Dastmalchi: 33:25

a million dollars with us. When they spend a million dollars, they get 10 million. Then they get 15 million or more.

Vic: 33:31

Exactly. So they get the, it's like the, uh, all of the above. They get better, happier nurses. The CFO and the, if they're investor owned, the shareholders are happier. And the patients get better care. Right.

Shawn Dastmalchi: 33:42

Ultimately, yeah, these health systems want to, serve their communities. Right. And, and nurses, again, going back to nurses being the backbone of care delivery, the best way to serve your communities, make sure that your, your nurses are. Yeah. The reason I'm beating on the return

Vic: 33:59

on investment question is that I think a lot of my listeners, a lot of people that I interact with think that it's a, um, either, or I can invest in my nurses and make them happy. But then I will spend a bunch of money and not, it's a tight budget environment, no matter who you are, it's a tight budget environment, so that's, we have limited resources, and I just wanted to emphasize that that's not the case with Gratia, it's sort of both ends, you have better nurses, happier nurses, better care, and you save money.

Merrill Anovick: 34:27

Yeah, going back to the founding of Gratia, one of the insights Chris Poole had, who was part of the team that helped us build this, Is that a lot of the solutions in the market were focused on retention. And I do think retention is ultimately the bigger pool of value. And I think Sean is the data to support that. But the problem with retention is it takes a while to see the things are working, right? If you're, if you're turning over nurses every year, you got to wait at least a year to see if your data's improving. So while we want to impact that ROI metric, we need to make the CFOs happy by doing something that hits their bottom line sooner. And that's really where the shift pickup came in, which is you can see the impacts on that. within weeks. Yeah. And you'll get a shorter term, hard ROI on that front. And then that will give us the opportunity from the Gratia point of view to be in the organization, uh, start rolling out our broader platform of options, which can drive that retention improvement, which is where more of the values. Yeah. And the

Vic: 35:20

preceptor program is similar to that where you need to have preceptors in order to bring new nurses in and get them. Um, up to speed and productive,

Shawn Dastmalchi: 35:30

well, well trained, well delivered better care, but to also stay with the organization because they see that growth path. Yeah, another point that I, I wanted to bring up to add to, to Merrill's point is that the shift pickup program. It's been running now for a year and a half at gracious. We have a lot of data.

Vic: 35:48

Yeah.

Shawn Dastmalchi: 35:49

And so when we're looking at retention. We're not only looking at the lagging metric of. Prior 12 months turnover rates, but we are now building predictive models That is able to look at that that take in a lot of data and create leading indicators For what next quarter is going to look like? Yeah in terms of turnover rates so that so that when we speak to You know better retention reduction of turnover We're not we don't have to look at lagging indicators, but we can look at combination of sentiment how well nurses are engaged, how well they're doing with the organization, how well they're doing with their careers, and be able to predict whether things are going the right way.

Vic: 36:36

Yeah. And part of, uh, maybe I, you could talk about where Grish is going, turning from a product company into a data insights company. But it may be that you can begin to get these leading indicators And then have a suite of programs to help the system work with that. Or you talk about where

Shawn Dastmalchi: 36:54

we're growing to. That's exactly right. Um, it, it really comes down to, you know, for one, using AI to better understand where the pain points are with the current clients or clients that we're prospecting. And then be able to design Um, very specific set of incentive programs for them to help them with the various issues that they're having. But all of that really depends on how well the nurses are engaged with Gratia. And, and we've been very successful in the, you know, how we've engaged nurses initially starting with SMS as the, you know, the primary way of communicating. But now with our 2. 0 platform and it's released. We have tens of hospitals where 80 percent or more of the nurses are logging into our application on the, on the regular basis. Yeah, that's incredible. To check in on their reward points, to also redeem those, whether by way of pay differential on their paycheck or gift cards. And ultimately, we, we make everything highly gamified and fun. Yeah.

Vic: 38:14

Yeah. Because that drives engagement. It's, I mean, fun drives people

Shawn Dastmalchi: 38:17

to use it. Absolutely.

Vic: 38:19

And all the incentives are included in the ROI discussion we just had. So, It's great for the nurses and it is great for the CFO, too.

Shawn Dastmalchi: 38:27

And then we can also use predictive analytics and AI to look at the contribution of every incentive dollar spent towards the ultimate, you know, goals of retargeting and reducing

Vic: 38:41

contract labor. Excellent. And so, um, wrapping up, Sean, maybe talk about where health systems can reach you, how they can find out about this, Uh, I'll put links in the show notes, but just talk about where, where you think you could really help and where maybe you're not ready for a certain type of facility or an interaction.

Shawn Dastmalchi: 39:05

Yeah, ultimately, um, given the diversity of incentive programs that we have, we can meet health systems where they're at. and where their initiatives, most important initiatives are. Um,

Vic: 39:19

So if they have nurses and if they want them to be engaged and productive, they should call you. So

Shawn Dastmalchi: 39:25

absolutely. I mean, contract labor costs is still remains to be high. And so that that's a pain point in various places. But in a recent survey conducted by Becker's hospital, um, about 50 percent of health systems see professional growth and development as one of the key ways to retain. And so there's a lot of health systems that are developing a lot of their nurse initiatives around career growth and development, preceptorship, clinical ladder, and various other methods that they use.

Vic: 40:00

Yeah.

Shawn Dastmalchi: 40:00

We certainly can serve as the motivation. You can plug into that or

Vic: 40:05

you can sort of help them

Shawn Dastmalchi: 40:07

create it either way. Absolutely. Well, the key, the key point here is that We don't deliver the educational content. We, we basically provide the incentives for creating a better pool of preceptors. We also incentivize, um, various mentorship and educational programs as nurses take them to get incentivized to do that, because if it helps the nurses, ultimately it helps the health system and their communities as well. Um, and so, so we can. You know, we can help health systems with whatever high priority initiatives that they have today because their platform is, is very flexible. And for us to roll out various business logic on top of this AI powered platform, uh, to meet the needs, their immediate needs is, is pretty simple for us. Um, obviously it takes a lot of diligence and a lot of project management to make make sure these programs are successful.

Vic: 41:11

I mean, I say all the time, it's really

Shawn Dastmalchi: 41:13

hard to

Vic: 41:14

deliver a simple mission. And so you've been able to do that. And so health, you're ready basically for the health systems to come to you. Yeah,

Shawn Dastmalchi: 41:22

we, we we're across, we're serving 81 hospitals across the nation, serving a lot of different communities, um, both the nurses as well as their patients. And so, um, we, we feel pretty ready. We've onboarded. several projects, um, across these 81 hospitals. And we are in, in, you know, acute care hospitals as well as specialty long term care hospitals as well. So, so we have a diversity of solutions that meets the needs of the market broadly.

Vic: 41:56

Excellent. Meryl, so Meryl, uh, take us out. So what is, what, you've seen Rasha grow up from a concept to where we are today. What, what learnings can other investors or people, what can we take away? Give us an optimistic, uh, sort of summary where we're headed as an industry.

Merrill Anovick: 42:15

Yeah, I mean, I think, uh, you know, the importance of failing fast. I already spoke to that. We were not married to the initial solution we came up with and we're able to quickly move into one that's worked a lot better. I think the second big takeaway is, you know, this really is the brainchild of one of the partners. I want to give a shout out to Danny Brzezinski at Scion Health, who was a critical thought partner in the early days of getting this thing started, uh, of giving us feedback throughout. And I think we have really, uh, you know, brought him in into the table to help us think through feature development, stuff like that. And having, you know, just underscores the importance of having really engaged, really bought in, really smart design partners. And then I think, you know, we covered it during our conversation, but companies need different expertise at different stages of their growth. And I think we have all collectively done a good job of handing off from one group to another. So from 25 and health heading off to Laura, from Laura bringing in Harrison from Harrison to bring in Sean. And I think we're going to continue to bring in, you know, high end talent. I know Sean is going to be building out the data science team for Gratia. And that's one thing I'm really excited about to, to bring in some really smart, capable data engineers to bring a lot of these things to life for us. Um, so that's just a good reminder that we're all stewards of these, of these products. And. Uh, when you have a team that's all working towards one goal, that can, that's how you build big, important things.

Vic: 43:37

Yeah. Excellent. Well, thanks guys for doing this. Appreciate it. I'm super grateful to be an investor as well. Excited for where Gratia is going to go and really appreciate you taking some time to talk about it. Tell the story.

Merrill Anovick: 43:48

Thank you for your support. And thank you for having us on.

Vic: 43:50

Yeah, yeah. Our pleasure. So we'll have the show in the show notes links where you can learn about 25 minute health and learn about Gratia. And, uh, we'll continue to build. Thanks, thanks for doing it. Thank you.