In this episode, we’re pleased to welcome Derek Streat Founder, CEO, & Chairman of DexCare, to discuss technology platforms becoming mission critical for U.S. health systems.Learn how to listen to The Hospital Finance Podcast® on your mobile device.
Highlights of this episode include:
- DexCare and its mission in the market
- Current financial landscape
- Reducing avoidable costs
- Attracting more new patients
- Operating at peak efficiency
Kelly Wisness: Hi, this is Kelly Wisness. Welcome back to the award-winning Hospital Finance Podcast. We’re pleased to welcome Derek Streat. Derek is founder, CEO, and chairman of DexCare. Derek is an accomplished healthcare technology entrepreneur and executive who cofounded and/or has been at the earliest stages of six venture-backed companies, including C-SATS, acquired by Johnson & Johnson; Classmates acquired by United Online; Medify, acquired by Alliance Health Networks; and AdReady acquired by CPXi. Prior to joining Providence as an entrepreneur in residence to commercialize the DexCare platform, Derek served as vice president of digital solutions at Johnson & Johnson, a role he assumed after C-SATS was acquired by the world’s largest healthcare company. Derek is also actively involved in national healthcare data transparency efforts for the improvement of patient care as a cofounder and board member of two leading data-sharing organizations, PEDSnet and the Improving Renal Outcomes Collaborative or IROC. In this episode, we’re discussing technology platforms becoming mission critical for U.S. health systems. Thank you for joining us today, Derek.
Derek Streat: Thanks for having me, Kelly.
Kelly: Well, great. Well, let’s jump in today. So, Derek, please tell us a little bit more about yourself and your experience in healthcare.
Derek: Sure. So, I’m a technology entrepreneur, as you had mentioned, and I had been building companies for about two and a half decades now at this point. Started my career in investment banking. And really, the most recent 12 years or so, it’s been about building health technology companies. The through line has been they’ve always been data-driven intelligence companies where we access or liberate some set of data, point compute power at it, and then derive insights from it that create value for some set of stakeholders. And DexCare is one of those companies as well. It does that in what we call the access optimization space.
Kelly: Fantastic. Can you tell us more about DexCare and its mission in the market?
Derek: Sure, happy to, Kelly. So DexCare is a company that we spun out of Providence Health system, one of the largest health systems here in the US, about 51 hospitals based on the West Coast and 27, 28 billion dollars in revenue. And the company started out as a project inside of Providence to unify in one particular interface, one central interface, all the care options that spoke to consumers, so things that they may access through some sort of digital tool, virtual care, synchronous and asynchronous online scheduling for in-clinic appointments, even home care. And the primary objective of the system initially – and it still does this today as well as many other things – was to help Providence attract and retain more commercial patients into the health system so that they could help fund, essentially, all the additional care that Providence provides as a large Catholic nonprofit. And fast-forward a few years, the system worked really, really well within Providence, very effective in helping Providence identify these additional patients that needed care, get them into the system in very, very seamless ways that kind of spoke to the needs of the consumer, and do it in ways that helped them drive 20, 30% net new patients, high rates of commercially insured patients, a fair amount of patients that then needed additional services to the tune of about nine times that initial transaction value, needed that in kind of additional network utilization down the road within the first 90 days, actually, or so, and do it all with very high satisfaction levels.
And so that worked really well inside of Providence, as I mentioned earlier. Because I like to build companies, when I had come in as an entrepreneur in residence, the goal was to see if we could do this with other health systems as well. And long story short, we were able to determine that we could. And so we spun the company out in 2021, kind of the spring of 2021. Did a series A financing with that. And it continued to this day – now we’re a couple of years into it as an independent company – to serve health systems all around the country, ranging from kind of the largest of the large, Kaiser Permanente, all the way to kind of leading academic brands in the country like a Mass General or a University of Rochester and then midsized regionals in between like a CHN or a THR in a Texas market, Froedtert on the academic side, against several health systems around the country. And in addition to helping those health systems find and attract more patients to help them grow, the system also adds to those capabilities the ability to intelligently navigate patients to the safest and best care options for them and then also to expand or extend the capacity of the health system’s existing resources so that those resources can be automatically allocated when and where they can be most productively employed.
And in this day and age when health systems are facing significant workforce shortages – it’s a problem that was there, honestly, prior to the pandemic and is just exacerbated by it, but this has been a train a coming, not enough providers to see patients out there – it’s really important that health systems not only handle the demand side of their business but also orchestrate that with the supply side and make sure that those resources are matched appropriately to consumers and patients in a way that finds the spaces in between so that more patients can be seen and also in a way that doesn’t burn out providers. And so DexCare, in sum, is really this orchestration platform that orchestrates a demand, the consumer, patient side of healthcare, with the supply or the provider health system side across all service lines and really for the benefit of optimizing access for all stakeholders. So, when we look at our vision to ensure that everyone everywhere has exceptional access to the best expertise to prevent, treat, and cure illness, we really mean everyone. So, it’s patients and consumers. It’s providers. It’s health systems. And you’ve really got to balance the needs of all of those stakeholders in order to have a healthcare access system that actually works, that is available for patients, that doesn’t burn out providers, and that’s financially sustainable for the health system as well. And that’s what we do for leading health systems around the country.
Kelly: Quite impressive. So, let’s talk about the current financial landscape that health systems and hospitals are trying to survive in today. First, what are the most pressing challenges or problems that these organizations face? And then second, what should their priorities be to alleviate these pressures?
Derek: Yeah. So given that this is a financial podcast, I’ll kind of focus there. Health systems face all sorts of challenges, so we’ll aim there. Yeah. I think it’s no secret, probably, to the listeners here that it’s a particularly challenging time for health systems. They’ve always been challenging businesses because, by their very nature, they’re human intensive, and people cost money, particularly when, as we just talked about earlier, often you don’t have enough of those people. You have a limited supply of those people relative to demand for care, which is continuing to increase. So, they’ve always been kind of low-margin businesses. The pandemic has obviously exasperated those issues as kind of the higher value services had to take a back seat to kind of lower– to care with lower reimbursements for COVID patients and things like that. And health systems are trying to recover from that right now, but it’s been a rough couple of years. This year will be a rough year as well. And so they’ve got to be able to sustain their operations through this time period– some won’t make it because it is a challenging environment, but be able to sustain their operations where growth is more challenging, costs are higher. And then the other thing that’s happening is there’s no shortage of additional entrants or disruptors into the space of delivering care, whether it’s the kind of large retailers that we all know out there that are continually adding more and more care services to their offerings or some of the technology– I wouldn’t really call them startups at this point, large technology companies that are also getting into the care space.
And so what health systems need to do – and we’re acutely focused on this – is they need to be able to grow and grow sustainably. And that’s where the value proposition that DexCare offers really comes into play. I like to say that DexCare is really made for this moment from a health system perspective because we can help them grow. We can help find those additional patients that have good margin associated with them to help care for the larger population and health systems. Health systems don’t have the luxury that some large tech disruptor has of choosing to serve this patient or that. Health systems are here to serve everybody. And so it’s important that you are able to work with enough patients that allow you to find the margin to sustain the mission. So growth is really important, and that side of the platform really helps them with that. And then really kind of making sure that, again, those patients are connected with the right provider, service line, modality, setting, or intersection of those things in a way that helps find that underutilized capacity. And there’s always underutilized capacity. We find within health systems, they just don’t have often enough visibility on the data in the systems that can help identify and then utilize that other capacity.
And so we help them with that with the second part of our platform that we call capacity optimization or load balancing to do that matching and that orchestration in a way that helps them grow, but do it in a way that sustains their operations as well, because when you think about it even just sort of logically, we all get lots of care. We’re humans. We get older. We all get lots of care. It increases as time goes on. And there’s a wide variety of care. Right? And some of that care can be taken care of by nurses instead of doctors. Some of that care can be handled virtually instead of in person, brick and mortar. Some of that care can be handled in a way where some of the decisioning that’s brought to the table for that professional to use is taken care of by the technology, so kind of pre-analysis, if you will. How that care is matched up in each of those settings to, again– or each of those situations to, again, the right provider and setting and service line, etc., matters a lot to how cost effectively that care can be delivered by the health system. And so you got to match the growth side with the kind of capacity optimization side of the equation as well to grow sustainably. And that’s what we help health systems do.
Kelly: That makes a lot of sense. And so how does technology like DexCare’s platform enable hospitals to solve these financial challenges, such as reducing avoidable costs, attracting more new patients, or operating at peak efficiency?
Derek: I’ll double-click on kind of the things I was mentioning earlier to give some concrete examples. So, I’ll give a couple of them. So, one of our partners is Kaiser. We work with Kaiser on a national basis and help them effectively load balance patients across the entire country, all regions, and even all 50 states. As large as Kaiser is, before we were working with them, they weren’t providing care in all 50 states in the country. And so we’ve enabled them to– as they’ve gotten folks credentialed in all states, we’ve enabled them to actually now load balance, again, this patient capacity and demand across the entire country. And what we found are dramatic improvements in the amount of time, the length of time it takes providers to see patients to the point we’re able to increase capacity 40, 50% through that reduction and visit duration. And we see that with our other health system partners as well.
And that’s because, again, as I was mentioning earlier, there are just certain provider settings, service lines, modalities that are better experienced or better equipped to see certain patients that come in with certain ailments versus others. So in a virtual setting, right, we can help health systems like Kaiser identify those providers in other settings, but particularly providers that, when historically see patients like this, are able to do it very cost effectively in the most efficient use of time so that then patients that they’re not most experienced in seeing can be seen by others, right, or as I mentioned, could be seen by different levels of license as well. And so that ends up kind of moving patients around and matching them up to providers in a way that kind of fills those spaces in between and by lowering that average visit duration allows them to see more patients in the end. The other example I’ll– and as we’re speaking here right now, Kelly, there are patients and providers being matched around all 50 states– Kaiser patients probably being matched around all 50 states in this most efficient kind of load-balanced way.
The other example I’ll give quickly is one health system we work with in the Wisconsin market. We work with them in multiple service lines, one of which is orthopedics. And prior to DexCare, back pain was finding its way through phone trees and things like that into an orthopedic surgeon. And most people who have back pain don’t need to see an orthopedic surgeon as that first stop. So, it resulted in just a bad experience for everybody. The patient was upset because they had to do another visit now to the more appropriate person. The orthopod was upset because their time was wasted with somebody they couldn’t really help. And they had a nursing staff that was really underutilized. And so we put DexCare in place, made it so that same-day kind of orthopedic service for kind of getting kind of these sort of preliminary workup for care was made discoverable, even online, people searching on Google. So, they took a risk there kind of opening the doors to make sure that people could find care very easily for their back pain and then used DexCare’s decisioning engine to help understand that patient’s intended motivation and what was going on with providers and those service lines to then come up with kind of best match. And then that information was then provided to nursing staff that is then activated, uses that information to do kind of last-mile routing of that patient. So, you’ve got a human in the loop there.
And in the end – and this is what happens today – now 80% of the patients that find– so now more patients are discovering orthopedic care quick or fast kind of orthopedic care – it’s called ortho now – from Froedtert Medical Center, finding that care in more easy ways online and additional kind of front doors, if you will, more getting in the front door. They’re being intelligently matched, and then that data is shared with now nurse practitioners who are less costly than MDs and who now their time is being utilized where it wasn’t before. So, they’re able to do the job that they were hired for and get the satisfaction from doing that. And 80% of those patients now go to physical therapists, much less expensive and better experience than going to an orthopod that can’t help you. 20% go to the orthopod. The orthopod now is seeing people who they can actually help. And the overall kind of marginal visit cost has gone down for that health system because now they’re operating at top of license. So, they get more patients. They lower the cost of seeing those patients. They can see more of those patients now. Everybody wins in that scenario. And it’s the key– back to your earlier question, it’s the key to driving the financial performance you need to in a health system as well because, again, you’ve got to be able to grow and do it sustainably at the same time. And that’s what we help them do.
Kelly: Very true. So do you have any final words of wisdom or advice that you can leave our listeners with?
Derek: I guess what I would say– I mean, it’s a pretty open-ended question, but I think that it’s easy in this time, I think, for folks to look at health systems and say health systems are kind of the way care has been delivered before. We see the big hospitals. It’s kind of the old way of doing things. Right? And so you’ve got all these disruptors that I mentioned before and other access points to get care now, whether it’s virtual care or digital care online or kind of analog clinics in retailers and things like that. And I think it’s healthy, by the way. I think it’s good. It’s great that there are more access points for consumers and patients now than there have ever been. And that’s a good thing. I would just say, let’s not count the health systems out as well, because I think as a society, it’s really important that we preserve and then improve the efficiency of the healthcare infrastructure, the care delivery infrastructure that’s put in place, particularly in this country. We all consume a lot of care in this country, maybe too much. I think it could be more efficient than it is right now. But it’s a fact: we get older and more things happen. And so we’re all, if not already, going to be consuming more care.
And at the end of the day, they’re brands that we trust, brands known in our local communities. Health systems are often the largest employers in their local communities. And at the end of the day, kind of that’s where the real care is delivered, particularly for the big stuff, which all hits us at some point as we get older. So, it’s important that health systems are part of the mix. They need to be able to play the game that these disruptors are playing as well, and they need to grow and grow sustainably. They need the kinds of tools that we talked about here today. And DexCare’s not a silver bullet. There are many of them out there. They need to be able to leverage them so that they can provide consumers and providers the kinds of experiences that they deserve to raise the level of care delivery overall. And they’re part of the mix. It’s important that they’re part of the mix because I don’t think any of us want to live in a world where we can’t get particularly the higher-end care, we can’t work with that health system that our families have worked with over the years and that we know well in our local communities, because at the end of the day, healthcare, even in a digital world, is still pretty local, and we’ve got to preserve and protect that.
Kelly: That makes a lot of sense. Thank you for those tips too. Where can our listeners keep up with you and the work that DexCare is doing?
Derek: Yeah. So, we’ve got a couple of places. Right? We have a LinkedIn presence. We have our website at dexcare.com or dexcarehealth.com as well. Those are probably the two best places to find us. We’re in the media quite a bit as well. And we’d love for people to follow us on our LinkedIn profile or follow us on our news feeds as well.
Kelly: Sounds great. Thank you so much for joining us today, Derek, and for these great insights.
Derek: Yeah. And thank you for having me, Kelly.
Kelly: And thank you all for joining us for this episode of The Hospital Finance Podcast. Until next time…
[music] This concludes today’s episode of the Hospital Finance Podcast. For show notes and additional resources to help you protect and enhance revenue at your hospital, visit besler.com/podcasts. The Hospital Finance Podcast is a production of BESLER | SMART ABOUT REVENUE, TENACIOUS ABOUT RESULTS.
If you have a topic that you’d like us to discuss on the Hospital Finance podcast or if you’d like to be a guest, drop us a line at email@example.com.