July 26, 2022
[00:00:28] Julie Yoo: All right. Hi everyone. This is Julie Yoo, general partner at Andreesson Horowitz and also an advisory council member here at Day Zero. And we have an awesome guest today. Don Trigg, who I’ve known for many, many years, almost 10 years, I guess, Don, or maybe more And I’ll let Don tell his story, but he is also a fellow advisory council member here as well. And we are thrilled to have him here, not only to talk about his path and sort of his professional career over time, but also most notably he is recently an author of a book called The New Healthcare Economy. And we’re gonna dive into some of the topics that it covers there and some of the key takeaways. So welcome Don. Excited for this conversation.
[00:01:04] Donald Trigg: Yeah, I think we’ve probably known each other about a decade which makes us both probably feel older than we like. But I was a longtime board member at a company called Kyruus that Julie co-founded and we both have a close mutual friend and financial sponsor in Brian Roberts at who was an investor in my early stage computer assisted coding company and was early in the origin story for Kyruus.
[00:01:28] Julie Yoo: Yes, absolutely. And actually let’s key off of that. So why don’t you walk us through, Don, the multiple acts of your career. You’ve done a little bit of everything. So tell us sort of what your path has been to this point.
[00:01:40] Donald Trigg: Sure. So, I’ve been at the intersection of healthcare and IT for almost 20 years now. But I started in the public policy space. So I started in Washington, where I worked for 10 years, the last four and a half years of which I was working for Governor and then President Bush. I knew two members of the Cerner board, very, very well, Nancy-Ann DeParle, who would go on to be a very important architect around the affordable care, and also Jack Danforth, who was a longtime Senator, a member of the Senate Finance Committee and also a mentor of mine. So they recruited me to come to Cerner, one of my mentors and our longtime CEO there, the late Neil Patterson promised to put me onto the operating side of the business as fast as I could go. And I did that, culminating in three years in London, during the National Program for Healthcare I then left, did an early stage company in computer assisted coding, lot of early exposure to NLP, which has become emergent and important as we digitized the industry. And then I came back to Cerner and played a variety of roles, culminating in president of the company itself. And that’s my truncated three minute version of my story.
[00:02:46] Julie Yoo: I’m curious, in retrospect, Don, since you’ve done two tours of duty at Cerner, what was the most intriguing role that you had there?
[00:02:52] Donald Trigg: Well, the chance to run a big piece of the global business was certainly super interesting. I’d say a lot of what played out in the UK ended up being highly informative for meaningful use and the strategies that were deployed here, both in terms of what to do and what not to do. So that was certainly an exciting role. And I would say that the chance to build out the strategic growth businesses outside the core EMR space, almost a billion dollars in top line revenue across them was certainly very exciting. And then the role as president where you’re trying to simultaneously drive the core business but also think about adjacent market and new market opportunities. All three of those roles were big, informative experiences for me professionally, for sure.
[00:03:39] Julie Yoo: Yeah, we’ll come back to some of your hot takes on the current state of the healthcare industry. And I remember every time I chatted with you, I learned like 17 new things just based on your purview that you had at the company. So thank you for sharing that.
[00:03:50] Donald Trigg: I always tell you the intersection healthcare and IT is a really fun place to wake up every morning. And I feel really fortunate to have been part of the industry the last two decades.
[00:04:00] Julie Yoo: Yeah. At a very, very cool and interesting perch. For this conversation, Don, I thought we could divide this into two parts. One is to talk about your new book, this book called The New Healthcare Economy. And, then the second part will be, as I mentioned, talking about the current state of the healthcare industry and what you’re seeing as the go forward path for the system. So starting with the book, The New Healthcare Economy, I love the way that it’s it’s set up, there’s sort of four major themes, which are framed as the Four P’s: Politics, Policy, Provider networks, and Personalization. And each one of them could be a show in and of itself. But before we go into the topics many people want to write a book and aspire to write a book, but maybe don’t know how to get started. What was the actual origin story of the book, the idea of the book coming together: was it something that you would always intended to do or were you sort of dragged into it by one of your co-authors?
[00:04:50] Donald Trigg: Yeah, so, look. I think of myself as an entrepreneur. I think of myself as an operator. I don’t really think of myself as an author. And there’s probably a joke embedded in there for folks who’ve read the book. But look. This was a collaborative dialogue. When I was president Cerner, I was actively involved in an organization called Health Management Academy. It’s a convening organization for top 100 health systems by NPR. And so the longtime founder and CEO of HMA was also a longtime board member at Cerner and then the head of the research and policy arm of HMA at the time, who’s now at Truliant. She, I would say, was really the animating force behind the idea to do the book and cajoled me certainly to get engaged around it. I think what Sanjula, Dr. Sanjula Jain, who I’m talking about, I think what she recognized were a couple of things. One that as COVID played out and we started to think about the next set of big businesses, the next Cerners, if you will, a lot of them were gonna play out outside the scope of their defined area of competitiveness today at the health economy level. I think, secondly she also realized that there wasn’t a decision framework. You enumerated it, but there, there isn’t a decision framework for how leaders could begin to think about how the different forces of change playing out at the health economy level need to be factored into operational decisions around their business. And then the final thing that I think we talked a lot about was the underappreciated role of Washington as it moved from not only top regulator, but I think more importantly, top payer and what that would do to impact rates of change and forces of change playing out in the health economy. So those three things were sort of cocktail conversations that turned into what’s ultimately became the framework for the book.
[00:06:51] Julie Yoo: Awesome. And what I loved about the book was the juxtaposition of the actual editorial commentary from the three co-authors, but also a number of intermittent interviews that you had with various thought leaders around the space. Was that the intended design of the book from the get go or, tell us a little bit about kind of the methodology for how you guys structured it.
[00:07:10] Donald Trigg: Yeah, for sure. So, Georgetown University Press is the publisher around the book, and they were a great collaborator with us around it. And so they played some conversational role in design elements around it. I think, if you think about forces of change that were playing out before COVID, the critical kind of realities that we’re playing out over the course of the pandemic, which are captured in a number of those interviews, and then sort of playing forward to after COVID, as we inch out of the pandemic and what the health economy will look like, I think that was an iterative design that came out of discussions with Dr. Bisby and Dr. Jain, but also with Georgetown. And I think there were some pieces of it that were important to the authors. I think we all agree that people in healthcare come interestingly, for as smart and capable they are, they tend to be bad at history and the history of the. So providing a primer for particularly new entrepreneurs and new students of the space about what had played out, because it is foundational, informative, was important. Dr. Bisby conducts a lot of discussions with industry leaders. And so he was really the driving force behind that interview section. And those discussions with a really, I think pretty interesting cross section of leaders. . And then again, we were keen to kind of put this decision framework in place for folks to think about, what was the incremental set of changes that are likely to play out over the course of the decade?
[00:08:40] Julie Yoo: Yeah. I love that framing of viewing this as a history primer for entrepreneurs who are building in this space because so much is cyclical, you know, truly history does repeat itself or at least rhyme in many instances. And maybe I’ll use that, to sort of pick one of the key topics of the book and kind of double click on it to get your take on what you think the implications of that concept are for a given area of our market, which is provider networks, which you and I are in. It’s, one of our mutual favorite topics, obviously. A lot of what Kyruus focused on and so much of your work at Cerner amongst other things. But, maybe just walk us through. You’ve done so much thinking on this. So maybe walk us through your thesis in general with regards to provider networks and their importance as a concept in our healthcare system. And what you think are some of the key lessons maybe to learn from historical, sort of efforts to shape and build provider networks and how that informs opportunities for innovation around provider networks today?
[00:09:36] Donald Trigg: Yeah, for sure. This is an area I’m super passionate about. It was one of the big catalysts and growth drivers for computer assisted coding too, by the way as we pushed into multi-specialty E/M. But look. This is a major force of change playing out. There is going to be a significant convergence of provider and payer in the decade ahead. It will lead to new alliances and JV activity. It will also introduce new competitive dynamics. And I think it is under appreciated in its disruptive potential. I think a lot of times when we think about provider networks, Julie, we pretty quickly gravitate towards MA, and certainly what were the twin forces that moved government from largest regulator to also largest payer, boomers aging into Medicare with a preference for Medicare advantage. And I think the underappreciated and accelerated expansion over time once it was litigated, of Medicaid, more people in Medicaid today than Medicare. So, those are the big forces playing out, and these provider networks are really a payer type agnostic. They play out in the commercial space where we see innovations around, onsite, near-site clinics, technology extension strategies into high performance networks for high cost procedures. They certainly have paid out in a high profile way around Medicare advantage. I would also contend that we will see them play out in a big way relative to Medicaid, and that non-traditional venues of care will become really important to how we define the provider network and think about engagement strategies around the Medicaid population, as we start to grapple with and tackle the cost curve in that space. So this is a big, disruptive force of change. And the final thing, which is kind of where you and I live is these rip and replace strategies around technology are far too onerous to work for enablement. So that simply won’t work. The standards regime is getting better. It’s moving too slow, but it’s getting better. And certainly as we see CDSS hooks and some of the other standards playing forward, the ability to connect inside that provider workflow will improve. And so all of that is gonna be catalytic for, I think a significant acceleration of activity in this space that will be really powerful and important.
[00:12:08] Julie Yoo: Yeah. I’m curious, Don, also your take on, you know, so we wrote a piece recently about the unbundling of the payvider and how, the incumbents have all started to vertically integrate, as you say, state, and yet, leaving a ton left to be desired around certain segments of the market with regards to whether it’s solution offering, whether it’s level of service or just ease of technical integration. And, we obviously, are always dealing with age old question of, ” Can the startups out innovate the incumbents quickly enough to get distribution?” versus, “Is it just inevitable that anything that’s a wide sweeping change in our industry, especially with regards to something like a provider network, which is so fundamental to the infrastructure of our system, can only be done through the chassis of an incumbent?” What’s your thought on that? Because I think we see so many startup trying to innovate around provider networks but again, inevitably you must start with leasing, sort of a legacy version of that infrastructure, to get started. And it’s very hard to navigate around kind of the ossified structures within those incumbent foundations. Do you think there’s hope that there could be breakthroughs that are driven from the upstarts in this area?
[00:13:11] Donald Trigg: Look when you create value, good things happen. So, by definition, the answer is yes. I think, one, anybody who can step into this space and do something meaningful and differentiated relative to the person, and I use person with intentionality, part of what makes technology and tech enabled strategies hardened this space, Julie, as you and I have talked about a bunch is sometimes I’m a patient; sometimes I’m a member inside an insurance framework. Sometimes I’m a caregiver for, we both have, we have kids. So sometimes I’m gonna caregiver posture either for children or for elderly parents. And sometimes the incentive structure around my benefits design is pushing me to act in a more overt and significant way as a consumer. So I have to be able to think through technology and tech enabled services strategies that can flex against those persona types. If I can do that, I’m doing something significant and differentiator that provider network has to be able to be both digital and physical in its orientation approach, again, I think a huge opportunity for early stage companies. But then the final thing that I get frustrated with at times when I talk to entrepreneurs is the sort of naivete around how things get paid for in healthcare and how pivotal in determining that is for business model. And so, we can’t have these sort of fanciful ideas that fee for service is gonna go away tomorrow. We have to be thinking about ways to add value inside the current system, at the same time that we advocate for larger change around approach. And so, yeah, I think there’s great hope for entrepreneurs. But they have to really think at the health economy level, the systems level about what’s playing out and then be very intentional about where they land from a starting perspective, and then not give up on that bigger swing vision that some of the IPOing valuations that we’ve seen in the last 36 months require.
[00:15:14] Julie Yoo: Yeah. So that’s a great piece of advice for readers. Especially those who are builders is to be pragmatic about the payment flows within our healthcare system. What would you say done are one or two other key takeaways that you hope folks that are innovating in this space take away from your book?
[00:15:31] Donald Trigg: If you’re at the health economy level and you’re thinking about, to use a big word, ecosystem dynamics at the health economy level, you better really understand the stakeholder dynamics. And incumbents aren’t looking to go anywhere, Julie. So, how are the incumbents going to think about your strategy and approach that creates opportunities for partnership and for some of the places where you invest in play and that Silicon Valley prefers it creates opportunities for disintermediation too. But you aren’t gonna go into an area like the employer space without having really thought through the role of the broker and how they are aren’t gonna play a role in the diffusion of your technology into the employer based insurance. So, that’s why people want to go work with H and with you is that, Hey, you’ve been through it and you kind of know what works and what doesn’t. But the incumbents I think, are more ripe to partnership than ever before. I think that brings its own set of complexities too, for smaller and early stage companies who
[00:16:31] Julie Yoo: Yeah, absolutely. Absolutely. Awesome. And then, as you, a lot of times as we are doing, certainly as I’m writing a blog post, it’s oftentimes the writing of the blog post that sort of inspires what the next blog post is gonna be. I’m curious now your book is out there and you guys covered a lot of comprehensive topics, was there anything that you sort of discovered or learned or came across during the writing of that, that inspires what your next book might be about?
[00:16:56] Donald Trigg: I would do another book for sure. We sort of tiptoe into lessons for leaders, which is the subtitle for the book, but I’d love to a little bit like you and I do when we’re getting together, talk about some of the really tangible examples, and the translational learning for leaders that come out of that in a more tangible way. So, if I could go back and either add to the book or author a sequel, it would be all about kind of as an operator, how I would pull out the right 10 examples to really surface what it looks like to, look, a lot of my thinking on approach is an outcome of failure, and not wanting to replicate mistake. And so, surfacing that in a tangible way for people would I think be super fun. I don’t plan to do that anytime soon, but Ron Adner from Dartmouth did the foreword. He’s a friend. We talk about that’d be the kind of thing if I were gonna go up to teach a class that’s what I would go talk
[00:17:55] Julie Yoo: Amazing. I would love to speak in your class, Don, if you ever do that.
[00:18:00] Donald Trigg: I’ll keep you posted.
[00:18:02] Julie Yoo: Very cool. Great. Well that gives folks a bit of a primer on the book. So everyone go by the book and read it and reach out to us with your thoughts. In the last few minutes of yours, Don, I wanted to switch gears a little bit and take sort of a forward looking look at the healthcare system. And I think in particular, as you say, the last couple of years, we’ve seen a huge amount of explosion of innovation from the digital health and health tech ecosystem. And yet here we sit in 2022 with the tide washing out and showing a lot of assets who don’t appear to be wearing any swimming suits as they say. So, what’s your take on where we are in the arc of that innovation wave. And what do you hope to see in the next generation of companies that do make it through especially to the public markets and are able to demonstrate that long term durability, defensibility that we hope all hope to see.
[00:18:47] Donald Trigg: As an entrepreneur and an operator, I’m super impatient. I always want to go faster. I think it is important in the context of healthcare to think about and have reasonable expectations around diffusion rate of change. Healthcare in that sense does operate differently. I think you measure in decades in a lot of ways, And I think you have to be very smart in terms of how you think through capital and capital allocation decisions contextual for that. So, if I’m gonna go build a business around a better and more aggressive version of MACRA and wholesale shift to episodic bundles that’s gonna play out incrementally, not radically in a single session of Congress. And so I’ve gotta be smart in terms of how I build out those proof points, how I partner and how I look to create scale examples of my capability set as an early stage company. So, all that’s a sort of a labor way of saying, Hey maybe, people weren’t realistic in terms of what they thought this was gonna look like or how quickly it was gonna play out, this is gonna be a huge decade in healthcare. I fundamentally believe that it will see as much change play out as any time since the inception of Medicare and Medicaid back in the sixties. We have digitized the content of the industry and it’s gonna have big second and third order impacts. But I think we have to be smart and realistic about what that looks like. Because I think we will measure it in years, not
[00:20:20] Julie Yoo: A hundred percent. I think it’s always good to remind ourselves, how recently the iPhone came out and how recently even the internet became a mainstream thing. And we’re talking a couple of decades that led to the mass adoption of many of the things that we now consider everyday solutions. But we’re only just at the beginning of that for our space, for sure.
[00:20:37] Donald Trigg: For sure. I think one of the things that’s super interesting is not just, if you think about kind of forces of disruptive change, I think that Amazon is a super interesting use case as a force of disruptive change. I think Walmart’s fight back around that competitive dynamic and what they’ve done around physical digital is almost as interesting, including some of the choices they made against business model and things like groceries, curbside delivery, home delivery that I think represent these sort of move to multichannel that play out in a way that sometimes is underappreciated, and which, if you think about it, from a payment model perspective will be super relevant to, to out in the healthcare.
[00:21:21] Julie Yoo: And to that point, off as much shade as there is cast on startups there’s been equal amounts of shade cast on like the big, sort of retailers and consumer players and tech players that have all tried their hand in various ways and shapes and forms in healthcare over the last decade or so. I think right now is a unique opportunity for folks who might have been underappreciated to emerge, given both the struggles of the incumbents but also the fact that there will be some drawback on the startup side as well. Who would you say is a key underdog player that you think will emerge in the next, let’s call it decade, as a primary winner that you think folks are undervaluing today.
[00:21:59] Donald Trigg: Well, well, look. There’s been a lot of focus on big tech and big tech entry into the space, either because of swings like Haven or Microsoft buying nuance. So there’s been a lot of focus on big tech. And maybe some cheering when some of those things have underperformed and not played out from the gallery. There’s also been some focus, I think to this discussion, on what I call out in players, someone like Walmart, who’s thinking about the vertical, thinking about how they can take their store footprint and fundamentally design it into the provider network on an MSA by MSA basis. And I think both of those things are super interesting. I think one of the stakeholders that gets underappreciated are the large healthcare big caps. That may seem a little self-evident given what a powerful force Optum has become on a multi-quarter, multi-year basis. But I think the thing that they show up with, in addition to capital which big tech and the out end players have too, is they show up with healthcare competency, and I think that’s pretty pivotal. Because it’s very hard for me coming from outside of healthcare with a very good core business potentially to understand the complexities of healthcare work through all the internal stakeholder dynamics, including my board, and take a big disruptive swing in the space. And so, I don’t know that it’s an underdog story, but I think on a tenure basis, I think those big cap healthcare players like the United Optums and even, some of the other payers who have, thought about, I’ll call them plan B strategies, as the consolidation efforts ran into to some headwinds. So, retail and digital health space, super interesting. What CVS is doing, what the Walgreens and the RiteAid are doing is they think about that network footprint and how to make it relevant. So think that’s been an underappreciated dynamic.
[00:23:56] Julie Yoo: Yeah, well, Optum does not have the privilege of ever get, being able to be called in an underdog. So , they are, they’re definitely an important player though, to your point for many reasons. Yeah. Yeah. And speaking of incumbents I would be remiss to not ask about your take on Cerner. And Cerner is oftentimes said in the same breath as Epic, right, as the two sort of market leaders in the EHR space. But, oftentimes it’s sort of Epic as the dominant player in the market despite their certain behaviors and whatnot, but what is one thing, given that you’ve been there for so long, or that you had been there so long, what is one thing that you wish people knew about Cerner or understood about Cerner that you think the majority of folks get wrong.
[00:24:36] Donald Trigg: Oh man, that’s a great question. So, look when you have a ton of success, Julie and, you grow to a $5 billion company with a 20 plus billion dollar market cap, it does work to redefine what people think about in terms of the business. That’s a little bit of your point on Optum there. They’re a long way from being a an upstart and an underdog. But I think that the thing that, that I love about Cerner and loved about Cerner was coming in in the early two thousands, when the market was really taking form and people tend to think about Cerner relative to meaningful use and the EMR requirements that were put in place by CMS. But the greatest part of that story is really the category creating dimensions of it around the EMR. So you had a huge culture around patient safety with “to err is human.” You had Y2K as a catalytic first for technology investment. And you had the mapping of the genome and this explosion of medical discovery and Neil really understood those three non-regulatory forces of change that were playing out. And at a time when everybody was buying best of breed and point solutions, he really imagined the concept of a common data model and a unified information architecture where the physician, the pharmacist and the nurse all had ubiquitous access to the same information. And it fundamentally changed clinical operational and financial performance of the provider. And so that’s the great story. He wasn’t using our health economy framework, but he absolutely thought at the health economy level. What would it look like for him to systemically drive change? And so that, there’s very few people who know that story, but it’s never been more.
[00:26:25] Julie Yoo: Mm-hmm. Cerner was the original provider enablement platform.
[00:26:28] Donald Trigg: They for sure. For sure. And there was a ton they got right. And there was a ton we got wrong. And probably a few things that we were right on but too early, which is equally complex for the entrepreneur and for capital allocation.
[00:26:42] Julie Yoo: Yeah. awesome. I will end on with a question on a personal level, but I know you’re thinking about your next act as well. What are some of the themes that you’re exploring as part of your next steps, and what excites you these days?
[00:26:54] Donald Trigg: I still think there’s gonna be a big and active role for the provider. And I think these strategies around realtime hospital become super relevant for how we manage workforce, capacity, hospital operations and start to really think about ML and AI to drive the next phase of automation and cost savings impact. I am absolutely focused on provider network and the provider network space. I did a lot of specific to Medicare advantage, but I also like the commercial space. I think it’s been under focused on and underappreciated. And then look, there’s a bunch of billion dollar businesses that are gonna be created around secondary data use and what it looks like to begin to tackle the friction between provider and payer. Think about more active, can it trial identification and participation in the pharma space. And I’m super excited about some of the capital strategies being put to work there. But provider network and how to reimagine that space, that’s my passion area. I think technology and tech enabled services strategies in that space are very ripe and relevant and I’m excited to spend more time.
[00:28:03] Julie Yoo: Many of my favorite themes as well. So when you find good stuff, send it my way.
[00:28:07] Donald Trigg: I will do. I will do it.
[00:28:09] Julie Yoo: Awesome. Thank you so much, Don, for spending time with us.
[00:28:12] Donald Trigg: Julie thank you. I think everybody knows I’m one of your biggest fans and Kyruus was important in terms of shaping provider network and provider network strategies. And I think this current act at age is really exciting. You’ve invested in some really neat portfolio companies and I’m super excited to see how it plays out.
[00:28:31] Julie Yoo: Yes, and I will have patients for decades to see them all play out.
[00:28:34] Donald Trigg: Great. Well, right. Year’s not quarters for sure.
[00:28:38] Julie Yoo: Exactly. All right. Thanks so much, Don.
[00:28:41] Donald Trigg: Appreciate it. Thanks Julie.