April 27, 2023
Nathan Bays: Hello everyone. This is Nathan Bayes your host for this episode filling in for Gary Bisby and wish it was under different circumstances, but certainly happy to be here. We’re with Russ Richmond today. Russ is a longtime healthcare. Entrepreneur, physician by training entrepreneur, and is now the CEO of a company called Laudio, which is doing amazing work with hospitals, health systems, other healthcare providers around the workforce and staffing. We’ll dive into all that, but Russ, it’s great to great to be with you today.
Russ Richmond: Nathan, thanks. It’s great to be here too. And certainly fond memories and wishes to Gary’s family.
Nathan Bays: Yeah. Thanks so much. Thanks so much, Russ. Let’s dive in. Tell us before we get into to all the exciting work you’re doing now with Laudio. Tell us a little bit about, your background, where’d you grow up and, what did you do as a kid, sports, other activities, and a little bit about yourself.
Russ Richmond: Yeah, I grew up in Ohio, in Cincinnati so right in the middle and in a very traditional family. My dad worked at. The major employer in town, which is Proctor and Gamble. And my mom was a school teacher. One interesting element is an my, an identical twin. So I have a twin brother and two older sisters as well. And as a kid, I was into sports. I was a competitive swimmer. I was a soccer player. Neither of which were, I was good enough to carry me into the collegiate level, but both of which I really enjoy. And the other key thing wa was I was an entrepreneur. So I had a bunch of businesses growing up. The biggest one was a business called Doctor Driveway, which was a driveway ceiling service that was a summer business where I hired my friends and friends, little brothers, and eventually helped me pay for college and medical schools. So that was in the blood from an early.
Nathan Bays: Yeah. That’s a tough business, especially in the summer when it’s hot.
Russ Richmond: Yeah, it’s Ohio. Ohio Summer is hot and humid and you’re working with nasty stuff, but hey, that puts a little moat around your business. You’re doing things that people, other people aren’t willing to do, so you can actually have some pricing power.
Nathan Bays: Yeah, absolutely. Lessons for the rest of your business career and the rest of life. Great. Tell us where did you go to college and and, when did you become interested in medicine and in going to medical school?
Russ Richmond: Yeah. The other threat I forgot to men mention is my mom was like a, like a hobby zoologist. So growing up I was at the zoo we were doing. Pond walks and exploring creeks, and that got me interested in the biologic sciences. And when I went to University of Michigan and majored in biology there. And got really interested in science and in ecology in particular to the point where I spent a summer in Alaska doing ecologic research. In that Arctic basin area. And there, what I learned was, Hey, I like the science. I enjoy doing this, but I think I need something that. A little bit more interactive, a little bit more personal, a little bit more focused on the human honestly. And, academic research in the electric scientists can be a lonely pursuit. And and that’s where I started thinking, oh hey, maybe medicine’s the right. The right thing for me and ended up applying to medical school and went to the University of Cincinnati, which was my hometown school. And loved it. I loved every second of it. I loved the the basic science work, which is your first two years. I loved the clinical rotations and work. Which is the last two years. The only problem was, is when I was graduating, I actually couldn’t like hone on in exactly what I wanted to be when I grew up. I liked it all. I thought I might want to be a head of neck surgeon. And then I felt oh, I’m committing just like one part of the body here. And so I ended up doing a residency in internal medicine in pediatrics, which is almost the opposite of surgery, but was like the most general pursuit that I could think of that will give me the most optionality moving forward. And so like fond memories, great experience. And then about midway through my first year of residency, I started to. Makeup, practicing medicine isn’t what I want to do. It was 1999. The first.com boom was going on. All this excitement and activity was happening around me, and I thought there’s a bigger world here. And going back to my entrepreneurial roots, that’s when I got connected into the business side. It ended up at McKinsey as a consultant.
Nathan Bays: Yeah. Fantastic. Certainly the the breadth of medicine is is almost unparalleled among professions and probably no better place to cover that breadth than at a place like McKinsey. If you’re as. Stated if you actually practice, you have to decide what you’re going to practice, and you can be a, an internist or something more general. But at the same time, you’re still self-selecting down. McKenzie, I’m sure you were able to cover the whole spectrum, both from a clinical knowledge, business knowledge but talk a little bit more about that experience and how that, that led to your, some of your entrepreneurial pursuits.
Russ Richmond: Yeah. For me what was really attractive was the apprenticeship model, which was the opportunity to learn why you worked, like instead of going back to school, Again, I had done a lot of school already, so I was ready to get out in the world, and one of the things that struck me right away was how far apart the business side of healthcare was from the clinical side of healthcare. I’d spent, a few years of medical school and a few years, a year as a resident walk in the halls of hospitals as a clinician. But I really didn’t understand as an example, the payer chain and how payments worked what A P B M was how to think about the product side. And these are all major influences in the world of medicine, especially in American healthcare. And so at McKinsey, that was when I started to put it all together and put the healthcare value chain into one place, whether it be from payments or provision or from product, and wove those together. And it gave me some of this deeper and broader appreciation. And when I joined, I originally only planned on staying for a few years and, but I actually really enjoyed the work. I enjoyed the people I was working with. I ended up developing a little bit of a specialty in health system operational work, so bringing lean thinking into health systems and that was incredibly fulfilling and led me to stay and stay until actually at a JP Morgan conference, I met a local Boston, an entrepreneur that was building a company called D two Hop guy. Which is on the claims analytics side. And got really excited by that because, in consulting a lot of what we were doing was we were harnessing a client’s data assets to then help them achieve, to help them improve, to help them move a certain direction. And I immediately saw in these early cloud models of software, and D two was certainly one of. The power of automating some of that, right? And grabbing the data, pushing back insights and intelligence through the internet. And so that’s what led me to believe was just like a continuation of this appreciation for wanting to have a broader impact on the healthcare system, but seeing almost a what in my mind was like a better model for. Which was through software. And that was an incredibly rich experience. D two was a An early cloud provider. We had the first predictive analytics based on healthcare claims information, and it was a company I give all the credit to the founders which was already shooting to the moon when I joined it. I think when I joined we had, maybe 30 employees. Three years later, we had hundreds. And it was like a early experience on, what it’s like to be in a growth company and to catch the tail of something really interesting. I got exposure to investors. I ended up growing up as an executive there. I led the. Sales and marketing and sort of medical services groups. So I was out selling, I was managing groups of folks that were distributing, and I just really, it connected me back to my roots as an entrepreneur and it really put it all together for me as aha, this is what I wanna be doing the rest of my life. It’s exactly this. It was a great experie.
Nathan Bays: Yeah, that’s, that is that’s fantastic and I’m familiar with, but maybe for the audience, talk about you. D two, Hawkeye and evolution of that company, the exit and you know where that’s at now. And then would love to hear post, that, that opportunity, how where you went next and the pathway to Laudio.
Russ Richmond: Yeah. We sold the company to a company called Verus, which was a it was pre i p o. It’s now a publicly traded firm that owns a lot of data companies in the PNC and healthcare space at just a tremendous multiple. And also D two Hawkey have been bootstrapped, which even is even more impressive than why I really credit the founding crew there for pulling off something that I’ve yet fully do in my career. So it was a great exit for everybody. And certainly a reminder of the power of ownership and equity. And since then, that company has just exploded in growth. It was spun out of vers and is now I think caught connectivity. But the root. Product or one of the root products inside of that was the D two Hawkeye claims analytics product. And it’s still a very important part of playing inside of of payers and payments. Al although the sophistication level continues to go up with AI and other forms of intelligence and things like that, but it was just really great, not just. C D two Hawkeye through its exit, but also watch it just boom and explode post that. After the exit though, I immediately was like, okay, where next? Because I wanted to do this thing again. I just saw the opportunity and that’s when I got back into kind of company growth and building a variety of different healthcare IT business.
Nathan Bays: Yeah. Fantastic. Tell us about Laudio. Laudio’s, a great company doing great work, very relevant now, has always been relevant, but even more relevant on the backside of Covid during and on the backside of Covid with the challenges that, that your clients and healthcare providers health systems are facing. But would love to hear a little bit more about, the. Of Laudio, the concept and then how you’re, taking the company and the problems you’re solving now.
Russ Richmond: Yeah, thanks. We I co-founded Laudio with three other co-founders and we had just exited our prior company together, and we’re looking for the next the next thing. And even five years ago we could see around one little corner, and that was that labor and labor productivity was going to be the number one issue for health systems. It was really clear that there were a lot of tension, even seat of pre C O V I D in the employment market. There were secular trends around labor supply shortage. And that L Systems really did not have the answers. And the answer would really hinge on working differently. It wasn’t just adding another app or another solution and throwing onto the pile of everything else that everyone is already doing, but that we actually had to structurally change the work that was happening. Was also informed, obviously by my background as a clinician and then as a consultant walk in the halls of a hundred different hospitals as a McKinsey consultant. And that you couldn’t just add more systems in to do the same amount of work. And so that was the founding thesis behind Laudio. And what Laudio is. It’s a set of workflow tools for frontline managers and health systems, and those that are manager adjacent, assistant managers, unit coordinators, charge nurses, et cetera. And it helps, it removes work from their everyday life and that helps ’em get a host of things done more effectively and more efficiently, and then they otherwise could have done. And this includes major workflows. There’s seven or eight major workflows like employee rounding, patient rounding. Quality care audits, new hire support, burnout prevention operations, work like ator and overtime, and time at attendance, employee voice collection, employee engagement. All of these things are currently today like point Solutions and L Systems, and we have a fundamental belief that it just all belongs in one. And that’s what we’re building at Laudio. And I think the second important component to it is once we literally make these all these workloads collaborative and easier and under one hood, we wanted to make them action oriented. And that’s where this is some really proprietary technology around not just being like business intelligence and showing people what the trends are and making them devise what to do next. But literally teeing up the next best actions for every manager in every area of the health system at any time. So whether you’re in housekeeping or whether you’re the nurse manager of the I C U or anywhere in between, what Laudio’s gonna do is give you a workflow interface to get all these workflows done, but also be pushing and suggesting the next best actions for you to take. And these are informed by our own risk models. In our own knowledge of what’s gonna drive quadruple aim outcomes inside that system. And so we’re able, not just to reduce the amount of work, but make the work that is done most efficient and most effective. And I think that’s the beauty of the platform.
Nathan Bays: Yeah. And the other thing I so first of all that I think that’s, thanks for the explanation and it’s, just fantastic and I think, one other piece that that I’ll just try to capture but would love your reaction to it is you’re actually freeing up, both leaders and caregivers to actually be more efficient and provide better care and be, spend more meaningful time with patients, which is always a good thing. But in this environment, post Covid where there’s been so much, distraction around sp, staffing and shortages and contract labor and noise, around the whole ecosystem. Would love to just hear your thoughts about, ma maybe reactions from caregivers that you know and leaders that have been using your product and just how that’s opened up the opportunity for them to spend more time with patients, which is what we all want in the hospital.
Russ Richmond: Yeah. Thanks for bringing it up, Nathan. The, we, our starting point is that. Most, if not everyone working in the healthcare system wants to do the right thing, they are actually there for a reason and that their heart is in caring and in the act of caring. And anything that takes them away from that is, or prevents them from doing more of that is a form of harm actually. Especially at a time when. The nation’s needs and these healthcare caregivers needs specifically were so high during the pandemic and there was so much more caregiving that was required with fewer staff to do it. The the outside work from that the managing of the work, the administrative trivia rounded that as that volume grew, it made the job just untenable. And I. And that’s why you’re seeing so much burnout exist, not just at the manager level, but also at the caregiver level. So anything we can do, To shift that balance and free up time is welcome. And that’s why this is, it’s not just a labor efficiency and labor productivity system, but it also improves burnout because if you can actually get the same outputs or better outputs with less work, you’re starting to restructure the work that’s actually being done. You actually have. At least an opportunity to get at this problem, right? And the current solutions out. A lot of it has been stopped the bleeding stuff, which is let’s throw more travelers in. Let’s solve like the staffing problem, but none while necessary. None of those actually change the work and change the core problem. And where we wanna be positioned is around that. And then to reduce this, Sense of harm or moral injury that comes from not being able to provide the care that folks need and to shift that balance and shift that equation. We we hope not just to improve outcomes, the F t E costs or the. The quality achieved by the workers themselves, but actually to reduce the burnout and improve the satisfaction engagement of those doing the work because they are doing the work we all need them to do. We need people to go into this space and feel valued. And that’s not gonna happen. I think our major belief, Nathan, is that just doesn’t happen without restructuring the work.
Nathan Bays: I, I would agree with that. I would agree with that strongly, Russ. Look, first of all, thank you for joining us today on the show and also thank you for the work that you’ve done throughout your career but specifically now with Laudio and what you’re doing to ease that burden that, that exists on the clinical staff today that are taking care of patients. A final question for you, looking at where you’re at now, if you were looking back at. 25 year old Russ, in medical school, thinking about graduating medical school, what advice would you give, that Russ a around kind of an entrepreneurial trajectory and and thinking about, what you’ve done, what advice would you give to a younger version of yourself?
Russ Richmond: That’s a great question. I think ownership early matters. And so if you are an entrepreneur, don’t wait. The earlier you can, to spark starting something or building something. Whether it’s just you or you and some co-founders, I’m a big believer in the co-founder model. I’ll say that out of the gate, the better off you are waiting until you’re late in the career when you’ve got, all kinds of other pressures to do it. It’s still possible and I suppose on proof of that, but the younger you can do it and learn through the school of Art Knox, the better off you are. Both from a productivity stand. And I also think from an equity ownership standpoint, I’m just a big believer that ownership matters. And the second thing is when you build these businesses, build in areas that really matter to you personally. You’re stepping into a 10 year run. Is it not a one or two or three year gig? It’s at least 10. And if it’s, if you’re not working on something that you have real passion for you are gonna burn out yourself and lose the focus and lose the thread. And so I think when you are ready to jump into something that you don’t have to be idea a hundred percent hammered out, but it’s got to be in a zone. That you really want to spend time applying your own personal leverage and torque to make a real difference, because while how you do it might shift with some pivots and learnings and adaptations and the area won’t change itself. And you want to be spending time in an area that matters to you personally, to, make your own dent in the universe.
Nathan Bays: Great advice, Russ, and great advice to all aspiring entrepreneurs whether they be clinical or otherwise. We’ll look at, you’ve got a, a fantastic career. We appreciate you sharing some of that with us here today. And we appreciate you sharing the learnings of of your entrepreneurial journey with those who who may be interested in taking the plunge and diving in themselves. So thanks again, Russ.
Russ Richmond: Really appreciate it. Thank you.