Technology continues to change every aspect of the healthcare industry. From the treatments, devices, and medicines available to patients, to the supply chain and distribution methods designed to provide access for all. The advent of 5G has had an impact well beyond telemedicine. Connectivity has touched all aspects of the medical field, from the computing power needed for drug research, to supply chain management, to the data made readily available through smart devices. Organizations such as Cardinal Health are seizing the opportunity to use these technologies, changing the ways healthcare is delivered to patients.
For this episode of The Restless Ones, I had the opportunity to sit with Ray Bajaj, Chief Technology of Cardinal Health, a multi-faceted company focused on improving access, affordability, and adherence across the industry. Ray sees the formula to success as the ability to advance the speed and slope of technology while concurrently changing the culture of his organization. From connected devices such as neonatal machines, and other critical equipment, to the latest digital therapeutic techniques, helping “unbundle the hospital” and create what will become the future of pharmacy care, Ray’s team is pushing the limits of technologies “to make a difference, in an industry that makes a difference.
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Episode Transcript
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Speaker 1 (00:03):
How you always retreat to my team that we are
making a difference in an industry that makes a difference.
This is our time where we need to stand up
and we need to use, like you know, our ingenuity
in a way. We need to create technology solutions so
that you know, we can solve critical problems. And we
(00:23):
did that in the in the middle of pandemic and
we will not go back now. You know, the company
that is emerging from this pandemic is completely different. The
company like that is digital, the company that is technology
forward leaning via an agile organization. We have created a
new revenue line from the technology services and we are
(00:45):
serving like a critical part of the health care value chain.
Welcome to the restless ones. I'm Jonathan Strickland. As you
may know, I've spent the last fifteen years covering technology
and learning how it works, demystifying everything from massive parallel
processing to advanced robotics and everything in between. Yet it's
(01:06):
the conversations with some of the most forward thinking leaders,
those at the intersection of technology and business that fascinated
me the most. Cardinal Health is a multinational health care
services company with double headquarters in Dublin. By that I
mean they have an HQ in Dublin, Ireland and another
in Dublin, Ohio. This massive corporation had its humble beginnings
(01:30):
in wholesale foods, but by the late nineteen seventies had
branched into pharmaceuticals and it grew rapidly over the next
few decades. Apart from drug sourcing and distribution, the company
also manufactures medical and surgical products. As the pandemic ramped up,
this business and managing the supply chain became critical for
not just Cardinal Health but for its customers as items
(01:53):
like ppe were sorely needed. Ray bag joined Cardinal Health
in late twenty nineteen, having previously worked in leadership positions
in fintech companies. He had no way of knowing that
within his first six months a CTEO of Cardinal Health,
that the company's business would need to shift dramatically to
meet the needs of a world struggling with a mysterious illness. Fortunately,
(02:14):
Ray has the desire to rise and meet challenges, no
matter how daunting. But before talking about all of that,
I wanted to get to know a bit more about
Ray Bagage. Ray, thank you so much for joining us
and welcome to the restless ones. Jonathan, thank you so
much for inviting me. It's my pleasure to be here.
(02:36):
I'm really excited about our conversation today. I feel that
the world of healthcare is one where we often see
some of the most interesting applications of cutting edge technologies
and an approach that I think is far more thoughtful
(02:56):
than what we see in other areas of the industry.
But before we get into all of that, I would
love to learn how you first became interested in technology.
I will say that my interaction with technology started in
the middle school. It was the first Stari game console
that I got from my parents, and I was so
(03:17):
fascinated by the games, how the objects in the games
interact with each other. I got my first computer when
I was in high school and started learning how to program,
and I was always fascinated by solving problems leveraging technology.
I'm so enavored by hands on way of first of all,
(03:38):
understanding problems and where technology can make the difference in
the business. I love that you're jumping up point was
video games. I feel like that's a great story for
lots of people in the sense that you know video
games they can get a bad rap, but they really
can inspire people to get interested in problem solving, but
(03:59):
then be on that learning how the actual technology works,
learning how the program and interact with technology on that
level to get that understanding of the fundamentals beneath it
in order to create a result that you have in mind. Yeah,
I was always a curious person, and I still remember
the first game like I was really passionate about was Starships,
(04:24):
which involves destroying many spacecrafts and obstacles as possible. And
the biggest lesson that I learned from that game is
everybody will face obstacles and situations where they will not
be comfortable, and some of these situations you need to
dodge few things, and some you need to confront head on.
Courage and agility are two important attributes that will serve
(04:45):
you well as a leader. And I keep on reminding
myself that I'm playing a game of Starships and these
business obstacles like now we need to have creative solutions
in everyday life. I love that. Well, you've worked in
several different industries before you came to your current role
over in cardinal health. Are there any sort of broad
(05:07):
similarities you've noticed between different industries when it comes to
business needs and technological solutions. I spent two decades in
financial services industry eight years I spent at Capital One,
and my experience in financial services industry gives me a
good frame of reference and best practices that I'm translating
(05:28):
into the health care industry. There are three major points
that I'm gonna make Jonathan on this one. The first
lesson that I learned is the businesses are not selling
products and services, they are selling customer benefits. The financial
services industry is selling customer benefit of how people manage
(05:48):
their money, creating a personal CFO in lives of people.
The health care industry is selling the benefit of how
the care is delivered to the patients and come panis
are using different business models to achieve this goal. The
second thing to achieve the goal of customer benefits, successful
(06:08):
companies are using technology and data to create a winning proposition.
Customer buying behaviors are changing in different industries and customers
are now demanding digital and physical experiences to come together steamlessly.
And this change has been accelerated by the global pandemic.
And the third point I'm going to make is technology,
(06:30):
data and new architectures may not be sufficient. I've seen
leading companies in various industries successfully modernize their operating model,
which has more to do with changing the social architecture
of the organization, building digital culture, agile business processes, adoption
of design thinking, up skilling and new skilling the talent,
(06:53):
and integrating multigenerational thinking in the organization. If you do
these things, you can catch the tail of market opportunities
that comes to your bay. M hmm. I like that
a lot as well. I like that organization centric approach
that focus upon finding and nurturing the right people, getting
the talent there that you need, and building the culture
(07:16):
that you need to support the mission. Yep. My role
in the organization, let me explain. We all have learned
a mathematical equation of bicycle to M X plus C,
which is algebraic equation considered like a vias the organization
value and X as technology and see as the culture.
My role becomes how can I change the slope of
(07:39):
technology and the organization and changing the culture so that
we can maximize organization value. And I have a bunch
of responsibilities that I oversee, but it is always about
changing the slope of the technology and changing the culture
so that we can maximize organization value. Ray, I gotta say,
(07:59):
I love the fact that you have described your role
in the form of an algebraic equation that we could
plot against a chart. It's the first time I've ever
heard an answer like that, and it absolutely delights me.
It's a fantastic way to get a high concept of
what it is you do. I'm curious what are some
(08:21):
of the challenges that are associated with driving innovation that
are unique to the healthcare industry in particular, So in
my professional career, like I've seen, like many reasons, it
is hard to drive innovations in large corporations. The biggest reason,
in my opinion, is the companies get wrapped up in
the tylany of solved markets. You know, large organizations have
(08:43):
optimized themselves to serve a particular business model, which is
how they create and capture business value existing customer segments, markets, products, pricing,
customer service, even technology and all the things like that
we have learned in the management curriculum. The companies have
optimized and scale to achieve the excellence in that business model.
(09:06):
The kinds of initiatives that get funding. These are efficiency
innovations with predictable outcomes, and these are incremental initiatives with
low risk. Then we ask the questions why we are
not innovating and exploiting the opportunities. The point is it
becomes difficult for big organization to unlearn things. Different kinds
(09:27):
of talent needs to be hired, creating new processes, even
fund initiative that have not a positive and PV to
start with. But the companies like that player, like this
bifocal nature or productivity and possibility like they do really
well from an innovation standpoint. And we at Cardinal Health,
we're making big moves where we are executing well inough
(09:50):
distribution business and also becoming a leader in the digital
health space. Now that you're coming back to your question
of unique challenges in the health care industry, first of all,
let's understand the magnitude of problem in the health care space.
Health care industry accounts for twenty percent of our GDP
and this number keeps on increasing the complexity and the
(10:12):
health care starts with the value chain. You have biopharma companies,
you have health plans, your PBMs, you have distributors like us,
you have physicians, your pharmacies, your hospitals, your patients. Getting
everybody aligned with the care journey of the patient is
not an easy proposition. Generally, we have seen innovation where
(10:35):
companies are focused in small, manageable areas to innovate in.
And one of the big things in the health care
which is unique, it's around technology and data. Like technology
and data is siloed, it is not interoperable across the
value chain, so that becomes a little bit difficult to
innovate the patient outcomes and patient experience. There are a
(10:57):
few things that are happening inside the healthcare industry, for example,
healthcare at home, tell ahealth selling, gene therapies, met tech,
connected devices, changing role of pharmacies, and technology enabled clinical workflows.
So we are seeing digital we are seeing clinical expertise.
We are seeing technology coming together as a trifecta changing
(11:22):
the patient outcomes as well as patient delivery inside the
health care setting. I imagine that the importance of things
like data security and data privacy, which are particularly important
in healthcare, presents itself as a challenge to work within
when you're evaluating technological innovations. No, that is such an
(11:44):
important point. I have always said that in my organization
that every engineer is a security engineer. First, we need
to get Hounter person right, Honter person the time we
are sitting on mountain of a patient data and we
need to be a great stewards of data and information security,
not only innovating and building digital products, but building the
(12:07):
products in the right manner with security at the center
of the products that we are building. Conventional thinking says
you have to pay more to get more. I want
the world, But T Mobile for Business uses unconventional thinking
to deliver premium benefits for better r o I from
(12:27):
customized five G solutions to three sixties support. We help
you reach your business goals right now. I want it now.
Innovating to improve business today and tomorrow. That's unconventional thinking
from T Mobile for Business. Capable device required covers not
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C mobile, dot Com well Ray. I would also love
(12:53):
if you could give us maybe a couple of examples
of some of these products that Cardinal Health has been
behind so for us, like every technology solution must solve
a business and customer needs, I have like know this
slide that I always use, which is around business viability,
customer desirability, and technology feasibility. So every idea, like you know,
(13:16):
has to be in the intersection of business, customer and technology.
I'm going to talk about an organization that I lead,
which is a FUSE organization, which is our innovation engine
and our product development center. It is an autonomous unit
integrated with our growth businesses. The two products, Jonathan, that
we are really proud of coming out of our FUSE organization,
(13:40):
they centered around creating digital tools for retail pharmacies so
that they can provide personalized care to their communities. These
solutions enable our pharmacy customers to manage COVID vaccination process,
administer point of care testing, chronic care management, and other
(14:00):
primary care services. And it not only digitizes the clinical
workflow in the pharmacy, but also enables reimbursements for these
services with medical billing capability. And also we are doing
a lot of work in the community oncology setting. We
recently launched Novista Technology platform, which is comprehensive value based
(14:24):
solutions that offer clinical decision support to assist our provider
customers to manage healthcare treatment and also it provides cost
of care transparency to physicians as well as of our patients.
I am fascinated by fears. I think it's a brilliant
approach to conducting R and D within a broader healthcare company.
(14:49):
I love hearing the phrase personalized healthcare. I feel like
that's something that we've been hearing about for more than
a decade. Can you talk a bit about some of
the different technologies that FUSE has been looking into specifically
and in what role. Yeah, we are very optimistic about blockchain,
and let me tell you while we are doing transformative
(15:11):
work in the pharmaceutical industry using blockchain technology to improve
our financial processes of managing our contracts and facilitate intercompany
commerce with our supply chain partners. Getting first time pricing right,
reducing disputes chargebacks between pharmaceutical manufacturers g p o S
(15:33):
and US is an important business problem to solve for us.
It is a ten billion dollar problem in the industry. Well,
we are confident that blockchain based solutions can reimagine the
operational backbone of pharmaceutical financial processes. The second technology that
we are investing heavily is in air and machine learning.
(15:56):
We are using A and machine learning agorithms like computer vision,
an edge computing to count pills, helping improve efficiency and
accuracy for pharmacy technicians. We are using data science to
improve medication adherence, identify patients who may be at risk
of healthcare episodes, and variety of population health risk management
(16:20):
use cases. So blockchain, data, AI, machine learning, and I'm
going to add like an augmented reality and virtual reality.
I think these will be like no critical pillars of
emerging technologies like not that will shape healthcare as well
as digitize some of the processes inside cardinal health. Gosh, Ray,
(16:40):
you you've covered so much, so many of my favorite
topics to talk about. The blockchain piece. When you mentioned
specifically not just for transactions, but for tracking things like
supply chain and keeping a close eye on that, I
have to admit to you, Ray that for the longest time,
blockchain was one of those concepts that I just couldn't
my head around until I started hearing about possibilities of
(17:05):
using block chain for the purposes of managing a supply
chain and being able to have governance over any particular
thing in that supply chain as it moves from one
point to the next. And then it started to click, Yeah,
because if you look at it. You know, historically we
have equated blockchain into bitcoin and cryptocurrency, which are applications
(17:28):
on the blockchain based decentralized ledger architecture. But there are
enterprise use cases where if you look at the pharmaceutical
supply chain that I talked about, which is you have manufacturers,
you have g p o s, you have distributors, and
you have dispensers, and there is a lot of inter
(17:51):
company commerce where we exchange data and there is misalignment
of contract, there's misalignment of data that we shared across
like an ore trading partners. You know, blockchain based architecture,
it is the right architecture for first of all data
alignment as well as immutability of data and providing provenance
(18:13):
over the transactions that are happening between the trading partners.
So it's our system of truth. And once like you
have the data alignment right, then like you can ingest
that data in your E r P platforms. Do we
think that is the right architecture. That is the future
of how the commerce happens between B two B space
(18:35):
and it will create first of all efficiency in our
business processes as well as new customer experiences will come
out of this architecture. I see that as also a
way where businesses are going to see tremendous savings and
an enormous reduction in waste as they're able to have
this level of scrutiny that was not really possible without
(18:58):
a tremendous amount of work on the back end. So
I really do see that as another one of those
transformational technologies. You also mentioned virtual and augmented reality too,
technologies I'm very passionate about as well. And one of
the things that I love about the time we're living
in now is we're in an age of connectivity where
it becomes possible to have things like virtual reality headsets
(19:22):
and augmented reality headsets that are no longer tethered to
a machine, but with the rollout of technologies like five G,
it then becomes possible to start to design and implement
VR and a our experiences. What kind of solutions in
the health care industry are you looking at that are
made possible by this new era of connectivity that we're in. Yeah,
(19:46):
you know. The full set of use cases that comes
to my mind that we are actively working on and
pursuing is in the met tec industry because continuous glucose monitors,
CPAP machines, neon neatle I see devices combined with digital
therapeutic techniques. I think it will change the game for
(20:06):
the patients and patient outcomes. Devices that have ability to
connect virelessly. As you said, EMT data will be used
for patient monitoring and for digital interventions. So those are
the first set of use cases where the devices are
becoming connected and those connected experiences are getting created around
patient outcomes. The second set of use cases are around
(20:29):
care coordination. We are seeing care shifting to lower cost
settings outside of hospitals through urgent care centers, walking clinics,
outpatient surgery centers, and home health care settings. Enhanced diagnostics, telehealth,
remote patient monitoring will be accelerated by the use of
(20:50):
five G use of sensors, variables, eHealth devices will increase,
and patient data now can be collected and analyzed where
a pay and does not need to travel to primary
care facilities and have face to face appointment with medical professionals.
You know, enhanced connectivity is a good thing and will
(21:11):
help us reimagine the care delivery model, and that is
what we are working on right now it is just
not about the products, it is about experiences, and those
are connected experiences where we're providing solution poolkads for the
problem inside the health care care delivery model. And as
someone who's not in the industry, as someone who is
(21:34):
a patient, I really appreciate the connectivity side because I
appreciate the idea of technology allowing more people to have
that level of independence for longer in their lives that
they might not otherwise be able to enjoy without the
benefit of that tag. Yeah, and and that's where Jonathan, like,
(21:55):
we have been thinking a lot about when I was
in financial so verses, like you know, we had this
thought of creating a pertional ized c in the customers lives.
In healthcare, we are creating an angel in the patient's
lives where that angel is always looking for like those
episodes where a patient needs help, and can we created
(22:19):
like that easy button where whenever there are healthcare episodes.
First of all, we are providing monitoring. Second of all,
we are providing diagnostics, and thought of all, we are
providing smart interventions so that we can truly care for
our patients. And the whole thing is powered by the
technology platform and that is our vision of creating that
(22:43):
angel in the health care system, that easy button that
we are missing. I'm curious, are there any particular solutions
that you personally find really motivating and inspirational things that
when you look at it, you say, this is making
the world the better place, This is really changing people's lives.
(23:04):
You know, Access, affordability, and adherence. I think those three
are big problems inside the health care industry. First of all,
if you look at medical access or health care access,
it is not distributed equally in the population inside the country.
So how can you provide access to good quality health care?
(23:25):
That is a big problem for us to solve. And
the way like we are doing that is making sure
like we have digital solutions where like your telepharmacy solutions,
or getting the health care in patients homes. One of
the solutions like that we are building is we are
unburning the hospital and bringing like in a hospital level
(23:46):
services to patients homes because it is an easier way
of consuming health care if the health care is delivered
in homes. And so I'm very passionate about another that
business model. Then the second question that comes is affordability.
Not everybody can afford the health care, So how can
I we provide the affordability the patient assistance programs? And
(24:11):
then adherence is another problem. There is a lot of
health care spending that is because of patients are not
taking medication as prescribed at the right time. So how
can I view use technology to solve that problem? And
if you solve under those three problems, is going to
create a lot of savings as well as it improve
(24:32):
outcomes for the patients. This is the sort of stuff
I really can get behind because I think in terms
of the ripple effect, it's essentially kind of the digital
age version of the old tiny concept of the doctor
who's going door to door, the doctor who does house calls.
But now we're in the digital age and we're using
technology to enable that level of access. On top of that,
(24:55):
I think about the next ripple out and how that
affects all these support system around any individual patient, the
friends and family, and the positive impact that has on
their lives, even if they're not aware of it intrinsically.
And then beyond that, the social impact that has. As
you improve people's lives, they become better at contributing back
(25:17):
to society. But I think about the overall communal benefit
that comes with this level of access, and how technology
is really fueling this push to create new solutions and healthcare.
Thriving communities is a good thing for the businesses, and
(25:37):
we have invested big in the future of the pharmacies
because the future of pharmacy is going to be a
place where the primary care services are delivered. They have
great relationship with their customers and the communities, and we
need to provide the technology and the clinical capability so
that the pharmacists can work with their patients on chronic
(26:02):
care management, on diabetes care management, on smoking cessation, on
variety of things. So they're like, no, we can keep
like an our communities healthy. We are reimagining the care
continuum and keep like our populations healthy and safe. Ray,
as I've talked to you, it is clear to me
how passionate you are in this mission to improve health
(26:24):
care and improve the reach of health care. I am
very curious what it was like to take on a
leadership role at a healthcare organization just as the world
was entering into a pandemic. Can you tell us what
you experienced as you stepped into this role. You know,
when I joined the organization. It was maybe six or
(26:44):
eight months before pandemic, and I never thought that I'm
going to land in the middle of pandemic. Where if
you look at our demand curves of our products. Now,
we deal with pharmaceutical products, both genetics as well as
branded products. We deal with blood and plasma products, we
deal with medical devices, we deal with testing products. So
(27:10):
the demand curves of all of our products were upside
down because we are seeing the higher demands for certain
categories and then suppressed demand for another category. So it
was a situation where there was not a playbook, but
one thing was clear, the mission and the vision that
we are essential to care. It is all about health
(27:33):
care heroism. There are people in the front lines that
we need to provide ppe. You know, your your gloves,
your syringes, all the things to make sure that we
are solving the problem in the global pandemic. Are you
always retreat to my team that we are making a
difference in an industry that makes a difference. This is
(27:55):
our time where we need to stand up and we
need to use like our ingenuity innovate. We need to
create technology solutions so that like you know, we can
solve critical problems, and we did that in the middle
of pandemic and we will not go back now. You know,
the company that is emerging from this pandemic is completely different.
(28:18):
The company like that is digital, the company that is
technology forward leaning. We are an agile organization. We have
created a new revenue line from the technology services, and
we are serving like a critical part of the health
care value chain. So it is tough to go through
the pandemic, but I think as a company like you know,
(28:38):
we are better off going through like this transition. I
don't in the you and the process that it must
have been. I'm sure you had long days and nights
working to stay ahead of challenges as the pandemic developed,
and my hat is off to you. You know. It's
all about the team effort. The mission like drives the
(29:00):
path that we are on, and we always gravitated towards
doing something that is bigger than ourselves. And that is
a very clear thing for us inside the organization, and
a lot of people like now stood up during this
time and took on greater responsibilities. And yes, we're long nights,
(29:21):
but we had a lot of fun doing it. Before
I could let him go, I had to ask Ray
one more thing. Well, Ray, I'm curious what lessons have
you learned that you wish you had known earlier on
in your career. Yeah, and that's a great question. You know.
I have always been influenced the work of Clay Christensen,
(29:45):
and especially like you know, his book which I read,
How Will You Measure Your Life? And I wish like
I had learned this lesson earlier, which is we all
get enamored by the next promotion or the fancier title
or the races, but in the end, it comes down
(30:05):
to how much love and respect you owned and how
many people you touched and made better. So those are
very important things for a leader to always let know
think about. And if you keep on I go thinking
about owning love and respect and grooming them, I think
you have done your job as a leader. Or Ray,
(30:27):
I have to say I completely agree. I also think
those are good guidelines for everyone leadership or otherwise that
approach to really focusing on the good you can do.
I'm a child who watched Mr Rogers every day, so
those sort of lessons are deep within my psychological being. Ray.
(30:50):
This has been a fantastic conversation. Thank you so much.
For your time and for joining the show. Thank you
so much for having me on the show. I enjoyed it.
Whenever I think about future technologies, I always like to
imagine how they will impact healthcare. The idea of tech
(31:12):
helping us live longer, healthier lives has been a beguiling
proposition for decades, but the truth of the matter is
that healthcare, above all other industries, must take a wise
and precise approach to integrating innovation. Yes, without innovation, a
company will falter, but the states with healthcare are as
high as they get, and so healthcare companies like Cardinal
(31:34):
Health have to be absolutely certain that those innovations support
the organization's mission. Ray embodies this ideal, and his determination
to pursue innovation and find ways to add value to
Cardinal Health and delight customers through the responsible application of
technology is admirable. I'm excited to see what emerges as
(31:55):
this era of connectivity matures. The possibilities are stagger ring.
With a low latency wireless connection, remote diagnostics and related
practices can return to us one of our most precious resources,
time and patients will be able to enjoy autonomy and
freedom for far longer. Throughout their lives, which has a
(32:17):
truly enormous impact on quality of life. And that's just
the forward facing side of healthcare. The ability to coordinate
operations along an entire supply chain is something I think
we all recognize is important in the wake of supply
chain issues highlighted by the pandemic. Innovation in spaces like
connectivity and blockchain can go a long way towards solving
(32:39):
this problem. Thanks again to Ray Bajaj for joining the show.
Be sure to join me for future episodes of The
Restless Ones. As I talked with more leaders in the
tech space, were forging a path to the future. I'll
see you soon. T Mobile for Business knows companies want
more than a one size fits all approach to support.
(33:02):
I want the world, so we provide three sixty support
customized to your business. From discovery through post deployment. You'll
get a dedicated account team and expertise from solutions engineers
and industry advisors already right now, I want it now,
three six support that's customized for your success. That's unconventional
(33:24):
thinking from T Mobile for Business
How you always retreat to my team that we are
making a difference in an industry that makes a difference.
This is our time where we need to stand up
and we need to use, like you know, our ingenuity
in a way. We need to create technology solutions so
that you know, we can solve critical problems. And we
(00:23):
did that in the in the middle of pandemic and
we will not go back now. You know, the company
that is emerging from this pandemic is completely different. The
company like that is digital, the company that is technology
forward leaning via an agile organization. We have created a
new revenue line from the technology services and we are
(00:45):
serving like a critical part of the health care value chain.
Welcome to the restless ones. I'm Jonathan Strickland. As you
may know, I've spent the last fifteen years covering technology
and learning how it works, demystifying everything from massive parallel
processing to advanced robotics and everything in between. Yet it's
(01:06):
the conversations with some of the most forward thinking leaders,
those at the intersection of technology and business that fascinated
me the most. Cardinal Health is a multinational health care
services company with double headquarters in Dublin. By that I
mean they have an HQ in Dublin, Ireland and another
in Dublin, Ohio. This massive corporation had its humble beginnings
(01:30):
in wholesale foods, but by the late nineteen seventies had
branched into pharmaceuticals and it grew rapidly over the next
few decades. Apart from drug sourcing and distribution, the company
also manufactures medical and surgical products. As the pandemic ramped up,
this business and managing the supply chain became critical for
not just Cardinal Health but for its customers as items
(01:53):
like ppe were sorely needed. Ray bag joined Cardinal Health
in late twenty nineteen, having previously worked in leadership positions
in fintech companies. He had no way of knowing that
within his first six months a CTEO of Cardinal Health,
that the company's business would need to shift dramatically to
meet the needs of a world struggling with a mysterious illness. Fortunately,
(02:14):
Ray has the desire to rise and meet challenges, no
matter how daunting. But before talking about all of that,
I wanted to get to know a bit more about
Ray Bagage. Ray, thank you so much for joining us
and welcome to the restless ones. Jonathan, thank you so
much for inviting me. It's my pleasure to be here.
(02:36):
I'm really excited about our conversation today. I feel that
the world of healthcare is one where we often see
some of the most interesting applications of cutting edge technologies
and an approach that I think is far more thoughtful
(02:56):
than what we see in other areas of the industry.
But before we get into all of that, I would
love to learn how you first became interested in technology.
I will say that my interaction with technology started in
the middle school. It was the first Stari game console
that I got from my parents, and I was so
(03:17):
fascinated by the games, how the objects in the games
interact with each other. I got my first computer when
I was in high school and started learning how to program,
and I was always fascinated by solving problems leveraging technology.
I'm so enavored by hands on way of first of all,
(03:38):
understanding problems and where technology can make the difference in
the business. I love that you're jumping up point was
video games. I feel like that's a great story for
lots of people in the sense that you know video
games they can get a bad rap, but they really
can inspire people to get interested in problem solving, but
(03:59):
then be on that learning how the actual technology works,
learning how the program and interact with technology on that
level to get that understanding of the fundamentals beneath it
in order to create a result that you have in mind. Yeah,
I was always a curious person, and I still remember
the first game like I was really passionate about was Starships,
(04:24):
which involves destroying many spacecrafts and obstacles as possible. And
the biggest lesson that I learned from that game is
everybody will face obstacles and situations where they will not
be comfortable, and some of these situations you need to
dodge few things, and some you need to confront head on.
Courage and agility are two important attributes that will serve
(04:45):
you well as a leader. And I keep on reminding
myself that I'm playing a game of Starships and these
business obstacles like now we need to have creative solutions
in everyday life. I love that. Well, you've worked in
several different industries before you came to your current role
over in cardinal health. Are there any sort of broad
(05:07):
similarities you've noticed between different industries when it comes to
business needs and technological solutions. I spent two decades in
financial services industry eight years I spent at Capital One,
and my experience in financial services industry gives me a
good frame of reference and best practices that I'm translating
(05:28):
into the health care industry. There are three major points
that I'm gonna make Jonathan on this one. The first
lesson that I learned is the businesses are not selling
products and services, they are selling customer benefits. The financial
services industry is selling customer benefit of how people manage
(05:48):
their money, creating a personal CFO in lives of people.
The health care industry is selling the benefit of how
the care is delivered to the patients and come panis
are using different business models to achieve this goal. The
second thing to achieve the goal of customer benefits, successful
(06:08):
companies are using technology and data to create a winning proposition.
Customer buying behaviors are changing in different industries and customers
are now demanding digital and physical experiences to come together steamlessly.
And this change has been accelerated by the global pandemic.
And the third point I'm going to make is technology,
(06:30):
data and new architectures may not be sufficient. I've seen
leading companies in various industries successfully modernize their operating model,
which has more to do with changing the social architecture
of the organization, building digital culture, agile business processes, adoption
of design thinking, up skilling and new skilling the talent,
(06:53):
and integrating multigenerational thinking in the organization. If you do
these things, you can catch the tail of market opportunities
that comes to your bay. M hmm. I like that
a lot as well. I like that organization centric approach
that focus upon finding and nurturing the right people, getting
the talent there that you need, and building the culture
(07:16):
that you need to support the mission. Yep. My role
in the organization, let me explain. We all have learned
a mathematical equation of bicycle to M X plus C,
which is algebraic equation considered like a vias the organization
value and X as technology and see as the culture.
My role becomes how can I change the slope of
(07:39):
technology and the organization and changing the culture so that
we can maximize organization value. And I have a bunch
of responsibilities that I oversee, but it is always about
changing the slope of the technology and changing the culture
so that we can maximize organization value. Ray, I gotta say,
(07:59):
I love the fact that you have described your role
in the form of an algebraic equation that we could
plot against a chart. It's the first time I've ever
heard an answer like that, and it absolutely delights me.
It's a fantastic way to get a high concept of
what it is you do. I'm curious what are some
(08:21):
of the challenges that are associated with driving innovation that
are unique to the healthcare industry in particular, So in
my professional career, like I've seen, like many reasons, it
is hard to drive innovations in large corporations. The biggest reason,
in my opinion, is the companies get wrapped up in
the tylany of solved markets. You know, large organizations have
(08:43):
optimized themselves to serve a particular business model, which is
how they create and capture business value existing customer segments, markets, products, pricing,
customer service, even technology and all the things like that
we have learned in the management curriculum. The companies have
optimized and scale to achieve the excellence in that business model.
(09:06):
The kinds of initiatives that get funding. These are efficiency
innovations with predictable outcomes, and these are incremental initiatives with
low risk. Then we ask the questions why we are
not innovating and exploiting the opportunities. The point is it
becomes difficult for big organization to unlearn things. Different kinds
(09:27):
of talent needs to be hired, creating new processes, even
fund initiative that have not a positive and PV to
start with. But the companies like that player, like this
bifocal nature or productivity and possibility like they do really
well from an innovation standpoint. And we at Cardinal Health,
we're making big moves where we are executing well inough
(09:50):
distribution business and also becoming a leader in the digital
health space. Now that you're coming back to your question
of unique challenges in the health care industry, first of all,
let's understand the magnitude of problem in the health care space.
Health care industry accounts for twenty percent of our GDP
and this number keeps on increasing the complexity and the
(10:12):
health care starts with the value chain. You have biopharma companies,
you have health plans, your PBMs, you have distributors like us,
you have physicians, your pharmacies, your hospitals, your patients. Getting
everybody aligned with the care journey of the patient is
not an easy proposition. Generally, we have seen innovation where
(10:35):
companies are focused in small, manageable areas to innovate in.
And one of the big things in the health care
which is unique, it's around technology and data. Like technology
and data is siloed, it is not interoperable across the
value chain, so that becomes a little bit difficult to
innovate the patient outcomes and patient experience. There are a
(10:57):
few things that are happening inside the healthcare industry, for example,
healthcare at home, tell ahealth selling, gene therapies, met tech,
connected devices, changing role of pharmacies, and technology enabled clinical workflows.
So we are seeing digital we are seeing clinical expertise.
We are seeing technology coming together as a trifecta changing
(11:22):
the patient outcomes as well as patient delivery inside the
health care setting. I imagine that the importance of things
like data security and data privacy, which are particularly important
in healthcare, presents itself as a challenge to work within
when you're evaluating technological innovations. No, that is such an
(11:44):
important point. I have always said that in my organization
that every engineer is a security engineer. First, we need
to get Hounter person right, Honter person the time we
are sitting on mountain of a patient data and we
need to be a great stewards of data and information security,
not only innovating and building digital products, but building the
(12:07):
products in the right manner with security at the center
of the products that we are building. Conventional thinking says
you have to pay more to get more. I want
the world, But T Mobile for Business uses unconventional thinking
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Innovating to improve business today and tomorrow. That's unconventional thinking
from T Mobile for Business. Capable device required covers not
available in some areas some US require certain clater features,
C mobile, dot Com well Ray. I would also love
(12:53):
if you could give us maybe a couple of examples
of some of these products that Cardinal Health has been
behind so for us, like every technology solution must solve
a business and customer needs, I have like know this
slide that I always use, which is around business viability,
customer desirability, and technology feasibility. So every idea, like you know,
(13:16):
has to be in the intersection of business, customer and technology.
I'm going to talk about an organization that I lead,
which is a FUSE organization, which is our innovation engine
and our product development center. It is an autonomous unit
integrated with our growth businesses. The two products, Jonathan, that
we are really proud of coming out of our FUSE organization,
(13:40):
they centered around creating digital tools for retail pharmacies so
that they can provide personalized care to their communities. These
solutions enable our pharmacy customers to manage COVID vaccination process,
administer point of care testing, chronic care management, and other
(14:00):
primary care services. And it not only digitizes the clinical
workflow in the pharmacy, but also enables reimbursements for these
services with medical billing capability. And also we are doing
a lot of work in the community oncology setting. We
recently launched Novista Technology platform, which is comprehensive value based
(14:24):
solutions that offer clinical decision support to assist our provider
customers to manage healthcare treatment and also it provides cost
of care transparency to physicians as well as of our patients.
I am fascinated by fears. I think it's a brilliant
approach to conducting R and D within a broader healthcare company.
(14:49):
I love hearing the phrase personalized healthcare. I feel like
that's something that we've been hearing about for more than
a decade. Can you talk a bit about some of
the different technologies that FUSE has been looking into specifically
and in what role. Yeah, we are very optimistic about blockchain,
and let me tell you while we are doing transformative
(15:11):
work in the pharmaceutical industry using blockchain technology to improve
our financial processes of managing our contracts and facilitate intercompany
commerce with our supply chain partners. Getting first time pricing right,
reducing disputes chargebacks between pharmaceutical manufacturers g p o S
(15:33):
and US is an important business problem to solve for us.
It is a ten billion dollar problem in the industry. Well,
we are confident that blockchain based solutions can reimagine the
operational backbone of pharmaceutical financial processes. The second technology that
we are investing heavily is in air and machine learning.
(15:56):
We are using A and machine learning agorithms like computer vision,
an edge computing to count pills, helping improve efficiency and
accuracy for pharmacy technicians. We are using data science to
improve medication adherence, identify patients who may be at risk
of healthcare episodes, and variety of population health risk management
(16:20):
use cases. So blockchain, data, AI, machine learning, and I'm
going to add like an augmented reality and virtual reality.
I think these will be like no critical pillars of
emerging technologies like not that will shape healthcare as well
as digitize some of the processes inside cardinal health. Gosh, Ray,
(16:40):
you you've covered so much, so many of my favorite
topics to talk about. The blockchain piece. When you mentioned
specifically not just for transactions, but for tracking things like
supply chain and keeping a close eye on that, I
have to admit to you, Ray that for the longest time,
blockchain was one of those concepts that I just couldn't
my head around until I started hearing about possibilities of
(17:05):
using block chain for the purposes of managing a supply
chain and being able to have governance over any particular
thing in that supply chain as it moves from one
point to the next. And then it started to click, Yeah,
because if you look at it. You know, historically we
have equated blockchain into bitcoin and cryptocurrency, which are applications
(17:28):
on the blockchain based decentralized ledger architecture. But there are
enterprise use cases where if you look at the pharmaceutical
supply chain that I talked about, which is you have manufacturers,
you have g p o s, you have distributors, and
you have dispensers, and there is a lot of inter
(17:51):
company commerce where we exchange data and there is misalignment
of contract, there's misalignment of data that we shared across
like an ore trading partners. You know, blockchain based architecture,
it is the right architecture for first of all data
alignment as well as immutability of data and providing provenance
(18:13):
over the transactions that are happening between the trading partners.
So it's our system of truth. And once like you
have the data alignment right, then like you can ingest
that data in your E r P platforms. Do we
think that is the right architecture. That is the future
of how the commerce happens between B two B space
(18:35):
and it will create first of all efficiency in our
business processes as well as new customer experiences will come
out of this architecture. I see that as also a
way where businesses are going to see tremendous savings and
an enormous reduction in waste as they're able to have
this level of scrutiny that was not really possible without
(18:58):
a tremendous amount of work on the back end. So
I really do see that as another one of those
transformational technologies. You also mentioned virtual and augmented reality too,
technologies I'm very passionate about as well. And one of
the things that I love about the time we're living
in now is we're in an age of connectivity where
it becomes possible to have things like virtual reality headsets
(19:22):
and augmented reality headsets that are no longer tethered to
a machine, but with the rollout of technologies like five G,
it then becomes possible to start to design and implement
VR and a our experiences. What kind of solutions in
the health care industry are you looking at that are
made possible by this new era of connectivity that we're in. Yeah,
(19:46):
you know. The full set of use cases that comes
to my mind that we are actively working on and
pursuing is in the met tec industry because continuous glucose monitors,
CPAP machines, neon neatle I see devices combined with digital
therapeutic techniques. I think it will change the game for
(20:06):
the patients and patient outcomes. Devices that have ability to
connect virelessly. As you said, EMT data will be used
for patient monitoring and for digital interventions. So those are
the first set of use cases where the devices are
becoming connected and those connected experiences are getting created around
patient outcomes. The second set of use cases are around
(20:29):
care coordination. We are seeing care shifting to lower cost
settings outside of hospitals through urgent care centers, walking clinics,
outpatient surgery centers, and home health care settings. Enhanced diagnostics, telehealth,
remote patient monitoring will be accelerated by the use of
(20:50):
five G use of sensors, variables, eHealth devices will increase,
and patient data now can be collected and analyzed where
a pay and does not need to travel to primary
care facilities and have face to face appointment with medical professionals.
You know, enhanced connectivity is a good thing and will
(21:11):
help us reimagine the care delivery model, and that is
what we are working on right now it is just
not about the products, it is about experiences, and those
are connected experiences where we're providing solution poolkads for the
problem inside the health care care delivery model. And as
someone who's not in the industry, as someone who is
(21:34):
a patient, I really appreciate the connectivity side because I
appreciate the idea of technology allowing more people to have
that level of independence for longer in their lives that
they might not otherwise be able to enjoy without the
benefit of that tag. Yeah, and and that's where Jonathan, like,
(21:55):
we have been thinking a lot about when I was
in financial so verses, like you know, we had this
thought of creating a pertional ized c in the customers lives.
In healthcare, we are creating an angel in the patient's
lives where that angel is always looking for like those
episodes where a patient needs help, and can we created
(22:19):
like that easy button where whenever there are healthcare episodes.
First of all, we are providing monitoring. Second of all,
we are providing diagnostics, and thought of all, we are
providing smart interventions so that we can truly care for
our patients. And the whole thing is powered by the
technology platform and that is our vision of creating that
(22:43):
angel in the health care system, that easy button that
we are missing. I'm curious, are there any particular solutions
that you personally find really motivating and inspirational things that
when you look at it, you say, this is making
the world the better place, This is really changing people's lives.
(23:04):
You know, Access, affordability, and adherence. I think those three
are big problems inside the health care industry. First of all,
if you look at medical access or health care access,
it is not distributed equally in the population inside the country.
So how can you provide access to good quality health care?
(23:25):
That is a big problem for us to solve. And
the way like we are doing that is making sure
like we have digital solutions where like your telepharmacy solutions,
or getting the health care in patients homes. One of
the solutions like that we are building is we are
unburning the hospital and bringing like in a hospital level
(23:46):
services to patients homes because it is an easier way
of consuming health care if the health care is delivered
in homes. And so I'm very passionate about another that
business model. Then the second question that comes is affordability.
Not everybody can afford the health care, So how can
I we provide the affordability the patient assistance programs? And
(24:11):
then adherence is another problem. There is a lot of
health care spending that is because of patients are not
taking medication as prescribed at the right time. So how
can I view use technology to solve that problem? And
if you solve under those three problems, is going to
create a lot of savings as well as it improve
(24:32):
outcomes for the patients. This is the sort of stuff
I really can get behind because I think in terms
of the ripple effect, it's essentially kind of the digital
age version of the old tiny concept of the doctor
who's going door to door, the doctor who does house calls.
But now we're in the digital age and we're using
technology to enable that level of access. On top of that,
(24:55):
I think about the next ripple out and how that
affects all these support system around any individual patient, the
friends and family, and the positive impact that has on
their lives, even if they're not aware of it intrinsically.
And then beyond that, the social impact that has. As
you improve people's lives, they become better at contributing back
(25:17):
to society. But I think about the overall communal benefit
that comes with this level of access, and how technology
is really fueling this push to create new solutions and healthcare.
Thriving communities is a good thing for the businesses, and
(25:37):
we have invested big in the future of the pharmacies
because the future of pharmacy is going to be a
place where the primary care services are delivered. They have
great relationship with their customers and the communities, and we
need to provide the technology and the clinical capability so
that the pharmacists can work with their patients on chronic
(26:02):
care management, on diabetes care management, on smoking cessation, on
variety of things. So they're like, no, we can keep
like an our communities healthy. We are reimagining the care
continuum and keep like our populations healthy and safe. Ray,
as I've talked to you, it is clear to me
how passionate you are in this mission to improve health
(26:24):
care and improve the reach of health care. I am
very curious what it was like to take on a
leadership role at a healthcare organization just as the world
was entering into a pandemic. Can you tell us what
you experienced as you stepped into this role. You know,
when I joined the organization. It was maybe six or
(26:44):
eight months before pandemic, and I never thought that I'm
going to land in the middle of pandemic. Where if
you look at our demand curves of our products. Now,
we deal with pharmaceutical products, both genetics as well as
branded products. We deal with blood and plasma products, we
deal with medical devices, we deal with testing products. So
(27:10):
the demand curves of all of our products were upside
down because we are seeing the higher demands for certain
categories and then suppressed demand for another category. So it
was a situation where there was not a playbook, but
one thing was clear, the mission and the vision that
we are essential to care. It is all about health
(27:33):
care heroism. There are people in the front lines that
we need to provide ppe. You know, your your gloves,
your syringes, all the things to make sure that we
are solving the problem in the global pandemic. Are you
always retreat to my team that we are making a
difference in an industry that makes a difference. This is
(27:55):
our time where we need to stand up and we
need to use like our ingenuity innovate. We need to
create technology solutions so that like you know, we can
solve critical problems, and we did that in the middle
of pandemic and we will not go back now. You know,
the company that is emerging from this pandemic is completely different.
(28:18):
The company like that is digital, the company that is
technology forward leaning. We are an agile organization. We have
created a new revenue line from the technology services, and
we are serving like a critical part of the health
care value chain. So it is tough to go through
the pandemic, but I think as a company like you know,
(28:38):
we are better off going through like this transition. I
don't in the you and the process that it must
have been. I'm sure you had long days and nights
working to stay ahead of challenges as the pandemic developed,
and my hat is off to you. You know. It's
all about the team effort. The mission like drives the
(29:00):
path that we are on, and we always gravitated towards
doing something that is bigger than ourselves. And that is
a very clear thing for us inside the organization, and
a lot of people like now stood up during this
time and took on greater responsibilities. And yes, we're long nights,
(29:21):
but we had a lot of fun doing it. Before
I could let him go, I had to ask Ray
one more thing. Well, Ray, I'm curious what lessons have
you learned that you wish you had known earlier on
in your career. Yeah, and that's a great question. You know.
I have always been influenced the work of Clay Christensen,
(29:45):
and especially like you know, his book which I read,
How Will You Measure Your Life? And I wish like
I had learned this lesson earlier, which is we all
get enamored by the next promotion or the fancier title
or the races, but in the end, it comes down
(30:05):
to how much love and respect you owned and how
many people you touched and made better. So those are
very important things for a leader to always let know
think about. And if you keep on I go thinking
about owning love and respect and grooming them, I think
you have done your job as a leader. Or Ray,
(30:27):
I have to say I completely agree. I also think
those are good guidelines for everyone leadership or otherwise that
approach to really focusing on the good you can do.
I'm a child who watched Mr Rogers every day, so
those sort of lessons are deep within my psychological being. Ray.
(30:50):
This has been a fantastic conversation. Thank you so much.
For your time and for joining the show. Thank you
so much for having me on the show. I enjoyed it.
Whenever I think about future technologies, I always like to
imagine how they will impact healthcare. The idea of tech
(31:12):
helping us live longer, healthier lives has been a beguiling
proposition for decades, but the truth of the matter is
that healthcare, above all other industries, must take a wise
and precise approach to integrating innovation. Yes, without innovation, a
company will falter, but the states with healthcare are as
high as they get, and so healthcare companies like Cardinal
(31:34):
Health have to be absolutely certain that those innovations support
the organization's mission. Ray embodies this ideal, and his determination
to pursue innovation and find ways to add value to
Cardinal Health and delight customers through the responsible application of
technology is admirable. I'm excited to see what emerges as
(31:55):
this era of connectivity matures. The possibilities are stagger ring.
With a low latency wireless connection, remote diagnostics and related
practices can return to us one of our most precious resources,
time and patients will be able to enjoy autonomy and
freedom for far longer. Throughout their lives, which has a
(32:17):
truly enormous impact on quality of life. And that's just
the forward facing side of healthcare. The ability to coordinate
operations along an entire supply chain is something I think
we all recognize is important in the wake of supply
chain issues highlighted by the pandemic. Innovation in spaces like
connectivity and blockchain can go a long way towards solving
(32:39):
this problem. Thanks again to Ray Bajaj for joining the show.
Be sure to join me for future episodes of The
Restless Ones. As I talked with more leaders in the
tech space, were forging a path to the future. I'll
see you soon. T Mobile for Business knows companies want
more than a one size fits all approach to support.
(33:02):
I want the world, so we provide three sixty support
customized to your business. From discovery through post deployment. You'll
get a dedicated account team and expertise from solutions engineers
and industry advisors already right now, I want it now,
three six support that's customized for your success. That's unconventional
(33:24):
thinking from T Mobile for Business
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