June 15, 2023 • 29 mins
Join Jessica Zeaske, Managing Partner at Echo Health Ventures, and host Shiva Mirhosseini as they discuss the role of purpose-driven, strategic investing in creating systemic healthcare transformation.
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Shiva (00:09):
Hi. Welcome to Paving the Path. I'm your host, Shiva,
Meera Saini. People know me as a customer experience champion
and the digital executive at Fortune 50 companies. I plan
on paving the path in my show with women game changers,
thought leaders and executives touching the entire spectrum of digital
transformation in healthcare. Join me in exploring the digital renaissance
(00:33):
that's shaping healthcare today and forever changing the future of
wellness care and health. Welcome to another episode of Paving
the Path. Today. My guest is Jessica. She is the
managing partner at Eco Health Ventures, where Jessica identifies and
(00:56):
invests in emerging and growth stage companies and supports Ecos
mission to drive systemic health care transformation through hands on
purpose driven strategic investing. She's a seasoned venture capitalist, and
by that I mean 20 plus years of venture investing
purely in healthcare. She has many board appointments across many
(01:22):
exciting and fast growing companies, and she has been in
the forefront of innovation for at least a couple of decades.
Prior to Eco Ventures, she was director of Healthcare investments
at GE Ventures and also a principal at Lemhi Ventures.
I can go on and on with her fabulous, extensive
(01:45):
and very rich background, but we have a lot of
ground to cover, so I would love to welcome her
to this episode of Paving the Path and very much
appreciate having you on this episode. Jessica, tell us about
yourself a little bit. Surely filling the gaps that I
might have missed in my intro, but probably more importantly,
(02:08):
tell us about how you find yourself at this moment
in time in healthcare, given your starting point. Back when
healthcare probably looked very, very different than what we are
experiencing right now. Thank you so.
Jessica (02:23):
Much, Shiva, and I'm delighted to be here and talk
a little bit about EcoHealth Ventures, the important work we do,
and coming back to that notion of how are we
transforming health care to make it more affordable, accessible for
for all Americans. I want to start by saying my
entire career has been in this space. It has been
(02:43):
all the way back to when I was doing graduate
work in public health, trying to figure out how electronic
medical records, if again, if they were adopted, how they
might change the doctor patient communication that was, you know,
late 90s. We did not have electronic medical errors. We
didn't have the pipes we have now. We didn't have
getting all the way even to the AI we have now.
(03:05):
But coming back to the the fundamentals of how do
we get accessible insurance to the under and uninsured, how
do we get care to where people need it? If
they have two jobs, how are they able to access
care and innovations we've seen over the years? For that,
I've had the privilege of having a front seat at
(03:28):
being able to be there through those innovations building and
growing great companies at EcoHealth Ventures. We couldn't do it
without what we call our alliance, our alliance. We invest
on behalf four different blue plans that can be up
in the Pacific Northwest Blue Cross, North Carolina, Arkansas, Blue Cross,
Blue Shield and Blue Cross Blue Shield of Tennessee. Those
(03:48):
four blue plans are very strong regional plans. They've come
together to say, hey, how can we truly make a
difference at a bigger scale? And have partnered with EcoHealth
Ventures so that we can go find companies where we
say these are at the forefront, We're going to change
how we deliver care. We're going to change how we,
(04:11):
you know, all the way back to the back Office
of Health Insurance also. But coming back to, again, what
I said, which is that build and grow great health
care companies. I've had a privilege of doing this over
my career and it's an exciting time right now.
Shiva (04:25):
Absolutely. And thanks so much for clarifying. Kind of Echoes
foundation and kind of being backed by this alliance. I
think it kind of sets it apart differently from other
venture capital firms. And when I look at your portfolio
and I welcome our audience to check it out, it's
very purpose driven. These are not just tech enabled or
(04:48):
SaaS or technology companies in health care. They are very
much aligned with how payers in particular, you know, their
lines can really improve the way they bring products and
serve their members in a meaningful way. I mean, I'm
looking at your website right now. I'm looking at Eleanor Health, which.
(05:08):
You are on the board. I'm looking at city block,
which is near and dear to my heart. Albert and
many others. Can you speak to maybe 1 or 2
examples where just that alliance, the way you guys are
structured and made a meaningful difference with respect to how
(05:30):
you identify and kind of connect the dots to put
capital where you can see measurable and accelerated way of
changing members lives in a meaningful way.
Jessica (05:45):
It's a great question and it builds upon this notion
that we've tried to build EcoHealth Ventures differently by being
not a corporate venture fund and not a pure institutional.
It is a new model. And I could speak the
entire podcast about what the foundations of how you build
a new model like that with this amazing team we
have at Echo. But it really comes back to that
(06:06):
feedback and that push and pull we have with the
Alliance because we do want to be ahead of them
at times and bring ideas that they haven't seen before.
You strive as an example of that. We invested in
Strive with some great syndicate of partners when it was
a time where we didn't see kidney care on the
(06:27):
headlines of news and probably spent more time talking with
the alliance members about what kind of some of the
things we saw coming. I won't say it was a PowerPoint,
but it was pretty early in its stage of development.
Fast forward. So that's a great example of something that
we would say, hey, we're we're fairly early on in
that process, Eleanor, being something that is coming the other way,
(06:49):
which is our alliance members have really pushed us to
say it doesn't matter how many mental health, behavioral health
you think we're saturated of all these new costs, it's
still not enough. We still need more resources. And specifically
in Eleanor, the substance use disorder space where it is
(07:10):
very underserved and the whole notion of bringing value based
care to substance use disorder and addressing the total cost
of care is that innovation that the alliance has done
a great job pulling us that way. And this this
push and pull is what is so healthy. I think
about this. We do want to be bringing things that
(07:30):
they they can use. And that's part of what we
we track metrics on that and things that but that
they're going to bring us priorities and insights that we
don't have otherwise. And that's what makes this as I'm
glad you spent some time looking at our portfolio. It's
a rich portfolio full of diverse founders, diverse companies, meaning
(07:53):
two different things companies and different markets and diverse founders
that I think really bring a richness to helping Americans.
Shiva (08:00):
Yes. And and, you know, having been in the payer
space myself at Aetna, even in the short time period
I was there, which was, you know, about five years
or so, things evolved very, very quickly. I mean, in
the past ten years, we are seeing payers essentially moving
from just being the financier of health care to becoming
(08:25):
an active participant in members health journey. And some to
your point about kidney care, taking an active role to
actually bring bringing solutions to to their members and put
them on a on a healthier path. And that's a
great segue to my next question, because when we think
(08:45):
about the evolution of health care, which back in the
days was very much confounded to the doctor's office or
the hospital, now we are growingly moving towards health care,
anywhere type of thing. The paradigm shift also has moved
towards a more patient centric and what we like to
(09:08):
call on this podcast, consumer centric experience with all the
improvements and changes that has happened over the past decade
or so in healthcare, we still have a long way
to go. I'm sure you agree, and members are still
dealing with a lot of complexities in the health care
(09:29):
system where they shouldn't be. And you brought up the
point around accessibility, the ease of use that frictionless. How
does eco health ventures help design a better consumer experience?
Jessica (09:42):
We are awash in acronyms, acronyms across health care. And
I think the deeper you get into insurance, the more
you do. We have things like pmpm, the per member
per month payments, the per engaged member per month, per,
or even going back to the we we do business
models and we call them B to B to C,
(10:03):
but in health care and especially in the insurance side,
it tends it can end up being. B to B
to B to M, remember? And it is I will
say it's not only trouble for the members, it's trouble
for the entrepreneurs who are trying to figure out how
to make it through this value chain, which isn't adding
much value to get the member the solution they need.
(10:24):
So how are how is EcoHealth Ventures trying to design
a better consumer experience? Well, first of all, it is
what I think we've talked so much and it's finally
coming to fruition in this country is really helping to
get health care at home. And a great example of
that is one of our later stage companies now called
Dispatch Health, which is really on the forefront of bringing
(10:45):
all sorts of providers into the home and meeting individuals
where they need to be treated, but also companies like
Heartbeat Health, which is bringing a new model of cardiology
where you'd say cardiology, but that has to be done
in the lab. You actually the management of those conditions,
the testing, the monitoring that can all be done at home.
And so when we start to think about underserved rural
(11:09):
remote populations, when we start to think about wait times
of six months, nine months to see a cardiologist or
an elderly person who shouldn't be potentially going to the
emergency room, that is a consumer experience. That isn't what
you'd call a consumer experience. It's the healthier experience also
and the better experience for the individual. I think those
(11:30):
two examples bring it's a new forms of provider and
novel care that you use the word patient centric in
the beginning and consumer centric. Absolutely it is. It does
require changing some of the payment models and that's where
having insurance and health plans as Echo's partner because we
(11:51):
can help design and drive some of that payment innovation also.
Shiva (11:56):
Oh, wow. That's so illuminating. Is it fair to say
that the changes and the innovation that we are seeing
presented by some of these more, I guess, progressive startups
like you mentioned, bringing health care home mean bringing from
Iot to digital health and connected health, really, and bringing
(12:18):
and embracing members and patients at home. Is it fair
to say that in a way it's also challenging and
at the same time presenting the opportunity for the payers
to change their business model? And if so, what? What
are you witnessing on that side?
Jessica (12:36):
This question evokes very seminal moment in my career. Back
in the late 90s, I heard a professor give a
talk that had three words on the board follow the money.
And when that really changed the progression, not just in
venture capital, but change the progression of my career to
always look at how providers are being reimbursed and how
(12:59):
novel insurance design can change provider behavior and when it
impacts the insurance can also change the consumer's behavior. But
staying on that provider side, we're seeing innovation in value
based care in bundles that are now changing, even Medicare Advantage.
It's changing our industry and I think great things are
(13:22):
coming out of that. Companies that some of them we've
already talked about, but also like Wildflower, where we start
to say how can we change pregnancy if there actually
is more value based care in pregnancy outcomes by paying
OBS for all the work that they do? And how
can we address some of those maternal challenges if there
is a bigger payment associated with it and they can
(13:44):
buy more resources and putting that with the OB GYNs
to help make those decisions because they do know what
is best for these patients and giving them that power
following the money. They will also thrive under those models
as well as the patients. So I think there is
some exciting opportunity ahead.
Shiva (14:03):
Absolutely. I couldn't agree more. But I wonder holistically if
you can give us a reality check, You know, what
kind of pros stress can we expect in the healthcare
industry in the next 1 or 2 years? And I
caveat this with, you know, some of the recent events
(14:23):
around this time that we are recording, this podcast is happening.
One has to do with some of the banking fallouts,
you know, things that are probably already have impacted some
of the startups in your portfolio, but also from a
technological side, generative AI is top of mind for many.
(14:45):
We know that the technology has been able to pass
the exam for medical professionals at like 8090 percentile, which
is very, very high. So given that in this moment
of time, what are you expecting to see as an investor,
as a counsel to. Her nerves as well as incumbents
(15:11):
whose business model may be impacted in a significant way.
Jessica (15:15):
The reality check is that we've had over $20 billion
come into the from venture capital and PE into digital
health health care services in this expansive industry. We have
seen an amazing amount of innovation and entrepreneurs heroically bringing
new innovation quickly during Covid and payors providers adopting some
(15:37):
of those. And I think we've just seen this transformation
occur over the last few years. Again, with social justice, Covid,
all of these things coming together at once. We've really
seen some progress on that. But unfortunately have to do
take the realistic approach and say there is going to
be fewer logos, there are going to be fewer logos,
(15:58):
there is are going to be canceled contracts, there is
going to be a tightening ahead. And that is a
natural cycle. Again, having done this for a lot of years,
it is a over exuberance. It is time to come
back to reality a bit in terms of the number
of companies we have in certain sectors. Some we are
going to have some weeding that needs to be that
(16:19):
will be done in this market. So what does that
mean for we'll see some consolidation, but we'll also see
some bankruptcies and unfortunately, some bankruptcies of some companies that
were good ideas. And hopefully we'll be able to take
some of those ideas and the companies that are moving
on and continue to serve the communities that they were serving.
But the first thing I think we can realistically expect
(16:41):
is that in the next two years, we're going to
see more logos potentially fall than new ones created, and
that will be a switch for our markets. We're also
going to see layoffs. We see a lot of headlines
on that. But again, coming back to the the realistic,
how much innovation can be absorbed, How much can we do?
We're going to continue to push this quite a bit,
(17:02):
but there is going to be some fallout there. This
plays in I mean, it touches the SVB. It touches
the we have capital. It just a lot of that
capital is going to be used to keep companies. You know,
the companies that are private are going to be staying
private for longer. And so those companies in a portfolio
are going to be fed more than potentially some new ones.
(17:23):
And so those do have long term or some downstream effects. Again,
I'll come back to the fewer logos in the market.
So what that means for CEOs, it's going to be
harder to raise money to make sure you've got an
ROI story, a return, an impact story that you've been
able to do. And I think that's a shift that
CEOs are making very, very quickly, really, not only just
(17:45):
to show your cash flow breakeven model, but to show
that ROI. And I think that progress is healthy, that
progress back to ROI, that progress back to what is
the true cost benefit against these other that's going to
be creating some absolutely stellar companies in the next five years.
And traditionally, we've seen great companies come out of some
(18:07):
of these trying experiences and expect to see the same.
Shiva (18:10):
Thank you, Jessica. And that makes as hard as it
is as an entrepreneur, I'm sure in our audience to
hear that it's the rule of nature right there, ups
and downs. And so right now there is this correction
that's occurring and it does take a lot of patience
and tenacity to go through this cycle. What resonated with
(18:33):
me as I was listening to you, connecting to another
wave of innovation that's coming up with generative AI is
whether this pullback or oversaturation in how tech is going
to actually slow down the next generation of innovations that
(18:58):
are powered by autonomous generative AI, and whether that's a
good thing or are we going to see more of
a rogue kind of activity in that space before some
of those ideas or product services come to your doorsteps?
(19:20):
As a as an.
Jessica (19:20):
Investor, yeah. The notion of rogue and medical care don't
usually go hand in hand. And this is a this
is why, you know, health care has been slow to adopt.
It will be slow to adopt generative AI. And where
we'll naturally see it first is on the administrative side,
and that is it's actually has some really exciting implications
(19:44):
of how you describe your benefits, how you whether or
not you're, you know, whether or not you should get
an MRI, what time and and how much it's going
to cost. Like these are great examples of how this
could be used. I agree. You know, even though it
can pass the medical exam, that's a pretty still a
big hurdle to get into actually providing care for an individual.
(20:07):
And so. I think traditionally what we see a lot
of ups and downs come into what's going to happen
when blockchain does X, Y, Z, What's going to happen
when generative AI starts to take over more? We see
these in their lead with product and lead with the technology.
And I would you know, how how is generative AI
(20:30):
going to impact and change site of service? How will
generative AI help more people get treated at home than
in the hospital? How will I drive affordability and helping
you choose your Medicare insurance which plan you should have?
I like it when it has that, not just that
that kind of next step to it, because then we're
(20:52):
not just talking about the technology, but the business model,
and then it can be accepted a little bit easier
also because it's going to touch all of these things.
It's going to touch everyone's job. It just is a
you know, putting it a little bit more in context.
And yes, I think there is there is fantastic. Again,
I'll come back to brokers, call centers. Those are all
(21:14):
jobs that we could see impacted as as early as maybe,
you know, this year, next year for those services.
Shiva (21:20):
I absolutely agree with with your projection of how this
will come to life and the fact that it's not
about the technology, but what it does. So much so
that I feel like people might not like hearing this,
but some of what we have seen in terms of
investments and even unicorns, even though they have been at
(21:43):
the forefront of innovation, they themselves make it disrupted by
some of these newer generation of technology. So everyone has
to have higher level of flexibility, adoption and tenacity. Staying
true to exactly what you said, the purpose, the cause,
the mission, the context, but agnostic to the technology and
(22:05):
be able to nimble to just productize and the best
of breed at a very agile and speedy fashion. This
is fabulous. And I know we have limited time, but
I have a couple of more questions. Let me bring
us to kind of equal health venture kind of where
you are headed in the next 6 to 12 months
(22:27):
in particular. What is your point regarding mental health and
wellness space? I know that Echo Health is very much
active in that kind of genre of products and services.
What do you see in the near term future and
what is your approach in that particular space?
Jessica (22:47):
I have the exciting news that as of January 2023,
we invested in a company called Cordova. Cordova is really
in the pediatric side of while it treats autism and
other related and affiliated diseases. And that is a great opportunity,
I think, for for Echo to bring another we talked
(23:10):
about it in the beginning, the patient centric the how
do you actually do all the wraparound services around patients
who need need care like this the most. And so
Cordova being another company that we just added to our
portfolio and we're going to just continue doing that, where
where do we really feel we can add value to
a syndicate, add something that we know that is so
(23:31):
needed in this country? I will say our perspective is
a little bit broader than that, which is how can
we infuse it in every single one of our portfolio companies?
And I'll come back to it. You wildflower health maternity
while you're giving maternity care. Where is the link to
care for depression, for postpartum depression, to any other challenges
(23:54):
that that woman may be having during that pregnancy? When,
you know, with Eleanor, it's just it's so infused in
all in so many of our portfolio companies that it's
it's not just because it's quartet or it is you know,
cortical in that truly in the behavioral health portfolio it
is all of our companies you mentioned city block in
(24:17):
the beginning and I put Alice in there also companies
that are looking at the whole person. And you cannot
do that without looking at the behavioral health aspect, which
is a we used to carve in the insurance world,
we used to have it all be a carve out.
And there's it's such a different time now where we
finally see the whole the whole person and taking care
(24:38):
of that whole person.
Shiva (24:39):
As I work with my clients in the, you know,
early stage mid-stage companies, growth stage companies, what I know
this is a lot of times there are these point
solutions that are addressing a piece of the problem and
or a particular situation for a given audience be new moms.
But in fact that same audience and sector can benefit
(25:03):
from a whole host of other solutions. But when. They
are presented by a list of products or services from
a customer experience perspective, that can be very overwhelming. And
I think that's what you're suggesting from a venture perspective,
not just looking at postpartum or breastfeeding support, but really
(25:27):
putting a holistic approach in terms of bringing products and
services that address that stage of life with respect to women,
for example, or children when it comes to mental health
or the likes, which I just love, love how you
put that in. So that's absolutely wonderful. Last question, very quick.
(25:47):
What are other trends, perhaps even from other sectors outside
of health care that you're paying attention to or drive
inspiration from?
Jessica (25:57):
So when I think about where do we see innovation coming,
where is it most needed? I'll come back to the
I family in Nebraska, and I'm very proud to have.
But when I think about a teacher in south central Nebraska,
what are the tools? Where are the virtual care? What
(26:17):
are they really going through? That's a really long way
away from Cambridge in and I'm here in Boston and
the type of health care that one can get at
when surrounded by world renowned hospitals. And there's two threads
in that is where is the site of service? What
can be done virtually, what can be done at home,
(26:40):
what can be done to extend second opinions, etcetera, to
an individual who may not have access to some of
that care? And secondly, how do we actually make that
care affordable? And then so we started with affordability and accessibility.
And I think that's where I just have to end
because that it's who you have in mind when you
are also trying to look at these solutions. And to me,
(27:04):
having someone who is in a non-urban area, someone who
has more than one job, someone who is taking care
of their parents and children, when when we start to
put our lens on, how is it going to work
for that person, then you actually make investments that are
better for Americans, not just for people who are living
(27:25):
in Cambridge or in Silicon Valley or something like that.
That's really where health care happens. And I'll come back
to the fundamentals of how our alliance helps us keep
our eye on those local markets and the needs that
they have and the needs that their members have is again,
a privilege of being able to do this job and
try to change health care for all of them.
Shiva (27:45):
Absolutely. Speaking of privilege, it's been a privilege to have
you on the show, Jessica. Thank you so, so much
for your time and the words of wisdom. Very quickly,
if our folks audience want to reach out to you,
where do you direct them? Social media, LinkedIn, your website? Yeah,
(28:06):
you're welcome.
Jessica (28:06):
To all of the above. Feel free to reach out
to me on LinkedIn. And I do read those and
and respond. So thank.
Shiva (28:14):
You. Fabulous. Thank you so, so much for your time.
Thank you for our audience taking the time to listen in.
It's a pleasure to have you all and wish you
all the best. Until next time, have a great day.
Jared (28:29):
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(28:51):
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Hi. Welcome to Paving the Path. I'm your host, Shiva,
Meera Saini. People know me as a customer experience champion
and the digital executive at Fortune 50 companies. I plan
on paving the path in my show with women game changers,
thought leaders and executives touching the entire spectrum of digital
transformation in healthcare. Join me in exploring the digital renaissance
(00:33):
that's shaping healthcare today and forever changing the future of
wellness care and health. Welcome to another episode of Paving
the Path. Today. My guest is Jessica. She is the
managing partner at Eco Health Ventures, where Jessica identifies and
(00:56):
invests in emerging and growth stage companies and supports Ecos
mission to drive systemic health care transformation through hands on
purpose driven strategic investing. She's a seasoned venture capitalist, and
by that I mean 20 plus years of venture investing
purely in healthcare. She has many board appointments across many
(01:22):
exciting and fast growing companies, and she has been in
the forefront of innovation for at least a couple of decades.
Prior to Eco Ventures, she was director of Healthcare investments
at GE Ventures and also a principal at Lemhi Ventures.
I can go on and on with her fabulous, extensive
(01:45):
and very rich background, but we have a lot of
ground to cover, so I would love to welcome her
to this episode of Paving the Path and very much
appreciate having you on this episode. Jessica, tell us about
yourself a little bit. Surely filling the gaps that I
might have missed in my intro, but probably more importantly,
(02:08):
tell us about how you find yourself at this moment
in time in healthcare, given your starting point. Back when
healthcare probably looked very, very different than what we are
experiencing right now. Thank you so.
Jessica (02:23):
Much, Shiva, and I'm delighted to be here and talk
a little bit about EcoHealth Ventures, the important work we do,
and coming back to that notion of how are we
transforming health care to make it more affordable, accessible for
for all Americans. I want to start by saying my
entire career has been in this space. It has been
(02:43):
all the way back to when I was doing graduate
work in public health, trying to figure out how electronic
medical records, if again, if they were adopted, how they
might change the doctor patient communication that was, you know,
late 90s. We did not have electronic medical errors. We
didn't have the pipes we have now. We didn't have
getting all the way even to the AI we have now.
(03:05):
But coming back to the the fundamentals of how do
we get accessible insurance to the under and uninsured, how
do we get care to where people need it? If
they have two jobs, how are they able to access
care and innovations we've seen over the years? For that,
I've had the privilege of having a front seat at
(03:28):
being able to be there through those innovations building and
growing great companies at EcoHealth Ventures. We couldn't do it
without what we call our alliance, our alliance. We invest
on behalf four different blue plans that can be up
in the Pacific Northwest Blue Cross, North Carolina, Arkansas, Blue Cross,
Blue Shield and Blue Cross Blue Shield of Tennessee. Those
(03:48):
four blue plans are very strong regional plans. They've come
together to say, hey, how can we truly make a
difference at a bigger scale? And have partnered with EcoHealth
Ventures so that we can go find companies where we
say these are at the forefront, We're going to change
how we deliver care. We're going to change how we,
(04:11):
you know, all the way back to the back Office
of Health Insurance also. But coming back to, again, what
I said, which is that build and grow great health
care companies. I've had a privilege of doing this over
my career and it's an exciting time right now.
Shiva (04:25):
Absolutely. And thanks so much for clarifying. Kind of Echoes
foundation and kind of being backed by this alliance. I
think it kind of sets it apart differently from other
venture capital firms. And when I look at your portfolio
and I welcome our audience to check it out, it's
very purpose driven. These are not just tech enabled or
(04:48):
SaaS or technology companies in health care. They are very
much aligned with how payers in particular, you know, their
lines can really improve the way they bring products and
serve their members in a meaningful way. I mean, I'm
looking at your website right now. I'm looking at Eleanor Health, which.
(05:08):
You are on the board. I'm looking at city block,
which is near and dear to my heart. Albert and
many others. Can you speak to maybe 1 or 2
examples where just that alliance, the way you guys are
structured and made a meaningful difference with respect to how
(05:30):
you identify and kind of connect the dots to put
capital where you can see measurable and accelerated way of
changing members lives in a meaningful way.
Jessica (05:45):
It's a great question and it builds upon this notion
that we've tried to build EcoHealth Ventures differently by being
not a corporate venture fund and not a pure institutional.
It is a new model. And I could speak the
entire podcast about what the foundations of how you build
a new model like that with this amazing team we
have at Echo. But it really comes back to that
(06:06):
feedback and that push and pull we have with the
Alliance because we do want to be ahead of them
at times and bring ideas that they haven't seen before.
You strive as an example of that. We invested in
Strive with some great syndicate of partners when it was
a time where we didn't see kidney care on the
(06:27):
headlines of news and probably spent more time talking with
the alliance members about what kind of some of the
things we saw coming. I won't say it was a PowerPoint,
but it was pretty early in its stage of development.
Fast forward. So that's a great example of something that
we would say, hey, we're we're fairly early on in
that process, Eleanor, being something that is coming the other way,
(06:49):
which is our alliance members have really pushed us to
say it doesn't matter how many mental health, behavioral health
you think we're saturated of all these new costs, it's
still not enough. We still need more resources. And specifically
in Eleanor, the substance use disorder space where it is
(07:10):
very underserved and the whole notion of bringing value based
care to substance use disorder and addressing the total cost
of care is that innovation that the alliance has done
a great job pulling us that way. And this this
push and pull is what is so healthy. I think
about this. We do want to be bringing things that
(07:30):
they they can use. And that's part of what we
we track metrics on that and things that but that
they're going to bring us priorities and insights that we
don't have otherwise. And that's what makes this as I'm
glad you spent some time looking at our portfolio. It's
a rich portfolio full of diverse founders, diverse companies, meaning
(07:53):
two different things companies and different markets and diverse founders
that I think really bring a richness to helping Americans.
Shiva (08:00):
Yes. And and, you know, having been in the payer
space myself at Aetna, even in the short time period
I was there, which was, you know, about five years
or so, things evolved very, very quickly. I mean, in
the past ten years, we are seeing payers essentially moving
from just being the financier of health care to becoming
(08:25):
an active participant in members health journey. And some to
your point about kidney care, taking an active role to
actually bring bringing solutions to to their members and put
them on a on a healthier path. And that's a
great segue to my next question, because when we think
(08:45):
about the evolution of health care, which back in the
days was very much confounded to the doctor's office or
the hospital, now we are growingly moving towards health care,
anywhere type of thing. The paradigm shift also has moved
towards a more patient centric and what we like to
(09:08):
call on this podcast, consumer centric experience with all the
improvements and changes that has happened over the past decade
or so in healthcare, we still have a long way
to go. I'm sure you agree, and members are still
dealing with a lot of complexities in the health care
(09:29):
system where they shouldn't be. And you brought up the
point around accessibility, the ease of use that frictionless. How
does eco health ventures help design a better consumer experience?
Jessica (09:42):
We are awash in acronyms, acronyms across health care. And
I think the deeper you get into insurance, the more
you do. We have things like pmpm, the per member
per month payments, the per engaged member per month, per,
or even going back to the we we do business
models and we call them B to B to C,
(10:03):
but in health care and especially in the insurance side,
it tends it can end up being. B to B
to B to M, remember? And it is I will
say it's not only trouble for the members, it's trouble
for the entrepreneurs who are trying to figure out how
to make it through this value chain, which isn't adding
much value to get the member the solution they need.
(10:24):
So how are how is EcoHealth Ventures trying to design
a better consumer experience? Well, first of all, it is
what I think we've talked so much and it's finally
coming to fruition in this country is really helping to
get health care at home. And a great example of
that is one of our later stage companies now called
Dispatch Health, which is really on the forefront of bringing
(10:45):
all sorts of providers into the home and meeting individuals
where they need to be treated, but also companies like
Heartbeat Health, which is bringing a new model of cardiology
where you'd say cardiology, but that has to be done
in the lab. You actually the management of those conditions,
the testing, the monitoring that can all be done at home.
And so when we start to think about underserved rural
(11:09):
remote populations, when we start to think about wait times
of six months, nine months to see a cardiologist or
an elderly person who shouldn't be potentially going to the
emergency room, that is a consumer experience. That isn't what
you'd call a consumer experience. It's the healthier experience also
and the better experience for the individual. I think those
(11:30):
two examples bring it's a new forms of provider and
novel care that you use the word patient centric in
the beginning and consumer centric. Absolutely it is. It does
require changing some of the payment models and that's where
having insurance and health plans as Echo's partner because we
(11:51):
can help design and drive some of that payment innovation also.
Shiva (11:56):
Oh, wow. That's so illuminating. Is it fair to say
that the changes and the innovation that we are seeing
presented by some of these more, I guess, progressive startups
like you mentioned, bringing health care home mean bringing from
Iot to digital health and connected health, really, and bringing
(12:18):
and embracing members and patients at home. Is it fair
to say that in a way it's also challenging and
at the same time presenting the opportunity for the payers
to change their business model? And if so, what? What
are you witnessing on that side?
Jessica (12:36):
This question evokes very seminal moment in my career. Back
in the late 90s, I heard a professor give a
talk that had three words on the board follow the money.
And when that really changed the progression, not just in
venture capital, but change the progression of my career to
always look at how providers are being reimbursed and how
(12:59):
novel insurance design can change provider behavior and when it
impacts the insurance can also change the consumer's behavior. But
staying on that provider side, we're seeing innovation in value
based care in bundles that are now changing, even Medicare Advantage.
It's changing our industry and I think great things are
(13:22):
coming out of that. Companies that some of them we've
already talked about, but also like Wildflower, where we start
to say how can we change pregnancy if there actually
is more value based care in pregnancy outcomes by paying
OBS for all the work that they do? And how
can we address some of those maternal challenges if there
is a bigger payment associated with it and they can
(13:44):
buy more resources and putting that with the OB GYNs
to help make those decisions because they do know what
is best for these patients and giving them that power
following the money. They will also thrive under those models
as well as the patients. So I think there is
some exciting opportunity ahead.
Shiva (14:03):
Absolutely. I couldn't agree more. But I wonder holistically if
you can give us a reality check, You know, what
kind of pros stress can we expect in the healthcare
industry in the next 1 or 2 years? And I
caveat this with, you know, some of the recent events
(14:23):
around this time that we are recording, this podcast is happening.
One has to do with some of the banking fallouts,
you know, things that are probably already have impacted some
of the startups in your portfolio, but also from a
technological side, generative AI is top of mind for many.
(14:45):
We know that the technology has been able to pass
the exam for medical professionals at like 8090 percentile, which
is very, very high. So given that in this moment
of time, what are you expecting to see as an investor,
as a counsel to. Her nerves as well as incumbents
(15:11):
whose business model may be impacted in a significant way.
Jessica (15:15):
The reality check is that we've had over $20 billion
come into the from venture capital and PE into digital
health health care services in this expansive industry. We have
seen an amazing amount of innovation and entrepreneurs heroically bringing
new innovation quickly during Covid and payors providers adopting some
(15:37):
of those. And I think we've just seen this transformation
occur over the last few years. Again, with social justice, Covid,
all of these things coming together at once. We've really
seen some progress on that. But unfortunately have to do
take the realistic approach and say there is going to
be fewer logos, there are going to be fewer logos,
(15:58):
there is are going to be canceled contracts, there is
going to be a tightening ahead. And that is a
natural cycle. Again, having done this for a lot of years,
it is a over exuberance. It is time to come
back to reality a bit in terms of the number
of companies we have in certain sectors. Some we are
going to have some weeding that needs to be that
(16:19):
will be done in this market. So what does that
mean for we'll see some consolidation, but we'll also see
some bankruptcies and unfortunately, some bankruptcies of some companies that
were good ideas. And hopefully we'll be able to take
some of those ideas and the companies that are moving
on and continue to serve the communities that they were serving.
But the first thing I think we can realistically expect
(16:41):
is that in the next two years, we're going to
see more logos potentially fall than new ones created, and
that will be a switch for our markets. We're also
going to see layoffs. We see a lot of headlines
on that. But again, coming back to the the realistic,
how much innovation can be absorbed, How much can we do?
We're going to continue to push this quite a bit,
(17:02):
but there is going to be some fallout there. This
plays in I mean, it touches the SVB. It touches
the we have capital. It just a lot of that
capital is going to be used to keep companies. You know,
the companies that are private are going to be staying
private for longer. And so those companies in a portfolio
are going to be fed more than potentially some new ones.
(17:23):
And so those do have long term or some downstream effects. Again,
I'll come back to the fewer logos in the market.
So what that means for CEOs, it's going to be
harder to raise money to make sure you've got an
ROI story, a return, an impact story that you've been
able to do. And I think that's a shift that
CEOs are making very, very quickly, really, not only just
(17:45):
to show your cash flow breakeven model, but to show
that ROI. And I think that progress is healthy, that
progress back to ROI, that progress back to what is
the true cost benefit against these other that's going to
be creating some absolutely stellar companies in the next five years.
And traditionally, we've seen great companies come out of some
(18:07):
of these trying experiences and expect to see the same.
Shiva (18:10):
Thank you, Jessica. And that makes as hard as it
is as an entrepreneur, I'm sure in our audience to
hear that it's the rule of nature right there, ups
and downs. And so right now there is this correction
that's occurring and it does take a lot of patience
and tenacity to go through this cycle. What resonated with
(18:33):
me as I was listening to you, connecting to another
wave of innovation that's coming up with generative AI is
whether this pullback or oversaturation in how tech is going
to actually slow down the next generation of innovations that
(18:58):
are powered by autonomous generative AI, and whether that's a
good thing or are we going to see more of
a rogue kind of activity in that space before some
of those ideas or product services come to your doorsteps?
(19:20):
As a as an.
Jessica (19:20):
Investor, yeah. The notion of rogue and medical care don't
usually go hand in hand. And this is a this
is why, you know, health care has been slow to adopt.
It will be slow to adopt generative AI. And where
we'll naturally see it first is on the administrative side,
and that is it's actually has some really exciting implications
(19:44):
of how you describe your benefits, how you whether or
not you're, you know, whether or not you should get
an MRI, what time and and how much it's going
to cost. Like these are great examples of how this
could be used. I agree. You know, even though it
can pass the medical exam, that's a pretty still a
big hurdle to get into actually providing care for an individual.
(20:07):
And so. I think traditionally what we see a lot
of ups and downs come into what's going to happen
when blockchain does X, Y, Z, What's going to happen
when generative AI starts to take over more? We see
these in their lead with product and lead with the technology.
And I would you know, how how is generative AI
(20:30):
going to impact and change site of service? How will
generative AI help more people get treated at home than
in the hospital? How will I drive affordability and helping
you choose your Medicare insurance which plan you should have?
I like it when it has that, not just that
that kind of next step to it, because then we're
(20:52):
not just talking about the technology, but the business model,
and then it can be accepted a little bit easier
also because it's going to touch all of these things.
It's going to touch everyone's job. It just is a
you know, putting it a little bit more in context.
And yes, I think there is there is fantastic. Again,
I'll come back to brokers, call centers. Those are all
(21:14):
jobs that we could see impacted as as early as maybe,
you know, this year, next year for those services.
Shiva (21:20):
I absolutely agree with with your projection of how this
will come to life and the fact that it's not
about the technology, but what it does. So much so
that I feel like people might not like hearing this,
but some of what we have seen in terms of
investments and even unicorns, even though they have been at
(21:43):
the forefront of innovation, they themselves make it disrupted by
some of these newer generation of technology. So everyone has
to have higher level of flexibility, adoption and tenacity. Staying
true to exactly what you said, the purpose, the cause,
the mission, the context, but agnostic to the technology and
(22:05):
be able to nimble to just productize and the best
of breed at a very agile and speedy fashion. This
is fabulous. And I know we have limited time, but
I have a couple of more questions. Let me bring
us to kind of equal health venture kind of where
you are headed in the next 6 to 12 months
(22:27):
in particular. What is your point regarding mental health and
wellness space? I know that Echo Health is very much
active in that kind of genre of products and services.
What do you see in the near term future and
what is your approach in that particular space?
Jessica (22:47):
I have the exciting news that as of January 2023,
we invested in a company called Cordova. Cordova is really
in the pediatric side of while it treats autism and
other related and affiliated diseases. And that is a great opportunity,
I think, for for Echo to bring another we talked
(23:10):
about it in the beginning, the patient centric the how
do you actually do all the wraparound services around patients
who need need care like this the most. And so
Cordova being another company that we just added to our
portfolio and we're going to just continue doing that, where
where do we really feel we can add value to
a syndicate, add something that we know that is so
(23:31):
needed in this country? I will say our perspective is
a little bit broader than that, which is how can
we infuse it in every single one of our portfolio companies?
And I'll come back to it. You wildflower health maternity
while you're giving maternity care. Where is the link to
care for depression, for postpartum depression, to any other challenges
(23:54):
that that woman may be having during that pregnancy? When,
you know, with Eleanor, it's just it's so infused in
all in so many of our portfolio companies that it's
it's not just because it's quartet or it is you know,
cortical in that truly in the behavioral health portfolio it
is all of our companies you mentioned city block in
(24:17):
the beginning and I put Alice in there also companies
that are looking at the whole person. And you cannot
do that without looking at the behavioral health aspect, which
is a we used to carve in the insurance world,
we used to have it all be a carve out.
And there's it's such a different time now where we
finally see the whole the whole person and taking care
(24:38):
of that whole person.
Shiva (24:39):
As I work with my clients in the, you know,
early stage mid-stage companies, growth stage companies, what I know
this is a lot of times there are these point
solutions that are addressing a piece of the problem and
or a particular situation for a given audience be new moms.
But in fact that same audience and sector can benefit
(25:03):
from a whole host of other solutions. But when. They
are presented by a list of products or services from
a customer experience perspective, that can be very overwhelming. And
I think that's what you're suggesting from a venture perspective,
not just looking at postpartum or breastfeeding support, but really
(25:27):
putting a holistic approach in terms of bringing products and
services that address that stage of life with respect to women,
for example, or children when it comes to mental health
or the likes, which I just love, love how you
put that in. So that's absolutely wonderful. Last question, very quick.
(25:47):
What are other trends, perhaps even from other sectors outside
of health care that you're paying attention to or drive
inspiration from?
Jessica (25:57):
So when I think about where do we see innovation coming,
where is it most needed? I'll come back to the
I family in Nebraska, and I'm very proud to have.
But when I think about a teacher in south central Nebraska,
what are the tools? Where are the virtual care? What
(26:17):
are they really going through? That's a really long way
away from Cambridge in and I'm here in Boston and
the type of health care that one can get at
when surrounded by world renowned hospitals. And there's two threads
in that is where is the site of service? What
can be done virtually, what can be done at home,
(26:40):
what can be done to extend second opinions, etcetera, to
an individual who may not have access to some of
that care? And secondly, how do we actually make that
care affordable? And then so we started with affordability and accessibility.
And I think that's where I just have to end
because that it's who you have in mind when you
are also trying to look at these solutions. And to me,
(27:04):
having someone who is in a non-urban area, someone who
has more than one job, someone who is taking care
of their parents and children, when when we start to
put our lens on, how is it going to work
for that person, then you actually make investments that are
better for Americans, not just for people who are living
(27:25):
in Cambridge or in Silicon Valley or something like that.
That's really where health care happens. And I'll come back
to the fundamentals of how our alliance helps us keep
our eye on those local markets and the needs that
they have and the needs that their members have is again,
a privilege of being able to do this job and
try to change health care for all of them.
Shiva (27:45):
Absolutely. Speaking of privilege, it's been a privilege to have
you on the show, Jessica. Thank you so, so much
for your time and the words of wisdom. Very quickly,
if our folks audience want to reach out to you,
where do you direct them? Social media, LinkedIn, your website? Yeah,
(28:06):
you're welcome.
Jessica (28:06):
To all of the above. Feel free to reach out
to me on LinkedIn. And I do read those and
and respond. So thank.
Shiva (28:14):
You. Fabulous. Thank you so, so much for your time.
Thank you for our audience taking the time to listen in.
It's a pleasure to have you all and wish you
all the best. Until next time, have a great day.
Jared (28:29):
Thanks for tuning in. If you like what you heard,
please spread the word. Tell your colleagues to tune in
for all the awesomeness, then leave a review on Apple,
Spotify or wherever you listen. This show is produced by
Shift Forward Health The Channel for Change Makers. Subscribe to
Shift Forward Health on your favorite podcast app and you'll
be subscribed to our entire library of shows. See our
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(28:51):
podcasts you need and it's all for free. And remember,
we might have a lot of work to do in
health care, but we'll get there faster together. Thanks again.
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