Converge Cast | Investing in Innovation Around True Value-Based Care: Anna Haghgooie
This episode of WittKieffer’s Converge Cast focuses on the transformative potential of value-based care. Our guest, Anna Haghgooie, shares her insight on investment in and...
This episode of WittKieffer’s Converge Cast focuses on the transformative potential of value-based care. Our guest, Anna Haghgooie, shares her insight on investment in and innovation around “true” value-based care, which provides holistic and viable models of integrated care for patients and populations. An eternal optimist, as well as seasoned operator and investor, she is actively pursuing her North Star in healthcare – to marry care efficiency and cost-effectiveness with human-to-human engagement. Anna is Managing Director of Valtruis, a unique Welsh Carson Anderson & Stowe platform company that invests in and partners with disruptive leaders whose mission is to break through the systemic barriers in the healthcare industry to reduce costs, expand access, increase quality, and radically improve the patient experience.
Speaking with WittKieffer’s Michael Castleman and Shelly Carolan, Anna explains how most current VBC models operate on a “chassis of legacy infrastructure,” which hampers innovation and inhibits sustainable approaches. Innovation around VBC, she says, will likely come from well-funded entrepreneurs willing to absorb risk and invest in alternate provider/payer/patient strategies.
(Full transcript available below)
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Full Transcript
INTRODUCTION
Each episode, we invite experts, innovators, and voices from diverse backgrounds to share their insights and discuss the challenges that affect the health and well-being of our communities.
Together, we’ll navigate the complexities and discuss the tangible benefits and hurdles associated with the shift towards improved consumer experiences and better patient outcomes.
Shelly:
Welcome to our next Converge Cast where we’re bringing leaders from across the quality of life, ecosystem, healthcare, life sciences and education together to explore the increasingly convergent trends impacting the well-being of our people and their communities. As is typical with our Converge podcast series, we have two cohosts today.
I’m Shelly Carolyn, Managing Partner of the investor backed healthcare team here at WittKieffer that serves companies backed by private, institutional, corporate, or public capital. My cohost today is Michael Castleman, Chief Business Officer of WittKieffer and leader of our global life sciences and investor backed internal leadership solution teams. We’re absolutely thrilled and privileged to have as our next guest, Anna Haghgooie, here to join us in a conversation about value-based care.
Anna Haghgooie is an Operating Partner at Welsh, Carson, Anderson & Stowe and Managing Director at Valtruis, a unique platform that invests in and partners with disrupted leaders whose mission is to align and transfer healthcare through value-based care. She works with portfolio companies to achieve not only growth and scale, but also unprecedented social and business impacts.
Previously, she served as Managing Director of the Healthcare Group of Sandbox Industries and the Blue Venture Fund, a unique collaboration between Blue Cross Blue Shield companies, Blue Cross Blue Shield Association and Sandbox where she managed over 900 million in capital across four funds and it currently serves on the boards of Wayspring and Stride Health, Oncology Care Partners and Taylor Care.
She previously has served on the boards of Contessa, PWN Health, ExactCare, naviHealth, Change Care and many more. Anna, I’ve been so inspired by hearing you speak on various panels over the last couple of years about transforming healthcare for value-based care and we are absolutely delighted to have you here to join the conversation today.
Anna:
Thank you for having me. I am honored to be able to do this with you today.
Shelly :
So I think that the first place we wanted to start is just understanding a little bit more about your career journey and how you ended up where you are today. It’s such an interesting mix, but maybe if you could just give us some highlights on sort of what has inspired you and shaped you into the executive and the investor you are today.
Anna:
I definitely have gotten lucky throughout my career to have found myself in spots where I have been able to sort of use my position to drive something that is probably my north star. which is efficiency. So, when I think about you know what has driven me to spend the time doing what I do in my life, it’s seeing a healthcare marketplace that has the potential to be so much more efficient in the sense of engaging in this human to human way while delivering better care at lower costs and more consistent outcomes. So, that is that is my north star in life and again have gotten lucky to be able to manage capital on behalf of investors who are really committed to that world view for our healthcare system in dollars.
Shelly:
And you made the transition from being an operational leader into the investment side from early in your careers, isn’t that right? Weren’t you born the operator; can you tell us a little bit more about that transition?
Anna:
Yeah, yeah, I think my, so I covered the healthcare markets actually as an analyst which was which was where this sort of light bulb moment of all of where all the opportunities existed in healthcare.
And my first sort of earnings season listening to the for-profit hospital operators and the for-profit managed care entities described whether they’re, you know, fourth quarter was going to be good based on whether the flu season was either good or bad depending on which seat you’re in.
And that was sort of my “aha” moment of like the system, the way the incentives are structured are set up in this sort of with an arbitrary layer of sort of whether performance is going to happen or not, something that’s outside of a business leader’s control and will sort of determine what cash flow is going to look like in a given year. And so that just always struck me as an odd way to run a large scale enterprise and and that if we could figure out and different ways to structure the way dollars were flowing in healthcare, you could align sort of business outcomes to true value creation not the flu season was bad or good in a given year. So, I went from sort of that role to then saying you know how do I want to be part of restructuring healthcare in this way as only a young 20 something can think that they’ve got sort of the agency to do that with a $4 trillion industry and ended up in the entrepreneurial world.
So I spent time working on really early-stage businesses, helping build and run their operations and and it was through that work that I came to Sandbox Industries which at the time was starting companies as well as managing venture funds. And so pretty quickly landed on the team that was partnering with the Blue Cross Blue Shield plans across the country to help them plug into innovation. And I do fondly look back, you know this was 2008, so prior to the passage of the HITECH Act, prior to the passage of ACA. And so, if you think about you know pre-2008 we had this analog healthcare system, nothing was really digitized. The last value-based care experiment was, you know, HMOs of the nineties which again was done on an undigitized chassis and so the the industry has shifted in enormous ways the last 15 years and in other ways has not changed at all. And so anyway that’s a little bit of the, the back story for how I ended up where I am.
Shelly:
And Valtrius, you know invests in organizations that are accelerating what you refer to as true and I’m using air quotes value-based here. Can you explain what that means to you and how you came to that term to sort of be you know one of your other guides on how you approach this.
Anna:
Yeah, I think when we when we set out to build Valtrius, you know it, it was with the lens that part of why value-based care was moving so slowly was because there wasn’t a level of commitment to taking real risk and really transforming the way that patients engage with healthcare around specific categories of spend or specific patient populations. And then in order to truly show what could be possible, you had to commit, you had to sort of put skin in the game and your butt on the line for can I engage these patients, can I pull what we call levers, so are there attributes of the status quo care that if done differently are meaningful levers, so can we do things that would avoid hospitalizations? Can we shift the sites of service from you know the most expensive hospital settings to home settings?
Can we invest in social determinants or social needs; food, stable housing to keep people healthy and and not utilizing healthcare? So those are the levers, and then can we contract? Is there a way to essentially work with whoever holds the risk today to cleanly carve out an attributed set of dollars or patients that we are going to then be accountable for. And so, when we say true value-based care, those are the pieces of the puzzle that have to be there. And I’d say you know we are, we are more broad in our thinking in that we do want to invest in next gen healthcare which can include things that maybe aren’t fully true value-based care, but that are delivering value through an easier to engage mechanism. But maybe aren’t taking costs out of the system or maybe aren’t you know structured in a way where you can cleanly attribute sort of cost and spend and restructure, restructure the care.
So our aperture is open as far as being interested in anyone that is working on next gen healthcare technology, infrastructure, and care models. But we do a sort of bristle when someone comes in and has a digital tool and says we want credit for avoided surgeries. When are you at risk for all of the surgeries and a patient population and therefore you know really truly, you know, accountable and therefore get credit for avoided surgery. So those are some examples of you know what we focus on when we say true value-based care.
Michael:
So Anna, first let me echo Shelly’s thanks for you being here. This is wonderful to have this dialogue with you in this, this light bulb moment of yours where it’s like efficiency and healthcare. Those are two things that don’t always get mentioned in the same word over time. And then what you described, it seems like there’s four basic elements to value-based care: the levers you can pull to impact outcomes, the discreteness or clarity of the problem, the discreteness and clarity of the population, and then contracting.
Will you invest when three of those levers or those elements are there, but perhaps not the fourth, in particular in advance of the contracting mechanism? Because it seems that creating the value sharing if you will, or the reimbursement mechanism, or the risk sharing mechanism is dependent on proving your ability to have impact. So, can you put the cart before the horse?
Anna:
Michael, it is a great question. I will say in my investing career, I have often put the cart before the horse, which is how I’ve gotten into deals early in their life cycle and therefore benefited from equity value creation. The the, the, the horse. Maybe if we’re the the contracting or the outcomes that I’ve looked to as a north star have been like show me where it’s worked. Show me where somebody with some set of circumstances has been able to deliver better clinical outcomes consistently at a lower cost. And so that can come through, you know, nonprofit experiments around, you know, the Centering for Pregnancy model is a great one of, like we’ve shown, we can lower preterm births and engage women through this model of prenatal care. It exists in these really small pockets of academic centers or nonprofit organizations. Is there an opportunity to scale that nationally? We look at rest of world.
Does the NHS actually do this part of care better and how? How when you sort of have an integrated delivery network, can it work better? Similarly looking at Kaiser or Geisinger, other, you know, integrated delivery models here in the states. So, the the short answer maybe is yes, we will put cart before horse when there is sort of execution risk. Someone has proven that it can be done. You just have to create the right circumstances. And then as you know anyone who is deep in healthcare can appreciate the long pole in the tent is always that payer contract. It’s always getting the the deal structured in a way that that allows you to actually do the work in its purest form. And and I would say you know we are always looking for payer partners that want to lean in at an early stage to sort of prove that these models are possible. And I’d say over the last 10 years there’s been a ton of appetite.
You know payers have really leaned into at least experimentation and a and a lot of first-generation value-based care companies successfully grew. Those payers, I think are feeling saturated. And so I think there is an eyes wide open reality of like how much more you know our payers going to do and in what set of circumstances are they going to do it.
Michael:
With that saturation, what does it take for them to absorb what they’ve incurred if you will or what they’ve experienced so far? And do you see there’s some sort of tipping point where they take on a new level of interest and actually potentially even a new level of contracting model than perhaps historic capitation or other risk sharing?
Anna:
Yeah, I think I embedded in that is actually a lot of questions in in some ways. You know, I think the complexity is increased because you’ve got you know potentially. I always sort of think about the world is like is it a belly button, is it a belly button contract or is it a utilization-based contract. Like there’s lots of ways to slice and dice the way that healthcare dollars get spent. And so, the purest form is a belly button contract where the responsibility of all the utilization and spend associated with a single belly button moves to a new organization that’s set up to better care for that belly button.
So, our company waste bringing in the substance use disorder space is a great example, where you know they are attributed, and at risk for substance use diagnosed patient population. They go into a community, engage that population, organize the social needs, organize behavioral health needs, and ultimately organize primary care and other clinical needs. And it’s that full sort of coordinated effort that allows Wayspring to do a much better job with that patient population than a typical managed Medicaid plan who otherwise would hold the risk. So, those risk transfers are somewhat more straightforward, but even there you know you’ve got complexity around setting baseline spend and understanding sort of how much savings are driven by a model like Wayspring. So, payers are sort of writing these contracts and making these decisions on a a chassis of what I would say is really legacy infrastructure.
So data that is disparate and sits in different parts of the organization, a whole system that is sort of optimized for a fee for service claims driven administration process versus you know answering the complex question of like how much did our substance use disorder population cost last year? How much would we have expected it to cost this year? And, how did Wayspring intervention change the future in a way that we can feel really confident that, you know, we’re not losing money on this contract?
And so there’s, you know this need to sort of retool an infrastructure – a data layer, an analytics layer, a contracting layer with a very clear sort of attribution frameworks on who holds risk, who gets credit for changes in performance. And, I think you know historically up until now most payers have been doing it on what is a legacy, a legacy chassis that was sort of built for a fee for service system.
Michael:
So, when you think about that historically analog model and legacy chassis which relied on one could say analog or legacy leadership experiences. How do you see, or maybe the better question is from where do you see new leadership, new functional skills coming from to meet the requirements of this re-recast infrastructure and recast approach to the business of care really?
Anna:
And yeah, yeah, I so part of this might be informed by you know where I started my investing career, which was, you know, at this intersection of the Blue Cross Blue Shield plans and entrepreneurs. And so, this idea that like where is the talent and transformation going to come from?
Probably not from within, but it’s probably going to come from an entrepreneurial organization that has figured out how to solve an initial problem for their sort of larger corporate customer and through the performance on solving that you know defined problem will begin to sort of earn the right to retool the the legacy infrastructure.
So, I do think you have to have a level of sophistication within the corporate purchaser around how new tools and technology work, and what impact it can have on the organization to be open to sort of partnering with these emerging companies. But, the the promise of you know, automation and new data models, the ability to sort of aggregate data that has historically lived in separate silos in healthcare like, I do think the next 15 years have to be more transformative than the last 15. And, I’ll say what gives me hope that that is the case is nope, despite all the issues with value-based care and how hard it is, nobody is saying we want to go back. Patients aren’t saying we want to go back.
You know they’re continuing to choose MA. They’re continuing to choose value align primary care as where they get their primary care. Payers are saying those practices perform better than our, you know, patients that are aligned to practices that are still in the legacy fee for service model, so, the sort of baby steps are there and so I do think there is a deep commitment from CMS, you know, all the way down to the managed care entities to continue on this path. And those that have been slower to adopt I think are starting to feel the fear, which is usually the biggest motivator for adopting new tools and technology.
So I’m hopeful, but I do think it’s going to be this intersection between more of the startup and entrepreneurial ecosystem and the legacy players that drive the transformation.
Michael:
And what you just referenced, again, language you might not have historically associated with healthcare, things like consumer engagement, attachment, loyalty, you know that alignment you referenced is all about that. How do you see those engagement models evolving, and in the companies where you’ve experienced the most success, what of those consumer engagement models look like?
Anna:
Yeah, I think it is. I think we’re still really early, maybe is what I’ll say, in this journey of like delightful experiences in healthcare. You tell me if you’ve got really good examples, but I think we’re still fairly early in sort of achieving that world view. But, I will say there are folks that are working on it and and it gets down to sort of human connection; being seen and heard, taking time. You know the the bill for purpose primary care entities like Oak Street Health, One Medical Senior, Centerwell, you know their staffing structure and model is set up to have community engagement as a core tenant to sort of how they launch in a market. And so it is a little bit of this blending of, you know what is, what should healthcare dollars be funding in America?
Should it be funding surgeries and interventions? Or, should it be funding community and bringing people together in a way that allows them to be more health literate, more health focused? Again, preventive medicine and wellness is something we’ve talked about forever and historically there hasn’t been a good business model to facilitate that stuff. When you start to get into value-based care models where patients are sticking with the relationship for five, seven, 10 years, investing in community, investing in wellness becomes a good business decision and you know can create some good experiences.
So I still think we’re really really early in sort of defining what delight looks like. But, I do have hopes that it will look more and more like good business as these models continue to proliferate so that there will be more investment in in sustained engagement and delightful experiences.
Shelly:
It’s such a complex problem with so many stakeholders and you know as you mentioned before you know this is it’s already been sort of trying to push value-based care and its evolution for you know decades now right under different forms. But you’re in the market, you’re seeing, you know, different and novel and innovative solution. What inspires you, what makes you optimistic that you’re seeing now that the future is brighter, that we can get there?
Anna:
Yeah, I think I think it gets back a little bit, Shelly, to the human element. So, we after a long time of thinking about whether to invest in this space just invested in a company called Tuesday Health that’s focused on the serious illness population and supportive care and end of life. And one of the reasons we took a long time to launch it is, you know, is there is there appetite for yet another solution? You know, is this sort of solved by these next gen primary care models or these, you know, next things that are models that people are launching? And as we continued to talk to folks, and in particular the people that are leading health plans and these provider organizations, not surprisingly, there are people in their, you know, fifties and sixties who have all gone through end-of-life experiences with their parents and two-way person. They’re like, “Yeah, it’s a mess. It’s a mess.” And you only have an end of one. You’re only going to do this, you know, once, twice, hopefully, you know, just a handful of times in your life where you are the caregiver trying to organize again all of what happens around that phase of life. And there is nobody in our existing healthcare system that is truly there to hold your hand through all the phases.
So you know once you get to hospice, there’s hospice organizations. There are lots of folks working on the clinical interventions associated with illness that might be terminal. But there is nobody that’s like just there to be the support system for families and caregivers, to help them navigate and organize in a way that is, you know, pulling together all the things that we that are embedded in supportive care, which is, you know, the hard conversations that families need to have, financial planning, the the sort of navigation of multiple care teams, what resources are included in your benefits that you can tap into to help help support caregivers and families and keep their loved one home. And because we don’t invest in that, there are way more people that die in the ICU and the hospital and create survivor trauma for the family and the loved ones because you didn’t have all the hard conversations and do things that need to happen. So I think for me anyway, what gives me hope is that we continue to hear from people that are in positions of power to sort of make the investment to try to change the status quo, saying yes, the status quo needs to be changed and is worth investing and changing.
And so as long as there are people in that purchasing seat that see problems worth solving and then coupled with entrepreneurs who think they’ve got you know the idea, the thing, the chassis that’s going to help change, I’ll keep doing what I’m doing because it’s really fun and when you when it when it works it is life changing for everyone involved. So, anyway that’s a little bit of where my optimism comes from.
Shelly:
I love that.
Michael:
I will say, thank you for investing in that company because, unfortunately, I’m at the age where I’ve experienced, and I expect I will experience those things. And they are the most emotional and difficult decisions and conversations to have, and many people feel like even though they may believe and know the right decisions, you still second guess yourself all the way through and so, I think it’s fabulous to provide that overused word, holistic approach, to the family and the caregivers as well as the person who’s obviously facing a very difficult end.
Anna:
And Michael, I think like when you spend time with these palliative care doctors and palliative care nurses and folks that that actually spend their life’s work sort of helping families navigate. You realize like there is, there is expertise there, there is sort of a reassurance and there this is this is a discipline and a specialty that does exist just as underfunded and there’s not a great business model. And so, like all things in America with you know, no margin, no mission, and so a lot of what we do is just trying to restructure the margin so that these things that have a real mission can flourish.
Shelly:
But it’s interesting because there are, they’re all cultural barriers here in the United States are on discussing end of care, end-of-life management; it’s like as a culture we avoid those conversations because they are uncomfortable, and they are difficult, so you know I think it just speaks to the the need even greater of someone to facilitate that.
And Anna, in closing you know what do you see sort of the next turn of the wheel on value-based care or just you know fostering those, you know, there’s so many impacts that you have around patient access, patient equity, other things that your investments move forward – what do you envision as sort of the next iteration? And, what do you see is still needed?
Anna:
Yeah, we hit on it a little bit in in some of the prior conversations, but I definitely think trust and relationships are going to be the the sort of big driver of the next phase of sort of success around these value models. And those are those are sort of harder capabilities to build you know within organizations. But I think will be the difference between those that that you know really have meaningful impact on cost, quality, and outcomes are those that have figured out how to institutionalize this idea of trust and relationships as part of their business model. ,So those are a couple of the things that I think are foundational and and it gets a little bit to you the point you made on Health equity and access. And you know, part of why we have inequitable outcomes is because of a lack of trust and and a lack of sort of how to navigate the healthcare system and how to advocate in addition to you know bias and and other sort of bigger issues.
But I think when you have organizations that, inherent in their business model, is building trust, building sort of a brand promise at the patient level. You know, you have an opportunity to really impact outcomes and impact populations that have historically been underserved. So, I think those are going to be things that probably are talked about more in the value-based care investing world. And then I think the the sort of ability to leverage technology to bring the unit cost to serve down for any of these models is also just a huge opportunity as healthcare is just barely standing up its ATM system, you know, if you think about data exchange and sort of getting on the same standards with FHIR and a bunch of the good work that that you know HHS is doing around trying to move us there.
You know we’re like just barely at ATMs if even there yet. And so, if you think about how our banking and financial system has changed over the last 25 years and you think about the application of technology to healthcare, there’s no reason why this industry, you know, can’t start to operate in a higher functioning, more efficient way. So, I think those are the two very different sides of the spectrum when you think about the human side of trust and relationships and the technology side of driving efficiency and taking costs out of the system.
Michael:
There’s you mentioned the comparison to the financial system, the financial system became national and actually even global fairly quickly, right just to facilitate the movement of funds. Healthcare has always been a very local business, right in a very local community oriented and at the center of it has been hospitals and health systems, traditionally. What’s their role in this evolution to value-based care?
Anna:
Oh, Michael, it is, I think, a question that every single strategy person at a health system is asking themselves and I think the hard part as a value-based care person is when I, you know, we talked at the very start of the conversation about levers. What are the levers that you can pull to drive down costs within a given patient population or episode of care? Number one is a reduction of hospitalizations and number two, is moving procedures from the hospital to outpatient or lower cost settings. So, the driver in most cases of value in value-based care models is something that erodes the legacy health systems business model, fee for service business model. So, I think there’s just eyes wide open like understanding that that is that is reality.
But I’ve certainly spent time with chief strategy officers of health systems who are really bullish on taking their fixed asset base and transitioning it to, you know, decommissioning the hospital aspects of those beds and using those beds for other uses that are, you know, building home and community bases, that are building ambulatory surgery centers, that are hearing from their primary care affiliated physicians that those docs want to move into risk just like they’re independent fellow PCPS. And so, there has been much more movement from health systems, I think post COVID, than anytime over the last 20 years where there was a lot of sort of lip service around value and the need to move to value, but it wasn’t a business imperative.
And I do think we’re sort of getting to the tipping point in certain communities where if you want to, if you want to survive that, you’ve got to figure out how you’re going to play in this shift and so, brands are important. Those brands are still local brands that matter, and I think for anyone who wants to use that brand to then create this differentiated experience that would be the most powerful way to drive value-based penetration in a given geography. I do think the window is closing though, like I think there are enough folks investing in alternative experiences for patient populations that are, you know, are easier to do business with, are easier to get your script, get the thing you need, you know create a more holistic experience around whatever the intervention is that, you know, the the more and more dollars shift into those models, the harder it is going to be for health systems to catch up. But I think everybody’s paying attention and and is thinking about this stuff. So I wouldn’t, bet against systems figuring it out.
Michael:
In a way, they’re the best position because those that have invested in that full continuum and pushed to more distributed treatment and engagement models, who have brought in specialty networks and physicians. They’re in a position to create almost a captive value-based care system and community, but it requires a massive change in mindset, in leadership and vision, in self-disruption. Before it’s forced upon you, will you undertake it yourself?
Anna:
Yeah, I do think that, you know, the health system is the the failure point of whatever is not working in society. And so I think whether it’s, you know, homelessness, using emergency rooms for warm meals and beds, whether it’s mental health crisis, whether it’s a complex patient with multiple comorbidities that’s not well managed in community that’s showing up. Like those are the the sort of “true norths” of what’s going on in my community, where I could use these dollars in a different way to create a different care model and therefore better outcomes. And I do think if they start thinking in that way, it could open up a lot of really interesting opportunities.
Shelly:
Well, you certainly give us a lot to think about Anna and just really enjoy hearing your perspectives and in you know seeing improvement over the course of time and I you have my full support, I think that you’re going to be one of the driving factors that’ll get us there, you and your organization. So I appreciate the time that you spent with us. Thank you so much for contributing and joining the conversation today. We really appreciate it.
Anna:
Thank you for having me.
CLOSING
Thank you for listening to the WittKieffer Converge cast. For more podcasts, articles and insights, visit wittkieffer.com/insights. Again, that’s wittkeiffer.com/insights.
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