May 30, 2024 • 45 mins
“We’re staking the company on personalization: If you can make the health-care experience more personal to the individual, they’ll be more likely to engage around their health care and take the proper actions to get better outcomes,” Chris Michalak, CEO of Personify Health, tells Bloomberg Intelligence in this episode of the Vanguards of Health Care podcast. Michalak joins BI analyst Jonathan Palmer to discuss the merger of Virgin Pulse and HealthComp, the company’s AI-driven personalization engine and the value proposition for employers. The conversation also covers Personify’s approach to consolidation in health care, the role of navigation and the impact of GLP-1 drugs on the market.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:20):
So welcome to another episode of the Vanguards of Healthcare podcast,
where we chat with the leaders at the forefront of
change in the healthcare industry. My name is Jonathan Palmer
and I'm a healthcare analyst at Bloomberg Intelligence, the in
house research arm of Bloomberg. We're happy to have Chris
Mahaalik joining us for today's episode. He's the CEO of
Personify Health and previously was the CEO of one of
(00:42):
its predecessor companies, Virgin Pulse. This isn't the first time
he's held the top role. Chris was also the CEO
of a Light and before that he had a long
career in consulting. Welcome to the podcast, Chris, Thanks Jonathan.
Speaker 2 (00:54):
Forward to our discussion.
Speaker 1 (00:56):
So why don't we get Why don't we kick it
off with what is Personify? And maybe let's start with
you know, it's two predecessor companies that are joined together
under a new brand. Why don't we talk about what
those two companies were and why all make sense together?
Speaker 2 (01:08):
Yeah. Personifi Health is a company that's focused predominantly on
the employer and health plan market to bring the experience
of healthcare together in a single platform that can be
personalized to the individual. We brought together two companies. We've
brought together what was Virgin Pulse, which was the leader
in the well being space, with health Coop, which was
(01:29):
the largest independent tpa UH And the intent behind this
company is to bring together all of the capabilities that
an employer that an employer needs for their employees to
manage their healthcare experience wherever they show up in that journey.
So whether they have an acute issue or a chronic
issue or an episodic issue, we want to be the
first place that they go in order to manage that
(01:52):
issue more effectively for themselves and for them for their family.
Speaker 1 (01:56):
So maybe simplistically, how does how does one plus one
equal three?
Speaker 2 (02:00):
Here?
Speaker 1 (02:00):
You know what capabilities are. How are you going to
market differently than maybe the two legacy companies were previously.
Speaker 2 (02:07):
Yeah, I think predominantly we're a very important consolidation play.
As you know, in the healthcare industry and in particular
in the employer market, there's been a proliferation of solutions
and complexity that's been introduced into that environment, and we
see ourselves as breaking through that noise in order to
make the overall experience to the individual better and more
(02:31):
effective in helping them manage their overall healthcare. So we
see ourselves as a consolidator and we're taking everything from
the health plan administration portion of healthcare. How you know
where your claims get process, how your claims get process,
how you interface around those, you know what your you
know what your claims experience is connecting that to well
(02:54):
being navigation and advocacy, care management and chronic condition management,
so that no matter where you are in that journey,
you have a single place to go. We say that,
you know, we're connecting the disconnected. We're taking the experiences
that have previously been across a number of different websites.
We just actually did a survey and the survey said
(03:16):
people are having to go to upwards of five and
six websites in order to manage their health more effectively.
Our intent is to connect the disconnected pieces and bring
them all together in a single, world class experience.
Speaker 1 (03:28):
So how do you do that for the employer and
then maybe probably more importantly for the member, how do
you how do you actually address that complexity? If I'm
a member who my employers contracted with personify, what do
I see.
Speaker 2 (03:40):
Yeah today today? You probably see some independent pieces a
well being solution, an advocacy solution, and a TPA solution.
But as one one twenty five, as we bring that
entire experience together, it will be on a single It'll
be on a single experience. So you could go in,
for example, and be prompted to be thinking about a
(04:04):
particular portion of your healthcare journey, like maybe we know
from claims data that you're dealing with an MSK issue,
and we might prompt you with information about that MSK
issue and tell you about a healthy habit that you
could use. But we might also direct you into our
partner ecosystem and have you talk with Hinge or Sword
or KaiA, one of our partners who are a specialist
(04:26):
in that care condition. Or we might call you directly
with one of our care management agents to direct your
care pathway to physical therapy rather than to a surgical solution.
And so I think what people are going to experience
is the ability to navigate through both digital assets as
well as high touch assets to the right form of
(04:49):
care wherever they are in that journey.
Speaker 1 (04:52):
And so one of the things that fascinate me about
this concept is how do you pick up that signal
that maybe I should be going to a hinge or
a sword. You know, how does that work in the background.
Speaker 2 (05:03):
Yeah, what will happen in the background is we'll see
the kinds of behaviors. First of all, I should say
we've been collecting data on the number on the people
who participate in our platform on a fairly regular basis,
and so we've learned a lot about them. We've learned
about their claims history, we've learned about their pharmaceutical history,
(05:25):
we've learned about their habits through devices and the information
we collect on those devices. Then we're deploying a number
of models that help us direct that more personal experience.
So what we describe as a thousand predictive models that
are running in the background to help people take the
next best action as it relates to their healthcare. And
so we'll be prompting people through the platform itself. Through
(05:48):
their experience on our platform, they'll see what is the
right thing for them to do next as it relates
to healthcare. But we'll also be sending that information to
our care management team and to our coaches who are
interfacing with people on a more relational level to help
direct their points of care, and so I think connecting
(06:10):
those disconnected experiences and making sure that the data that
comes into the system is being leveraged in order to
direct people towards the right kind of care is really important.
And I think those are the pieces that have to
come together. And again, it's a thousand predictive models. We're
using artificial intelligence to do that, and we're using both
a digital and a personal way of communicating to people.
Speaker 1 (06:33):
Maybe let's dive into that piece on the artificial intelligence.
Can you talk a little bit about what you're deploying
in that arena.
Speaker 2 (06:41):
Yeah, we're using artificial intelligence in a number of ways
at Personify. We're using it in our call center environment
to create a more efficient chat experience, if you will,
or member experience, so that there are a number of
participants who won't even have to talk with somebody if
they don't need to. We'll find ways through artificial intelligence
(07:01):
to meet their needs in a fully digital fashion. We're
doing it through our website by providing information to them
in a proactive fashion based on data points that we
pick up. And then we'll also be using artificial intelligence
as a core way of driving the personalization engine. And
(07:21):
I think that's probably the most important component. So at Personify,
you know, we're staking kind of the company on personalization.
If you can make the healthcare experience we're personal to
the individual, they'll be more likely to engage around their
healthcare and take the proper actions to get to better
healthcare outcomes. We think that's critically important. And so the
(07:43):
predictive engines that we're building based on artificial intelligence will
teach us about that individual person. That data will be
used to render up the right information to them at
the right time, given where they're at. And so we
think that that's the kind of the underlying critical component
of personalization.
Speaker 1 (08:05):
And if you take a step back from the employer perspective,
how did they see this evolution in terms of the
personalization of the care? I mean, what's the win win
for the employer other than you know, I could think
of some of the easy ones, but I'd love to
hear your perspective.
Speaker 2 (08:20):
Yeah, I think I think employers are really wrestling with
three things. Predominantly. I think they wrestle with cost, I
think they wrestle with outcomes, and I think they wrestle
with experience. I think those are you know, if an
employer can help solve those three things. If I can
create a better experience, if I can get better outcomes
from my people, and lower the overall cost of healthcare delivery.
(08:41):
I think those are the three critical measurement points. We
think we're impacting all three of those, just on the
cost side. We just did a study that demonstrates our
ability to save about seven hundred dollars per participant by
helping them focus on their preventative healthcare. We did a
second study in our Health plan administration business or TPA business,
(09:04):
where we're demonstrating upwards of nineteen percent cost savings on
a like for like basis against industry averages in terms
of overall cost savings. So we think we're demonstrating very
clear cost savings to our clients. We're doing that by
helping people make good decisions about their healthcare, better decisions
(09:25):
about care management pathways, making sure that their doctors are
billing them more effectively, making sure they're getting to the
right kind of provider, the highest quality, lowest cost provider,
and directing those kind of navigating them to those right solutions.
Those are leading to better outcomes, and we can show
three to one improvement in outcomes for people who are
(09:48):
using the platform, and then, last but not least, probably
most importantly, in some ways, the overall experience has to
be better for the individual member. I mentioned earlier, people
are being forced to go to sites for multiple points
of care, and what we're trying to do is unite
those together in a single experience. We think we're actually
very well positioned in that regard. Our platform has an
(10:11):
over fifty percent engagement rate. It means people are participating
in the platform on a regular basis. We see them
coming into the platform more than a dozen times a
month and six times a day. In those cases, they'll
have six interactions with the platform. That level of engagement
is enabling us to affect outcomes and then get to cost.
(10:33):
And so it all starts with engagement at some point
as people use our platform for various aspects of healthcare management.
Speaker 1 (10:41):
So if we think about the evolution of navigation, I
mean there's been this proliferation of solutions, right, some of
the companies you mentioned on the MUSCO skeletal didn't exist
a decade ago, right, you know, as employers have been
forced to deal with all these different options and proliferation
of these solutions. It seems like navigation's key to just
being successful in dealing with their members managing their members'
(11:03):
healthcare costs from both a cost perspective and from a
critical outcomes perspective. So is it table spakes now to
use navigation for you know, as kind of the tip
of the spear for your business or for the industry
at large? Or how has the evolution of the market
changed in the last five or ten years.
Speaker 2 (11:22):
Yeah, I think what we've seen, as you rightly pointed out,
is the proliferation of these solutions. They've come from everywhere.
And it's funny. I went to a conference, one of
the very large healthcare conferences year about a year and
a half ago, and I said to myself as I
left the conference, I see two trends coming out of
this conference. One that there will be consolidation. There has
(11:47):
to be consolidation, and two there will be continued proliferation.
Like I think both things are going to coexist in
the world. There's always going to be innovators, and innovators
are always going to be creating new applications. There's three
hundred and fifty thousand healthcare apps that exist in the
world today. There will be more, not fewer. Some will
(12:08):
go away, but many more will get created. But there
will be consolidation. Employers will be you know, they are
forced to kind of deal with the needs for consolidation
in order to make that experience better for their people.
And there's just only so many solutions that you can
even integrate and track the ROI and see that they're
(12:30):
creating value. So I've been I've had this core belief
around consolidation for probably upwards of six years across you know,
three different companies now, the belief that consolidation has to
happen in order for employers to have a good experience.
And so I think navigation is a critical part of consolidation.
(12:52):
I think the consolidators in the marketplace, and we think
will be one of the leaders in that space, have
to create a way to make it easier to access
and for people to know which of these solutions will
be most value to them. So consolidation in and of
itself is not effective. The consolidation with insight and navigation,
(13:13):
we think is really powerful and will have a huge
impact on people's ability to manage you know, a larger
set of solutions on behalf of employers.
Speaker 1 (13:22):
So how do you see that unfolding? Because I think
I was at the same conference and I came to
the same conclusion that you know, there's four booths and
they're all doing the same thing, right next to each other,
and nobody has a lot of capital, and they're on pilots,
and you can see where this is eventually going to
wind up. But you know, as I think about navigators
and I think about the slides with all the logos
of all the different players across the ecosystem, do you
(13:45):
see the consolidation of those logos or do you see
consolidation even among the navigation companies themselves.
Speaker 2 (13:52):
Yeah, I think navigation is a space that's still one
of the faster growing spaces in the healthcare ecosystem. I
think it's a space that will continue to expand. Actually,
the the total green field opportunity across employers and navigation
is still incredibly large, and so lots of opportunity for
that to continue to grow. But with respect to the
(14:17):
field of players, I do think there should there can
be consolidation in that field. Uh you know. I interestingly enough,
a lot of partners reach out to Personify because we've
become a great foundation for distributing solutions. And you know,
I had one the other day come to me, and
I thought they were going to be another MSK provider,
(14:38):
and it turned out they weren't actually an MSK digital provider.
They were a digital you know, navigator in the MSK environment,
and I thought, wow, now we're really getting there, which
you know, now that's a whole nother, you know, a
whole other capability set. I do think there has to
be consolidation. I do think they're you know, in a
(15:00):
any industry, it starts with many solutions, and typically you know,
it starts to consolidate into a handful of the best
players in the industry. And I think the best players
are going to have to prove really strong ROI they're
going to have to create, you know, an absolutely great experience,
and they're going to have to actually impact outcomes. And
I think if they do those three things well, they'll
(15:22):
end up being the winners in their individual spaces. At Personify,
we're trying to manage to which of these partners adds
the greatest value to our clients set. And you know,
our intention isn't to create winners and losers, but we
do think, you know, there are certain leading players in
a space, and we want to make sure that our
clients have access to those leading players.
Speaker 1 (15:45):
Now that makes a ton of sense. Maybe that's a
good jumping off point. Just to talk about your scale.
Can you share some numbers with us in terms of
your size, whether it's members or clients, revenues, that sort
of thing.
Speaker 2 (15:55):
Yeah, we're currently serving seventy five hundred customers today, doing
about one thousand of those directly and a number through
our health planned partners, and so a very large clients
that we're serving about twenty five percent, just shy of
twenty five percent of the fortune five hundred. So we
have a number of very large clients. In our book
(16:16):
of business. We have about twenty million members just shy
of twenty million members on our platform as well, and
so that's the combined platforms of the TPA business that
we acquired last year as well as the historic well
Being business. But across that twenty million members who are
using our platforms in some way, shape or form. And
(16:36):
so we're a very large scaled organization in that regard.
And you know, I think one of the own you know,
there are very few health tech companies of our size
and scale and scope, and so I think it's putting
us in a great position to continue to lead in
the marketplace, particularly now with this more comprehensive set of capabilities.
Speaker 1 (16:59):
If you think about that, you know, how is your
mandate in your in your role changed. You know, now
that you have the health comp and the TPA asset
under your umbrella.
Speaker 2 (17:10):
We're playing a much more significant role in core health
plan administration today than we were in the past. That
has changed sort of the set of competencies that we need.
Like if I look at the two companies, one was
more of a tech enabled service and the other one
was a SaaS based software company, And there's different core
(17:30):
competencies in those two companies. And here's what I think
is great about the combination. The SaaS based software company
had a tremendous core of engineering and product development capability.
We're bringing those capabilities into the TPA business and most
TPA businesses don't have a lot of that. They're more
(17:50):
services based. And I think it's going to be one
of the things that really sets us apart, bringing a
very advanced, very tech, tech forward innovation capability into the TPA.
Capability I think is going to really push us forward
well beyond where our competitors are today. For example, you know,
and I mentioned we'll create a world class user experience.
(18:13):
Very few TPAs offer a world class user experience. Very
few healthcare companies in general have really captured what engages
people effectively, and we've done that well. We'll bring that
capability across everything that we do now, and I think
it will start to connect the box, you know, connect
the dots for people across their healthcare experience. I think
(18:37):
those that's the power of these two companies coming together,
bringing you know, deep innovation and technology on that side,
by the way, deep health plan expertise on the other side,
they you know, the TPA side of our business, new
healthcare and the absolute depths of healthcare more deeply than
we did on this side. And so we've become a
(18:59):
much more insightful healthcare company with this incredible world class
technology capability. And I think that combination is super powerful.
Speaker 1 (19:09):
So how the tenor of I guess conversations with clients
or even maybe prospective clients changed since that that's occurred.
Speaker 2 (19:18):
Yeah, about a month after we made the announcement, I
had a chance to sit down with a handful of
clients and I walked them through the storyline. I walked
them through the capabilities that we were bringing together and
how those would fit together in a single company. And
one of the clients in that session, at the end
(19:39):
of that talk said, I have twenty two vendors that
are currently doing what you're suggesting you'll be able to do.
And if you can do what twenty two vendors are
doing today in a single platform with a single capability,
that's groundbreaking for US, Like, that's a massive change for
US and opens up a ton of possibilities for us US.
(20:01):
And so I think that employers see a tremendous amount
of potential in these capabilities coming together. Now, those sane
employers are accustomed to buying you know, product A, product B,
product C, product D from different RFPs and different influencers, brokers, etc.
(20:22):
I think those buyers are going to have to change
some of their behavior as well. They're going to have
to think in a more integrated fashion. They're going to
have to say, hey, I can get well being, navigation,
and plan management all from a single provider, and it's
going to require some rewiring of the way they think
about what's possible in the healthcare ecosystem, and you know,
(20:44):
we're starting to have those conversations with clients each and
every day. I think they love the concept, they love
the idea. We just had our large client conference we
call it Thrive. We had six hundred people participate in
that conference, and I think they really embraced a message
of these capabilities coming together and now they've got to
think through how do I, you know, practically execute on
(21:07):
that over the course of the next couple of years.
Speaker 1 (21:10):
So what do you have to show them in terms
of an ROI or from a product perspective, and how
long does that selling cycle typically last? You know, I
think they're like you said, there's a lot of different
options out there is in a lot of different ways
to execute on member benefits. So I'd love to hear
your perspective on just how you see it unfolding over
the next year or two from a selling perspective.
Speaker 2 (21:33):
Yeah, I think, well, we're in the heart of selling
season right now for mid and small employers. Like if
I think about one one twenty five, for a mid
and small employer, they're probably in the heart of making
some decisions about their healthcare plan for one one twenty five.
If you're a very large employer, you probably that ship
has sailed. You're probably thinking more long term around one
(21:54):
one twenty six. Uh. And so we're sort of engaging
with clients where they are in their own you know,
buying process and so forth. But I think the story
that we're talking with them about, we're talking about the
integrated experience, the single platform capability set. We're talking a
lot about personalization and how personalization drives better outcomes. And
(22:17):
then we are spending a bunch of time on ROI.
I mentioned earlier in the discussion. These two studies that
we've recently completed. One was completed on our health plan
administration or TPA business. That study clearly outlined on an
actual araild basis that we're saving nineteen percent for the
clients that we're serving, and we're doing that through a
(22:38):
combination of the way we manage the claims, the way
we manage care management, and the way we manage payment
integrity or managing around fraud, waste and abuse in the
healthcare system. Those levers that we're able to pull on
in an integrated company, those levers are driving of fairly
significant savings for our clients. And the second study that
(23:01):
I mentioned was one specifically in the well being space.
We went to a third party and we said, we
want to give you our data for half a dozen clients.
We want you to turn through that data and tell
us what it says about cost savings in particular, and
their conclusion relative to market averages is that we're driving
about six hundred and ninety dollars in cost savings across
(23:23):
our customer base, our users, the people who would roll
in our platform and you use the platform, versus the
market average. And so we know that we're able to
drive cost savings for our clients, and we think that
really matters. Now, we think a lot of things matter.
We think that matters. We think, you know, member experience matters,
and we think outcomes matter, and we think we're affecting
(23:45):
all three of those in a fairly significant way.
Speaker 1 (23:48):
And if you think about it in light of those
really positive numbers and outcomes, you know, where do you
get pushback in the story? You know, what is it
that maybe doesn't get you across the finish line? Is
there a commonality there?
Speaker 2 (24:04):
Right now? I would say the storyline is resonating with people.
I would say people are enthusiastic about the story. As
I said, you know a few minutes ago. I think
them adapting, they're buying behaviors to new possibilities is the key.
I think within HR communities they can be a little
(24:26):
risk averse at times. And you know haven't been involved
in the HR and benefits community for most of my career.
There's there can be a risk aversion to trying new things,
particularly in the large market UH. And so I think
you've got to prove your way into those those outcomes,
prove your way into you know, your ability to do
(24:47):
those things. So on one one twenty five, we'll launch
this integrated platform across all of our new new clients
that join us UH, and that will be the great
opportunity for us to show here's how the piece has
come to get other and here's the kind of experience
it creates. I have every confidence, you know, we'll do
an incredible job on that, and that will create an
(25:08):
even greater foundation for dialogue into one one twenty six
UH and beyond. So I'm very optimistic about employers and
what they're looking for. By the way, they have as
much need for change, right now as they ever have.
I mean, think about employers today. They're facing complexity, they're
(25:29):
facing ever increasing price tags around healthcare, and they're not
getting all of the outcomes they want. Just I just
think about mental health. You know, forty percent of people
who are who just responded to our survey said mental
health issues are affecting their ability to show up to work.
(25:50):
And so we we know employers are feeling the pressure
of those things. Costs, outcomes, experience really matter to them,
and so there's as much need for change, you know,
drivers of change for that group of buyers as there's
ever been, and we think that's really going to play
to our favor in that regard.
Speaker 1 (26:12):
So maybe thinking about that a little bit more. You know,
you talked about it, you know, the new people being
on the new platform one one twenty five, is that
also for all your legacy clients as well, or just
new clients.
Speaker 2 (26:22):
That is only for new clients. For legacy clients, will
move them at the right point in time when they
feel it's the right time to move them, whether they
come up for renewal or what have you. So we'll
put a roadmap in place for every one of our
existing clients at the same time got it.
Speaker 1 (26:38):
And so also thinking about those legacy clients, you know,
how do you what's your land and expand strategy, you know,
what's the tip of the spear in terms of getting
in the door and getting on then into the book
of business and then what do you typically where do
you find they gravitate to after maybe that initial service contract.
Speaker 2 (26:55):
Well, today, if you think about the two businesses and
where we evolve from, we have a great strength on
the health plan administration TPA side. We're the largest independent
player in that space and have an absolutely great foundation.
On the well being side, we similarly are well positioned
with you know, a very large customer set on that side.
(27:19):
So those are our two you know, centers of gravity,
if you will, and we believe there's an opportunity to
kind of land there and expand from there, and we'll
bring to you know, to those two solutions. We'll bring
each of those solutions to each other. But then we'll
also bring a navigation and advocacy capability, so we have
the ability to digitally direct people to better doctors. We
(27:41):
have the ability to help people navigate to the right
decisions around you know, healthcare cost management. We have the
ability to help people with complex billing situations, so we'll
do we'll cross sell or upsell navigation and advocacy, and
we have a great chronic condition management capability in both
(28:04):
of our organizations as well. We built out a diabetes prevention,
weight loss and hypertension capability installed in the platform that
people can buy into. At the same time, we think
we're well positioned to help people manage GLP one ones,
which has become a very hot topic. And then finally
(28:24):
we bring a partner ecosystem at the same time, and
that partner ecosystem seventy five partners that we're bringing through
our platform. That also creates an opportunity for us to upsell.
So we think there are lots of opportunities for us
to land and expand into other things that our clients
really care about. You know, I almost hesitate to use
(28:44):
the word upsell. I don't think of it as upsell.
I think of it as figure yeah, or even serving them,
you know, multifunctionally, Like the whole point of the platform
is to connect the disconnected. And you know, so that's
our it's not our sales stream, it's our service strategy,
it's our value strategy to clients. When they do that,
(29:05):
we think they get to better experience, better outcomes.
Speaker 1 (29:08):
So I wanted to come back to the golp one
conversation because we seem to spend a lot of time
on it in our team. What are you hearing from
your clients in relation to their appetite to let their
employees use these drugs and pay for these drugs? And
then can you talk maybe a little bit more broadly
about the solution set that you guys are offering.
Speaker 2 (29:26):
Yeah, I hear fear from my clients, and.
Speaker 1 (29:32):
Anything with a thousand dollars list price is gonna instill
that pretty quickly.
Speaker 2 (29:37):
And it was okay when it was just people who
were diagnosed with a diabetic situation because that wasn't an
enormous portion of the population. That was a small portion
of the population. And when it was a small portion
of the population, I think the feeling was we'd love
for them to have access to that drug to help
(29:58):
them manage that condition. And in the end, there's a
clear ROI on that to them. Now that it's become
recommended for obesity, that becomes a larger part of the population.
If it gets recommended for people with mental health situations
that becomes an even larger part of the population. And
I think the fear stems from the large percentage of
(30:20):
possible people who are part of employer's environments who now
become eligible for that drug at one thousand dollars a month,
And I think that's where the fear comes from. And
my sense is that employers are looking for help around
the onboarding strategy. How do we bring people that onto
(30:40):
that drug, how do we manage that drug while they're
on it to make sure they're using it and using
it effectively and doing all the other things you have
to do in order for it to be effective. And
then how do we offboard people from it at some
point in time as well? And I think employers are
trying to figure out who are the right solutions to
help them with that. I said, you know, we created
(31:02):
a condition management capability around diabetes and weight loss prevention.
It's a twelve month program that we put people through.
It engages people around pharmaceutical solutions and it helps them
and it helps employers to onboard people at the right
time for people to be in a more comprehensive program
rather than just taking the drug. We get them into
(31:25):
a twelve month program that we think drives better behaviors
and better outcomes when they're using when they're using those
kinds of pharmaceutical solutions.
Speaker 1 (31:35):
Interesting. So, you know, you brought up pharmaceuticals and I
spend a lot of time looking at the supply chain
and companies in the supply chain. Where do you think
the evolution of that market is going to go? And
maybe bifurcate it to you know, the high cost specialty drugs,
of which glp ones are you know, one corner of
the market. And then you know, we have our maintenance
or chronic condition drugs that the generics that are almost
(31:57):
ninety percent of scripts. How do you see pharmacy unfolding
over the next couple of years. And there's been a
proliferation there as well of different solutions, whether it's Amazon,
Mark Cuban, you know, maybe just talk through your views
on that. I'd love to get your perspective.
Speaker 2 (32:12):
Yeah, I think, like many things, there's a desire to
take the complex and make it simple, make it easier.
And I think, you know, if you take what Mark
Cuban's doing, I think at its core, that's what he's doing.
He's taking what others have made a complex environment, and
he's simplifying that environment to get to the actual value
(32:35):
and the actual you know, sort of root of how
should we be delivering these kinds of drugs, And that's
working in the generic environment. I think, you know, he'll
have an impact there, and I think solutions like that
will have an impact there. The second thing I'll say
is where market forces aren't capable of creating change, I
(32:57):
think regulatory forces will. I think there's a lot of
focus right now on the complexity of the pharmaceutical environment,
the rebate environment, and where value is both being created
and taken, and I think there is going to be
some regulatory change that really affects that marketplace in a
significant way. We're about to approach a time where you know,
(33:21):
the pharmaceutical side of healthcare will outpace the actual healthcare
delivery part of healthcare, and you know, as we reach
that tipping point, it'll be more and more focus on,
you know, how that gets delivered, whether it's being delivered efficiently,
whether it needs to be regulated in a different way.
So I think we're going to see a fairly significant
(33:43):
amount of change around the pharmacy side of things. Over
the course of the next five years. By the way,
I think that's good for our customers, because our customers
are wrestling with that issue. By the way, I think
our navigation solutions in that space will have to evolve
and get better in terms of directing people to the
right forms of care as it relates to pharmacy, and
(34:06):
so that will be an important part of our you know,
our development in R and D investment over the next
few years as well. Got it.
Speaker 1 (34:14):
Yeah, that's an interesting perspective. You know, I hadn't thought
about navigation and your business model through the lens of legislation.
Is there anything currently in the House or in Congress
that that you're paying particular attention to?
Speaker 2 (34:27):
Nothing specific that I'd say we're paying attention to. I mean,
obviously we're keeping track of, how, you know, the conversation
that's happening around pharmacy and healthcare in general. But there's
not a specific there's not one specific thing that we're
tracking right now that's super important to us.
Speaker 1 (34:45):
Got it, Well, maybe switching gears. You know, I'm a
financial analyst, and if I don't ask about numbers and
some some regard, I'm not doing my job. What are
some of the key KPIs that you're looking at, you know,
whether it's on a weekly, monthly, daily basis that that
kind of tracks the health of your busines.
Speaker 2 (35:00):
This. Yeah, obviously you know, we're a for profit business,
you know, and so we're obviously check tracking revenue growth.
That's a really important indicator for us. We think revenue
growth growth is really important. The underlying aspects of revenue
growth from my perspective, start with client retention. You have
to have very high client retention. We're a mid nineties
(35:21):
client retention performer at this point, which we think is
really good, very consistent with other SaaS based and tech
enabled companies. We think we need to be in that
kind of mid nineties retention rate. And then it's bookings.
Bookings is the next thing that we track. We have
very ambitious bookings objective every year. We never seem to
(35:46):
under club our bookings objective. So we care a lot
about signing new logos as well as expanding because we
think expansion starts to provide greater value to our client
and have a better impact on their outcomes and their people.
And so so revenue growth, bookings and retention, you know
kind of core on on that side, we care about profitability.
(36:08):
Profitability matters to us. It's partly why we're leveraging artificial intelligence.
We think that, you know, we might leap frog other
strategies like offshoring by leveraging artificial intelligence more comprehensively on
our platform. We believe, you know, we'll pick up far
fewer phone calls in the future. We think will provide
(36:30):
better support to people digitally through the technologies that we're
deploying in the platform. So you know, profitability is driven
by you know, those kinds of capabilities. And then scale
would be the other one. So AI is important, but
we will continue to scale as a you know, as
a over five hundred million dollar company, uh, you know,
(36:52):
headed towards a billion, We'll continue to scale the organization
that will get economies at scale and that will have
a tangible impact on our profitability. And so you know,
those things are important. And then I maybe last, but
not least, the mix of the business really matters. Certain
parts of the business create more profit than other parts
of the business, and we'll manage around that mix while
(37:12):
at the same time doing the right thing. And I'll
give you a great example. Our partner ecosystem is a
very effective tool for clients. It's a core part of
our personalization story and our consolidation story. It is not
the most profitable part of our business, and yet we
are super committed to it. It's growing very quickly. It's
(37:34):
an important part of our solution for clients. But you know,
so while we manage the mix, you know, certain things
produce higher profits than other things. But if you're a consolidator,
you've got to bring all of those capabilities to your clients.
Speaker 1 (37:47):
Now that makes a ton of sense. So I guess
if I heard you correctly, scale is probably the number
one key to driving operating leverage in the business.
Speaker 2 (37:54):
Maybe scale artificial intelligence and the deployment of technology. I mean,
I kind of left that one out, but we think
there's great opportunity to deploy enabling technologies that make us
a more efficient organization, less handoffs, less phone calls, less
warm transfers, less minutes on the phone by having the
(38:18):
technologies that put the information at the fingertips of anybody
who's serving an end member. And so technology will be
a really critical part of our future as it relates
to driving additional efficiencies.
Speaker 1 (38:32):
And is that where the majority of your capital investment
goes Yeah, I would.
Speaker 2 (38:36):
Say the capital investment is going into product development, So
we continue to be a very product driven organization. The
member experience is very important. We continue to enhance and
invest in the member experience. So if you're a well
being client today, we continue to make investments in that
platform to make it richer, to make the experience richer,
to bring new capabilities to it. So R and D
(38:58):
is important from a a core platform perspective, and then
the enabling tools will be the next piece. So so
think platform and then enabling tools around it, and artificial
intelligence is a sort of uh capability that will build
across everything that we do.
Speaker 1 (39:17):
That's great. So if we think about personifying a couple
of years time, where where do you want to take
the company? I guess you know, knowing that you have
some pretty big financial sponsors, you know, what do you
think is the as it stands today? What's the I
don't know if I want to call it an exit strategy,
but is there a liquidity event that you see for
seeing in the future or is it just business as
usual for now?
Speaker 2 (39:36):
Yeah, I would say it's business for as usual for now.
We're early on in the journey. I think we're well
positioned for multiple possible exit scenarios, whether it's going public,
or being acquired, or or just continuing to add you know,
more capabilities through acquisition and to grow, you know, from
(39:59):
our current I think there are lots of possibilities for
our future. I think because we've built such a powerful
core underlying platform, it creates you know, a ton of possibility.
We could be in the benefits administration space and be
an enrollment company, we could be in the virtual primary
care space in the foreseeable future. So the possibilities of
(40:25):
things that could be added to the core platform, added
to the twenty million lives added to the seventy five
hundred client base, like, we think, there are lots of
things that are possible. And it's partly what gets me
most excited about Personifying and its future is, you know,
I think the possibilities are endless for what we can do. Meanwhile,
(40:47):
by the way, Jonathan and I see this to every customer,
and in case there's a customer listening, I would say,
the first and foremost thing is they have given us
an accountability to liver is something for them today. They've
entrusted that to us. The first and foremost thing is
for us to continue and invest, to invest in those
(41:07):
things that matter most to them. If they have us
for well being, I want them to know I'm invested
in well being. If they have us for our TPA capability,
We're doubling down and investing in there. We're investing in
our navigation, advocacy, care management and condition management capabilities, and
so we'll continue to get better in those. There's a
(41:27):
ton of runway and a ton of opportunity for us
to continue to grow in those spaces before we do
anything else. But the possibilities on our platform are also,
you know, pretty significant.
Speaker 1 (41:40):
That's a that's a great summary there. So maybe just
summing it up, you know, there's a lot of optionality
in the business to go going forward in still early days.
Is that's fair to say?
Speaker 2 (41:50):
That is fair to say. We're bringing together two really
powerful capabilities, and I think, you know, the next the
next twelve months are going to be a very interesting
time the history of Personify.
Speaker 1 (42:02):
Well, that's great. We'll have to check in a year
plus from now.
Speaker 2 (42:05):
You know.
Speaker 1 (42:05):
One of the ways I like to end these conversations
is maybe just to bring it back to a personal
level and ask the speaker if they could share something
from their life that drives them, whether it's a lesson
or a philosophy. Is there something that guides you in
your day to day or how you approach the business.
Speaker 2 (42:22):
Yeah. I would say maybe two things on that front, Jonathan. I.
You know, first, I grew up in a world where
leading authentically was the core highest value of leadership, and
I've tried to bring that kind of authentic leadership style
to the companies that I've been leading, and with that
you create a culture of keeping it real with people
(42:45):
and making sure people understand there is a place that
cares about people. You know, we have a handful of values.
People matter is the first value we always talked about,
and so leading with authenticity has been a you know,
a cornerstone and of sort of my style and my
approach and what I think is important as I build
a company culture with the rest of my leadership team
(43:08):
in Peers. The second thing I would say is I
have learned that, like the career path isn't just an
up into the right career path. I've had that I
think people can look at your LinkedIn and go wow,
that's an amazing career path. And all people you know,
paing me occasionally from the past and say, boy, your
career has been amazing. Well, my career has been amazing,
(43:30):
but it's been some very difficult times combined with some
really amazing times. And so you know, I have found
that succeeding through failure and learning lessons from the most
difficult parts of your career path have really mattered to me.
And I've turned those into fuel instead of failure, and
(43:50):
that has been a very it's been a very great
lesson for me over the course of the last twenty
years in particular. And so like when people say, like
somebody pay me the other day and said, hey, I'm
taking a new job, what advice do you have, And
you know, oftentimes I'll say, hey, listen, man, you know,
take the failures and turn them into fuel. And it's
(44:11):
really important that you don't get stuck in those things
and you continue to grow as an individual and as
a leader going forward. So do that, and I always
remind him to, you know, be humble and authentic in
in what you do.
Speaker 1 (44:24):
Well, thank you, Chris, those are two great lessons. Thanks
for sharing. So I think we'll wrap it up here.
That was Chris Mahalik of Personify Health. I'd also like
to thank our listeners for joining us on our latest episode.
Please make sure you click the follow button on your
podcast app so you never miss a future discussion with
the leaders in healthcare innovation. I'm Jonathan Palmer, and you've
been listening to the vanguards of healthcare podcasts by Bloomberg Intelligence.
(44:49):
Until next time, take care, toss
Speaker 2 (45:16):
Us as
So welcome to another episode of the Vanguards of Healthcare podcast,
where we chat with the leaders at the forefront of
change in the healthcare industry. My name is Jonathan Palmer
and I'm a healthcare analyst at Bloomberg Intelligence, the in
house research arm of Bloomberg. We're happy to have Chris
Mahaalik joining us for today's episode. He's the CEO of
Personify Health and previously was the CEO of one of
(00:42):
its predecessor companies, Virgin Pulse. This isn't the first time
he's held the top role. Chris was also the CEO
of a Light and before that he had a long
career in consulting. Welcome to the podcast, Chris, Thanks Jonathan.
Speaker 2 (00:54):
Forward to our discussion.
Speaker 1 (00:56):
So why don't we get Why don't we kick it
off with what is Personify? And maybe let's start with
you know, it's two predecessor companies that are joined together
under a new brand. Why don't we talk about what
those two companies were and why all make sense together?
Speaker 2 (01:08):
Yeah. Personifi Health is a company that's focused predominantly on
the employer and health plan market to bring the experience
of healthcare together in a single platform that can be
personalized to the individual. We brought together two companies. We've
brought together what was Virgin Pulse, which was the leader
in the well being space, with health Coop, which was
(01:29):
the largest independent tpa UH And the intent behind this
company is to bring together all of the capabilities that
an employer that an employer needs for their employees to
manage their healthcare experience wherever they show up in that journey.
So whether they have an acute issue or a chronic
issue or an episodic issue, we want to be the
first place that they go in order to manage that
(01:52):
issue more effectively for themselves and for them for their family.
Speaker 1 (01:56):
So maybe simplistically, how does how does one plus one
equal three?
Speaker 2 (02:00):
Here?
Speaker 1 (02:00):
You know what capabilities are. How are you going to
market differently than maybe the two legacy companies were previously.
Speaker 2 (02:07):
Yeah, I think predominantly we're a very important consolidation play.
As you know, in the healthcare industry and in particular
in the employer market, there's been a proliferation of solutions
and complexity that's been introduced into that environment, and we
see ourselves as breaking through that noise in order to
make the overall experience to the individual better and more
(02:31):
effective in helping them manage their overall healthcare. So we
see ourselves as a consolidator and we're taking everything from
the health plan administration portion of healthcare. How you know
where your claims get process, how your claims get process,
how you interface around those, you know what your you
know what your claims experience is connecting that to well
(02:54):
being navigation and advocacy, care management and chronic condition management,
so that no matter where you are in that journey,
you have a single place to go. We say that,
you know, we're connecting the disconnected. We're taking the experiences
that have previously been across a number of different websites.
We just actually did a survey and the survey said
(03:16):
people are having to go to upwards of five and
six websites in order to manage their health more effectively.
Our intent is to connect the disconnected pieces and bring
them all together in a single, world class experience.
Speaker 1 (03:28):
So how do you do that for the employer and
then maybe probably more importantly for the member, how do
you how do you actually address that complexity? If I'm
a member who my employers contracted with personify, what do
I see.
Speaker 2 (03:40):
Yeah today today? You probably see some independent pieces a
well being solution, an advocacy solution, and a TPA solution.
But as one one twenty five, as we bring that
entire experience together, it will be on a single It'll
be on a single experience. So you could go in,
for example, and be prompted to be thinking about a
(04:04):
particular portion of your healthcare journey, like maybe we know
from claims data that you're dealing with an MSK issue,
and we might prompt you with information about that MSK
issue and tell you about a healthy habit that you
could use. But we might also direct you into our
partner ecosystem and have you talk with Hinge or Sword
or KaiA, one of our partners who are a specialist
(04:26):
in that care condition. Or we might call you directly
with one of our care management agents to direct your
care pathway to physical therapy rather than to a surgical solution.
And so I think what people are going to experience
is the ability to navigate through both digital assets as
well as high touch assets to the right form of
(04:49):
care wherever they are in that journey.
Speaker 1 (04:52):
And so one of the things that fascinate me about
this concept is how do you pick up that signal
that maybe I should be going to a hinge or
a sword. You know, how does that work in the background.
Speaker 2 (05:03):
Yeah, what will happen in the background is we'll see
the kinds of behaviors. First of all, I should say
we've been collecting data on the number on the people
who participate in our platform on a fairly regular basis,
and so we've learned a lot about them. We've learned
about their claims history, we've learned about their pharmaceutical history,
(05:25):
we've learned about their habits through devices and the information
we collect on those devices. Then we're deploying a number
of models that help us direct that more personal experience.
So what we describe as a thousand predictive models that
are running in the background to help people take the
next best action as it relates to their healthcare. And
so we'll be prompting people through the platform itself. Through
(05:48):
their experience on our platform, they'll see what is the
right thing for them to do next as it relates
to healthcare. But we'll also be sending that information to
our care management team and to our coaches who are
interfacing with people on a more relational level to help
direct their points of care, and so I think connecting
(06:10):
those disconnected experiences and making sure that the data that
comes into the system is being leveraged in order to
direct people towards the right kind of care is really important.
And I think those are the pieces that have to
come together. And again, it's a thousand predictive models. We're
using artificial intelligence to do that, and we're using both
a digital and a personal way of communicating to people.
Speaker 1 (06:33):
Maybe let's dive into that piece on the artificial intelligence.
Can you talk a little bit about what you're deploying
in that arena.
Speaker 2 (06:41):
Yeah, we're using artificial intelligence in a number of ways
at Personify. We're using it in our call center environment
to create a more efficient chat experience, if you will,
or member experience, so that there are a number of
participants who won't even have to talk with somebody if
they don't need to. We'll find ways through artificial intelligence
(07:01):
to meet their needs in a fully digital fashion. We're
doing it through our website by providing information to them
in a proactive fashion based on data points that we
pick up. And then we'll also be using artificial intelligence
as a core way of driving the personalization engine. And
(07:21):
I think that's probably the most important component. So at Personify,
you know, we're staking kind of the company on personalization.
If you can make the healthcare experience we're personal to
the individual, they'll be more likely to engage around their
healthcare and take the proper actions to get to better
healthcare outcomes. We think that's critically important. And so the
(07:43):
predictive engines that we're building based on artificial intelligence will
teach us about that individual person. That data will be
used to render up the right information to them at
the right time, given where they're at. And so we
think that that's the kind of the underlying critical component
of personalization.
Speaker 1 (08:05):
And if you take a step back from the employer perspective,
how did they see this evolution in terms of the
personalization of the care? I mean, what's the win win
for the employer other than you know, I could think
of some of the easy ones, but I'd love to
hear your perspective.
Speaker 2 (08:20):
Yeah, I think I think employers are really wrestling with
three things. Predominantly. I think they wrestle with cost, I
think they wrestle with outcomes, and I think they wrestle
with experience. I think those are you know, if an
employer can help solve those three things. If I can
create a better experience, if I can get better outcomes
from my people, and lower the overall cost of healthcare delivery.
(08:41):
I think those are the three critical measurement points. We
think we're impacting all three of those, just on the
cost side. We just did a study that demonstrates our
ability to save about seven hundred dollars per participant by
helping them focus on their preventative healthcare. We did a
second study in our Health plan administration business or TPA business,
(09:04):
where we're demonstrating upwards of nineteen percent cost savings on
a like for like basis against industry averages in terms
of overall cost savings. So we think we're demonstrating very
clear cost savings to our clients. We're doing that by
helping people make good decisions about their healthcare, better decisions
(09:25):
about care management pathways, making sure that their doctors are
billing them more effectively, making sure they're getting to the
right kind of provider, the highest quality, lowest cost provider,
and directing those kind of navigating them to those right solutions.
Those are leading to better outcomes, and we can show
three to one improvement in outcomes for people who are
(09:48):
using the platform, and then, last but not least, probably
most importantly, in some ways, the overall experience has to
be better for the individual member. I mentioned earlier, people
are being forced to go to sites for multiple points
of care, and what we're trying to do is unite
those together in a single experience. We think we're actually
very well positioned in that regard. Our platform has an
(10:11):
over fifty percent engagement rate. It means people are participating
in the platform on a regular basis. We see them
coming into the platform more than a dozen times a
month and six times a day. In those cases, they'll
have six interactions with the platform. That level of engagement
is enabling us to affect outcomes and then get to cost.
(10:33):
And so it all starts with engagement at some point
as people use our platform for various aspects of healthcare management.
Speaker 1 (10:41):
So if we think about the evolution of navigation, I
mean there's been this proliferation of solutions, right, some of
the companies you mentioned on the MUSCO skeletal didn't exist
a decade ago, right, you know, as employers have been
forced to deal with all these different options and proliferation
of these solutions. It seems like navigation's key to just
being successful in dealing with their members managing their members'
(11:03):
healthcare costs from both a cost perspective and from a
critical outcomes perspective. So is it table spakes now to
use navigation for you know, as kind of the tip
of the spear for your business or for the industry
at large? Or how has the evolution of the market
changed in the last five or ten years.
Speaker 2 (11:22):
Yeah, I think what we've seen, as you rightly pointed out,
is the proliferation of these solutions. They've come from everywhere.
And it's funny. I went to a conference, one of
the very large healthcare conferences year about a year and
a half ago, and I said to myself as I
left the conference, I see two trends coming out of
this conference. One that there will be consolidation. There has
(11:47):
to be consolidation, and two there will be continued proliferation.
Like I think both things are going to coexist in
the world. There's always going to be innovators, and innovators
are always going to be creating new applications. There's three
hundred and fifty thousand healthcare apps that exist in the
world today. There will be more, not fewer. Some will
(12:08):
go away, but many more will get created. But there
will be consolidation. Employers will be you know, they are
forced to kind of deal with the needs for consolidation
in order to make that experience better for their people.
And there's just only so many solutions that you can
even integrate and track the ROI and see that they're
(12:30):
creating value. So I've been I've had this core belief
around consolidation for probably upwards of six years across you know,
three different companies now, the belief that consolidation has to
happen in order for employers to have a good experience.
And so I think navigation is a critical part of consolidation.
(12:52):
I think the consolidators in the marketplace, and we think
will be one of the leaders in that space, have
to create a way to make it easier to access
and for people to know which of these solutions will
be most value to them. So consolidation in and of
itself is not effective. The consolidation with insight and navigation,
(13:13):
we think is really powerful and will have a huge
impact on people's ability to manage you know, a larger
set of solutions on behalf of employers.
Speaker 1 (13:22):
So how do you see that unfolding? Because I think
I was at the same conference and I came to
the same conclusion that you know, there's four booths and
they're all doing the same thing, right next to each other,
and nobody has a lot of capital, and they're on pilots,
and you can see where this is eventually going to
wind up. But you know, as I think about navigators
and I think about the slides with all the logos
of all the different players across the ecosystem, do you
(13:45):
see the consolidation of those logos or do you see
consolidation even among the navigation companies themselves.
Speaker 2 (13:52):
Yeah, I think navigation is a space that's still one
of the faster growing spaces in the healthcare ecosystem. I
think it's a space that will continue to expand. Actually,
the the total green field opportunity across employers and navigation
is still incredibly large, and so lots of opportunity for
that to continue to grow. But with respect to the
(14:17):
field of players, I do think there should there can
be consolidation in that field. Uh you know. I interestingly enough,
a lot of partners reach out to Personify because we've
become a great foundation for distributing solutions. And you know,
I had one the other day come to me, and
I thought they were going to be another MSK provider,
(14:38):
and it turned out they weren't actually an MSK digital provider.
They were a digital you know, navigator in the MSK environment,
and I thought, wow, now we're really getting there, which
you know, now that's a whole nother, you know, a
whole other capability set. I do think there has to
be consolidation. I do think they're you know, in a
(15:00):
any industry, it starts with many solutions, and typically you know,
it starts to consolidate into a handful of the best
players in the industry. And I think the best players
are going to have to prove really strong ROI they're
going to have to create, you know, an absolutely great experience,
and they're going to have to actually impact outcomes. And
I think if they do those three things well, they'll
(15:22):
end up being the winners in their individual spaces. At Personify,
we're trying to manage to which of these partners adds
the greatest value to our clients set. And you know,
our intention isn't to create winners and losers, but we
do think, you know, there are certain leading players in
a space, and we want to make sure that our
clients have access to those leading players.
Speaker 1 (15:45):
Now that makes a ton of sense. Maybe that's a
good jumping off point. Just to talk about your scale.
Can you share some numbers with us in terms of
your size, whether it's members or clients, revenues, that sort
of thing.
Speaker 2 (15:55):
Yeah, we're currently serving seventy five hundred customers today, doing
about one thousand of those directly and a number through
our health planned partners, and so a very large clients
that we're serving about twenty five percent, just shy of
twenty five percent of the fortune five hundred. So we
have a number of very large clients. In our book
(16:16):
of business. We have about twenty million members just shy
of twenty million members on our platform as well, and
so that's the combined platforms of the TPA business that
we acquired last year as well as the historic well
Being business. But across that twenty million members who are
using our platforms in some way, shape or form. And
(16:36):
so we're a very large scaled organization in that regard.
And you know, I think one of the own you know,
there are very few health tech companies of our size
and scale and scope, and so I think it's putting
us in a great position to continue to lead in
the marketplace, particularly now with this more comprehensive set of capabilities.
Speaker 1 (16:59):
If you think about that, you know, how is your
mandate in your in your role changed. You know, now
that you have the health comp and the TPA asset
under your umbrella.
Speaker 2 (17:10):
We're playing a much more significant role in core health
plan administration today than we were in the past. That
has changed sort of the set of competencies that we need.
Like if I look at the two companies, one was
more of a tech enabled service and the other one
was a SaaS based software company, And there's different core
(17:30):
competencies in those two companies. And here's what I think
is great about the combination. The SaaS based software company
had a tremendous core of engineering and product development capability.
We're bringing those capabilities into the TPA business and most
TPA businesses don't have a lot of that. They're more
(17:50):
services based. And I think it's going to be one
of the things that really sets us apart, bringing a
very advanced, very tech, tech forward innovation capability into the TPA.
Capability I think is going to really push us forward
well beyond where our competitors are today. For example, you know,
and I mentioned we'll create a world class user experience.
(18:13):
Very few TPAs offer a world class user experience. Very
few healthcare companies in general have really captured what engages
people effectively, and we've done that well. We'll bring that
capability across everything that we do now, and I think
it will start to connect the box, you know, connect
the dots for people across their healthcare experience. I think
(18:37):
those that's the power of these two companies coming together,
bringing you know, deep innovation and technology on that side,
by the way, deep health plan expertise on the other side,
they you know, the TPA side of our business, new
healthcare and the absolute depths of healthcare more deeply than
we did on this side. And so we've become a
(18:59):
much more insightful healthcare company with this incredible world class
technology capability. And I think that combination is super powerful.
Speaker 1 (19:09):
So how the tenor of I guess conversations with clients
or even maybe prospective clients changed since that that's occurred.
Speaker 2 (19:18):
Yeah, about a month after we made the announcement, I
had a chance to sit down with a handful of
clients and I walked them through the storyline. I walked
them through the capabilities that we were bringing together and
how those would fit together in a single company. And
one of the clients in that session, at the end
(19:39):
of that talk said, I have twenty two vendors that
are currently doing what you're suggesting you'll be able to do.
And if you can do what twenty two vendors are
doing today in a single platform with a single capability,
that's groundbreaking for US, Like, that's a massive change for
US and opens up a ton of possibilities for us US.
(20:01):
And so I think that employers see a tremendous amount
of potential in these capabilities coming together. Now, those sane
employers are accustomed to buying you know, product A, product B,
product C, product D from different RFPs and different influencers, brokers, etc.
(20:22):
I think those buyers are going to have to change
some of their behavior as well. They're going to have
to think in a more integrated fashion. They're going to
have to say, hey, I can get well being, navigation,
and plan management all from a single provider, and it's
going to require some rewiring of the way they think
about what's possible in the healthcare ecosystem, and you know,
(20:44):
we're starting to have those conversations with clients each and
every day. I think they love the concept, they love
the idea. We just had our large client conference we
call it Thrive. We had six hundred people participate in
that conference, and I think they really embraced a message
of these capabilities coming together and now they've got to
think through how do I, you know, practically execute on
(21:07):
that over the course of the next couple of years.
Speaker 1 (21:10):
So what do you have to show them in terms
of an ROI or from a product perspective, and how
long does that selling cycle typically last? You know, I
think they're like you said, there's a lot of different
options out there is in a lot of different ways
to execute on member benefits. So I'd love to hear
your perspective on just how you see it unfolding over
the next year or two from a selling perspective.
Speaker 2 (21:33):
Yeah, I think, well, we're in the heart of selling
season right now for mid and small employers. Like if
I think about one one twenty five, for a mid
and small employer, they're probably in the heart of making
some decisions about their healthcare plan for one one twenty five.
If you're a very large employer, you probably that ship
has sailed. You're probably thinking more long term around one
(21:54):
one twenty six. Uh. And so we're sort of engaging
with clients where they are in their own you know,
buying process and so forth. But I think the story
that we're talking with them about, we're talking about the
integrated experience, the single platform capability set. We're talking a
lot about personalization and how personalization drives better outcomes. And
(22:17):
then we are spending a bunch of time on ROI.
I mentioned earlier in the discussion. These two studies that
we've recently completed. One was completed on our health plan
administration or TPA business. That study clearly outlined on an
actual araild basis that we're saving nineteen percent for the
clients that we're serving, and we're doing that through a
(22:38):
combination of the way we manage the claims, the way
we manage care management, and the way we manage payment
integrity or managing around fraud, waste and abuse in the
healthcare system. Those levers that we're able to pull on
in an integrated company, those levers are driving of fairly
significant savings for our clients. And the second study that
(23:01):
I mentioned was one specifically in the well being space.
We went to a third party and we said, we
want to give you our data for half a dozen clients.
We want you to turn through that data and tell
us what it says about cost savings in particular, and
their conclusion relative to market averages is that we're driving
about six hundred and ninety dollars in cost savings across
(23:23):
our customer base, our users, the people who would roll
in our platform and you use the platform, versus the
market average. And so we know that we're able to
drive cost savings for our clients, and we think that
really matters. Now, we think a lot of things matter.
We think that matters. We think, you know, member experience matters,
and we think outcomes matter, and we think we're affecting
(23:45):
all three of those in a fairly significant way.
Speaker 1 (23:48):
And if you think about it in light of those
really positive numbers and outcomes, you know, where do you
get pushback in the story? You know, what is it
that maybe doesn't get you across the finish line? Is
there a commonality there?
Speaker 2 (24:04):
Right now? I would say the storyline is resonating with people.
I would say people are enthusiastic about the story. As
I said, you know a few minutes ago. I think
them adapting, they're buying behaviors to new possibilities is the key.
I think within HR communities they can be a little
(24:26):
risk averse at times. And you know haven't been involved
in the HR and benefits community for most of my career.
There's there can be a risk aversion to trying new things,
particularly in the large market UH. And so I think
you've got to prove your way into those those outcomes,
prove your way into you know, your ability to do
(24:47):
those things. So on one one twenty five, we'll launch
this integrated platform across all of our new new clients
that join us UH, and that will be the great
opportunity for us to show here's how the piece has
come to get other and here's the kind of experience
it creates. I have every confidence, you know, we'll do
an incredible job on that, and that will create an
(25:08):
even greater foundation for dialogue into one one twenty six
UH and beyond. So I'm very optimistic about employers and
what they're looking for. By the way, they have as
much need for change, right now as they ever have.
I mean, think about employers today. They're facing complexity, they're
(25:29):
facing ever increasing price tags around healthcare, and they're not
getting all of the outcomes they want. Just I just
think about mental health. You know, forty percent of people
who are who just responded to our survey said mental
health issues are affecting their ability to show up to work.
(25:50):
And so we we know employers are feeling the pressure
of those things. Costs, outcomes, experience really matter to them,
and so there's as much need for change, you know,
drivers of change for that group of buyers as there's
ever been, and we think that's really going to play
to our favor in that regard.
Speaker 1 (26:12):
So maybe thinking about that a little bit more. You know,
you talked about it, you know, the new people being
on the new platform one one twenty five, is that
also for all your legacy clients as well, or just
new clients.
Speaker 2 (26:22):
That is only for new clients. For legacy clients, will
move them at the right point in time when they
feel it's the right time to move them, whether they
come up for renewal or what have you. So we'll
put a roadmap in place for every one of our
existing clients at the same time got it.
Speaker 1 (26:38):
And so also thinking about those legacy clients, you know,
how do you what's your land and expand strategy, you know,
what's the tip of the spear in terms of getting
in the door and getting on then into the book
of business and then what do you typically where do
you find they gravitate to after maybe that initial service contract.
Speaker 2 (26:55):
Well, today, if you think about the two businesses and
where we evolve from, we have a great strength on
the health plan administration TPA side. We're the largest independent
player in that space and have an absolutely great foundation.
On the well being side, we similarly are well positioned
with you know, a very large customer set on that side.
(27:19):
So those are our two you know, centers of gravity,
if you will, and we believe there's an opportunity to
kind of land there and expand from there, and we'll
bring to you know, to those two solutions. We'll bring
each of those solutions to each other. But then we'll
also bring a navigation and advocacy capability, so we have
the ability to digitally direct people to better doctors. We
(27:41):
have the ability to help people navigate to the right
decisions around you know, healthcare cost management. We have the
ability to help people with complex billing situations, so we'll
do we'll cross sell or upsell navigation and advocacy, and
we have a great chronic condition management capability in both
(28:04):
of our organizations as well. We built out a diabetes prevention,
weight loss and hypertension capability installed in the platform that
people can buy into. At the same time, we think
we're well positioned to help people manage GLP one ones,
which has become a very hot topic. And then finally
(28:24):
we bring a partner ecosystem at the same time, and
that partner ecosystem seventy five partners that we're bringing through
our platform. That also creates an opportunity for us to upsell.
So we think there are lots of opportunities for us
to land and expand into other things that our clients
really care about. You know, I almost hesitate to use
(28:44):
the word upsell. I don't think of it as upsell.
I think of it as figure yeah, or even serving them,
you know, multifunctionally, Like the whole point of the platform
is to connect the disconnected. And you know, so that's
our it's not our sales stream, it's our service strategy,
it's our value strategy to clients. When they do that,
(29:05):
we think they get to better experience, better outcomes.
Speaker 1 (29:08):
So I wanted to come back to the golp one
conversation because we seem to spend a lot of time
on it in our team. What are you hearing from
your clients in relation to their appetite to let their
employees use these drugs and pay for these drugs? And
then can you talk maybe a little bit more broadly
about the solution set that you guys are offering.
Speaker 2 (29:26):
Yeah, I hear fear from my clients, and.
Speaker 1 (29:32):
Anything with a thousand dollars list price is gonna instill
that pretty quickly.
Speaker 2 (29:37):
And it was okay when it was just people who
were diagnosed with a diabetic situation because that wasn't an
enormous portion of the population. That was a small portion
of the population. And when it was a small portion
of the population, I think the feeling was we'd love
for them to have access to that drug to help
(29:58):
them manage that condition. And in the end, there's a
clear ROI on that to them. Now that it's become
recommended for obesity, that becomes a larger part of the population.
If it gets recommended for people with mental health situations
that becomes an even larger part of the population. And
I think the fear stems from the large percentage of
(30:20):
possible people who are part of employer's environments who now
become eligible for that drug at one thousand dollars a month,
And I think that's where the fear comes from. And
my sense is that employers are looking for help around
the onboarding strategy. How do we bring people that onto
(30:40):
that drug, how do we manage that drug while they're
on it to make sure they're using it and using
it effectively and doing all the other things you have
to do in order for it to be effective. And
then how do we offboard people from it at some
point in time as well? And I think employers are
trying to figure out who are the right solutions to
help them with that. I said, you know, we created
(31:02):
a condition management capability around diabetes and weight loss prevention.
It's a twelve month program that we put people through.
It engages people around pharmaceutical solutions and it helps them
and it helps employers to onboard people at the right
time for people to be in a more comprehensive program
rather than just taking the drug. We get them into
(31:25):
a twelve month program that we think drives better behaviors
and better outcomes when they're using when they're using those
kinds of pharmaceutical solutions.
Speaker 1 (31:35):
Interesting. So, you know, you brought up pharmaceuticals and I
spend a lot of time looking at the supply chain
and companies in the supply chain. Where do you think
the evolution of that market is going to go? And
maybe bifurcate it to you know, the high cost specialty drugs,
of which glp ones are you know, one corner of
the market. And then you know, we have our maintenance
or chronic condition drugs that the generics that are almost
(31:57):
ninety percent of scripts. How do you see pharmacy unfolding
over the next couple of years. And there's been a
proliferation there as well of different solutions, whether it's Amazon,
Mark Cuban, you know, maybe just talk through your views
on that. I'd love to get your perspective.
Speaker 2 (32:12):
Yeah, I think, like many things, there's a desire to
take the complex and make it simple, make it easier.
And I think, you know, if you take what Mark
Cuban's doing, I think at its core, that's what he's doing.
He's taking what others have made a complex environment, and
he's simplifying that environment to get to the actual value
(32:35):
and the actual you know, sort of root of how
should we be delivering these kinds of drugs, And that's
working in the generic environment. I think, you know, he'll
have an impact there, and I think solutions like that
will have an impact there. The second thing I'll say
is where market forces aren't capable of creating change, I
(32:57):
think regulatory forces will. I think there's a lot of
focus right now on the complexity of the pharmaceutical environment,
the rebate environment, and where value is both being created
and taken, and I think there is going to be
some regulatory change that really affects that marketplace in a
significant way. We're about to approach a time where you know,
(33:21):
the pharmaceutical side of healthcare will outpace the actual healthcare
delivery part of healthcare, and you know, as we reach
that tipping point, it'll be more and more focus on,
you know, how that gets delivered, whether it's being delivered efficiently,
whether it needs to be regulated in a different way.
So I think we're going to see a fairly significant
(33:43):
amount of change around the pharmacy side of things. Over
the course of the next five years. By the way,
I think that's good for our customers, because our customers
are wrestling with that issue. By the way, I think
our navigation solutions in that space will have to evolve
and get better in terms of directing people to the
right forms of care as it relates to pharmacy, and
(34:06):
so that will be an important part of our you know,
our development in R and D investment over the next
few years as well. Got it.
Speaker 1 (34:14):
Yeah, that's an interesting perspective. You know, I hadn't thought
about navigation and your business model through the lens of legislation.
Is there anything currently in the House or in Congress
that that you're paying particular attention to?
Speaker 2 (34:27):
Nothing specific that I'd say we're paying attention to. I mean,
obviously we're keeping track of, how, you know, the conversation
that's happening around pharmacy and healthcare in general. But there's
not a specific there's not one specific thing that we're
tracking right now that's super important to us.
Speaker 1 (34:45):
Got it, Well, maybe switching gears. You know, I'm a
financial analyst, and if I don't ask about numbers and
some some regard, I'm not doing my job. What are
some of the key KPIs that you're looking at, you know,
whether it's on a weekly, monthly, daily basis that that
kind of tracks the health of your busines.
Speaker 2 (35:00):
This. Yeah, obviously you know, we're a for profit business,
you know, and so we're obviously check tracking revenue growth.
That's a really important indicator for us. We think revenue
growth growth is really important. The underlying aspects of revenue
growth from my perspective, start with client retention. You have
to have very high client retention. We're a mid nineties
(35:21):
client retention performer at this point, which we think is
really good, very consistent with other SaaS based and tech
enabled companies. We think we need to be in that
kind of mid nineties retention rate. And then it's bookings.
Bookings is the next thing that we track. We have
very ambitious bookings objective every year. We never seem to
(35:46):
under club our bookings objective. So we care a lot
about signing new logos as well as expanding because we
think expansion starts to provide greater value to our client
and have a better impact on their outcomes and their people.
And so so revenue growth, bookings and retention, you know
kind of core on on that side, we care about profitability.
(36:08):
Profitability matters to us. It's partly why we're leveraging artificial intelligence.
We think that, you know, we might leap frog other
strategies like offshoring by leveraging artificial intelligence more comprehensively on
our platform. We believe, you know, we'll pick up far
fewer phone calls in the future. We think will provide
(36:30):
better support to people digitally through the technologies that we're
deploying in the platform. So you know, profitability is driven
by you know, those kinds of capabilities. And then scale
would be the other one. So AI is important, but
we will continue to scale as a you know, as
a over five hundred million dollar company, uh, you know,
(36:52):
headed towards a billion, We'll continue to scale the organization
that will get economies at scale and that will have
a tangible impact on our profitability. And so you know,
those things are important. And then I maybe last, but
not least, the mix of the business really matters. Certain
parts of the business create more profit than other parts
of the business, and we'll manage around that mix while
(37:12):
at the same time doing the right thing. And I'll
give you a great example. Our partner ecosystem is a
very effective tool for clients. It's a core part of
our personalization story and our consolidation story. It is not
the most profitable part of our business, and yet we
are super committed to it. It's growing very quickly. It's
(37:34):
an important part of our solution for clients. But you know,
so while we manage the mix, you know, certain things
produce higher profits than other things. But if you're a consolidator,
you've got to bring all of those capabilities to your clients.
Speaker 1 (37:47):
Now that makes a ton of sense. So I guess
if I heard you correctly, scale is probably the number
one key to driving operating leverage in the business.
Speaker 2 (37:54):
Maybe scale artificial intelligence and the deployment of technology. I mean,
I kind of left that one out, but we think
there's great opportunity to deploy enabling technologies that make us
a more efficient organization, less handoffs, less phone calls, less
warm transfers, less minutes on the phone by having the
(38:18):
technologies that put the information at the fingertips of anybody
who's serving an end member. And so technology will be
a really critical part of our future as it relates
to driving additional efficiencies.
Speaker 1 (38:32):
And is that where the majority of your capital investment
goes Yeah, I would.
Speaker 2 (38:36):
Say the capital investment is going into product development, So
we continue to be a very product driven organization. The
member experience is very important. We continue to enhance and
invest in the member experience. So if you're a well
being client today, we continue to make investments in that
platform to make it richer, to make the experience richer,
to bring new capabilities to it. So R and D
(38:58):
is important from a a core platform perspective, and then
the enabling tools will be the next piece. So so
think platform and then enabling tools around it, and artificial
intelligence is a sort of uh capability that will build
across everything that we do.
Speaker 1 (39:17):
That's great. So if we think about personifying a couple
of years time, where where do you want to take
the company? I guess you know, knowing that you have
some pretty big financial sponsors, you know, what do you
think is the as it stands today? What's the I
don't know if I want to call it an exit strategy,
but is there a liquidity event that you see for
seeing in the future or is it just business as
usual for now?
Speaker 2 (39:36):
Yeah, I would say it's business for as usual for now.
We're early on in the journey. I think we're well
positioned for multiple possible exit scenarios, whether it's going public,
or being acquired, or or just continuing to add you know,
more capabilities through acquisition and to grow, you know, from
(39:59):
our current I think there are lots of possibilities for
our future. I think because we've built such a powerful
core underlying platform, it creates you know, a ton of possibility.
We could be in the benefits administration space and be
an enrollment company, we could be in the virtual primary
care space in the foreseeable future. So the possibilities of
(40:25):
things that could be added to the core platform, added
to the twenty million lives added to the seventy five
hundred client base, like, we think, there are lots of
things that are possible. And it's partly what gets me
most excited about Personifying and its future is, you know,
I think the possibilities are endless for what we can do. Meanwhile,
(40:47):
by the way, Jonathan and I see this to every customer,
and in case there's a customer listening, I would say,
the first and foremost thing is they have given us
an accountability to liver is something for them today. They've
entrusted that to us. The first and foremost thing is
for us to continue and invest, to invest in those
(41:07):
things that matter most to them. If they have us
for well being, I want them to know I'm invested
in well being. If they have us for our TPA capability,
We're doubling down and investing in there. We're investing in
our navigation, advocacy, care management and condition management capabilities, and
so we'll continue to get better in those. There's a
(41:27):
ton of runway and a ton of opportunity for us
to continue to grow in those spaces before we do
anything else. But the possibilities on our platform are also,
you know, pretty significant.
Speaker 1 (41:40):
That's a that's a great summary there. So maybe just
summing it up, you know, there's a lot of optionality
in the business to go going forward in still early days.
Is that's fair to say?
Speaker 2 (41:50):
That is fair to say. We're bringing together two really
powerful capabilities, and I think, you know, the next the
next twelve months are going to be a very interesting
time the history of Personify.
Speaker 1 (42:02):
Well, that's great. We'll have to check in a year
plus from now.
Speaker 2 (42:05):
You know.
Speaker 1 (42:05):
One of the ways I like to end these conversations
is maybe just to bring it back to a personal
level and ask the speaker if they could share something
from their life that drives them, whether it's a lesson
or a philosophy. Is there something that guides you in
your day to day or how you approach the business.
Speaker 2 (42:22):
Yeah. I would say maybe two things on that front, Jonathan. I.
You know, first, I grew up in a world where
leading authentically was the core highest value of leadership, and
I've tried to bring that kind of authentic leadership style
to the companies that I've been leading, and with that
you create a culture of keeping it real with people
(42:45):
and making sure people understand there is a place that
cares about people. You know, we have a handful of values.
People matter is the first value we always talked about,
and so leading with authenticity has been a you know,
a cornerstone and of sort of my style and my
approach and what I think is important as I build
a company culture with the rest of my leadership team
(43:08):
in Peers. The second thing I would say is I
have learned that, like the career path isn't just an
up into the right career path. I've had that I
think people can look at your LinkedIn and go wow,
that's an amazing career path. And all people you know,
paing me occasionally from the past and say, boy, your
career has been amazing. Well, my career has been amazing,
(43:30):
but it's been some very difficult times combined with some
really amazing times. And so you know, I have found
that succeeding through failure and learning lessons from the most
difficult parts of your career path have really mattered to me.
And I've turned those into fuel instead of failure, and
(43:50):
that has been a very it's been a very great
lesson for me over the course of the last twenty
years in particular. And so like when people say, like
somebody pay me the other day and said, hey, I'm
taking a new job, what advice do you have, And
you know, oftentimes I'll say, hey, listen, man, you know,
take the failures and turn them into fuel. And it's
(44:11):
really important that you don't get stuck in those things
and you continue to grow as an individual and as
a leader going forward. So do that, and I always
remind him to, you know, be humble and authentic in
in what you do.
Speaker 1 (44:24):
Well, thank you, Chris, those are two great lessons. Thanks
for sharing. So I think we'll wrap it up here.
That was Chris Mahalik of Personify Health. I'd also like
to thank our listeners for joining us on our latest episode.
Please make sure you click the follow button on your
podcast app so you never miss a future discussion with
the leaders in healthcare innovation. I'm Jonathan Palmer, and you've
been listening to the vanguards of healthcare podcasts by Bloomberg Intelligence.
(44:49):
Until next time, take care, toss
Speaker 2 (45:16):
Us as
Host
Jonathan Palmer
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