What Does Hospital at Home Need Beyond an App?

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0:00 In MedTech, the difference between a good quarter and a great one isn't always the product. It's the friction standing in the way. Broken sales cycles, misaligned teams, deals that stall at the finish line. Every leader feels it, and the best ones know how to remove it. Welcome to Zero Friction, the podcast where we go inside the minds of MedTech's top commercial leaders to uncover the real barriers they face, the decisions they make, and the systems they build to keep the revenue moving. I'm your host, Terry Coutsolioutsos. Let's remove some friction.

Welcome to the Zero Friction Podcast. This is Terry Coutsolioutsos, and I have another exciting guest today, Josh Garrison, who is the co-founder of Village Health Systems. And Village Health Systems in its current state is an EMR platform that's doing its own purpose of changing health care, but more importantly, it's setting up for a bigger transformation on how urgent care may be delivered in the future. So, Josh, if you could, just give us a little background on yourself, and then take us up to speed where Village Health Systems is today.

Yeah, hey, Terry. It's a pleasure to be here. So, my name is Josh Garrison, and I've spent kind of the last 10 years working in big tech, kind of at the intersection between tech and operations. And really growing up with a lot of family, parents, and aunts and uncles in the health care space, and also as a consumer myself, I kind of started to view health care as an area where there's a lot of addressable um and you know, we could start to rethink how to improve the patient experience. And so, this was kind of an interest of mine personally. And then when COVID came about, I think that was a really good at scale stress test saying, "Hey, you know, this system doesn't work." You know, we had SLAs from a wait time perspective going and going in the wrong direction. We had basically outcomes going in the wrong direction. And there was a couple of mindset shifts that I started to really get interested in and and reading about and observing that

That I felt was kind of lacking in healthcare and kind of that first mindset shift was overall you know healthcare is kind of lacking a bit in consumerism. I think Walt Disney said it best you know when he said hey when you look at you know healthcare today it you know just bolts you a lot of consumerism and really just kind of another mindset you know is is patients is is customers. So with these two mindsets in place we initially started building um our EMR which is a boutique EMR really looks to put a large language model where we think it makes sense for providers to really help claw back on the provider to administration or administration ratio. If we take a look at the provider to administration ratio you've seen provider growth from the 70s and you know really stay flat but you know you've seen administration growth grow like 3500% right? So there's a lot of money being spent there. I think some of that is structural some of that is being driven by poor EMR

3:17 Experiences so we built an EMR that you know really just allows users you know really for kind of all of practices um to take the patients uh through a traditional patient journey whether it's a one-off appointment or more recurring rehabilitative care where SMART goals and SOAP notes need to be administered providers can do all that in our platform at a very low cost and kind of have all their insurance but prompt but also have uh good visibility of what outcomes are looking like um across their practice.

And really this is kind of our our first step in building something larger where ultimately kind of going back into that, you know, lack of health care consumerism. We believe that kind of the ideal patient experience is for for a lot of illnesses, why not just have the doctor kind of show up in your home? Uh so, as we kind of scale and launch the EMR, we're we're pivoting uh into kind of building out uh a provider network that from the comfort of your own home really allows patients to say, "Hey, I'm not feeling good. I would like to have someone come out and take a look. And if we find that we need to do some treatment that we would traditionally execute kind of in the ER or through admission, we're actually going to try and administer at home and try and circumvent that whole admission process. You know, that's a really interesting concept and, you know, in today's society, you know, with Uber and DoorDash and Amazon, you know, you you

Work for as well, right? Like, we live in a push-button society where no matter what we need, there's it's never further than our phone, right? Or our laptop or our desktop or whatever that might be. And so, why should health care be any different? Like, so if especially if we can do it more affordably, more efficiently, create great experiences, and provide good care, and along the way find a way to reduce the cost of health care. Instead of going to an urgent care center and spending three or four or five hundred dollars out of pocket for, you know, one ailment or another and a shot or something, like, you know, you can have a a virtual visit, you can have it triaged at a lower cost, faster efficiency, and then find a way if you do need a higher level of care, right?

And we can talk about what that level of care looks like and how Village Health Systems has identified that nice sweet spot category where you feel like you make a real impact. To me, that's phenomenal. Like, and and you know, you have virtual telehealth for primary care. You know, the urgent care business across America is exploding and now you're bringing something that can totally continue that transformation not only further away from the hospital to urgent care, but now you can get urgent care delivered at home, which is what a what a remarkable concept.

6:06 Yeah. Yeah, absolutely. And you you really kind of you know, hit it on the head with you know, just kind of some of the some of the cost allocations not really kind of you know, working out for for patients, you know, and there's being an opportunity to you know, if we reset the table and rethought about kind of how we treated the patient without any kind of advances and you know, scientific studies, you know, or medical treatments, you we think we can we can deliver a lot of savings for for customers cuz when you look at you know, an ER admission, you know, 25% of your bill, you know, out the door is administrative spend. That's 15% for primary care and then you know, when you're an inpatient, you get a little bit of you know, cost spreading that's down to 8%, but we really think that you know, going to the patient will actually you know, be able to help us deliver a a cheaper cost and at the same time,

There's a lot of hospital at home studies out there through PubMed and what they did is they kind of had two treatment groups or they had a treatment group and a control group where you know, one group was was treated at home and the other group was treated in the traditional system and we found that in the group that was treated at home, they were able to produce average costs by about 38% and so, you know, imagine if your doctor, you know, showed up at your house, you were able to circumvent kind of the traditional ER admission and overall kind of process and your bill was 38% cheaper and you have kind of the experience of doing it at your house. That's kind of the overall service model that that we're leaning into. And you know, there's other evolutionary demographics that are changing too. So, insurance becomes more expensive.

Families are opting for lower premium, higher deductible policies, right? You go to an urgent care center with an insurance plan and it's three, four, five hundred dollars. Like it's not like it's not a small amount of money. You know, I have my own personal family experiences with my kids and they think they're young and they don't need to have a robust health plan so they go for the cheap one and you know, you got to go to urgent care and it was like 500 bucks. Like walk in and walk out of there. And so, like there has to be better options for us because, you know, paying out of pocket basically when you have a $7,000 deductible, you're going to be paying out of pocket all year long if you're relatively healthy. And every time you go for a cold or you know, sinuses or whatever it might be, you're dropping three, four, five hundred bucks. That's that's like real money and you know, it's beyond real money. It's big money. And so, doing what you're

8:55 Doing, you know, quickly, efficiently, cost effectively, triaging the care. You can always go get a higher levels of care if you need it, but being able to manage that is, you know, a remarkable opportunity. Yeah. Yeah, absolutely. And you mentioned, you know, there there has to be better options and I think kind of a an interesting gauge of kind of where we're at, you know, is the health care system is, you know, if you look at net promoter scores, right? So, hey, how often are, you know, the customers I interact with, you know, promoting the experiences I deliver. Like health care in the aggregate is in the low teens and you know, more consumer-centric companies like Apple, you know, they're in the '80s, right? So, that's that's kind of, you know, I think the customers, you know, in the aggregate in the NPS scores are telling us that and if you look at life expectancy versus health spending, I think this also kind of aligns with that NPS, right? We've we've been a

Clear laggard in the United States for quite some time. Like, to me, this is you know, just unfortunately, I think failure at scale. Um the good news is is, you know, we're we're starting to go high into the right on life expectancy, right? But it it's coming at the cost of of expenditure, so um we've got to solve that. You got another chart for us which really kind of outlines maybe some of the implications of our value-based care system today. And I think we had talked a little bit about this some really interesting data regarding physician and administrator growth.

Yeah, absolutely. And so, this is where we really believe is kind of the root cause of um you know, what's driving our health care expenditures versus outcomes in the wrong direction. Um you know, really this study is kind of going back and this is from uh the Bureau of Labor Statistics, um but really going back from 1970s as the baseline. You've seen about 3,200% growth in administrator head count versus only about, you know, 100%, 150% growth um in physician head count. Wow. And yeah. What happened there in the middle? Like, something like been some sort of dynamic change there in like 1990-ish or so.

11:33 Yeah. And so this was managed care and insurance reimbursement, um, you know, complexity going a lot higher. And I think the reason why NPS is going in the wrong direction is because the hospital system is burdened with having to have all these administrators, right? Um when you look at uh, the traditional you know, kind of hospital system, their monthly bill or their monthly expenditures about 35 to 40% is not even touching the patient. Um right? So when you have that amount of monthly misallocation and then you get um, slammed in backlog, right? Which, you know, is our COVID scenario. Um you're going to you know, have SLAs going the wrong direction. You're not going to be able to treat patients. So I think if we as a healthcare society kind of focused on bringing this down and bringing this up we'll be in a much better spot, um, with those NPS scores.

For sure. And, you know, the cost of care would be a lot more efficient, you know. I think our health care system would run more efficiently, too. Like, you know, you have that much cost associated with your deliverables. Be hard to believe any business could be viable at that kind of rate. Yeah, I absolutely. That's a really compelling chart. Thank you for bringing that to our attention. So tell me what's next then. So, you know, where do you go next with this platform? It's so interesting. It's so compelling, by the way. Like, like where do you and your your co-founder, it's Raj, right? Raj is your technical guy.

It. you guys see this going next? Yeah, absolutely. So, we are definitely from a next steps perspective, you know, now that we have kind of the EMR in place and it is solution where, you know, providers can go in and, you know, really just execute the care and have a virtual experience that supports them. We really want to lean into growing the hospital at home admits We really want to start looking at growing the hospital at home infrastructure and kind of taking a metro by metro approach. So, we're very interested in any state where, you know, there's kind of strong Medicare, Medicaid managed care programs. We're very interested in Arizona, Texas, Florida, and Georgia. And we believe, you know, this model will work anywhere where those programs are in place. And there's kind of been a lot of debate about, you know, if these changes to Medicare and and Medicaid, you know, are going to be a positive thing for the health care industry. I view it as kind

14:31 Of our proving ground cuz if you look at, you know, that the legislation, they're getting more strict on what gets reimbursed and, you know, looking at kind of the data since that we just looked at with growth and physician to administrators, you know, a lot of the cost that is being, you know, passed on the patients is it treatment, right? It's we're just passing indirect spend uh to the patient. So, I'm actually excited about a more Medicaid or a more strict reimbursement regime. And so, our thought process is over the next 6 months, we really want to find a uh chief medical officer co-founder who's really mission aligned and can kind of help us start scaling metro by metro.

And really kind of what alignment looks like for for me and a CMO is is, you know, someone who's not only a clinician, but is an operator at heart, and, you know, who's really interested in kind of, you know, resetting the table, uh so to speak, and and how we deliver, you know, health care that to customers. That's awesome, and, you know, not only being a, you know, being a great operator is a big part of it, having a great network, and that's a big role for you guys. That's a will be a big strategic component of, you know, how you deliver care, where you deliver care. Looking forward to you, you know, going through that process. That's exciting. So, what do you need to do in order to get this thing moving and off? Like, where's your friction points right now, Josh, when you when you think about like, what's next for Village? Yeah, so from a friction point perspective, I would I would again say,

Circling back to getting that uh CM, and then also, you know, still kind of debating from an operational perspective, if if we want to be more of a monolith, where, you know, we, you know, hire all of the doctors, you know, they they work on kind of our payroll, you know, along with uh you know, PAs, nurses, lab technicians, or if we kind of want to go a more contractor approach. I think there's there's pros and cons to both with the monolith approach, you get a lot more controls kind of on on standards, right? That scaling can be slower, um you know, whereas if we start provi- partnering with other providers who have a little bit more capacity than we have today, but they might meet our standards, there may be some benefits in in partnering then today, kind of before we have all of our infrastructure built out. So, those are kind of the friction points that that are keeping me up at night.

17:12 Got you. And so, do you How do you view the different levels of care? Is it going to be like three levels of care theoretically like you know, is there is there a virtual tele health option in your model or is it just a go to home model and then triage to the facility? Yeah. Yeah, absolutely. So, you know, from a customer journey perspective, you know, we really want to start with, you know, the customer says they're sick via the app and you know, we can do a telehealth, you know, evaluation right there, but you know, we really want to kind of target. Our niche is really kind of folks that are, you know, what's called a step three, you know, through five admission. These are kind of things like you know, cellulitis, pneumonia, certain diabetic care regimens, things that today you need to go to the hospital for, but you know, you're not you're you're not a mortality risk, right? You only have to go to the hospital because unfortunately, that's

Where the resources that's where the only resources are to to get that care. So, kind of from our our patient journey perspective is, you know, once we've kind of done that virtual triage or the patient, you know, has said, you know, hey, I just would really like you to come out, you know, get eyes on and you know, what we're going to do is you know, we're going to evaluate the patient at home, kind of start all that, you know, IV treatment, labs, plan, you know, any nurse regimens, set up remote monitoring, really just kind of the, you know, establishing what that regimen is and bringing in any equipment needed and then kind of, you know, as the patient recovers, you know, we're checking in on them from a virtual perspective, but we also have physical rounds scheduled. You know, so we're always always getting that physical kind of check-in and touch point and then as the patient is recovered, you know, that's kind of our our

Teardown process where we go in, kind of get all the equipment, handle kind of discharge instructions with the the and then they handle all the billing on the side. Well, good. And so, from all your SaaS lessons with the EMR and moving forward, like, you know, so getting the CMO in place, are you looking for funding? Are you funded? Are you bootstrapping? What What What does the funding Cuz I'm guessing, you know, like, scaling this thing is not, you know, inexpensive. Yeah, definitely, definitely. So, we're we're definitely interested in, you know, funding and and engaging venture, you know, for for kind of building out, you know, this kind of health at home model. A lot of the lessons learned, you know, from from the SaaS perspective, you know, would be I think the first big one is I I should have just kind of built the big thing first. I kind of took a hey, let's, you know, use the EMR to fund, you know, the bigger CapEx-heavy idea. And I did this I did

20:02 This in the middle of a software re-rating where, you know, because of, you know, agentic frameworks, AI, a lot of people in the market, you know, kind of think software eventually may be a commodity, right, instead of a moat. So, just going after the big thing is really important. Other lessons learned in the SaaS space are be very careful about where in your software architecture, where you invoke AI. I think there is tons of over-engineering within high-level designs where, you know, throughout your workflow, you're just calling the LLM a lot, and you're going to blow out your token budget. Uh A lot of the big players are I see in this, you know, with with with non-medical, you know, challenges. Token Token budgeting is is really important.

So, if you're thinking about using AI in your EMR, rather than having, you know, rather than in your customer workflow, invoking the LLM, maybe just use the LLM to build a really solid heuristic model, right? That, you know, can can ping a billing API, right? Or can write a report, you know, something that can live, you know, on a server or in the cloud. Have the AI create that, but don't invoke the LLM every transaction in your workflow. I think that that's really big. And other lessons I would kind of like give to founders is you know, as we continue to operate kind of in this agentic, you know, potential commodification of software is, you know, don't be afraid to put an MCP around your your EMR, and that way you can start integrating with other, you know, EMRs. MCP is you know, machine context protocol.

That's kind of the standard language, you know, that, you know, Terry, if I wanted my, you know, EMR to interact with your revenue system, they'll kind of talk to each other that way. So, having a plan to kind of MCP your whole your whole software stack is something I would also say is a big lesson learned. Yeah, something like probably how like Clay kind of works, how they do that aggregation model, and, you know, how they you can have 12 or 15 different platforms that operate within Clay pretty autonomously, which is nice, too.

So, um Yeah, I I agree with you. The MCP is an important layer for any platform today for agents to work together and communicate and and engage. So, any other last closing statements on the Village Health Systems piece? I have one more question for you before we go, but I want to make sure we, you know, is there anything else left on Village Health Systems we can we can we can uh tackle it now. No, just, you know, my my parting words, you know, for the viewers is you know, for all of us that are working on, you know, like cool innovations and projects, you know, just really thinking keeping there in mind that, you know, patients are ultimately, you know, customers and and thinking through, you know, how can we get that NPS, you know, those NPS scores in the right directions, how can we get, you know, health care outcomes versus expenditures going in the right directions. I think if everybody just keeps those in the back of their minds and applies it to

23:22 What they're working on, we'll be in a really cool spot in the future. I totally agree. Couldn't be better said. You nailed it right on the head. Uh at the end of the day, you know, patients are our consumers of health care. And, you know, just like anything else that we're buying in today's society, you know, five Google star ratings and customer experience and all those things are important. And I think the more that health care providers and platforms of health care realize that, that it is real money.

It's not insurance money. It's people's like it's real people's money now that we've got to put those things in front like value for care, like it should be equivalent. And it seems sometimes it's not always there. So, thank you for that. So, Josh, I have one final question for all my guests or at least when I remember is that I love asking this question where current day Josh had the opportunity go back and meet 22-year-old Josh. What would be the only what if you had one piece of advice to give, what advice would you provide?

It would have been to lean into health care earlier. At that time, that was around 2016. You know, so prior to COVID and there was all this technology out that, you know, could have enabled care at home. I don't think we need AI to deliver care at home. You could pause all AI and therapeutic innovation and still deliver all of this, you know, today just with the innovations we have. So, it would have probably been to Got you. That's great advice and, you know, what a great purpose and what a great mission. So, So, Josh, has been great having you today. Thank you so much for being here. We wish you and Raj and Village Health Systems nothing but great success. That's absolutely Thanks so much, Terry.

It was an honor to be here. That's a wrap on Zero Friction, the show built around one simple idea. Remove the barriers and the revenue will follow. If today's conversation was valuable, please subscribe and share it with somebody who needs to hear it. That's how we will grow this community. I'm Terry Coutsolioutsos Revenue Architect powered by AI. Come find me at my website, myrevRX.com, and let's talk about what friction is costing you and your organization. Until next time, keep removing the barriers and keep the revenue flowing.