Introduction to Healthcare Theory Podcast
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Welcome to the Healthcare Theory Podcast. I'm your host, Nikhil Reddy, and every week we interview the entrepreneurs and thought leaders behind the future of healthcare care to see what's gone wrong with our system and how we can fix it.
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Today on the Healthcare Theory, we're joined by Tai Wang, the co-founder and CEO of Engel Health.
Engel Health's Mission and Funding
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After raising a $60 million dollars Series A, Engel's one of the most ambitious attempts to rebuild health insurance from the ground up.
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And in this episode, Tai breaks down why incumbent insurers struggle to modernize, how Engel themselves is building a fully AI-native, fully integrated health plan, And while the future of care will be driven by unified data personalization and radically new funding models rather than the legacy and common system we see
Tai Wang's Background and Experience
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So thank you so much, Ty, for coming on today. i mean, you've worked for massive institutions like with Palantir. And of course, you worked for the federal government for a while. What were some of the most formative lessons you had working with bureaucratic institutions and how do they shape the way you think about problems today?
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Yeah, that's a great question, Nikhil. Like you mentioned, I studied engineering and in college. And while I was in college as well, i actually worked on medical devices at the WashU School of Medicine, building out what was... ah it was ah It was an augmented reality tool for oncologic surgery and biopsy procedures, but it was, ah i i would say, well before things like like AR and VR and and and now with all the
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ah AI tools that exist now before any of that
Scholarship and Co-Founding Journey
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existed. But um ah that was that was kind of my first experience when it came to really applying a lot of the um knowledge and skills from from from engineering into ah um into a a product that could really be commercialized. Yeah.
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over the Over the summers and and and after college, i I worked for the federal government. And that was all, that was through a scholarship program with the federal government that is actually how I met my co-founders. so we were both part of the same program. It was a full ride um to college as long as we went into a STEM field. And then we would work for the federal government ah ah full-time after graduating.
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What that, I mean, my my roles, i was I spent a lot of that time abroad. I spent a lot of time that time working with um foreign partners, working with a variety of government agencies.
Lessons from Palantir and Transition to Startups
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And I think really what ah that taught me and and I think how that really translated into...
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and ah into the skills that were needed to, to build Angle Health. And, and I would say ultimately into kind of, uh, uh, transitioned into,
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um how I ended up at Palantir is that it, uh, really It really taught me how to how to just solve problems with with on my own, like how to how to figure things out. the the the The places that I were in and and the the work that I was doing was very much kind of... um you had to be you had to be very autonomous. you had to You had to really kind of figure things out on the fly and and and um
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ah be really self-sufficient. And that's, I think, that translates to, that translates really well to kind of the skills, one, i would say the characteristics that Palantir looks for in their hiring. and And there's a reason why um they recruit they recruited heavily from the federal government. And and and many of my my peers actually ended up at Palantir as well.
Challenges in Healthcare Technology Adoption
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um But ah it's also it's also why i think ah there's kind of, i don't know i don't know if this is still the case, but but back then there was kind of ah a saying or a joke where um you really only left Palantir for two reasons, and that was too um to to to to go chill and and and rest out like a at a big tech company or to go start a company. Mm-hmm.
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And of course you've picked the latter and it's interesting because Palantir of course is one of the biggest, a lot of their customers are like bureaucratic, large organizations, the federal government, for example. And I know you spoke on that you worked with the few larger health organizations in your time there.
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I mean, I'd love to kind of hear you talk about like, what did you witness when you're working with these large healthcare organizations?
Healthcare Services Disconnect
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Like what were the main problems? What were you trying to solve? And what made you really think like we need to really fix what's going on here?
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Yeah, I mean, i think one of the biggest, that there are a couple of key insights that came from my time at Palantir. One of the big things was just really seeing, i mean i mean, I had been inside um with the federal government and and had seen, although I was i was at an a pretty unique part of the federal government that that probably didn't operate the same way that most other agencies did. But at Palantir, I also um experience several other ah ah federal government organizations that hadn't worked with prior to my experience at Palantir.
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um and then And then similarly on the commercial side, I think really just saw how... how slowly and how difficult it was to to get things done at these large organizations and how slow it was for them to really adopt um tools like like AI and machine learning and and and and ah the time it takes for them to to modernize their platforms. um What we realized, and also being an employee of Palantir, we had very... we had um
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ah really rich benefits, um
Rebuilding Health Plan Infrastructure
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especially when it came to things like healthcare benefits and access to various digital health programs and and and and even clinical services like like chronic disease management programs and in virtual behavioral health programs, things like that.
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ah We kind of put together that. um well for So for me personally, also, I grew up in ah in an immigrant family that was fairly low income. we my parents were the kinds of people that couldn't afford to take time off work to go to in-person doctor's appointments.
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and And there was this realization there where we had access to all these benefits that that almost no one used because the population of Palantir is not the people that need access to um or are going to heavily utilize things like ah like a virtual diabetes prevention program or or um things like that. It's it's it's the it's the companies and the and and the people like my parents where it's it's not your large, um like, I thought you're like, retail chains, or like restaurant groups or manufacturing companies that are paying ah these big digital health companies, six, seven figures a year to offer those as benefits ah to their employees outside of the health plan.
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um and and And that is the way that a lot of these services are accessed today is that there's still direct contracts between a company like Omada or Livongo or whomever with a large employer. And a lot of times the employers that are offering these are contracts.
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white collar firms, these big tech companies, financial institutions, law firms, things like that, when those are really not the um the people that that um would benefit most from those kinds of services or or the populations of those of of those kinds of those companies are not the...
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on are not the ones that have, like those those companies aren't the ones with huge populations of people that would benefit from it. um ah But the the problem is that a lot of these services, which many of them are clinical services, are totally disconnected from the way that the vast majority of Americans actually access healthcare, which is through their health plan. So, yeah.
Need for New Healthcare Startups
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we kind of realized that the only way to um really democratize access to these kinds of services was to rebuild this health plan stack from the ground up on on modern, very robust, highly integrated infrastructure that allows us to um tie in these these these kinds of services and and and really really increase access to these kinds of services to the people that really need them. And that's... ah ah Why even today we serve the vast majority of our companies are small and medium sized businesses.
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Mm hmm. And I think it's really interesting. And before we get to angle, want to talk about the incumbents a little bit. it's Because i mean back in the 1950s, 1960s, the point of insurance, that employers providing insurance to get people to get to work. But now, more often than not, like your physical state of being doesn't really dictate how well you are at work and how good you are at working because they're not like working on factory lines for a lot of people at companies like Palantir. So...
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I want to kind of speak to like, in theory, it sounds easy. and Maybe there's insurance companies because there's a provider more like personalized comprehensive packages that fit different companies. But oftentimes the problem is not as simple as that. It's not so easy to solve as like configuring these packages in a certain way in certain ways. But I'd love for you to speak to like what was the issues that the incumbents are facing? Why could they not just fix this problem themselves?
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And why did you need a whole different startup that's fully integrated to kind of step in here?
Complexities Within Large Insurers
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Yeah, I mean, I i think there's there's a lot to unpack there. There's a lot of challenges from from being able to even administer, to to to layer in and administer a lot of these kinds of benefits into the into the core health plan product and the plan designs to the actual like um engagement of people people into these programs. and And that's actually, I mean, that's one of the biggest issues when it comes to like all of these ah like digital product disease management programs or behavioral health programs is, is
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um first being able to identify um who are good candidates for these programs. Because we know that not everyone is a is is a good candidate for a virtual behavioral health program, but for the people that are good candidates for them, it can be extremely effective. So so there's the identification of that. Then there's the engagement of these um of of um of these people into the into the programs.
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um And then there's the, yeah, and there's the the administration of all of that when it comes to the um reimbursements and the payments and and and and how that is really kind of um layered in from like a a care coordination perspective.
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um So so there's there's a lot of pieces to that. um we We really viewed this as a data problem and we really viewed this as a... um ah a challenge. Well, we view the solutions to these as something that can be unlocked through data. And one of the biggest challenges that incumbents face is that when we're talking about these the these biggest healthcare care companies in the world. um They're formed through over the past several decades through M&As of all of these regional health plans. And and and today, they what they look like is not kind of like one integrated company, but
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They look like dozens, hundreds of regional health plans that operate in a that um operate independently of each other. um and within any even within any of these regions, they have tens of systems that are supposed to store the same information, but it's never consistent across
Member-Focused Approach of Engel Health
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the board. They have platforms for enrollment and eligibility and utilization management and claims and and billing and invoicing and and and and and any any like name and name a an operation within a health plan or within the healthcare system and there's there's a system for that.
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um and then And all of these systems have their own siloed data that or they have information about a member or a plan or a claim or a provider or what have you, but it's never consistent across the board. And in turn, that's what makes it extremely difficult for these organizations to even answer very simple questions like, like like how much have I spent towards my deductible? Or like to be able to see like real-time status of claims and and and um
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ah and things like that. So we we really saw that One, in order to really drive true change and and and and and improve access to the kinds of modern healthcare care services that that people should have access to, we needed to, on and and a big piece of that is the identification and the engagement piece, we we needed to have the data to do that.
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To have the data to do that, um ah we we kind of identified that the health plan is the it's the nexus of, um, the, uh, all the, data, the flow of, um, uh, funds, things like medical records and for better for worse, it's also the, the, entity that kind of makes the final determination on things like medical necessity. And the reality is that if your health plan doesn't cover it, then you're most likely not going to access the service, let alone even know about a service because, um,
00:13:55
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ah Because it's it's cost prohibitive. so So we really saw that as kind of a place to start. And that is the the the point that also unlocks our ability to do all these other things that we set out to do.
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And it's really interesting. i like how you called like these big insurers like a nexus because data is more important than ever. You think these big insurers that have so many different silos would be like a goldmine for data, but instead orchestration is so hard for them that it's just going to be extremely hard for this to all to work together. It's like a huge patchwork of different systems. So, i mean, what did you set out when you started to angle health?
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mean, can you can speak to like, what do you guys do at Engle Health
Integrated Healthcare Solutions
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and what were your first like the core principles or constraints you set out for the product? Like what was the goal in building this kind of almost like competitor to these big insurers?
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Yeah, so I mean, what I would say Engle Health is today is that we're we're an AI native integrated healthcare company. um our Our core products that we deliver to our customers today are custom full-service health plans. Or i'll ah rather, I should say the way that we deliver our products and services to our customers are through these ah custom health plan products for employers in the U.S.
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which we Which is that in and of itself is a product, but we're virtually full stack in that we um are risk bearing, we do distribution, um we are a third party administrator, and and we handle everything from implementation to claims administration to member and provider support.
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um And we're also a healthcare services company today where we have products like our Angle Advocacy Program, which is essentially a concierge care navigation service for our for our members. um So so ah we really are an integrated healthcare company.
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um and And that's been an evolution. and and but but what we set out to do has has never really changed. And that is to fundamentally change the way that people approach and access healthcare and to democratize access to these kinds of modern healthcare services.
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as As we kind of...
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think about think about the products that we that we launch and and and the way that we serve our customers. um Our customers being um ah employers, being members, being the brokers and the benefits consultants that serve those employers, as well as the providers who are serving our members.
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we really we We are a very member-focused company where we view ah and and ask ourselves, is this something in the best interest and and and for the benefit of the member? Does this improve? Does this program or or or this this workflow or or or um what have you improve the health or financial outcome of our member and how do we make that as seamless as possible? And our our goal is really when a member or patient joins Angle Health, they feel like they're entering into a new kind of integrated healthcare system where um they as an individual, as a consumer, no longer have to be the i no longer have to carry the burden of um understanding all the complexities of of health insurance or how to navigate the healthcare care system. And, and, and that is really how our members view us today is they don't see us as just this financial layer that they have to deal with or fight with to get anything done, but really a partner in health. They're,
Building Efficient Full-Stack Services
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we're a resource to them and they can come to us for, um for, for anything, for any of their questions or, or as a first point of contact for anything healthcare related. And, and ah we, our, our team, our, our advocacy team, our care team, our,
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Even our account management team, any anyone at Angle Health is is is there to um make the lives of of our customers and make the workflows of our customers as as easy and as streamlined as possible.
00:18:02
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And it is interesting because you see like, i mean, you guys basically do everything look across the insurance stack. And you see like UnitedHealthcare in a way does that too. They have like a value-based care clinic, like they have their PBM. They basically are a TPA, but they're also worth like half a trillion dollars. And it's taken like many years to get there.
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But for you, I mean, when you first set out to build this like full stack insurance plan, we'd love to kind of hear from a software and a generic perspective. Like, how did you go about that? Because I can imagine on day one, you weren't like, let's get two people for a TPA, two people for a pharmacy benefit manager and divide and conquer. It must have been a bit of a more like trials and tribulations type of kind of situation there. but But we'd love to hear, like, how'd you go about building this? Because, of course, it seems pretty difficult.
00:18:46
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Yeah, I mean, there's there's definitely a lot of ah ah it's a very complex business. There's a lot of moving pieces to it. um What we've always been really good about is being highly focused and being very and and and um building very intentionally. So like we didn't when we first set out, we didn't boil the ocean to to be on with. and And even today, there are a lot of there are a lot of functions and and and services that we may not do entirely in house or that we may not or that um ah
00:19:16
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we haven't necessarily optimized, but but we focused on ah really the things that that that mattered the most from the beginning, whether that was um having the infrastructure or the like the the regulatory and compliance pieces to be able to deliver um a product like ours and the services that we deliver in the first place to really focusing on the the the most important but also extremely difficult pieces like ah
00:19:47
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like the systems and the and and the workflows needed to, I mean, i come the first step is kind of being able to administer a health plan. So being able to build um ah build a plan and and process claims, pay claims, do all of that stuff. So, so we, we were very intentional in terms of like, which, which pieces we wanted to tackle first. And then it was, it was really an evolution over the last several years of, okay, now that we, now that we're able to do this really well, like but ah we have a very lean team as well.
Operating with a Lean and Innovative Team
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So, so today we have less than a hundred full-time employees. um And, and,
00:20:28
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Pretty much any other health plan or healthcare company at our scale now has hundreds of employees, or if not more than that. um ah So so we we set out to to to do it very intentionally and and identify, we we take a very thesis-driven approach for for what we decide to expand into or what what what new um initiatives or or or are programs or services we set out to um to build or launch. and And a lot of that really goes back to the member experience. Like, what are we what are we seeing with our members and patients today that are causing them kind of the... the um the biggest friction and that are also some of the blockers when it comes to truly kind of improving the cost of healthcare, care bending the cost curve. Um, and, and let's identify those and let's, let's tackle those, let's rebuild those workflows. And what we're really good at doing is, is, is is rebuilding these kinds of workflows or, or care pathways or, um, uh,
00:21:36
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uh, or, or kind of experiences from first principles. aha And it would be really interesting. I think that like, of course people and are usually the number one cost for a software business. And you guys have great operating leverage in the way that as your company skills, you don't need to hire drastically more employees.
00:21:54
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I think part of that, of course, it comes from AI. Like you guys are an AI native health plan, like, providing better care without sacrificing on like the actual infrastructure behind it but could you give some examples in like how you're using this data that you're orchestrating and ai behind the scenes i know you have developed some like proprietary algorithms and of course you can't get into the details but it'll be really cool to hear like how does ai improve the insurance process and personalized care for your enrollees and members and employers Yeah, ah a big piece of of
AI and Personalization in Insurance Processes
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that. so So we leverage it heavily from an administrative workflow standpoint. And and um these models are what drive the um both the ability for us to deliver the kinds of products we do, these custom health plans to small medium-sized businesses, and
00:22:42
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where that, I mean, that there's a reason why no one, no one offers, um, custom health plan products and plan designs to 20, 30, 40 employee companies. And and there's a reason why it's really only offered to, um companies with, with hundreds to thousands, tens of thousands of, of employees. And that's because, um, it's for, for, for most incumbents, it's, it's an incredibly manual process, uh, a lot of operational overhead too to, configure custom plan designs and administer them.
00:23:16
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Um, but we've been able to automate, uh, a large majority of those, of those, um, uh, functions and, and, and deliver it in a very seamless, um, uh, very digital manner to our, to our brokers and employers to, uh,
00:23:33
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so so So a big piece of that is driven by... So but so ah the the models that we've built um drive a lot of our ability to deliver the products that we deliver and then the operational efficiencies behind the scenes to actually administer them. So um one of the i mean one of like the kind of core... um ah ah tenants that we built this company on was was was this highly integrated infrastructure where we have what we call a canonical data asset. So all of our data sits in one place and that's what powers everything we do, both um
00:24:09
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across our across our teams. and that's in And that's what enables us to leverage ah and and really embed ai and machine learning across all these workflows from um underwriting to implementation to claims administration to member engagement. and and um and And that's why I say that we're we're an AI native company.
Regulatory Strategies as Advantages
00:24:36
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I actually do kind of want to pivot here a little bit. I mean, of course, it's really impressive that you guys are able to build that infrastructure out. I'm sure it's paying us dividends now. But there's one thing I want to really touch on before we end off is that most people in healthcare care kind of view regulations as a bad thing, something to be scared of. VCs run away when they hear that stuff. But I mean, for you guys, I heard you spoke about how regulations are a moat for your business, and you've really been able to utilize that to your strengths. But i would love to kind of speak to how you go about interpreting and using regulations to benefit your company long-term instead of kind of putting that as an obstacle? Like how do you use that to your benefit? Yeah. I mean, I think, um,
00:25:14
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i think i think I think there's a couple pieces to unpack there. One, I think regulations exist for reason, and and they're there largely. And and and the the the really the role of, whether it's the Department of Insurance or the Department of Labor or or CMS, the role is to protect consumers and to protect people from...
00:25:36
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ah protect people ah ah from from what could be dangerous practices. So, so, so I think one thing that's important to note off upfront is that regulations in and of them themselves are not a, are not necessarily a bad thing. They're, they're, they're there for a purpose. I think, yeah um, what the, I think, I think over-regulation is a different, um,
00:26:02
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ah is a different question. I think i think what what we've seen and in definitely in the healthcare industry and in a lot of other industries is that you end up with these these massive incumbents that have significant leverage that benefit ah immensely from uh from these regulations and and and from incur and enacting greater and greater regulations because it uh creates such a huge moat for for these companies where it makes it makes uh uh startups it makes it very difficult for startups to um really break into certain industries um so it's it's it's kind of like a it's kind of a
00:26:43
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a double-edged sword in that like when you when when you're able to reach a certain level of scale or become entrenched, then it becomes ah a major vote for you. But it's also it also really stifles innovation and stifles our ability as a country to to kind of move forward and improve the way that we, that we deliver these kinds of products and services, especially in the, in the healthcare world.
Alternative Funding Models and Insurance Evolution
00:27:07
Speaker
Um, for us, I mean, think you, you asked like, how do we, how do we use this as a, as, uh, uh, a tool or, or, or, or use this to our, to, to our advantage when it comes to, uh, when it comes to kind of the products that we build, I think that,
00:27:29
Speaker
I think that it's not necessarily like what we, we i don't I don't think that you ever kind of use regulation to your advantage when it comes to um
00:27:43
Speaker
building new products, i think that I think that the regulation serves as a good kind of, um serves as serves as solid rails to help to to help you um kind of think about and and and and and guide your development of um of the different products that you're going to launch or that or that that you think should exist.
00:28:09
Speaker
um because i think yeah like again at the end of the day like the a lot of times i mean regulations are also a reaction to something that has occurred or to some to to some like edge case or something and it's we especially see that when it comes to kind of like local um and state uh government and and and and regulations at that level so um i don't know if that answered your question but Yeah, it's definitely helpful. Yeah, because I think it's not something that like highly regulated industries. I mean, regulations are built for a reason and sometimes they're important. and Sometimes there's ways you can use that to deliver better care working with them instead of around them. But I would love to hear like kind of our last question here is that I'm speaking on how regulations and obviously it's pretty changing a good administrative environment and like there's more alternative funding models that are being used, like level funded insurance plans,
00:29:03
Speaker
um I see HRAs are going to be used like getting used more and more by these companies. like how do you guys How do you view kind of the way healthcare care is changing and how is Angle Health, how do you think that will change within this changing like insurance environment and payer environment in the next few years?
00:29:20
Speaker
Yeah, I mean, i i I think we're seeing a major shift today, and I think it's been going on for a couple years now, but I think we're seeing this this major shift and in in how people really view the role of of of payers and how healthcare care um ah should be accessed.
00:29:40
Speaker
um and And I think... ah I think people are tired of of seeing the the pace of increase in in the cost of healthcare and the cost of things like their their health plans and the and the coverage.
00:29:56
Speaker
um And a lot of the a lot of the reason for that I think people are are kind of converging on or kind of seeing now is because of these... uh, uh, large entrenched organizations with very skewed incentives. Um, and, and I think that's, what's really driving kind of the the big shift over to alternative funding models as well, where, um, employers and and individuals are really able to take a lot more control over, over their own, um, healthcare care costs and their own, own healthcare care access. And I think that's a good thing all around, um,
00:30:32
Speaker
I think that um it also opens the door, especially with with with the scrutiny today on on on the big health plans and healthcare companies and and PBMs and and and all of these different players, even large hospital systems. I think i think it really opens the door for...
00:30:53
Speaker
companies like Angle and other startups um ah to to come in and and and really rethink from kind of the foundational level from first principles, how ah these different structures should be set up, how how these um different pieces of of the healthcare system, whether it's on the provider side, whether it's on the payer side, whether it's on the pharmacy side or, um, uh,
00:31:21
Speaker
ah should should actually operate and and how to kind of truly align up set incentives um across the board. And I think that's what ah i think that's what a lot of a lot of the healthcare care startups we're seeing are are doing today. And then i think the i think i think that's been going on for for many years now.
00:31:42
Speaker
um And I think the the advent of these large language models and and how quickly these AI tools are are um evolving and advancing is is kind of ah cherry on the on the pie in that like now now we're also able to unlock significantly more operational efficiencies while really rethinking the the the underlying kind of operations interactions of these of all these different parts of the system.
Conclusion and Resources
00:32:16
Speaker
Yeah, and that's really exciting. I think that, of course, like seeing how people value healthcare, care like how people want to consume healthcare care is going to change quite a bit over the next few years. So I think i really believe that startups that are able to pivot, able to provide like customized plans within their like more personalized datasets will really be able to have... like a lot of strengths in a new environment. So I mean, really appreciate you coming on today, Ty, to kind of talk about Angle Health, how you guys have pivoted, and also just about your background beforehand.
00:32:44
Speaker
um It's been super helpful. And if anyone wants to learn more about Angle Health, there'll be more information in the description. But thank you again for your time today. Awesome. Thanks so much for having me, Nikhil.
00:32:56
Speaker
Thanks for listening to The Healthcare Theory. Every Tuesday, expect a new episode on the platform of your choice. You can find us on Spotify, Apple Music, YouTube, any streaming platform you can imagine.
00:33:07
Speaker
We'll also be posting more short-form educational content on Instagram and TikTok. And if you really want to learn more about what's gone wrong with healthcare care and how you can help, check out our blog at thehealthcaretheory.org.
00:33:20
Speaker
Repeat, thehealthcaretheory.org. Again, i appreciate you tuning in and I hope to see you again soon.