AI transcript
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0:00:21 – Hi, and welcome to the A16Z podcast, I’m Hannah.
0:00:23 For many of us, nurses are essentially
0:00:25 the face of the healthcare system.
0:00:27 The person you’ll see the most of while you’re in it,
0:00:30 who will monitor your vitals, administer medications,
0:00:32 hold your hand when you’re in pain or scared,
0:00:35 answer all the questions you forgot to ask the doctor.
0:00:37 In this episode, we talk all about the role
0:00:40 of that unsung hero of the healthcare system, the nurse.
0:00:44 Iman Abouzade, CEO and co-founder of Incredible Health,
0:00:45 a hiring platform for nurses,
0:00:49 and A16Z general partners Jeff Jordan and Julie Yu
0:00:50 on the consumer and bio teams,
0:00:52 discuss with Hannah Tidnam
0:00:55 how the scope of the job is changing today and why,
0:00:58 what’s driving the looming nursing labor crisis
0:01:00 and all the ways we might be able to impact that,
0:01:01 what it’s like to build
0:01:03 an innovative marketplace platform in healthcare
0:01:05 and how best to introduce innovation
0:01:08 into the healthcare system overall.
0:01:09 So we’re here today to talk about
0:01:10 the role of the healthcare worker
0:01:12 and specifically the role of the nurse.
0:01:15 We’ve all of us, I’m sure, interacted with nurses.
0:01:16 I think we have a sense of what the job looks like
0:01:18 when you’re there in the doctor’s office,
0:01:19 but can we zoom out a little bit
0:01:21 and talk about what the job looks like
0:01:22 from an industry level?
0:01:24 – So there’s a lot of clinical workers in healthcare
0:01:27 and it’s a very labor intensive industry.
0:01:30 And so as of say like 2018,
0:01:32 I became the biggest industry in the US
0:01:34 in terms of number of workers.
0:01:36 And it’s a very labor intensive industry.
0:01:39 So the majority of those workers are nurses.
0:01:41 So 60% of clinical workers are nurses.
0:01:43 – Oh my gosh, that’s a really high percentage.
0:01:44 – It’s a really high percentage.
0:01:46 – How many nurses are there in the United States?
0:01:48 – So there’s 3 million nurses in the US.
0:01:50 – That’s like 1% of the US population.
0:01:51 – And when you say labor intensive,
0:01:54 do you mean physically labor intensive or ours?
0:01:55 What do you actually mean by that?
0:01:56 – What I mean by labor intensive
0:01:58 is you need a lot of workers to deliver the care
0:02:01 in the same way a restaurant is labor intensive.
0:02:02 There are team players,
0:02:04 they’re involved when patients are entering
0:02:06 the hospital or healthcare facility
0:02:09 during their entire stay and also during discharge.
0:02:12 They make a huge impact on the patient’s experience
0:02:13 while they’re in the facility.
0:02:14 – Nurses are kind of the engine
0:02:16 of how hospitals and clinics work.
0:02:19 When you think about an encounter as a patient,
0:02:22 the number of minutes that you spend sort of interfacing
0:02:23 with any of the healthcare workers,
0:02:24 the vast majority of those minutes
0:02:25 are likely to be with the nurse.
0:02:28 It’s on admission, even the upfront triage,
0:02:30 when you get referred to a facility,
0:02:33 oftentimes that first point of contact
0:02:34 where they are trying to qualify,
0:02:36 where in the hospital should I even send you,
0:02:38 sometimes is a nurse.
0:02:41 Because of the need to actually clinically understand
0:02:42 what is happening to you as a patient.
0:02:45 The doctor is typically kind of the primary type
0:02:47 of provider that one thinks about
0:02:49 when interacting with the healthcare system,
0:02:51 but oftentimes the physician is actually the one
0:02:52 that you spend the least time with
0:02:54 in a healthcare encounter vis-a-vis a nurse.
0:02:56 – That’s right, yeah.
0:02:58 – So when you say labor intensive,
0:02:59 what does that actually break down to?
0:03:01 How many patients for how many nurses?
0:03:03 – Yeah, it’s funny you bring that up
0:03:05 because that’s a really controversial topic.
0:03:07 The topic of staffing ratios,
0:03:09 how many patients to a nurse.
0:03:11 So in the state of California, it’s actually regulated
0:03:15 and it’s five patients to one nurse at any given time.
0:03:16 It’ll vary by unit.
0:03:18 So for example, in the intensive care unit,
0:03:19 it’s more like two patients to one nurse.
0:03:21 But California is one of those rare states
0:03:24 that we’re just a little bit more regulated here.
0:03:26 Now there are nurses all over the country
0:03:27 fighting for staffing ratios
0:03:31 because when you have too many patients to one nurse,
0:03:34 your quality of care goes down, nurses get burnt out.
0:03:37 A nurse who’s working beyond the 12 hour shift, right?
0:03:39 They’re on hour 15, 16.
0:03:41 The research shows they are 2.5 times more likely
0:03:43 to create a medication error.
0:03:45 There’s also research that shows when you’re understaffed,
0:03:47 your patient mortality goes up by 4%, right?
0:03:49 So the patients are literally more likely to die
0:03:51 when the hospital’s understaffed.
0:03:52 It’s a really challenging problem.
0:03:54 – And that’s not regulated as well.
0:03:56 It seems like if you’re regulating the ratios,
0:03:58 like you would not be regulating the–
0:03:59 – It should be, but you know.
0:04:01 – They relate truckers, but not nurses.
0:04:04 – So let’s actually talk about the scope of the job.
0:04:05 What does that look like today?
0:04:07 The job is changing in clinical terms.
0:04:08 Is it also changing in other ways?
0:04:11 – There’s increasingly more and more administrative work
0:04:14 to be done just because of the way hospitals bill
0:04:16 and the way medical records work
0:04:18 that things have to get recorded.
0:04:21 So also for a bunch of liability and malpractice reasons,
0:04:23 you also have to record everything.
0:04:24 And so the nurses heavily involve
0:04:25 in documentation as well.
0:04:27 – Which also involves reimbursement.
0:04:28 They’re a pretty core function
0:04:30 for both the patient and the provider.
0:04:31 – And anything reimbursement related,
0:04:33 oftentimes that’s viewed as something
0:04:35 that is sort of below the pay grade of the physician.
0:04:37 Health plans and insurance companies oftentimes
0:04:39 are employing droves of nurses
0:04:41 for things like prior authorization
0:04:44 and sort of medical necessity assessment
0:04:46 because you do need to literally review
0:04:48 and actually notes around that patient encounter
0:04:49 to determine whether or not
0:04:51 it is something that should be reimbursed
0:04:53 under those medical circumstances.
0:04:55 And right now there’s not a great way
0:04:57 to sort of automate that process.
0:04:58 And so it does require human judgment.
0:05:00 And oftentimes, again, those folks are nurses
0:05:02 because it’s expensive to do it with a nurse,
0:05:04 but it’s even more expensive to do it with a physician.
0:05:07 And so it’s sort of the lowest sort of level of clinician
0:05:09 that you can still have that judgment,
0:05:12 but do it in as cost-effective of a way as possible.
0:05:14 – So we’re in the middle of a big nursing shortage.
0:05:17 There’s been a lot of coverage about this looming crisis
0:05:20 in nursing, and I understand the regulation to make it
0:05:23 so that nurses aren’t handling 25 patients at one.
0:05:26 But why are nurses in such short supply?
0:05:28 – Our demand for healthcare as a country keeps going up
0:05:30 as our population ages,
0:05:32 growing demand, not enough supply of workers.
0:05:35 The nursing shortage is a number one skilled labor shortage
0:05:36 we have in this country.
0:05:38 And it’s estimated that by 2024,
0:05:40 we’ll be one million nurses short.
0:05:43 – The shortage of workers is estimated to be three times
0:05:46 larger than the shortage of engineers in the United States.
0:05:48 So I mean, these are big, big numbers.
0:05:49 – Are there other reasons as well,
0:05:51 besides just the growing system?
0:05:53 Are there things specific to the job
0:05:56 that people are not bringing in more talent?
0:05:58 – The other reasons that kind of just exacerbate
0:05:59 the situation is one,
0:06:02 nursing schools are not able to take in as many students
0:06:06 as they would like because their faculty is also retiring.
0:06:08 You know, the biggest group of nurses right now
0:06:10 is millennials, but the second biggest is the baby boomers.
0:06:12 So it’s expected that 20% of nurses
0:06:14 are expected to retire in the next three years.
0:06:17 And that includes not just the nurses on the floor
0:06:19 or in the units, but also the nurses
0:06:21 who train other nurses in nursing schools.
0:06:23 So there’s also a shortage of faculty too.
0:06:25 – There’s also geographic mismatches
0:06:28 where they’re acute shortages in certain places.
0:06:30 – But it’s prevalent throughout.
0:06:31 So even in all the big cities,
0:06:34 whether it’s New York City, LA, San Francisco,
0:06:36 they are all suffering from shortages.
0:06:39 – So does that mean it’s a good career to get into
0:06:40 because you’re highly desirable?
0:06:42 – It is an amazing career to get into.
0:06:45 For job security, it also pays quite well.
0:06:47 And because of the labor shortage,
0:06:49 the compensation does keep moving up.
0:06:52 So for example, in California specifically,
0:06:56 the average salary for a nurse is $100,000.
0:06:59 In the Bay Area, it’s closer to $140,000.
0:07:02 In LA, the average is $120,000.
0:07:04 It has traditionally been looked at as a blue collar job,
0:07:06 but they’re getting white collar compensation now.
0:07:08 And it does require a degree.
0:07:11 It does require training and certifications.
0:07:15 So you have OR nurses, ICU nurses, emergency nurses,
0:07:18 oncology nurses, with more expertise,
0:07:20 with more certifications, with more training
0:07:21 in specific areas.
0:07:24 So I think there’s a perception that it’s blue collar,
0:07:24 but it’s actually not.
0:07:26 – I mean, it’s a pretty rigorous curriculum
0:07:29 with certifications and tests and things like that.
0:07:30 I’ve talked to a number of young people
0:07:32 who are considering a career in nursing
0:07:34 and they’re like, I know it’s gonna be hard work.
0:07:36 I know it’s gonna take a long time,
0:07:38 but the prize at the end is rewarding.
0:07:40 – Actually, what does that look like?
0:07:42 How much education, how much certification?
0:07:45 – Yeah, so the usual degrees are either the BSN,
0:07:46 Bachelor of Science in Nursing,
0:07:48 or the Associate’s Degree in Nursing.
0:07:50 The Associate’s Degree is kind of falling out of favor
0:07:53 as hospitals increasingly require a bachelor’s degree.
0:07:56 And then even after the degree, you start working,
0:07:58 but you are also training and/or specializing
0:07:59 in specific units as well.
0:08:01 – And is that degree falling out of favor
0:08:03 because nurses are doing more and hospitals want nurses
0:08:05 with a higher degree of education?
0:08:06 – Yeah, you just stumbled on another
0:08:09 really controversial topic.
0:08:12 There’s a certification for hospitals called MAGNIT,
0:08:15 and one of the requirements to be MAGNIT certified
0:08:16 as a hospital is to have, you know,
0:08:19 the majority of your nurses with bachelor’s degrees.
0:08:21 So like many, many things in healthcare
0:08:22 because it’s a regulated profession
0:08:25 and a regulated industry, but it’s also an industry
0:08:27 that they’re very big on brands
0:08:30 and it’s yet another stamp that a hospital
0:08:31 or an academic medical center can get.
0:08:33 – Okay, so the hospitals are getting squeezed
0:08:36 by the regulation and then also by this increasing demand
0:08:38 for a certain level of expertise.
0:08:40 And the nurse’s job is growing.
0:08:42 What is the bottom line for hospitals at the moment?
0:08:45 How are they dealing with this kind of increased pressure?
0:08:46 – Yeah, so here’s the bottom line.
0:08:50 When you’re understaffed or when you don’t have enough nurses,
0:08:54 you end up spending on overtime, on contract workers,
0:08:55 and you can’t see as many patients.
0:08:57 So this whole issue that–
0:08:58 – So higher costs and lower revenue.
0:08:59 – Exactly.
0:09:00 – Other than that, not an issue.
0:09:03 – Exactly, higher costs and less revenue.
0:09:06 And it is probably the number one issue
0:09:08 for hospital executives, staffing is,
0:09:10 and it’s definitely certainly their number one cost.
0:09:13 And the thing to keep in mind is that hospitals
0:09:15 are thin margin businesses.
0:09:17 The average margins is 3%.
0:09:19 – That’s interesting because I think the common perception
0:09:21 is that hospitals tend to be places
0:09:23 with huge high volume financial flow.
0:09:24 – Cost structures are so high
0:09:27 that it’s hard to operate in the black.
0:09:28 I mean, the other thing that’s contributing
0:09:30 to a lot of this is, you know,
0:09:32 we talk a lot about the unbundling of the hospital
0:09:33 and the fact that a lot of the care
0:09:35 that used to require coming to a hospital
0:09:38 is now being provided sort of out of the communities
0:09:41 in urgent care clinics and, you know, retail type settings.
0:09:44 And many of those clinics are actually staffed by nurses.
0:09:46 And so, you know, at the same time
0:09:47 as you have these shortages,
0:09:49 sort of in the traditional care settings,
0:09:51 you also have more demand coming
0:09:53 from these sort of alternative sites of care
0:09:55 that are designed specifically to be staffed
0:09:58 by lower acuity providers, not physicians.
0:10:00 And the whole purpose of those care settings
0:10:03 is to reduce costs on the delivery side.
0:10:05 But it’s just this sort of vicious cycle
0:10:07 where that’s also contributing to higher demand
0:10:08 for this kind of skill set.
0:10:10 – What does that process look like today
0:10:12 for the profession of finding the right job,
0:10:14 you know, the right hospital, the right clinic?
0:10:16 – Yeah, it’s pretty broken right now.
0:10:19 So if you’re looking for a job, for example, as a nurse,
0:10:23 you have to apply to probably 10, 15, 20 places.
0:10:25 And most of the time you don’t even hear back.
0:10:26 And if you hear back, it could take months.
0:10:28 – But why, if they need them so badly,
0:10:29 I don’t understand, it seems so.
0:10:32 – So we talked a lot about the shortage and the under supply,
0:10:34 but the other thing that kind of plagues
0:10:35 this industry is inefficiency.
0:10:38 And the talent acquisition teams or HR teams
0:10:40 inside hospitals are armed
0:10:42 with pretty outdated tools and processes
0:10:45 that really haven’t changed since like the 90s.
0:10:48 And they’re primarily using external job boards
0:10:51 like Indeed or LinkedIn or their own hospitals job board,
0:10:53 put a posting out there and hope something happens.
0:10:55 That’s really difficult when you are going after
0:10:57 a group of workers that are in high, high demand.
0:10:59 And so you’re basically waiting
0:11:00 for the right people to come.
0:11:02 And it’s really quantity over quality.
0:11:06 So when people apply, the HR teams are manually sifting
0:11:07 through all of those applicants
0:11:10 and manually matching them as well.
0:11:13 And so that just creates an insane amount of inefficiency.
0:11:15 At any given time, one hospital recruiter
0:11:16 is trying to fill a hundred jobs.
0:11:18 – Another contributor to inefficiencies
0:11:21 on the health system side are really when patients come in,
0:11:24 how do you sort of effectively match demand to supply?
0:11:27 And today that’s done in a barely brute force way,
0:11:30 there really aren’t technology tools with intelligence
0:11:33 that allow you to route and triage patients
0:11:36 to the right type of provider or the right type of nurse
0:11:38 or even distinguish whether or not a patient
0:11:41 is appropriate to see a nurse versus a doctor.
0:11:43 And that’s one of the highly evolving areas
0:11:47 of the market right now is the scope of practice concept
0:11:51 where things that maybe used to be only possible
0:11:53 to do by a physician, increasingly
0:11:55 those boundaries are being redrawn
0:11:57 and nurses are taking on a lot more of that.
0:12:00 But that’s not yet reflected in sort of that routing logic,
0:12:01 so to speak.
0:12:03 And so you often will end up with situations
0:12:06 where a patient will end up waiting eight weeks
0:12:07 to see a physician when in fact,
0:12:09 that person likely could have gotten in
0:12:10 to see a nurse much sooner.
0:12:13 And that has not only clinical implications,
0:12:14 obviously for the patient,
0:12:16 but operational inefficiency implications
0:12:18 for the physicians in the hospital system
0:12:21 where that doctor is not being effectively utilized
0:12:22 for their unique expertise
0:12:25 versus a lower sort of acuity provider.
0:12:26 And then for the health system,
0:12:27 they’re losing out on potential revenue
0:12:29 if again, if those slots are not being fully utilized
0:12:30 to their full extent.
0:12:31 – I just had this happen to me last week.
0:12:33 My doctor was unavailable for two weeks
0:12:36 and then the nurse practitioner would see me the same day.
0:12:37 – Yeah, and there are real sort of societal
0:12:39 and cultural challenges with that.
0:12:42 I think Americans are not yet fully bought into
0:12:44 sort of going to a nurse for something
0:12:46 that they think they should go to see a doctor about.
0:12:47 And we hear that all the time in the market.
0:12:49 In fact, it might be better to go to a nurse
0:12:51 for certain things because you are gonna get
0:12:52 a different level of empathy,
0:12:55 a different level of care and support and service.
0:12:56 And so that’s also contributing to this,
0:12:58 but that’s sort of the notion
0:13:01 of the most effective use of clinical resource.
0:13:03 I think it’s a big component of the challenge here.
0:13:05 – The process is largely on the same way
0:13:07 it was a generation ago.
0:13:08 It’s a paper oriented process
0:13:10 because the tech tools don’t really work
0:13:13 for something this specialized and this unique.
0:13:15 So, you know, the dominant job platforms
0:13:18 are LinkedIn and Indeed and Zip Recruiter,
0:13:21 but they’re not engineered to have this level
0:13:23 of specificity and this granular of matching.
0:13:25 You know, they’re not checking licenses
0:13:27 and credentials and certifications
0:13:31 and aren’t set to match those with existing job openings
0:13:33 ’cause the horizontal platforms kind of fall prey
0:13:35 to the least common denominator factor.
0:13:37 – Can you explain a little bit more about what you mean
0:13:40 by that, Jeff, that the horizontal platforms fall prey
0:13:41 to the least common denominator?
0:13:44 – If you’re trying to fill everything from a CEO
0:13:47 to a sales rep to, you know, oncology nurse,
0:13:49 you’re not going to have the same certifications
0:13:50 clearly for the CEO.
0:13:54 For the nursing and that general purpose tool
0:13:57 does not work well for that highly specialized vertical.
0:14:00 We see a natural progression that tends to repeat over
0:14:03 and over where, you know, the one horizontal platform
0:14:05 serves the needs of multiple verticals.
0:14:08 eBay, you know, started as trading collectibles,
0:14:10 but then they added computers and sporting goods
0:14:12 and clothes and, you know, and cars.
0:14:14 We even sold an airplane when I was there at Gulfstream.
0:14:18 And so the same platform is being called, in this case,
0:14:21 to service all the needs of that vertical.
0:14:23 And early on in platform development,
0:14:26 that typically is sufficient because it’s so much better
0:14:28 than the analog alternative.
0:14:31 But as these platform gets big and the individual verticals
0:14:34 on that platform get big, there’s an opportunity
0:14:37 for new codes to come in and better serve the needs
0:14:41 of that vertical relative to the one size fits all.
0:14:45 For example, StubHub came along and did a highly tailored
0:14:48 offering for the resell of secondary tickets.
0:14:52 They had time and energy and site space to do things
0:14:54 like ensure electronic delivery of tickets, you know,
0:14:57 have a trust and safety function for if the ticket
0:14:59 didn’t work when you got to the venue.
0:15:03 And as a result, StubHub was able to build a big business
0:15:06 in the secondary ticket market, taking a lot of that business
0:15:06 away from eBay.
0:15:10 Right now, StockX are doing collectible sneakers.
0:15:13 You know, Poshmark is doing apparel and each of those
0:15:17 is building verticals that in some cases taking one
0:15:18 of their verticals and doing it better.
0:15:21 – So what do we need to see then if we’re to better serve
0:15:23 the needs of the specific vertical?
0:15:25 – To be honest, most healthcare workers are not on LinkedIn.
0:15:27 And then so that makes the search and discovery
0:15:29 for the employers very difficult.
0:15:31 And the search and discovery fields, you know,
0:15:33 they’re not healthcare specific either.
0:15:36 And then you have the in-mail product that the response rates,
0:15:38 like it’s less than 10% the response rate on in-mail.
0:15:40 So there’s a lot of improvement needed.
0:15:43 – So high signal is better than low signal.
0:15:44 – Yeah.
0:15:47 – So now you’re in a narrow vertical one job description
0:15:51 and the complexity and optionality is enormous.
0:15:54 How could that horizontal platform begin to address it
0:15:58 if it’s highly challenged in a highly constrained environment
0:15:59 to address it really well?
0:16:02 So I mean, that’s a lot of the thesis is it takes that level
0:16:06 of focus specialization, maniacal optimization
0:16:09 to add value to the healthcare system
0:16:13 and to the nurses that helps bridge the gap.
0:16:15 – So if now is the moment for the healthcare vertical
0:16:17 to kind of be better addressed,
0:16:20 what does that actually look like in tactical detail?
0:16:21 – We’ve done three or four things
0:16:23 that are specific for this industry.
0:16:26 Number one is that the employers apply to the talent
0:16:27 instead of the other way around.
0:16:29 We get away with that because there’s such a big shortage
0:16:31 and honestly, that’s what’s needed
0:16:33 given the supply, demand and balance in this market.
0:16:36 The second thing is we’ve largely automated the screening
0:16:38 things like licenses and certifications
0:16:40 and experience and skills.
0:16:42 All of these things that the hospital usually does manually
0:16:44 by using technology, you can just deliver
0:16:47 a lot higher quantity and quality of talent to the employers.
0:16:50 – A highly curated sample based on their specific need.
0:16:51 – Exactly.
0:16:53 And so then the third piece is the custom matching, right?
0:16:56 So it is not helpful for a recruiter
0:16:59 to log into their web application and see 200 candidates.
0:17:02 They need to just see the 12 out of the best fit.
0:17:04 – Right, no, 200 just makes you want to close it again.
0:17:04 Do something else.
0:17:06 – Think of the gains the hospitals.
0:17:08 If you all of a sudden, the process goes
0:17:12 from a torrent of inbound to highly curated sample.
0:17:15 The number of resumes you review goes way down.
0:17:18 The number of interviews you do typically goes way down.
0:17:20 The time to hire goes way down
0:17:22 because you’ve got that curated sample
0:17:26 of qualified nurses for this specific position you have.
0:17:29 You are creating a very high level of operational efficiency
0:17:31 for the administrator at the hospital
0:17:33 and that administrator is very, very busy.
0:17:34 – And it’s the same experience on the talent.
0:17:37 The nurse does not want to hear from 80 employers.
0:17:39 They want to hear from the three that are the right fit.
0:17:41 And so building those custom matching algorithms
0:17:42 are really important.
0:17:45 Dry the experience and the efficiency for both sides as well.
0:17:46 And then the fourth piece,
0:17:50 we provide pretty robust data analytics to the employers
0:17:52 where they can see their utilization
0:17:54 and their hiring process
0:17:55 and they have a lot more visibility into it.
0:17:57 And they can even see the number of days talent
0:17:59 is spending between each step.
0:18:01 And they’re able to benchmark that against their competitors
0:18:04 ’cause their competitors are also using our platform.
0:18:06 – So just shining a light on that kind of black box
0:18:09 where things would languish in weird limboes
0:18:10 for a super long time.
0:18:12 I mean, just like any industry, any function,
0:18:14 a lot of decisions should be based on data.
0:18:17 And HR and talent acquisition is a function
0:18:20 that has an insane amount of data,
0:18:22 but sometimes it’s hard to get at.
0:18:24 And that’s what decisions should be based on,
0:18:26 how they can improve their internal hiring processes.
0:18:27 – Can you talk a little bit about
0:18:29 how this actually affects the bottom line
0:18:30 of hospitals and providers?
0:18:32 Like how does making a specific search field
0:18:35 for certification actually turn into dollars saved?
0:18:37 – Hospitals and health systems are able to hire
0:18:40 and fill those roles for permanent nurses
0:18:41 in less than 30 days,
0:18:43 where that national average is 90 days or longer.
0:18:45 That results in significant,
0:18:47 like millions of dollars in cost savings for the hospital,
0:18:49 because they’re not spending on overtime,
0:18:51 they’re not spending on contract workers.
0:18:53 – And healthcare is notorious for it being
0:18:55 a very, very challenging place for technology companies
0:18:56 to prove ROI.
0:18:57 And this is one of those areas
0:19:00 where there’s such a clear top line benefit
0:19:02 because you can literally say my patient volumes
0:19:05 are hurt or benefit from being able
0:19:06 to hire nurses more quickly.
0:19:07 – And hire revenue.
0:19:10 – Because you have the capacity to take
0:19:11 on the business you need.
0:19:13 – The other place where the revenue piece shows up
0:19:14 is just in terms of patient access.
0:19:16 You know, one of the crises in this country
0:19:19 is the fact that patients cannot access care
0:19:20 because of these supply constraints.
0:19:23 It goes back to this notion of kind of right sizing care.
0:19:26 If you were a patient who had, let’s say, elevated PSA,
0:19:29 that is a fairly wide spectrum of clinical,
0:19:31 you know, may actually warrant going straight
0:19:34 to a urologist versus you might have to be worked up
0:19:36 and kind of go through a care journey.
0:19:37 But if you were not doing this appropriately,
0:19:40 you would essentially be sort of closing the door
0:19:42 to patients because you were making them wait.
0:19:43 The patient wouldn’t get the clinical benefit
0:19:45 and then you were losing out on that revenue stream.
0:19:47 And frankly, the physicians, you know,
0:19:50 they would always say I’m optimizing for surgical yield.
0:19:53 I want a mix of patients who are most likely
0:19:56 to result in a case that is gonna take advantage
0:19:57 of my unique skill set.
0:20:00 And so even from a physician retention, satisfaction,
0:20:02 et cetera, that perspective,
0:20:03 that was a huge issue
0:20:05 that these organizations were trying to deal with.
0:20:08 – Did nurses get to optimize for anything like that as well?
0:20:09 – Oh, absolutely.
0:20:11 No, I mean, it’s the same thing where I think for nurses
0:20:13 and even MAs and some of these other, you know,
0:20:15 types of roles that have sort of popped up
0:20:18 to kind of support the administrative overhead,
0:20:21 you started to see, again, the administrative tasks
0:20:23 be passed on to these folks
0:20:26 who are very legitimately trained in clinical practice.
0:20:29 And we’re taking on these sort of lower utility tasks.
0:20:31 How can technology sort of effectively route people
0:20:33 so that some of that burden disappears?
0:20:36 – So when you’re creating a jobs marketplace like this
0:20:38 where you’re matching up this highly vetted,
0:20:41 highly curated with all these different requirements
0:20:44 and challenges from regulation and certification,
0:20:47 how do you think about vetting for the non-obvious stuff?
0:20:50 Like about empathy, about bedside manner,
0:20:51 how do you think about those?
0:20:52 – That stuff is really important
0:20:55 ’cause ultimately the mission of most of these hospitals,
0:20:58 all of them probably, is to deliver amazing care, right?
0:21:01 And putting all the hard skills aside,
0:21:03 the licenses, the certifications, all the hard skills.
0:21:05 There is a whole set of soft skills
0:21:07 that people need to convey and practice
0:21:09 when they’re on the floor as well.
0:21:12 We have an entire interview preparation kind of like module,
0:21:14 basically that helps nurses convey
0:21:16 their softer skills and interviews.
0:21:17 What are they motivated by?
0:21:20 Are they truly motivated by patient care or not?
0:21:22 How much empathy do they have?
0:21:23 What are their motivations?
0:21:25 What do they want to do with their career?
0:21:27 We’ve taken a much more like hands-on approach
0:21:28 with just like, hey, these are the things
0:21:31 that you need to just really convey in your interview.
0:21:32 – What was the most challenging thing
0:21:33 for you to build into the system
0:21:35 when you’re building these tools from the ground up?
0:21:39 – I think the challenge of just the heterogeneity of this,
0:21:42 like so we’re dealing with all RNs and NPs.
0:21:46 There’s multiple specialties and multiple requirements.
0:21:48 And then the employers also have lots of different needs.
0:21:50 And when you’re trying to build technology
0:21:53 that works for that, for all the users, it’s challenging.
0:21:55 – The healthcare industry is notoriously difficult
0:21:57 to disrupt with new innovation,
0:21:58 often for very good reason.
0:22:01 And because of the complex nature of the system itself,
0:22:04 how do you see yourself fitting into an overall trend
0:22:07 of new technological innovation in healthcare?
0:22:09 Or I guess another way to say that is,
0:22:11 what has your experience been like
0:22:14 introducing a new tech into this particular system?
0:22:15 – I actually feel a lot of empathy
0:22:17 for some of the hospital executives
0:22:19 and the administrators and the nurse managers
0:22:22 and so on who are trying to manage the operations, right?
0:22:24 Internally, they’re dealing with multiple issues
0:22:25 at the same time.
0:22:27 First of all, like reimbursements going down, right?
0:22:29 So they had a lot of revenue pressure.
0:22:32 Number two, it’s actually not completely clear
0:22:33 in the healthcare industry or in a hospital
0:22:35 who your actual customer is.
0:22:37 Common sense would say it’s just the patient,
0:22:40 but the patient doesn’t actually, for the most part,
0:22:42 doesn’t pay for the care directly, right?
0:22:45 So they also have to take into account health insurance,
0:22:47 the payers, how they’re ultimately making money
0:22:48 and how they’re getting reimbursed.
0:22:50 So that’s why you see a lot of the technology investments
0:22:53 in healthcare or in a hospital are more around billing
0:22:56 than around optimizing operations, right?
0:22:59 And then you also have employers in the healthcare industry
0:23:01 who are ultimately also the ones who are paying for the care.
0:23:04 And their employers are offering the health insurance
0:23:07 to the employees and they’re making decisions
0:23:09 about what plans to offer
0:23:11 and there’s not much clarity on pricing.
0:23:13 It’s just like a very convoluted industry, right?
0:23:17 Where just like the normal free market forces
0:23:19 and competition that we see in other industry
0:23:21 doesn’t necessarily apply.
0:23:23 – The stakes are just so much higher
0:23:24 than any other industry.
0:23:25 If you turn an engineer,
0:23:26 you’re probably gonna lose a little bit on productivity
0:23:28 and maybe not ship some code.
0:23:31 But here, if you are constantly churning talent
0:23:34 and turning over folks who are staffed in these environments,
0:23:36 there is such huge risk
0:23:37 from a patient safety perspective on that
0:23:40 because these teams have protocols
0:23:42 and they have ways that they respond
0:23:44 to sort of emergency situations and whatnot
0:23:46 to train and really sort of get up to speed
0:23:48 on those types of environments,
0:23:50 very complex environments takes time.
0:23:52 If you’re not doing that match upfront
0:23:54 in a way that sort of guarantees
0:23:56 or at least raises the probability
0:23:58 of longer retention of these employees,
0:24:01 then there’s a real high stakes risk to patients.
0:24:04 – Actually, let’s talk about that retention piece specifically.
0:24:06 We’ve talked about the talent acquisition,
0:24:08 but not so much how do you hold on to good talent?
0:24:11 What’s the turnover rate like in this profession?
0:24:15 – The annual turnover for nurses in the US today is 20%.
0:24:17 – Oh my gosh, is that because it’s so hard
0:24:19 or because people move or what?
0:24:21 – The number one driver is understaffing, right?
0:24:22 ‘Cause when you’re understaffed,
0:24:24 you’re burning out your existing workers.
0:24:26 And then also it’s a really tight labor market.
0:24:28 You tend to change jobs more often when there’s a shortage.
0:24:29 – So what happens?
0:24:31 You get the job and then you’re overworked
0:24:33 and you start to become disillusioned
0:24:34 and then you think you’re gonna have
0:24:36 a better job elsewhere essentially?
0:24:37 – Yeah, there’s probably three or four main factors
0:24:39 why nurses change jobs.
0:24:41 Number one is like, they’re tired and burnt out
0:24:42 and just need a different unit
0:24:44 or hope for a hospital that’s better managed
0:24:45 or better staffed.
0:24:47 Number two is they’re trying to reduce commute times.
0:24:49 90% of nurses are women.
0:24:51 Many of them are taking care of children.
0:24:53 Many of them are trying to shorten commute times.
0:24:55 – I can’t believe it, it’s 90% still, that’s so high.
0:24:56 – Yeah, it’s still high.
0:24:59 And then career advancement is another reason.
0:25:00 So if you’re trying to grow your skill set,
0:25:02 become more specialized and you’re not seeing those
0:25:03 opportunities with your current employer,
0:25:05 you’re gonna change and then higher pay.
0:25:07 – As good market wages ’cause it’s applied
0:25:08 to man in balance.
0:25:10 – It’s funny, it sounds like all the normal reasons,
0:25:11 but like super condensed into like a,
0:25:14 where you feel them very acutely and it happens very fast.
0:25:17 Okay, so on retention, what are the things
0:25:20 that people can do then besides finding the right job
0:25:24 the first time and supplementing the supply
0:25:26 so that there is not a critical shortage
0:25:29 and you’re working way long hours?
0:25:31 What are other things that employers and hospitals
0:25:33 can do to solve that piece of the problem?
0:25:36 – The few factors that influence it and the hospitals
0:25:39 that have the best retention do this extremely well.
0:25:41 Number one is fast hiring.
0:25:43 So it turns out if you have an amazing candidate experience
0:25:45 while you’re getting hired, you are more likely
0:25:46 to stay around.
0:25:47 – Really?
0:25:49 Even if you get disillusioned a little bit later?
0:25:51 – Yeah, because that’s part of it.
0:25:52 – Even disillusioned before you start,
0:25:55 that’s usually not a good leading indicator.
0:25:57 – That’s true, that’s true.
0:26:00 If you’re hired in 11 days, you have a very positive
0:26:01 impression of that employer, like oh my goodness,
0:26:03 like they have their act together.
0:26:06 And then that leads to higher employee engagement scores.
0:26:07 – Wow.
0:26:08 – And more likely them to stay.
0:26:09 – I was talking to multiple venture capitalists
0:26:11 when I made the move for being an operator
0:26:12 to a venture firm.
0:26:14 The first talk to me, the recruiting cycle
0:26:17 was over six months before an offer came.
0:26:19 And the offer only came after I started talking
0:26:21 to Andreessen Horowitz and got to an offer
0:26:23 within a few weeks.
0:26:26 And then the six month person said oh, we’ll move fast.
0:26:28 And so I was so disillusioned at that point,
0:26:29 it was a pretty easy decision.
0:26:30 – Yeah, it’s very telling.
0:26:33 What have we learned from these other platforms
0:26:35 that we can incorporate into the platform
0:26:37 that’s better addressing a specific vertical?
0:26:40 What is some of the kind of knowledge that does apply?
0:26:42 – So we use these competitive tactics, right?
0:26:44 When a hospital recruiter logs in,
0:26:46 they know they’re competing with other employers
0:26:47 at the same time.
0:26:48 There’s a time limit.
0:26:48 – You gamify it?
0:26:50 – Yeah, yeah. – That’s awesome.
0:26:51 – There’s a time limit.
0:26:52 There’s a seven day countdown
0:26:54 for them to send their interview requests.
0:26:56 And they can see which candidates are popular.
0:26:59 So we’re creating urgency, scarcity, and competition.
0:27:01 – That’s at e-commerce to only one left.
0:27:02 Yeah, that kind of thing.
0:27:03 – It works.
0:27:05 – So how is the adoption of this kind of thing?
0:27:06 Like do you hit resistance along the way
0:27:07 in certain areas?
0:27:09 Is there friction to getting these new platforms
0:27:11 integrated into the system?
0:27:13 – Okay, so this goes back to what Julie had said earlier
0:27:16 about ROI and the value proposition.
0:27:19 You have to have a really, really strong value proposition
0:27:20 and ROI.
0:27:21 And whatever you’ve come up with
0:27:23 has to be at least 10 times better
0:27:24 than what’s already out there.
0:27:25 So whatever we come up with,
0:27:27 incredible health needs to be at least 10 times better
0:27:29 than LinkedIn or Indeed or any of these other tools
0:27:30 that they’re using.
0:27:33 We now have over 150 hospitals in California
0:27:35 using our platform in less than 18 months.
0:27:37 Very short sales cycles.
0:27:39 Because this is a hair on fire problem.
0:27:43 The CEO and everyone in the C-suite cares about staffing
0:27:46 and getting great talent and getting amazing nurses
0:27:49 in permanent roles quickly impacts their bottom line
0:27:51 and both revenue and cost.
0:27:52 – That’s the other sort of case
0:27:54 for why you need vertical solutions
0:27:57 is the supply side of the market also has to believe
0:28:00 that they are gonna be better represented on this platform
0:28:02 than your sort of generic horizontal platform
0:28:03 and that there’s something new to offer there.
0:28:06 So what are you seeing on the response from the nurses side?
0:28:08 – Yeah, it’s similar in that the value
0:28:09 has to be really clear to them as well.
0:28:11 Right now we’re the only platform out there
0:28:14 that says create a profile, sit back and relax,
0:28:16 employers are gonna apply to you.
0:28:18 So employers send them interview requests
0:28:19 and then the nurse gets to decide
0:28:21 which ones to accept and which ones to decline.
0:28:25 And what that does is it gives more control to the nurse
0:28:27 and this is something that they do not normally experience.
0:28:29 – Yeah, it sounds like a profession rife
0:28:31 with a feeling of lack of control actually
0:28:33 that you’re constantly being told what to do
0:28:34 and where to go.
0:28:37 – Yeah, this is a highly mistreated
0:28:39 and underserved group of workers.
0:28:41 The vision is to help them live better lives.
0:28:42 It’s about the healthcare professionals.
0:28:45 Whoever creates a product or an experience
0:28:47 and treats this group of workers the best,
0:28:49 appreciates them, celebrates them,
0:28:50 gives them an amazing experience.
0:28:51 All of that is gonna win.
0:28:52 – That’s interesting.
0:28:55 I blogged years ago about in two-sided marketplaces,
0:28:57 the consumer side is the one that you should have
0:29:00 to optimize for even if the institutional side
0:29:01 is the one that pays you.
0:29:03 You know, at eBay you optimize for the buyer,
0:29:05 at OpenTable you optimize for the diner here,
0:29:06 you optimize for the nurses.
0:29:09 – The folks in the recruiting office of the hospital
0:29:11 are actually consumers, right?
0:29:12 And they’re gonna go home
0:29:15 and they’re gonna use their iPhone and shop on Amazon
0:29:17 and have these magical experiences
0:29:18 in other parts of their lives.
0:29:19 And then they get to work
0:29:22 and they have these sort of highly legacy
0:29:25 ossified archaic systems that sort of overall trend
0:29:27 is what’s driving a ton of uptake
0:29:29 of these novel technology solutions.
0:29:32 – A few of the hospitals use Oracle PeopleSoft,
0:29:34 some use Teleo, some use, you know,
0:29:36 there’s lots of different software,
0:29:37 whether they’re applicant tracking systems
0:29:39 or more general HR systems.
0:29:41 And we’re there and they’re like,
0:29:44 oh, I have to use a 20 page manual to create a job rec.
0:29:45 – Oh my gosh.
0:29:46 – Right?
0:29:47 And you look at it and it’s like, oh my God,
0:29:50 this software looks like it’s from like the 80s.
0:29:54 Like when software was first like a thing, right?
0:29:56 And so when we come in,
0:29:58 we’ve even had chief nursing officers say like,
0:30:00 oh, wow, it looks like a dating app.
0:30:01 – Yeah, I was gonna say that earlier
0:30:02 when you were checking the nurses.
0:30:05 – Yeah, match.com for nurses in hospitals, right?
0:30:06 And so–
0:30:08 – You don’t have to fake profiles and spam.
0:30:10 – Yeah, yeah, yeah, yeah, yeah.
0:30:11 Certainly a lot of the features we’ve built
0:30:14 into the platform we’ve borrowed from consumer apps,
0:30:17 like the countdown timers and who’s popular
0:30:20 and kind of creating urgency and scarcity in the platform
0:30:23 and just simply making it beautiful and easy to use.
0:30:24 – You see now for the first time,
0:30:28 it really grounds up demand from clinicians
0:30:29 asking for better tools.
0:30:33 They no longer are able to deal with kind of these legacy EHRs
0:30:35 that have been implemented across the industry.
0:30:36 One of the challenges has been,
0:30:40 it is just so damn hard to sell to these organizations, right?
0:30:42 If I’m looking at two options as an entrepreneur,
0:30:45 either I build software that I need to somehow figure out
0:30:48 how to distribute to this industry,
0:30:50 make them change the way that they operate,
0:30:53 deal with thousands of employees at these organizations
0:30:54 that all have their own agendas,
0:30:57 versus building sort of outside of the system,
0:30:59 let’s say a full stack primary care clinic
0:31:02 that I can build my own technology from the ground up,
0:31:03 eat my own dog food.
0:31:05 And therefore the packaging of that offering
0:31:07 may look like a direct to consumer offering,
0:31:08 but at the end of the day,
0:31:10 I’m trying to solve the same problem,
0:31:11 just sort of from the outside.
0:31:13 And so those are the two attack vectors
0:31:14 that we see out there.
0:31:15 I totally agree that in some ways,
0:31:18 the clinicians are sort of the forgotten end users
0:31:19 of this whole thing.
0:31:21 And you see a lot of emphasis on the patient,
0:31:23 but at the end of the day,
0:31:25 the high leverage point is actually putting better tools
0:31:26 in the hands of clinicians.
0:31:29 – Yeah, I mean, I meet many founders
0:31:30 who are working in the healthcare industry
0:31:32 and they’re usually building applications
0:31:34 that are patient facing, which is great.
0:31:38 But I don’t see enough working on the backend of healthcare.
0:31:40 We took one part of it, which is staffing.
0:31:43 There’s certainly a ton throughout operations.
0:31:45 And there’s a lot of innovation needed
0:31:48 in basically the full stack of healthcare.
0:31:50 – So what kind of takeaways or advice would you have
0:31:52 for other founders building companies
0:31:55 in the particularly challenging space that is healthcare?
0:31:57 – Like many things in entrepreneurship timing
0:31:58 is everything, right?
0:31:59 The healthcare industry is at a point
0:32:02 where the cost pressure has never been more intense
0:32:04 because reimbursements are going down
0:32:07 and the competition is fierce among providers.
0:32:10 And that creates opportunities for entrepreneurs
0:32:12 and a bunch of hospital executives
0:32:13 that may be willing to listen.
0:32:15 And so when you’re creating your product,
0:32:16 you need to come up with something
0:32:17 that’s at least 10 times better
0:32:19 than what’s already out there.
0:32:20 Like at least 10, and you can measure that however you want.
0:32:22 10 times better, 10 times cheaper,
0:32:24 10 times more efficient, 10 times faster,
0:32:25 like whatever it is.
0:32:29 And have a really, really strong value proposition
0:32:33 that clearly ties to ROI and impacts the bottom line
0:32:35 for the hospital, clearly impacts it.
0:32:38 Not like indirectly, but directly impacts it.
0:32:39 – That’s awesome.
0:32:41 Thank you so much for joining us on the A16Z podcast.
0:32:41 – Thank you. – Thank you.
0:32:50 [BLANK_AUDIO]
0:00:05 should not be taken as legal business tax
0:00:06 or investment advice,
0:00:09 or be used to evaluate any investment or security
0:00:11 and is not directed at any investors
0:00:14 or potential investors in any A16Z fund.
0:00:18 For more details, please see a16z.com/disclosures.
0:00:21 – Hi, and welcome to the A16Z podcast, I’m Hannah.
0:00:23 For many of us, nurses are essentially
0:00:25 the face of the healthcare system.
0:00:27 The person you’ll see the most of while you’re in it,
0:00:30 who will monitor your vitals, administer medications,
0:00:32 hold your hand when you’re in pain or scared,
0:00:35 answer all the questions you forgot to ask the doctor.
0:00:37 In this episode, we talk all about the role
0:00:40 of that unsung hero of the healthcare system, the nurse.
0:00:44 Iman Abouzade, CEO and co-founder of Incredible Health,
0:00:45 a hiring platform for nurses,
0:00:49 and A16Z general partners Jeff Jordan and Julie Yu
0:00:50 on the consumer and bio teams,
0:00:52 discuss with Hannah Tidnam
0:00:55 how the scope of the job is changing today and why,
0:00:58 what’s driving the looming nursing labor crisis
0:01:00 and all the ways we might be able to impact that,
0:01:01 what it’s like to build
0:01:03 an innovative marketplace platform in healthcare
0:01:05 and how best to introduce innovation
0:01:08 into the healthcare system overall.
0:01:09 So we’re here today to talk about
0:01:10 the role of the healthcare worker
0:01:12 and specifically the role of the nurse.
0:01:15 We’ve all of us, I’m sure, interacted with nurses.
0:01:16 I think we have a sense of what the job looks like
0:01:18 when you’re there in the doctor’s office,
0:01:19 but can we zoom out a little bit
0:01:21 and talk about what the job looks like
0:01:22 from an industry level?
0:01:24 – So there’s a lot of clinical workers in healthcare
0:01:27 and it’s a very labor intensive industry.
0:01:30 And so as of say like 2018,
0:01:32 I became the biggest industry in the US
0:01:34 in terms of number of workers.
0:01:36 And it’s a very labor intensive industry.
0:01:39 So the majority of those workers are nurses.
0:01:41 So 60% of clinical workers are nurses.
0:01:43 – Oh my gosh, that’s a really high percentage.
0:01:44 – It’s a really high percentage.
0:01:46 – How many nurses are there in the United States?
0:01:48 – So there’s 3 million nurses in the US.
0:01:50 – That’s like 1% of the US population.
0:01:51 – And when you say labor intensive,
0:01:54 do you mean physically labor intensive or ours?
0:01:55 What do you actually mean by that?
0:01:56 – What I mean by labor intensive
0:01:58 is you need a lot of workers to deliver the care
0:02:01 in the same way a restaurant is labor intensive.
0:02:02 There are team players,
0:02:04 they’re involved when patients are entering
0:02:06 the hospital or healthcare facility
0:02:09 during their entire stay and also during discharge.
0:02:12 They make a huge impact on the patient’s experience
0:02:13 while they’re in the facility.
0:02:14 – Nurses are kind of the engine
0:02:16 of how hospitals and clinics work.
0:02:19 When you think about an encounter as a patient,
0:02:22 the number of minutes that you spend sort of interfacing
0:02:23 with any of the healthcare workers,
0:02:24 the vast majority of those minutes
0:02:25 are likely to be with the nurse.
0:02:28 It’s on admission, even the upfront triage,
0:02:30 when you get referred to a facility,
0:02:33 oftentimes that first point of contact
0:02:34 where they are trying to qualify,
0:02:36 where in the hospital should I even send you,
0:02:38 sometimes is a nurse.
0:02:41 Because of the need to actually clinically understand
0:02:42 what is happening to you as a patient.
0:02:45 The doctor is typically kind of the primary type
0:02:47 of provider that one thinks about
0:02:49 when interacting with the healthcare system,
0:02:51 but oftentimes the physician is actually the one
0:02:52 that you spend the least time with
0:02:54 in a healthcare encounter vis-a-vis a nurse.
0:02:56 – That’s right, yeah.
0:02:58 – So when you say labor intensive,
0:02:59 what does that actually break down to?
0:03:01 How many patients for how many nurses?
0:03:03 – Yeah, it’s funny you bring that up
0:03:05 because that’s a really controversial topic.
0:03:07 The topic of staffing ratios,
0:03:09 how many patients to a nurse.
0:03:11 So in the state of California, it’s actually regulated
0:03:15 and it’s five patients to one nurse at any given time.
0:03:16 It’ll vary by unit.
0:03:18 So for example, in the intensive care unit,
0:03:19 it’s more like two patients to one nurse.
0:03:21 But California is one of those rare states
0:03:24 that we’re just a little bit more regulated here.
0:03:26 Now there are nurses all over the country
0:03:27 fighting for staffing ratios
0:03:31 because when you have too many patients to one nurse,
0:03:34 your quality of care goes down, nurses get burnt out.
0:03:37 A nurse who’s working beyond the 12 hour shift, right?
0:03:39 They’re on hour 15, 16.
0:03:41 The research shows they are 2.5 times more likely
0:03:43 to create a medication error.
0:03:45 There’s also research that shows when you’re understaffed,
0:03:47 your patient mortality goes up by 4%, right?
0:03:49 So the patients are literally more likely to die
0:03:51 when the hospital’s understaffed.
0:03:52 It’s a really challenging problem.
0:03:54 – And that’s not regulated as well.
0:03:56 It seems like if you’re regulating the ratios,
0:03:58 like you would not be regulating the–
0:03:59 – It should be, but you know.
0:04:01 – They relate truckers, but not nurses.
0:04:04 – So let’s actually talk about the scope of the job.
0:04:05 What does that look like today?
0:04:07 The job is changing in clinical terms.
0:04:08 Is it also changing in other ways?
0:04:11 – There’s increasingly more and more administrative work
0:04:14 to be done just because of the way hospitals bill
0:04:16 and the way medical records work
0:04:18 that things have to get recorded.
0:04:21 So also for a bunch of liability and malpractice reasons,
0:04:23 you also have to record everything.
0:04:24 And so the nurses heavily involve
0:04:25 in documentation as well.
0:04:27 – Which also involves reimbursement.
0:04:28 They’re a pretty core function
0:04:30 for both the patient and the provider.
0:04:31 – And anything reimbursement related,
0:04:33 oftentimes that’s viewed as something
0:04:35 that is sort of below the pay grade of the physician.
0:04:37 Health plans and insurance companies oftentimes
0:04:39 are employing droves of nurses
0:04:41 for things like prior authorization
0:04:44 and sort of medical necessity assessment
0:04:46 because you do need to literally review
0:04:48 and actually notes around that patient encounter
0:04:49 to determine whether or not
0:04:51 it is something that should be reimbursed
0:04:53 under those medical circumstances.
0:04:55 And right now there’s not a great way
0:04:57 to sort of automate that process.
0:04:58 And so it does require human judgment.
0:05:00 And oftentimes, again, those folks are nurses
0:05:02 because it’s expensive to do it with a nurse,
0:05:04 but it’s even more expensive to do it with a physician.
0:05:07 And so it’s sort of the lowest sort of level of clinician
0:05:09 that you can still have that judgment,
0:05:12 but do it in as cost-effective of a way as possible.
0:05:14 – So we’re in the middle of a big nursing shortage.
0:05:17 There’s been a lot of coverage about this looming crisis
0:05:20 in nursing, and I understand the regulation to make it
0:05:23 so that nurses aren’t handling 25 patients at one.
0:05:26 But why are nurses in such short supply?
0:05:28 – Our demand for healthcare as a country keeps going up
0:05:30 as our population ages,
0:05:32 growing demand, not enough supply of workers.
0:05:35 The nursing shortage is a number one skilled labor shortage
0:05:36 we have in this country.
0:05:38 And it’s estimated that by 2024,
0:05:40 we’ll be one million nurses short.
0:05:43 – The shortage of workers is estimated to be three times
0:05:46 larger than the shortage of engineers in the United States.
0:05:48 So I mean, these are big, big numbers.
0:05:49 – Are there other reasons as well,
0:05:51 besides just the growing system?
0:05:53 Are there things specific to the job
0:05:56 that people are not bringing in more talent?
0:05:58 – The other reasons that kind of just exacerbate
0:05:59 the situation is one,
0:06:02 nursing schools are not able to take in as many students
0:06:06 as they would like because their faculty is also retiring.
0:06:08 You know, the biggest group of nurses right now
0:06:10 is millennials, but the second biggest is the baby boomers.
0:06:12 So it’s expected that 20% of nurses
0:06:14 are expected to retire in the next three years.
0:06:17 And that includes not just the nurses on the floor
0:06:19 or in the units, but also the nurses
0:06:21 who train other nurses in nursing schools.
0:06:23 So there’s also a shortage of faculty too.
0:06:25 – There’s also geographic mismatches
0:06:28 where they’re acute shortages in certain places.
0:06:30 – But it’s prevalent throughout.
0:06:31 So even in all the big cities,
0:06:34 whether it’s New York City, LA, San Francisco,
0:06:36 they are all suffering from shortages.
0:06:39 – So does that mean it’s a good career to get into
0:06:40 because you’re highly desirable?
0:06:42 – It is an amazing career to get into.
0:06:45 For job security, it also pays quite well.
0:06:47 And because of the labor shortage,
0:06:49 the compensation does keep moving up.
0:06:52 So for example, in California specifically,
0:06:56 the average salary for a nurse is $100,000.
0:06:59 In the Bay Area, it’s closer to $140,000.
0:07:02 In LA, the average is $120,000.
0:07:04 It has traditionally been looked at as a blue collar job,
0:07:06 but they’re getting white collar compensation now.
0:07:08 And it does require a degree.
0:07:11 It does require training and certifications.
0:07:15 So you have OR nurses, ICU nurses, emergency nurses,
0:07:18 oncology nurses, with more expertise,
0:07:20 with more certifications, with more training
0:07:21 in specific areas.
0:07:24 So I think there’s a perception that it’s blue collar,
0:07:24 but it’s actually not.
0:07:26 – I mean, it’s a pretty rigorous curriculum
0:07:29 with certifications and tests and things like that.
0:07:30 I’ve talked to a number of young people
0:07:32 who are considering a career in nursing
0:07:34 and they’re like, I know it’s gonna be hard work.
0:07:36 I know it’s gonna take a long time,
0:07:38 but the prize at the end is rewarding.
0:07:40 – Actually, what does that look like?
0:07:42 How much education, how much certification?
0:07:45 – Yeah, so the usual degrees are either the BSN,
0:07:46 Bachelor of Science in Nursing,
0:07:48 or the Associate’s Degree in Nursing.
0:07:50 The Associate’s Degree is kind of falling out of favor
0:07:53 as hospitals increasingly require a bachelor’s degree.
0:07:56 And then even after the degree, you start working,
0:07:58 but you are also training and/or specializing
0:07:59 in specific units as well.
0:08:01 – And is that degree falling out of favor
0:08:03 because nurses are doing more and hospitals want nurses
0:08:05 with a higher degree of education?
0:08:06 – Yeah, you just stumbled on another
0:08:09 really controversial topic.
0:08:12 There’s a certification for hospitals called MAGNIT,
0:08:15 and one of the requirements to be MAGNIT certified
0:08:16 as a hospital is to have, you know,
0:08:19 the majority of your nurses with bachelor’s degrees.
0:08:21 So like many, many things in healthcare
0:08:22 because it’s a regulated profession
0:08:25 and a regulated industry, but it’s also an industry
0:08:27 that they’re very big on brands
0:08:30 and it’s yet another stamp that a hospital
0:08:31 or an academic medical center can get.
0:08:33 – Okay, so the hospitals are getting squeezed
0:08:36 by the regulation and then also by this increasing demand
0:08:38 for a certain level of expertise.
0:08:40 And the nurse’s job is growing.
0:08:42 What is the bottom line for hospitals at the moment?
0:08:45 How are they dealing with this kind of increased pressure?
0:08:46 – Yeah, so here’s the bottom line.
0:08:50 When you’re understaffed or when you don’t have enough nurses,
0:08:54 you end up spending on overtime, on contract workers,
0:08:55 and you can’t see as many patients.
0:08:57 So this whole issue that–
0:08:58 – So higher costs and lower revenue.
0:08:59 – Exactly.
0:09:00 – Other than that, not an issue.
0:09:03 – Exactly, higher costs and less revenue.
0:09:06 And it is probably the number one issue
0:09:08 for hospital executives, staffing is,
0:09:10 and it’s definitely certainly their number one cost.
0:09:13 And the thing to keep in mind is that hospitals
0:09:15 are thin margin businesses.
0:09:17 The average margins is 3%.
0:09:19 – That’s interesting because I think the common perception
0:09:21 is that hospitals tend to be places
0:09:23 with huge high volume financial flow.
0:09:24 – Cost structures are so high
0:09:27 that it’s hard to operate in the black.
0:09:28 I mean, the other thing that’s contributing
0:09:30 to a lot of this is, you know,
0:09:32 we talk a lot about the unbundling of the hospital
0:09:33 and the fact that a lot of the care
0:09:35 that used to require coming to a hospital
0:09:38 is now being provided sort of out of the communities
0:09:41 in urgent care clinics and, you know, retail type settings.
0:09:44 And many of those clinics are actually staffed by nurses.
0:09:46 And so, you know, at the same time
0:09:47 as you have these shortages,
0:09:49 sort of in the traditional care settings,
0:09:51 you also have more demand coming
0:09:53 from these sort of alternative sites of care
0:09:55 that are designed specifically to be staffed
0:09:58 by lower acuity providers, not physicians.
0:10:00 And the whole purpose of those care settings
0:10:03 is to reduce costs on the delivery side.
0:10:05 But it’s just this sort of vicious cycle
0:10:07 where that’s also contributing to higher demand
0:10:08 for this kind of skill set.
0:10:10 – What does that process look like today
0:10:12 for the profession of finding the right job,
0:10:14 you know, the right hospital, the right clinic?
0:10:16 – Yeah, it’s pretty broken right now.
0:10:19 So if you’re looking for a job, for example, as a nurse,
0:10:23 you have to apply to probably 10, 15, 20 places.
0:10:25 And most of the time you don’t even hear back.
0:10:26 And if you hear back, it could take months.
0:10:28 – But why, if they need them so badly,
0:10:29 I don’t understand, it seems so.
0:10:32 – So we talked a lot about the shortage and the under supply,
0:10:34 but the other thing that kind of plagues
0:10:35 this industry is inefficiency.
0:10:38 And the talent acquisition teams or HR teams
0:10:40 inside hospitals are armed
0:10:42 with pretty outdated tools and processes
0:10:45 that really haven’t changed since like the 90s.
0:10:48 And they’re primarily using external job boards
0:10:51 like Indeed or LinkedIn or their own hospitals job board,
0:10:53 put a posting out there and hope something happens.
0:10:55 That’s really difficult when you are going after
0:10:57 a group of workers that are in high, high demand.
0:10:59 And so you’re basically waiting
0:11:00 for the right people to come.
0:11:02 And it’s really quantity over quality.
0:11:06 So when people apply, the HR teams are manually sifting
0:11:07 through all of those applicants
0:11:10 and manually matching them as well.
0:11:13 And so that just creates an insane amount of inefficiency.
0:11:15 At any given time, one hospital recruiter
0:11:16 is trying to fill a hundred jobs.
0:11:18 – Another contributor to inefficiencies
0:11:21 on the health system side are really when patients come in,
0:11:24 how do you sort of effectively match demand to supply?
0:11:27 And today that’s done in a barely brute force way,
0:11:30 there really aren’t technology tools with intelligence
0:11:33 that allow you to route and triage patients
0:11:36 to the right type of provider or the right type of nurse
0:11:38 or even distinguish whether or not a patient
0:11:41 is appropriate to see a nurse versus a doctor.
0:11:43 And that’s one of the highly evolving areas
0:11:47 of the market right now is the scope of practice concept
0:11:51 where things that maybe used to be only possible
0:11:53 to do by a physician, increasingly
0:11:55 those boundaries are being redrawn
0:11:57 and nurses are taking on a lot more of that.
0:12:00 But that’s not yet reflected in sort of that routing logic,
0:12:01 so to speak.
0:12:03 And so you often will end up with situations
0:12:06 where a patient will end up waiting eight weeks
0:12:07 to see a physician when in fact,
0:12:09 that person likely could have gotten in
0:12:10 to see a nurse much sooner.
0:12:13 And that has not only clinical implications,
0:12:14 obviously for the patient,
0:12:16 but operational inefficiency implications
0:12:18 for the physicians in the hospital system
0:12:21 where that doctor is not being effectively utilized
0:12:22 for their unique expertise
0:12:25 versus a lower sort of acuity provider.
0:12:26 And then for the health system,
0:12:27 they’re losing out on potential revenue
0:12:29 if again, if those slots are not being fully utilized
0:12:30 to their full extent.
0:12:31 – I just had this happen to me last week.
0:12:33 My doctor was unavailable for two weeks
0:12:36 and then the nurse practitioner would see me the same day.
0:12:37 – Yeah, and there are real sort of societal
0:12:39 and cultural challenges with that.
0:12:42 I think Americans are not yet fully bought into
0:12:44 sort of going to a nurse for something
0:12:46 that they think they should go to see a doctor about.
0:12:47 And we hear that all the time in the market.
0:12:49 In fact, it might be better to go to a nurse
0:12:51 for certain things because you are gonna get
0:12:52 a different level of empathy,
0:12:55 a different level of care and support and service.
0:12:56 And so that’s also contributing to this,
0:12:58 but that’s sort of the notion
0:13:01 of the most effective use of clinical resource.
0:13:03 I think it’s a big component of the challenge here.
0:13:05 – The process is largely on the same way
0:13:07 it was a generation ago.
0:13:08 It’s a paper oriented process
0:13:10 because the tech tools don’t really work
0:13:13 for something this specialized and this unique.
0:13:15 So, you know, the dominant job platforms
0:13:18 are LinkedIn and Indeed and Zip Recruiter,
0:13:21 but they’re not engineered to have this level
0:13:23 of specificity and this granular of matching.
0:13:25 You know, they’re not checking licenses
0:13:27 and credentials and certifications
0:13:31 and aren’t set to match those with existing job openings
0:13:33 ’cause the horizontal platforms kind of fall prey
0:13:35 to the least common denominator factor.
0:13:37 – Can you explain a little bit more about what you mean
0:13:40 by that, Jeff, that the horizontal platforms fall prey
0:13:41 to the least common denominator?
0:13:44 – If you’re trying to fill everything from a CEO
0:13:47 to a sales rep to, you know, oncology nurse,
0:13:49 you’re not going to have the same certifications
0:13:50 clearly for the CEO.
0:13:54 For the nursing and that general purpose tool
0:13:57 does not work well for that highly specialized vertical.
0:14:00 We see a natural progression that tends to repeat over
0:14:03 and over where, you know, the one horizontal platform
0:14:05 serves the needs of multiple verticals.
0:14:08 eBay, you know, started as trading collectibles,
0:14:10 but then they added computers and sporting goods
0:14:12 and clothes and, you know, and cars.
0:14:14 We even sold an airplane when I was there at Gulfstream.
0:14:18 And so the same platform is being called, in this case,
0:14:21 to service all the needs of that vertical.
0:14:23 And early on in platform development,
0:14:26 that typically is sufficient because it’s so much better
0:14:28 than the analog alternative.
0:14:31 But as these platform gets big and the individual verticals
0:14:34 on that platform get big, there’s an opportunity
0:14:37 for new codes to come in and better serve the needs
0:14:41 of that vertical relative to the one size fits all.
0:14:45 For example, StubHub came along and did a highly tailored
0:14:48 offering for the resell of secondary tickets.
0:14:52 They had time and energy and site space to do things
0:14:54 like ensure electronic delivery of tickets, you know,
0:14:57 have a trust and safety function for if the ticket
0:14:59 didn’t work when you got to the venue.
0:15:03 And as a result, StubHub was able to build a big business
0:15:06 in the secondary ticket market, taking a lot of that business
0:15:06 away from eBay.
0:15:10 Right now, StockX are doing collectible sneakers.
0:15:13 You know, Poshmark is doing apparel and each of those
0:15:17 is building verticals that in some cases taking one
0:15:18 of their verticals and doing it better.
0:15:21 – So what do we need to see then if we’re to better serve
0:15:23 the needs of the specific vertical?
0:15:25 – To be honest, most healthcare workers are not on LinkedIn.
0:15:27 And then so that makes the search and discovery
0:15:29 for the employers very difficult.
0:15:31 And the search and discovery fields, you know,
0:15:33 they’re not healthcare specific either.
0:15:36 And then you have the in-mail product that the response rates,
0:15:38 like it’s less than 10% the response rate on in-mail.
0:15:40 So there’s a lot of improvement needed.
0:15:43 – So high signal is better than low signal.
0:15:44 – Yeah.
0:15:47 – So now you’re in a narrow vertical one job description
0:15:51 and the complexity and optionality is enormous.
0:15:54 How could that horizontal platform begin to address it
0:15:58 if it’s highly challenged in a highly constrained environment
0:15:59 to address it really well?
0:16:02 So I mean, that’s a lot of the thesis is it takes that level
0:16:06 of focus specialization, maniacal optimization
0:16:09 to add value to the healthcare system
0:16:13 and to the nurses that helps bridge the gap.
0:16:15 – So if now is the moment for the healthcare vertical
0:16:17 to kind of be better addressed,
0:16:20 what does that actually look like in tactical detail?
0:16:21 – We’ve done three or four things
0:16:23 that are specific for this industry.
0:16:26 Number one is that the employers apply to the talent
0:16:27 instead of the other way around.
0:16:29 We get away with that because there’s such a big shortage
0:16:31 and honestly, that’s what’s needed
0:16:33 given the supply, demand and balance in this market.
0:16:36 The second thing is we’ve largely automated the screening
0:16:38 things like licenses and certifications
0:16:40 and experience and skills.
0:16:42 All of these things that the hospital usually does manually
0:16:44 by using technology, you can just deliver
0:16:47 a lot higher quantity and quality of talent to the employers.
0:16:50 – A highly curated sample based on their specific need.
0:16:51 – Exactly.
0:16:53 And so then the third piece is the custom matching, right?
0:16:56 So it is not helpful for a recruiter
0:16:59 to log into their web application and see 200 candidates.
0:17:02 They need to just see the 12 out of the best fit.
0:17:04 – Right, no, 200 just makes you want to close it again.
0:17:04 Do something else.
0:17:06 – Think of the gains the hospitals.
0:17:08 If you all of a sudden, the process goes
0:17:12 from a torrent of inbound to highly curated sample.
0:17:15 The number of resumes you review goes way down.
0:17:18 The number of interviews you do typically goes way down.
0:17:20 The time to hire goes way down
0:17:22 because you’ve got that curated sample
0:17:26 of qualified nurses for this specific position you have.
0:17:29 You are creating a very high level of operational efficiency
0:17:31 for the administrator at the hospital
0:17:33 and that administrator is very, very busy.
0:17:34 – And it’s the same experience on the talent.
0:17:37 The nurse does not want to hear from 80 employers.
0:17:39 They want to hear from the three that are the right fit.
0:17:41 And so building those custom matching algorithms
0:17:42 are really important.
0:17:45 Dry the experience and the efficiency for both sides as well.
0:17:46 And then the fourth piece,
0:17:50 we provide pretty robust data analytics to the employers
0:17:52 where they can see their utilization
0:17:54 and their hiring process
0:17:55 and they have a lot more visibility into it.
0:17:57 And they can even see the number of days talent
0:17:59 is spending between each step.
0:18:01 And they’re able to benchmark that against their competitors
0:18:04 ’cause their competitors are also using our platform.
0:18:06 – So just shining a light on that kind of black box
0:18:09 where things would languish in weird limboes
0:18:10 for a super long time.
0:18:12 I mean, just like any industry, any function,
0:18:14 a lot of decisions should be based on data.
0:18:17 And HR and talent acquisition is a function
0:18:20 that has an insane amount of data,
0:18:22 but sometimes it’s hard to get at.
0:18:24 And that’s what decisions should be based on,
0:18:26 how they can improve their internal hiring processes.
0:18:27 – Can you talk a little bit about
0:18:29 how this actually affects the bottom line
0:18:30 of hospitals and providers?
0:18:32 Like how does making a specific search field
0:18:35 for certification actually turn into dollars saved?
0:18:37 – Hospitals and health systems are able to hire
0:18:40 and fill those roles for permanent nurses
0:18:41 in less than 30 days,
0:18:43 where that national average is 90 days or longer.
0:18:45 That results in significant,
0:18:47 like millions of dollars in cost savings for the hospital,
0:18:49 because they’re not spending on overtime,
0:18:51 they’re not spending on contract workers.
0:18:53 – And healthcare is notorious for it being
0:18:55 a very, very challenging place for technology companies
0:18:56 to prove ROI.
0:18:57 And this is one of those areas
0:19:00 where there’s such a clear top line benefit
0:19:02 because you can literally say my patient volumes
0:19:05 are hurt or benefit from being able
0:19:06 to hire nurses more quickly.
0:19:07 – And hire revenue.
0:19:10 – Because you have the capacity to take
0:19:11 on the business you need.
0:19:13 – The other place where the revenue piece shows up
0:19:14 is just in terms of patient access.
0:19:16 You know, one of the crises in this country
0:19:19 is the fact that patients cannot access care
0:19:20 because of these supply constraints.
0:19:23 It goes back to this notion of kind of right sizing care.
0:19:26 If you were a patient who had, let’s say, elevated PSA,
0:19:29 that is a fairly wide spectrum of clinical,
0:19:31 you know, may actually warrant going straight
0:19:34 to a urologist versus you might have to be worked up
0:19:36 and kind of go through a care journey.
0:19:37 But if you were not doing this appropriately,
0:19:40 you would essentially be sort of closing the door
0:19:42 to patients because you were making them wait.
0:19:43 The patient wouldn’t get the clinical benefit
0:19:45 and then you were losing out on that revenue stream.
0:19:47 And frankly, the physicians, you know,
0:19:50 they would always say I’m optimizing for surgical yield.
0:19:53 I want a mix of patients who are most likely
0:19:56 to result in a case that is gonna take advantage
0:19:57 of my unique skill set.
0:20:00 And so even from a physician retention, satisfaction,
0:20:02 et cetera, that perspective,
0:20:03 that was a huge issue
0:20:05 that these organizations were trying to deal with.
0:20:08 – Did nurses get to optimize for anything like that as well?
0:20:09 – Oh, absolutely.
0:20:11 No, I mean, it’s the same thing where I think for nurses
0:20:13 and even MAs and some of these other, you know,
0:20:15 types of roles that have sort of popped up
0:20:18 to kind of support the administrative overhead,
0:20:21 you started to see, again, the administrative tasks
0:20:23 be passed on to these folks
0:20:26 who are very legitimately trained in clinical practice.
0:20:29 And we’re taking on these sort of lower utility tasks.
0:20:31 How can technology sort of effectively route people
0:20:33 so that some of that burden disappears?
0:20:36 – So when you’re creating a jobs marketplace like this
0:20:38 where you’re matching up this highly vetted,
0:20:41 highly curated with all these different requirements
0:20:44 and challenges from regulation and certification,
0:20:47 how do you think about vetting for the non-obvious stuff?
0:20:50 Like about empathy, about bedside manner,
0:20:51 how do you think about those?
0:20:52 – That stuff is really important
0:20:55 ’cause ultimately the mission of most of these hospitals,
0:20:58 all of them probably, is to deliver amazing care, right?
0:21:01 And putting all the hard skills aside,
0:21:03 the licenses, the certifications, all the hard skills.
0:21:05 There is a whole set of soft skills
0:21:07 that people need to convey and practice
0:21:09 when they’re on the floor as well.
0:21:12 We have an entire interview preparation kind of like module,
0:21:14 basically that helps nurses convey
0:21:16 their softer skills and interviews.
0:21:17 What are they motivated by?
0:21:20 Are they truly motivated by patient care or not?
0:21:22 How much empathy do they have?
0:21:23 What are their motivations?
0:21:25 What do they want to do with their career?
0:21:27 We’ve taken a much more like hands-on approach
0:21:28 with just like, hey, these are the things
0:21:31 that you need to just really convey in your interview.
0:21:32 – What was the most challenging thing
0:21:33 for you to build into the system
0:21:35 when you’re building these tools from the ground up?
0:21:39 – I think the challenge of just the heterogeneity of this,
0:21:42 like so we’re dealing with all RNs and NPs.
0:21:46 There’s multiple specialties and multiple requirements.
0:21:48 And then the employers also have lots of different needs.
0:21:50 And when you’re trying to build technology
0:21:53 that works for that, for all the users, it’s challenging.
0:21:55 – The healthcare industry is notoriously difficult
0:21:57 to disrupt with new innovation,
0:21:58 often for very good reason.
0:22:01 And because of the complex nature of the system itself,
0:22:04 how do you see yourself fitting into an overall trend
0:22:07 of new technological innovation in healthcare?
0:22:09 Or I guess another way to say that is,
0:22:11 what has your experience been like
0:22:14 introducing a new tech into this particular system?
0:22:15 – I actually feel a lot of empathy
0:22:17 for some of the hospital executives
0:22:19 and the administrators and the nurse managers
0:22:22 and so on who are trying to manage the operations, right?
0:22:24 Internally, they’re dealing with multiple issues
0:22:25 at the same time.
0:22:27 First of all, like reimbursements going down, right?
0:22:29 So they had a lot of revenue pressure.
0:22:32 Number two, it’s actually not completely clear
0:22:33 in the healthcare industry or in a hospital
0:22:35 who your actual customer is.
0:22:37 Common sense would say it’s just the patient,
0:22:40 but the patient doesn’t actually, for the most part,
0:22:42 doesn’t pay for the care directly, right?
0:22:45 So they also have to take into account health insurance,
0:22:47 the payers, how they’re ultimately making money
0:22:48 and how they’re getting reimbursed.
0:22:50 So that’s why you see a lot of the technology investments
0:22:53 in healthcare or in a hospital are more around billing
0:22:56 than around optimizing operations, right?
0:22:59 And then you also have employers in the healthcare industry
0:23:01 who are ultimately also the ones who are paying for the care.
0:23:04 And their employers are offering the health insurance
0:23:07 to the employees and they’re making decisions
0:23:09 about what plans to offer
0:23:11 and there’s not much clarity on pricing.
0:23:13 It’s just like a very convoluted industry, right?
0:23:17 Where just like the normal free market forces
0:23:19 and competition that we see in other industry
0:23:21 doesn’t necessarily apply.
0:23:23 – The stakes are just so much higher
0:23:24 than any other industry.
0:23:25 If you turn an engineer,
0:23:26 you’re probably gonna lose a little bit on productivity
0:23:28 and maybe not ship some code.
0:23:31 But here, if you are constantly churning talent
0:23:34 and turning over folks who are staffed in these environments,
0:23:36 there is such huge risk
0:23:37 from a patient safety perspective on that
0:23:40 because these teams have protocols
0:23:42 and they have ways that they respond
0:23:44 to sort of emergency situations and whatnot
0:23:46 to train and really sort of get up to speed
0:23:48 on those types of environments,
0:23:50 very complex environments takes time.
0:23:52 If you’re not doing that match upfront
0:23:54 in a way that sort of guarantees
0:23:56 or at least raises the probability
0:23:58 of longer retention of these employees,
0:24:01 then there’s a real high stakes risk to patients.
0:24:04 – Actually, let’s talk about that retention piece specifically.
0:24:06 We’ve talked about the talent acquisition,
0:24:08 but not so much how do you hold on to good talent?
0:24:11 What’s the turnover rate like in this profession?
0:24:15 – The annual turnover for nurses in the US today is 20%.
0:24:17 – Oh my gosh, is that because it’s so hard
0:24:19 or because people move or what?
0:24:21 – The number one driver is understaffing, right?
0:24:22 ‘Cause when you’re understaffed,
0:24:24 you’re burning out your existing workers.
0:24:26 And then also it’s a really tight labor market.
0:24:28 You tend to change jobs more often when there’s a shortage.
0:24:29 – So what happens?
0:24:31 You get the job and then you’re overworked
0:24:33 and you start to become disillusioned
0:24:34 and then you think you’re gonna have
0:24:36 a better job elsewhere essentially?
0:24:37 – Yeah, there’s probably three or four main factors
0:24:39 why nurses change jobs.
0:24:41 Number one is like, they’re tired and burnt out
0:24:42 and just need a different unit
0:24:44 or hope for a hospital that’s better managed
0:24:45 or better staffed.
0:24:47 Number two is they’re trying to reduce commute times.
0:24:49 90% of nurses are women.
0:24:51 Many of them are taking care of children.
0:24:53 Many of them are trying to shorten commute times.
0:24:55 – I can’t believe it, it’s 90% still, that’s so high.
0:24:56 – Yeah, it’s still high.
0:24:59 And then career advancement is another reason.
0:25:00 So if you’re trying to grow your skill set,
0:25:02 become more specialized and you’re not seeing those
0:25:03 opportunities with your current employer,
0:25:05 you’re gonna change and then higher pay.
0:25:07 – As good market wages ’cause it’s applied
0:25:08 to man in balance.
0:25:10 – It’s funny, it sounds like all the normal reasons,
0:25:11 but like super condensed into like a,
0:25:14 where you feel them very acutely and it happens very fast.
0:25:17 Okay, so on retention, what are the things
0:25:20 that people can do then besides finding the right job
0:25:24 the first time and supplementing the supply
0:25:26 so that there is not a critical shortage
0:25:29 and you’re working way long hours?
0:25:31 What are other things that employers and hospitals
0:25:33 can do to solve that piece of the problem?
0:25:36 – The few factors that influence it and the hospitals
0:25:39 that have the best retention do this extremely well.
0:25:41 Number one is fast hiring.
0:25:43 So it turns out if you have an amazing candidate experience
0:25:45 while you’re getting hired, you are more likely
0:25:46 to stay around.
0:25:47 – Really?
0:25:49 Even if you get disillusioned a little bit later?
0:25:51 – Yeah, because that’s part of it.
0:25:52 – Even disillusioned before you start,
0:25:55 that’s usually not a good leading indicator.
0:25:57 – That’s true, that’s true.
0:26:00 If you’re hired in 11 days, you have a very positive
0:26:01 impression of that employer, like oh my goodness,
0:26:03 like they have their act together.
0:26:06 And then that leads to higher employee engagement scores.
0:26:07 – Wow.
0:26:08 – And more likely them to stay.
0:26:09 – I was talking to multiple venture capitalists
0:26:11 when I made the move for being an operator
0:26:12 to a venture firm.
0:26:14 The first talk to me, the recruiting cycle
0:26:17 was over six months before an offer came.
0:26:19 And the offer only came after I started talking
0:26:21 to Andreessen Horowitz and got to an offer
0:26:23 within a few weeks.
0:26:26 And then the six month person said oh, we’ll move fast.
0:26:28 And so I was so disillusioned at that point,
0:26:29 it was a pretty easy decision.
0:26:30 – Yeah, it’s very telling.
0:26:33 What have we learned from these other platforms
0:26:35 that we can incorporate into the platform
0:26:37 that’s better addressing a specific vertical?
0:26:40 What is some of the kind of knowledge that does apply?
0:26:42 – So we use these competitive tactics, right?
0:26:44 When a hospital recruiter logs in,
0:26:46 they know they’re competing with other employers
0:26:47 at the same time.
0:26:48 There’s a time limit.
0:26:48 – You gamify it?
0:26:50 – Yeah, yeah. – That’s awesome.
0:26:51 – There’s a time limit.
0:26:52 There’s a seven day countdown
0:26:54 for them to send their interview requests.
0:26:56 And they can see which candidates are popular.
0:26:59 So we’re creating urgency, scarcity, and competition.
0:27:01 – That’s at e-commerce to only one left.
0:27:02 Yeah, that kind of thing.
0:27:03 – It works.
0:27:05 – So how is the adoption of this kind of thing?
0:27:06 Like do you hit resistance along the way
0:27:07 in certain areas?
0:27:09 Is there friction to getting these new platforms
0:27:11 integrated into the system?
0:27:13 – Okay, so this goes back to what Julie had said earlier
0:27:16 about ROI and the value proposition.
0:27:19 You have to have a really, really strong value proposition
0:27:20 and ROI.
0:27:21 And whatever you’ve come up with
0:27:23 has to be at least 10 times better
0:27:24 than what’s already out there.
0:27:25 So whatever we come up with,
0:27:27 incredible health needs to be at least 10 times better
0:27:29 than LinkedIn or Indeed or any of these other tools
0:27:30 that they’re using.
0:27:33 We now have over 150 hospitals in California
0:27:35 using our platform in less than 18 months.
0:27:37 Very short sales cycles.
0:27:39 Because this is a hair on fire problem.
0:27:43 The CEO and everyone in the C-suite cares about staffing
0:27:46 and getting great talent and getting amazing nurses
0:27:49 in permanent roles quickly impacts their bottom line
0:27:51 and both revenue and cost.
0:27:52 – That’s the other sort of case
0:27:54 for why you need vertical solutions
0:27:57 is the supply side of the market also has to believe
0:28:00 that they are gonna be better represented on this platform
0:28:02 than your sort of generic horizontal platform
0:28:03 and that there’s something new to offer there.
0:28:06 So what are you seeing on the response from the nurses side?
0:28:08 – Yeah, it’s similar in that the value
0:28:09 has to be really clear to them as well.
0:28:11 Right now we’re the only platform out there
0:28:14 that says create a profile, sit back and relax,
0:28:16 employers are gonna apply to you.
0:28:18 So employers send them interview requests
0:28:19 and then the nurse gets to decide
0:28:21 which ones to accept and which ones to decline.
0:28:25 And what that does is it gives more control to the nurse
0:28:27 and this is something that they do not normally experience.
0:28:29 – Yeah, it sounds like a profession rife
0:28:31 with a feeling of lack of control actually
0:28:33 that you’re constantly being told what to do
0:28:34 and where to go.
0:28:37 – Yeah, this is a highly mistreated
0:28:39 and underserved group of workers.
0:28:41 The vision is to help them live better lives.
0:28:42 It’s about the healthcare professionals.
0:28:45 Whoever creates a product or an experience
0:28:47 and treats this group of workers the best,
0:28:49 appreciates them, celebrates them,
0:28:50 gives them an amazing experience.
0:28:51 All of that is gonna win.
0:28:52 – That’s interesting.
0:28:55 I blogged years ago about in two-sided marketplaces,
0:28:57 the consumer side is the one that you should have
0:29:00 to optimize for even if the institutional side
0:29:01 is the one that pays you.
0:29:03 You know, at eBay you optimize for the buyer,
0:29:05 at OpenTable you optimize for the diner here,
0:29:06 you optimize for the nurses.
0:29:09 – The folks in the recruiting office of the hospital
0:29:11 are actually consumers, right?
0:29:12 And they’re gonna go home
0:29:15 and they’re gonna use their iPhone and shop on Amazon
0:29:17 and have these magical experiences
0:29:18 in other parts of their lives.
0:29:19 And then they get to work
0:29:22 and they have these sort of highly legacy
0:29:25 ossified archaic systems that sort of overall trend
0:29:27 is what’s driving a ton of uptake
0:29:29 of these novel technology solutions.
0:29:32 – A few of the hospitals use Oracle PeopleSoft,
0:29:34 some use Teleo, some use, you know,
0:29:36 there’s lots of different software,
0:29:37 whether they’re applicant tracking systems
0:29:39 or more general HR systems.
0:29:41 And we’re there and they’re like,
0:29:44 oh, I have to use a 20 page manual to create a job rec.
0:29:45 – Oh my gosh.
0:29:46 – Right?
0:29:47 And you look at it and it’s like, oh my God,
0:29:50 this software looks like it’s from like the 80s.
0:29:54 Like when software was first like a thing, right?
0:29:56 And so when we come in,
0:29:58 we’ve even had chief nursing officers say like,
0:30:00 oh, wow, it looks like a dating app.
0:30:01 – Yeah, I was gonna say that earlier
0:30:02 when you were checking the nurses.
0:30:05 – Yeah, match.com for nurses in hospitals, right?
0:30:06 And so–
0:30:08 – You don’t have to fake profiles and spam.
0:30:10 – Yeah, yeah, yeah, yeah, yeah.
0:30:11 Certainly a lot of the features we’ve built
0:30:14 into the platform we’ve borrowed from consumer apps,
0:30:17 like the countdown timers and who’s popular
0:30:20 and kind of creating urgency and scarcity in the platform
0:30:23 and just simply making it beautiful and easy to use.
0:30:24 – You see now for the first time,
0:30:28 it really grounds up demand from clinicians
0:30:29 asking for better tools.
0:30:33 They no longer are able to deal with kind of these legacy EHRs
0:30:35 that have been implemented across the industry.
0:30:36 One of the challenges has been,
0:30:40 it is just so damn hard to sell to these organizations, right?
0:30:42 If I’m looking at two options as an entrepreneur,
0:30:45 either I build software that I need to somehow figure out
0:30:48 how to distribute to this industry,
0:30:50 make them change the way that they operate,
0:30:53 deal with thousands of employees at these organizations
0:30:54 that all have their own agendas,
0:30:57 versus building sort of outside of the system,
0:30:59 let’s say a full stack primary care clinic
0:31:02 that I can build my own technology from the ground up,
0:31:03 eat my own dog food.
0:31:05 And therefore the packaging of that offering
0:31:07 may look like a direct to consumer offering,
0:31:08 but at the end of the day,
0:31:10 I’m trying to solve the same problem,
0:31:11 just sort of from the outside.
0:31:13 And so those are the two attack vectors
0:31:14 that we see out there.
0:31:15 I totally agree that in some ways,
0:31:18 the clinicians are sort of the forgotten end users
0:31:19 of this whole thing.
0:31:21 And you see a lot of emphasis on the patient,
0:31:23 but at the end of the day,
0:31:25 the high leverage point is actually putting better tools
0:31:26 in the hands of clinicians.
0:31:29 – Yeah, I mean, I meet many founders
0:31:30 who are working in the healthcare industry
0:31:32 and they’re usually building applications
0:31:34 that are patient facing, which is great.
0:31:38 But I don’t see enough working on the backend of healthcare.
0:31:40 We took one part of it, which is staffing.
0:31:43 There’s certainly a ton throughout operations.
0:31:45 And there’s a lot of innovation needed
0:31:48 in basically the full stack of healthcare.
0:31:50 – So what kind of takeaways or advice would you have
0:31:52 for other founders building companies
0:31:55 in the particularly challenging space that is healthcare?
0:31:57 – Like many things in entrepreneurship timing
0:31:58 is everything, right?
0:31:59 The healthcare industry is at a point
0:32:02 where the cost pressure has never been more intense
0:32:04 because reimbursements are going down
0:32:07 and the competition is fierce among providers.
0:32:10 And that creates opportunities for entrepreneurs
0:32:12 and a bunch of hospital executives
0:32:13 that may be willing to listen.
0:32:15 And so when you’re creating your product,
0:32:16 you need to come up with something
0:32:17 that’s at least 10 times better
0:32:19 than what’s already out there.
0:32:20 Like at least 10, and you can measure that however you want.
0:32:22 10 times better, 10 times cheaper,
0:32:24 10 times more efficient, 10 times faster,
0:32:25 like whatever it is.
0:32:29 And have a really, really strong value proposition
0:32:33 that clearly ties to ROI and impacts the bottom line
0:32:35 for the hospital, clearly impacts it.
0:32:38 Not like indirectly, but directly impacts it.
0:32:39 – That’s awesome.
0:32:41 Thank you so much for joining us on the A16Z podcast.
0:32:41 – Thank you. – Thank you.
0:32:50 [BLANK_AUDIO]
“Constant attention by a good nurse may be just as important as a major operation by a surgeon”, diplomat Dag Hammarskjöld once observed — and that may be more true today than ever before. For most of us, nurses are essentially the face of the healthcare system: the person you’ll see the most of while you’re in it, who will monitor your vitals, administer medications, hold your hand when you’re in pain or scared, answer all the questions you forgot to ask the doctor.
So in this episode, we take a look at the role of that unsung hero of healthcare — the nurse — at an industry level. Iman Abuzeid, CEO and co-founder of Incredible Health (a hiring platform for nurses), and a16z general partners Julie Yoo and Jeff Jordan discuss with Hanne Tidnam how the scope of the job is changing today and why; what’s driving the looming nursing shortage crisis, and ways we can help solve it; what it’s like to build a new marketplace platform in healthcare; and how best to introduce innovation into the healthcare system overall.