96 - Empowering Nurses: Innovation and Retention in Healthcare w/ Merrill Anovick & Shawn Dastmalchi

Show Notes

Shawn Dastmalchi, CEO, Gratia Health

Mr. Shawn Dastmalchi, Ph.D., is a serial entrepreneur and the current CEO of Gratia Health, a company specializing in workforce intelligence and optimization in healthcare. He is also the Founder and Director of Data Expanse Ventures, a firm that advises early-stage digital health startups in Silicon Valley. With over 25 years of experience spanning life sciences, medical devices, health IT, and the Internet, Shawn has established himself as a leading figure in healthcare analytics and AI.

Before his role at Gratia Health, Shawn was the Co-founder and CEO of Ark.one Health. This company emerged from his work as an Entrepreneur in Residence at Sutter Health, where Ark.one developed AI and predictive analytics solutions to help hospitals improve patient outcomes and manage payer risk. Shawn's expertise in AI and machine learning has been pivotal in driving these innovations and enhancing healthcare delivery.

Shawn is also a Co-founder of Apixio Inc., the foremost provider of big data-enabled risk assessment solutions for Medicare Advantage plans. He served as CEO of Apixio for over five years and was a board member for six years. Under his leadership, Apixio achieved significant growth and was ultimately acquired by Centene, a leading healthcare enterprise. Prior to founding Apixio, he was the Director of the Informatics Business at Carl Zeiss Meditec, Inc. There, he helped establish a new division, overseeing sales, marketing, service, and support for Zeiss' health IT solutions in the U.S. market. In a previous role at Zeiss, he was instrumental in introducing and growing their highest-grossing diagnostic device product.

Earlier in his career, Shawn held senior positions at Alpha Innotech Corp. and aPeerance Inc., and served as a business strategy consultant for companies including Yahoo Inc. In addition to his industry experience, he has nine years of academic experience at UCSF and UC Berkeley, where he co-authored several publications and grants. He is also the co-author of 12 patents.

Shawn holds an undergraduate degree in Genetics from UC Davis and a Ph.D. in Vision Science from UC Berkeley.

Merrill Anovick, Co-Founder and President, 25m Health

Merrill is the President and COO of 25m Health. He launched 25m Health in partnership with Apollo, Lifepoint Health, and Scion in November 2021. He sits on the 25m Health Investment Committee and oversees both the investing and incubation strategies.​
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Merrill co-founded and sits on the board of 25m Health's first incubation, Kouper Health, a platform focused on creating an integrated transition of care experience for patients, providers, and payors. Kouper’s most recent financing round was led by General Catalyst.
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Merrill also led investments in Thrive Health Tech, Midi Health, Peer Supply, Keragon, Operait, and Swap Health. Merrill sits on the Boards of Kouper Health, Gratia Health, Swap Health and Peer Supply.​
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Merrill previously worked at Google across Product Management, Business Development, and Marketing leadership roles. Merrill was part of the founding team of Google Fi, now a +$1B top-line business. As a Business Development Manager on the early Android Go team, he negotiated distribution deals with wireless carriers in Nigeria, South Africa, and India. ​
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Merrill graduated from the Johns Hopkins University with a B.A. in Economics and Political Science, and earned an MBA from the Harvard Business School. He sits on t

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Thank you.

Hi, welcome everyone to Healthfur, the recording live here at the Nashville Healthcare Council sessions program.

It's been a great session so far, and I'm excited today to have two guests with me to talk about really some of the successes out of bringing innovation out of the health systems into the real world.

So.

We have Merrill Inovec.

He is a partner at 25M Health.

And Sean Dasmulchi, who is the CEO of Gratia Healthcare.

Welcome, guys.

Thanks for having us.

Thanks for having us.

So before we get started, uh, Merrill, why don't you just give a little introduction of yourself and, and the firm, a little bit different strategy and approach to investing than maybe some people are aware of.

So maybe talk about that as well as your background.

Absolutely.

So, uh, 25M Health stems from.

A belief within LifePoint and Apollo that the strategy of building new companies in partnership with operators can have a transformational impact on that company.

And then it also stems from the belief from the 25 Madison side that that can be a way to produce outside returns and that some of the best companies in health care are built via this type of close kind of inside out collaboration.

So that was really the thesis that led to this firm being created.

I'm happy to talk more.

Well, I think everyone in

the audience probably knows LifePoint and Apollo, but talk about 25 Madison and like the heritage there.

Yeah.

So 25 Madison is a, is a venture studio, uh, and it's founded by a few successful multi time founders, Steven Price, Michael Linton, Matt Fremont Smith, that have had success across a variety of industries and they were really drawn to this.

Uh, philosophy of not just providing capital to new businesses, but providing wraparound services and in many cases coming up with the ideas ourselves and really starting those companies.

And that led to a relationship with Apollo who was trying to build out their innovation capabilities when Mark Rowan became CEO.

And, uh, one of the places that we thought the strategy could make the most sense was in the healthcare world.

And there's obviously a, a long history of successful collaboration between healthcare systems and the venture community.

And we sought to build on top of that success.

And like a lot of good firms learn from the people who came before us and have been, have been successful and impactful.

I think core to what we do is really about, uh, depth of relationships as opposed to breadth of relationships.

So we believe that by focusing really intently.

On LifePoint and Scion and building relationships, not just at the CEO level with our sponsors like David Dill and Aaron Lewis, but all the way down the organization's, uh, the VPs of physician services.

The directors of population health, the leaders of the regional facilities, that if we spend a lot of time with those people, we can produce really interesting innovations.

And then we combine that with concentrated capital.

So we have the ability to not just come up with these businesses, but fund them for a long time until we're able to bring a board, awesome investors like yourself, Vic, to help them take the next step.

Yeah.

Yeah.

And so for full disclosure, I was, uh, the first outside investor, I think, Sean, in your company.

So give a little bit about your background personally, and then also Gratia.

Yeah,

wonderful.

Um, so as for my background, I, I am part technologist and part serial entrepreneur.

I have my PhD from UC Berkeley in area related to medical data analytics and modeling.

But I've spent the better part of my career on the business side.

I came up through the ranks of marketing and product management in a large publicly traded medical device company named Carl Zeiss Meditech, eventually rose to being the general manager of their informatics division.

And from there, I, uh, went on to start a company and begin my entrepreneurial experience and.

And in this 2010, when I entered into the, uh, into the startup ecosystem and I've since founded a few companies, uh, some successful, uh, namely a Pixio Health that, um, use big data to help Medicaid Advantage plans do a better job of revenue capture.

Um, and some not, not so successful, uh, which obviously helped with my experience of learning how to be a better entrepreneur, better investor.

And I also, uh, um, advise companies along the way.

So my journey with Gratia Health started when Gratia reached out in, uh, in, at the end of last year, 2023, uh, looking for a CEO.

And, uh, it really piqued my interest for one, because it was a workforce enablement solution for nurses.

And my wife's a nurse, so it was very, very near and dear my heart in terms of what can be done to bring joy and stability to the profession of nursing.

But also what also, you know, what piqued my interest additionally was the fact that there was this opportunity to start from.

a wedge application that has been very successfully deployed by Gratia Health for workforce enablement to turn the company towards being a data company.

One can deeply understand nurses at the individual level and really help improve their professional lives and thereby retaining them.

And so here I am, very excited and having a lot of fun.

Uh, two things I've learned in the first five minutes here.

One, I need to start calling you doctor, and two, your wife, uh, is a nurse, which is great for the Gratia, uh, mission.

Um, so Mera, I want to turn to you and sort of start with the, the founding origin story of Gratia, uh, and maybe relate how 25M Health.

Thinks about building these concepts into companies and maybe use Gratia as a part of that.

Absolutely.

So with our innovation model, broadly, I'd say there's two sources of ideas.

One is inside out.

So through our relationships with the operators that I spoke to, they often come up with really interesting ideas that will surface pain points that are top of mind for them that they haven't been able to solve.

And they'll bring those to us.

Seek help.

And then the second way is outside in.

So I'm naturally spending a lot of time in the entrepreneurial community, interacting with awesome founders like Sean and hearing what they're excited about and where they think the world is going from a, from a technology perspective.

The best ideas, the best companies we build are often an overlap of those two.

And I think Gratia is a good example of that.

So Gratia really Uh, you know, going back to my first conversations, my first meetings with David Dill when I asked him what keeps you up at night, it really was about retaining high quality nurses, making sure that they felt that the life point hospitals were a place where they could have a lifelong career and that they would be on site to provide care for, for patients in the communities because there's such a critical role there.

And I think in during the COVID times, there was obviously obviously tons of disruptions, but one of the major disruptions is that there was a huge.

Spike in contract labor spend and these systems had to spend had to rely more and more on people traveling into markets to augment the existing full time workforce.

And that was not great for hospitals from a financial perspective.

It obviously was more costly than their employee workforce, but it also, I think this is more overlooked.

It's not great from a, from a care perspective because you have people who are not as.

Deeply ingrained in the community, playing a larger role in the care journey.

And I think in many of the life point communities.

The people who are providing care there, they know the people on the other side of the, of the operating table or of the, uh, you know, the bed and it's really, that adds to the experience of receiving care at a life point community.

So we kind of broadly asked the question, which is how can we solve more of these gaps, these care gaps by getting people who are employed at the facility to.

Fill and take those incremental shifts.

And it's a simple, it's a simple problem, a simple question that is actually very difficult to implement in practice.

So we kind of worked with a leader at a regional facility who had come up with a incentive program to encourage those employed nurses to pick up incremental shifts.

It was a pen and paper process that was done kind of almost invisibly via their existing payroll solutions, and we tried to build on top of that, which was successful and turn that into more of a product.

So the first permutation of the product was simply taking that instead of program and making it, uh, you know, interactable via text messaging.

And then from there, uh, we have continued to build on top of that into a broader ratio platform solution, which Sean could talk more about, but we basically went from a single site that was doing this very well to three systems.

When the ROI was shown there, we made the decision to roll it out, uh, starting with Scion to a large number of their facilities across the country.

Um, and that was prior to Sean joining, uh, and then Sean has come in and as he alluded to has really kind of built out the more comprehensive

offering.

Yeah.

And so I, I talked to, uh, David Dale of LifePoint yesterday and it really was striking how much he focused on the overall community.

So, of course, there's the patient and the family, but, but the nurse and the caregivers broadly and the physicians, uh, especially in, in LifePoint's markets, but really in any health systems markets, it's the humans that are, that are caring for one another.

And the nurse really is at the heart of that, the center of that.

Course we need the doctors and the lab techs and all the different people in the health system, but the nurse is Uh, the most common person that the patient and the family sees by the bedside all the time, and it's a hard job, and it's a taxing job, and emotionally draining, and physically draining, and it strikes me that it was really, um, great to sort of take this open, open problem Adventure.

Let's go learn about the nurses.

Let's try to understand what they're focusing on.

Let's find one facility with have had some success.

And then I think I want to bring Harrison into this.

He's not in the booth with us right now, but is the fat was the founder before John joined about sort of sending him in there and go talk to these people.

What's working?

What's not working?

Try to take those stories, those individualized stories, and can we find commonality?

So, is that fair?

Did I miss things in that process?

How would you translate that?

No, I think that's exactly right.

And I think the part that we don't talk about as much is that the first permutation of our solution here completely flopped.

So we, we built a kind of text based interaction engine for nurses to answer questions.

Uh, mostly focused on new nurses as they were getting started on the job and things that they maybe would be too new.

You know, afraid to bring to their, to their nurse managers.

And I think what we found is it was just, it didn't work in the workflow.

So we, we did that and we, we built a very lightweight tech solution.

We put it live at a, you know, small scale on a, with a, with a pilot and it didn't work at all.

Yeah.

And I think we completely threw it out.

And so we, we have in the audience that listens, we have sort of, uh, operators, healthcare leaders, in payers and providers.

We have entrepreneurs and management teams and investors.

And I think it's important to point out that the iterative process of bringing a product to market, that product market fit, we typically celebrate the end point, but the iteration, you always have less than perfect success early on.

And I don't see that as failing.

I think that is part of the process to get to the, to get to the product that fits with what the market needs.

It's very natural.

I'd say almost every product that I've been with has gone through those growing pains and fits and starts.

And that is the entrepreneurial journey and you need someone like Harrison to to sort of be every day in there listening.

Okay, why?

Why does it not work?

Or what?

What would make it better or learn?

And then there's a version two and a version three and a version four.

And then you finally find something that it.

The nurses start taking and all of a sudden they're not going to give back.

Yeah, you have to feel fast and learn quickly.

Yeah, keeping it low fidelity, low cost, low engagement so that you can learn quickly, I think is exactly right.

You also need to do what we like to call non scalable things.

And I think Harrison was really the heart and soul doing that in early days where a lot of the early success of Gratia when we did arrive at this wedge solution, which took off and drove huge impact.

A lot of that was because Harrison was there at these facilities is.

Implementing it, winning over the hearts and minds of these nurses.

I mean, anyone who's involved with a health organization knows that anytime you kind of pitch a new tech solution to a provider, whether it's a doctor or

a nurse, they

glaze over because they've had so many things put in front of them that completely flopped, that failed to deliver on what they promised.

So a lot of that early trust that opportunity to build something that is going to help them.

It comes down to do they believe that you're going to credibly partner with them?

And a lot of that is really just do they believe the person across the table?

And Harrison did a lot of that in these early markets.

Yeah,

when you're trying to learn, let's, let's, let's, Double click on that non scalable.

Like it may be something that, uh, you can only do with three nurses in an hour.

And of course that would not be a business, but you can learn a lot from that and learn what pieces work and don't work.

Is that, is that kind of what you mean by that?

Totally.

Yeah.

So I think, you know, non scalable, which is like, you know, now that Sean is bringing this to many, many systems and hospitals, the implementation process is going to look a little bit different than what Harrison was doing with our, with our foresight.

So, you know, there's non scalability from an operations perspective.

Then also the early product in and of itself being just text messages based.

We could have easily decided to build a full scale application to get that out of the door.

And that would have taken us a lot more time that would have required more capital.

But it would not based based on what we heard from the nurses, it would have made at that juncture a huge difference in validating our core hypothesis, which is does this incentive program drive incremental shift?

Yeah.

And we were able to do that via text message.

And now that we landed that wedge product, Sean, I think is built a really compelling vision for how that becomes a comprehensive workforce management solution.

Yeah.

And so I think John, one of the most important steps in a, in a startup's journey from just beginning to then a seed investment, when I come in to series a or growth, Is finding the right role for the founder, which is a really important role, and then bringing in someone who has the understanding of what it takes to scale a business and hire lots of people, bring in lots of capital, build a board, all those things.

Can you talk about that transition and how you protect the value that Harrison brought with what you can bring, which is, you know, quite different.

Right.

Obviously, if you don't start with a good core.

Yeah.

Without the founder, there's nothing.

Yeah.

And founders don't just help, uh, start the company.

The founders also carry Um, much of the culture, enthusiasm and the vision that the company needs to grow in the various stages of your growth.

Right.

And so both Harrison and Laura are key members of the team, and they both bring a lot of value and a lot of experience to the table.

Harrison, operationally, is probably one of the best people I've ever worked with.

You speak to him today about a thought.

And it's already in action the next day.

Yeah.

And he's very, very impressive individual.

Um, from that standpoint and many other standpoint, of course, he, he was instrumental in the early days of building the wedge product.

that has produced phenomenal unit economics, also doing it in a very capital efficient way.

Um, you're probably happy to hear that at half of the proceeds that, um, we, we raised in the pre seed, and this is prior to me joining the company, is still there in the bank, right?

And so the company must have good capital efficiency, unit economics, and a valuable product to be able to do that.

Also, Laura having both the nurse background, but also deep understanding of healthcare processes, has been instrumental in helping the company get started and to be where it is today.

Yeah, and I think part of the culture, Uh, sort of intertwined in that is their, each of their personal egos, right?

Cause it has to be about a mission greater than Laura and Harrison, or they would never step aside.

And as much as Merrill and I might like yell at them to step aside, if the founders are not willing to, the company dies.

And they were really, uh, open to, we need to make Grasha the best it can be really for the health systems, for the nurse population, because it's that important.

And I think, so talk about stepping into that and how you now have broadened the vision or, or added to the product set and grown it a little bit.

Right.

So the spirit was there, the mission was there and perhaps something I helped facilitate a little bit in the early days.

after I joined the company was to make sure that, um, we all really understand the mission and that whatever we do from standpoint of vision and where we want to go is always checked against that mission.

So if we don't feel it and believe in it, then we're not going to do it.

Yeah.

Um, and then also I made sure that we have fun along the way.

The, the startup game is a long game.

Yeah.

It's, it's a marathon that's done by a series of sprints, essentially.

So you're sprinting and then you're resting, maybe you're sprinting again.

And so you have to play the long game.

And, and if you're not having fun along the way, it's Yeah, you can't make it.

So I think we have a team that's really high on spirit.

Morale, um, and low on, you know, ego, which a lot of times can get in the, um, when I joined the company, I said, look, we're going to be flat.

I'm just another person.

There's not going to be a hierarchy here.

Um, we're all going to be working just as hard and we're, you know, we're, we're, we're moving towards the mission that we all love and want to, want to deliver.

And so I think that has helped.

Everyone get comfortable with their roles, but also they know that at every stage, all the roles are going to change.

My role will continue to evolve and change as a CEO and their roles as co founders of the company will constantly evolve.

In fact, uh, we're just in the midst of moving Laura to a different position VP of operations, but now she's going to be much more.

Move towards, um, customer relations and also helping with future sales.

Um, and so, and she's pretty excited about that and wants to grow with that.

That's another piece that people don't usually talk about is that as the company grows, it is a good sign that you're hiring new people and roles have to change, but it can be hard on the individual.

So talking about that in a very transparent, open way.

Sort of having values that you can sort of ascribe to is really important in building that.

Yeah, so all of our engineers and all the members of the team, customer success, everyone puts meetings on my calendar and they meet with me one on one.

I encourage kind of the open door policy of, Hey, let's chat about life.

Let's chat about what's on your mind.

Let's chat about what may help you in your, you know, professional, you know, Uh, growth and ambitions and, and so we have those free communication lines all the time.

Yeah, and is it, is it fair to say that that helps them certainly, but I would say it helps you too.

You get information then from all different, uh, sides of the organization.

Absolutely.

I mean, at the end of the day, um, you know, I think information in today's AI world is becoming commoditized.

Yeah.

Absolutely.

Um, you could even chat GPT to answer much of the questions that an experienced CEO or entrepreneur.

Yeah.

I'm not even, I'm not even

live now.

It's my agent.

That's actually, that's right.

So it really comes down to the team.

It really comes down to, um, how motivated they are.

And, and that's what I try to foster is really to bring out the best in them and, and bring that positive energy to the table and ultimately we're going to win.

As a team, right?

So, so yes, information is important, but I think if every individual in the company is an agent of change and agent of improving the company, whether it's processes or product, that's what, you know, I, I try to foster and that's what I try to, uh, try to do from sampling of management style and it's been, you know, It's been truly an exciting and joyful ride for me so far.

Yeah.

Excellent.

Meryl seemed like you had a comment.

No, I was just, I was

just laughing, reflecting on a leader who I admire, who, who I remain nameless.

So he told me like, as you rise up the organization, the amount of people who are laughing at your jokes constantly increases.

And it's very tough to get the truth out of people.

And in order to do that, you need to go above and beyond to earn their trust and maintain a culture where that kind of negative information will flow to you in a.

True manner so that you're getting a, you're keeping a good pulse of the organization.

And I think Sean has done a, an excellent job of building a culture like that.

Every person I talk to at the company, cause I still have good relationships with people who are there and they all, all speak glowingly about how Sean has been able to do that.

So it's something I admire and I've enjoyed watching.

Yeah.

Thank you.

And, and, you know, speaking to the vision of the company, the vision of the company existed, um, prior to me joining.

And there's still.

a lot of the components of it that keeps bubbling up, perhaps what I've brought to the table slightly is to try to create a cohesive strategy.

So how do we, you know, get from where we are to that ultimate vision that we have?

Yeah.

So I wanted you to talk about going from the first wedge product, um, to the next product.

So how did you think about that?