In Conversation with Brad Smith, CEO of Aspire

October 11, 2017

Annie Lamont - OAK HC/FT

Annie Lamont: What is Aspire?

Brad Smith: Aspire is the nation’s largest home-based provider of care to patients facing a serious and life-limiting illness. We employ interdisciplinary teams of palliative care physicians, nurse practitioners, nurses, social workers, and chaplains who use our data-driven and technology-enabled workflows to provide 24/7 care to our patients and their families. Today, we are working with patients in 23 states across the country.

AL: Why palliative care? How did you first recognize a need or opportunity to focus on that area of healthcare?

BS: I was introduced to palliative care by my brother, who was studying to be a physician at Harvard. He had decided to take a year off to work with Atul Guwande and Susan Block, who was the leading palliative care physician at Dana Farber. We were home for Christmas and my brother was sharing articles about his work. I became fascinated by the research, which focused on the health implications of palliative care.

The studies demonstrated consistently high patient and family satisfaction; rates of hospitalization coming down by about 50% in the last year of life; and costs coming down by 20 to 25% for patients. I thought, “Wow, this works so well, why is it not happening everywhere?”

About six months later, my grandmother became sick and ended up going into the hospital unfortunately without the benefits of ever receiving hospice care. It was a very challenging and personal experience, and I decided there had to be a better way.

AL: How are you leveraging data analytics and IT within your business?

BS: Data is an important part of our operations and we use it in two main ways. First, we use it to identify patients. We work with our partner health plans to collect information from claims and clinical records, and then we project how likely patients are to pass away and have high spend in the coming months.

The second way we use data is after patients are enrolled on Aspire’s service, where we use data to help support our clinicians’ decision-making and ensuring patients get the right resources they need at the right times.

In palliative care, no two patients are the same, so there’s never a definitive right answer. For individual patients, it is more about presenting them with a set of options that they might want to consider.

AL: In serving patients across the United States, what are some notable differences you’ve seen in the way you manage the business or work with stakeholders?

BS: When we started the company, we suspected there would be a good chance that outcomes would be different because we serve patients in places that are so diverse.

For example, we serve patients in the Rio Grande Valley, where 90% of our patients prefer to speak Spanish. We are also in the South Side of Chicago, where many of our patients and their families experience adverse socioeconomic conditions.

But what we have been surprised to learn is, across all those different locations, the outcomes are all remarkably similar — both in terms of patient satisfaction and in terms of the reduction in hospitalizations and transition rates to hospice. I think what that speaks to is people, at the end of the day and no matter their background or socioeconomic status, really want the same thing, which is to be with family members they care about as they near those difficult times.

One big difference is how we engage with those different patients, however. Reaching out to patients in the Rio Grande Valley is very different than reaching out to patients in downtown Chicago.

AL: You previously worked in state government. What lessons or experiences have been most valuable as an entrepreneur and CEO?

BS: When I started the company, I had no idea if anything I had done before would be relevant. It turns out it was very helpful. For one thing, when I led nonprofits and worked in government, I had to bring together people with different perspectives to tackle a common problem. It turns out this is actually very similar to the work we are doing at Aspire.

For example, you have patients and families that really care about the kind of care they are getting. You have health plans that care a lot about cost and quality factors they are held accountable for. And you have investors who are interested in both the underlying mission as well as the financial aspects of the company. In many ways, this is like running a campaign. You need to understand divergent stakeholders and where those different groups are coming from. And, then you need to find the common ground and align all those people. This is far more like politics and leading non-profits than I ever anticipated.

AL: Aspire is featured in Dr. Ezekiel Emanuel’s recent book, “Prescription for the Future”. How did that come about? What’s been the response?

BS: Zeke had heard about us from various people and had reached out to us, so we arranged an opportunity for him to shadow one of our clinicians in Philadelphia for a day. Based on that experience, what he saw was a company that was really making a difference in the lives of patients and families. At the end of the day, what we do is all about serving patients and families, and it is important that stakeholders know about what we do so that we can do more of it. His book has been very helpful in raising the profile of a healthcare issue we care so much about, and highlighting the work we do.

Lightening Round:

If I weren’t a CEO I would be… running a nonprofit.

What’s on your desk right now? Nothing. I keep my desk completely clean; it makes it easier for me to concentrate that way.

What is your favorite source for news? Politico. I am fascinated by everything that is happening in DC right now.

What’s a great piece of professional advice you’ve received? The best advice I received was from Senator Bill Frist, who co-founded Aspire with me. About six years ago, I brought him two ideas to consider: one in education and one in healthcare. He knew a lot about both markets and strongly suggested we pursue the palliative care opportunity given the vast amount of patient need. Without his guidance, I may never have launched Aspire.

What one piece of advice would you offer to an entrepreneur? Focus on the biggest problems. When you’re starting out and leading a company, it’s often tempting to do the things that are easiest first. But all too often, there are only one or two things you must really figure out to make the business successful. Focusing your time on the one or two most important things is critical.

Headline: In Conversation with Andrew Robinson

Logo: Oak HC/FT Insights

Author: Patricia Kemp

Date: September 21, 2017

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Patricia Kemp: What is an Executive in Residence?

Andrew Robinson: As the first Executive in Residence (EIR) at Oak HC/FT, my role will be to develop new insurance tech businesses through a combination of building from scratch and investing in early- and growth-stage companies. The role would evolve into me overseeing one of the new companies on an operating basis.

PK: What attracted you to the opportunity to work with Oak HC/FT?

AR: The Oak HC/FT team, first and foremost. Besides having a terrific track record in the industry, they’re wonderful people; very smart and down to earth, which makes for a dynamic working environment.

We also share a view on big opportunities within the insurance tech space and a common philosophy around how to pursue those opportunities. My background and Oak HC/FT’s deep capabilities and insurance tech expertise make for a powerful combination. I am confident we will pursue some big ideas together.

PK: What are you most excited to do in your role as Oak HC/FT’s first EIR?

AR: While the Oak HC/FT team has already made smart investments in insurance tech, there are many more attractive opportunities to pursue. Within the US property and casualty market, for example, carriers have only returned cost of capital in aggregate once over the last 12 years. Products remain extremely complex to understand — even to a sophisticated corporate buyer — and efficiency gains and improvements in reducing loss costs over the past 10 years have done very little to reduce end-customer cost. Services and service quality are generally poor when measured against nearly any other industry of comparable size.

The opportunity to build a business that meaningfully addresses these factors is what gives me and the team at Oak HC/FT a lot of energy and excitement.

PK: What are some of the initiatives you will be focusing on at Oak HC/FT?

AR: We see abundant opportunities across the entire value chain: how capital is sourced for a specific risk type; how products are constructed; how risk is selected and priced; and how loss events are managed and adjudicated. While we don’t want to be specific on the core ideas, using commercial lines as an example, it is easy to envisage how new categories of data can be harnessed in combination with new approaches that better leverage existing information for competitive advantage. This concept cuts across nearly all product lines and risk types and will be central to product construction, driving down loss costs, and improving risk selection and pricing.

PK: How have you leveraged your corporate experience and background in your entrepreneurial roles?

AR: I am passionate about working with entrepreneurs and have years of experience serving on the boards of VC-back insurance tech companies. I can leverage my corporate experience within the VC community to add credibility, context, and perspective around the power of the ideas of each of these companies. My understanding of the insurance market and where and how value is created (or destroyed) is often helpful to the design of the solutions these early-stage companies are creating. I have also been a cheerleader and door-opener for business development and relationship building with carriers, brokers, and service providers.

PK: You have strong experience in both financial services and insurance. Compared with other financial services, do you think insurance has been slower to innovate and digitize?

AR: Yes and no. The insurance industry is composed of many smaller markets, so you need to look at them independently. Commercial insurance accounts for about half of the industry, and it is more akin to commercial banking, which has been slow to innovate, as well. But if you look at other segments — such as personal auto insurance, which is more consumer-driven — you would find more evidence of innovation. For example, a company like Progressive has been innovative on pricing, customer experience, and, recently, telematics, where they have been leading the way in product design and driving adoption. So, I don’t think you can paint the industry with broad brush strokes.

That said, there are a handful of challenges that have hampered the speed of innovation and digitization. The US insurance market is regulated at the state level, making changes costlier and more time consuming. International insurers have also been focused on Solvency II compliance over the past several years, which has been an intense process and consumed resources that otherwise might have been deployed toward innovation.

Talent is another root cause. Historically, the industry has not been perceived as “cool” by the next generation “A” talent, and the industry hasn’t paid for top tech talent like many banks and other industries have.

Lastly, the commercial insurance industry is unique in that prices are effectively “set at the checkout line” yet the cost of goods sold (COGS) isn’t known until a future point in time. The combination of these factors makes innovation a challenge but also an attractive opportunity for the future.

PK: What do you think will be the biggest upcoming trends in insurance tech?

AR: Big data, artificial intelligence, robotic process automation, blockchain, and chat-bot technologies will all have an important role in shaping the insurance industry’s future. I think the sharing and gig economy will also play an important role in enabling development of new products and markets, and attracting talent to the industry.

One specific area is sensor technology, which could have a profound impact and accelerate the elimination of some categories of risk and the creation of others. These changes will impact every step of the value chain.

PK: You’ve worked extensively overseas. Are there any notable lessons or experiences you’ve carried back with you?

AR: Whether they are in London, Mumbai, or Chicago, many early-stage, emerging and growth technology companies share a similar ethos, determination, and frequently, values. That’s unique to the entrepreneurial mindset and start-up culture, which makes working across borders relatively easier than what you might experience within an older, established company.

Specific to the insurance industry, the London market, where I spent many years, demonstrates that concentration of talent can make a huge difference to building real expertise and distinguishing a market. While technology has the potential to make talent concentration less relevant, I would not underestimate this historical advantage and how this concentration of talent may be foundational to innovation.