AH009 - Modern Technology in Healthcare: Enhancing Efficiency & Security, with Ryan Kelly

March 15, 2024

Capital Rx

In this episode of the Astonishing Healthcare podcast, Ryan Kelly joins Justin Venneri for a discussion about the opportunity to bring efficiency to an industry reliant on "horrendously and horribly inefficient" technology and the benefits that modern technology can bring to the administration of a pharmacy benefit program. Some benefits include centralizing all operational workflows and health information in one platform (JUDI®) and data security in the wake of recent cyberattacks. 

Ryan also shares his thoughts on AI use cases and how to achieve true value-based care. He explains what frustrates him to no end and the most astonishing thing he [continues to] see in the industry (hint: it should have died long ago, but it's still used and sometimes favored). Listen below, and don't forget to subscribe on Apple, Spotify, or YouTube Music!


Lightly edited for clarity.

Justin Venneri: Hello and thank you for joining us for this episode of the Astonishing Healthcare podcast. This is Justin Venneri, your host and director of communications at Capital Rx. And today I'm excited to have Ryan Kelly with us, our Co-Founder and Chief Technology Officer. Ryan, thanks for joining us today.

Ryan Kelly: It's a pleasure to join you.

[00:44] Justin Venneri: Before we get into it, maybe could you share a little bit more about your background? What led you to join AJ and start Capital Rx?

Ryan Kelly: Yeah, sure. So, I've been working myself, actually, with AJ for over 13 years, and it's been a long and fruitful partnership. I sort of stumbled into the industry. I didn't know what PBM stood for when I got a job working in the PBM space, but it was a job, and it was good. And I was very fortunate to be connected with AJ and learned a lot doing pharmacy benefit procurement and audit work.  

We really saw that there were two opportunities for us in healthcare. One: vast, vast inefficiency. And that inefficiency comes in a lot of forms. And at first, we began thinking about starting Capital Rx as financial efficiency, as I'll put it -- the way that PBMs make money was abhorrent to all of us. And we really saw that as an opportunity to start a new business. And when we decided to do that, and we began to investigate how to operationalize that model, we quickly realized that today's technology solutions are horrendously and horribly inefficient, and that we needed to build our own platform to truly realize both sides of that efficiency solution. So that's a little bit about how I ended up here.

[02:05] Justin Venneri: Got it. And building JUDI, our adjudication platform -- as it's affectionately named, as AJ likes to say -- through a pandemic, can you talk a little bit about the technology itself, why this was the solution that needed to be built, and what it brings to the table.

Ryan Kelly: Sure. I'd characterize JUDI as even broader than an adjudication platform. It truly is an enterprise healthcare platform. And the vision, which today we have realized certainly much of, is for it to perform all the operations of a pharmacy benefit manager and beyond today, for other healthcare payer entities.  

Adjudication, however, is the beating heart of the platform. Claims come in and those are the core around which the business is built. And all the other operational workflows work together in harmony on a single platform to make that happen. So, things like plan and benefit setup, eligibility management, accumulation feeds, invoicing, pharmacy payments, prior authorizations, clinical workflows, all those exist on a single platform. And that is a significant differentiator in industry.

I was talking to another senior executive at a large health insurer, and they had let me know that employees had to access over 23 ... 2, 3 ... 23 different systems day in and day out in order to perform their job. Here at Capital Rx, and anywhere anyone is using the JUDI platform, it is a single platform allowing you to do your job. And the level of efficiency that that alone drives is unparalleled and unprecedented in industry.

[03:56] Justin Venneri: So, the platform itself characterized as an open API based cloud native – however we want to say it. Can you elaborate on how that helps with creating this more efficient framework for all these workflows that are required to efficiently manage a pharmacy benefit program?

Ryan Kelly: Absolutely. One of the key differentiators about the platform, especially in comparison to these legacy and traditional platforms, which are mainframe, green screen, terminal based, is that our modern technology stack can actually be worked on by people. People know the technologies that we're using today. People are actually using the technologies that we are using to build new tools and solutions.

So, when we want to add a new feature, add a new capability, it's very simple for us to go in, build, add, create, introduce a new API endpoint to make that happen. Now you mentioned open API architecture. Obviously, we have a fully documented API ready for use for anyone. Other platforms don't have that. API is not a thing that wasn't a legacy concept or technology that you could actually utilize. So, if you want to do something unique, something interesting in healthcare, you couldn't do it on these old and legacy platforms. With our APIs, with the modern architecture, it is very, very simple and very, very easy to perform that kind of integration that you would want to.  

Additionally, because the platform is cloud-native, we can take advantage of the scale that AWS, our primary cloud partner, can offer to us. If we need to run a whole bunch of historical claim imports, all that computing power is there and available and waiting for us on AWS. If we don't need to run anything, we aren't paying for it.  

So the platform in that sense is also always right sized. We have access to scale and can take advantage of it, but we don't need to pay for it all the time. And one of the interesting things -- and I'm sure, Justin, you've been following the news this week with Change Healthcare and their outage and everything -- one of the knock-on effects, and I'll talk about the Change Healthcare outage and security in just a moment,  but one of the knock-on effects is that people are trying to move their traffic from Change Healthcare to a competitor switch. But the competitor switch being legacy mainframe racking and cabling based, they can't possibly ramp up quickly enough to take on this traffic. Whereas if you have a platform that is built with the cloud in mind, that does take advantage of the cloud, you could easily scale these things up. Now, I don't know if that really answered your question, but I'd love to actually talk about the Change Healthcare situation, if you'd let me.

Justin Venneri: Absolutely. Yeah, I would love to hear your thoughts on it.

Ryan Kelly: So, the Change Healthcare situation is certainly unfortunate. A ransomware attack is something that everybody needs to keep in mind and is sensitive to. But one of the key advantages with JUDI as a platform, and being cloud-native, and the way that we have structured our services and solutions, in contrast to a legacy player like Change Healthcare, we are much more insulated from these kinds of attacks. Our security profile, especially working in concert with our partners at AWS, is much better than the security profile of a legacy platform. That doesn't mean that we don't need to do our due diligence and be highly attentive and highly attuned to emerging security threats, which we are. We have significant and very strong controls in place internally, as well as external third-party certifications to back that up. However, when it comes to building a new and modern solution, the backup capabilities, the security capabilities, everything offered by the cloud that doesn't exist in these legacy platforms would have allowed Change Healthcare, even if they had been hacked, to recover much more quickly and potentially at much lower cost than the ransomware payment and the certain damage to their brand from such an extended outage.

Related Content - The Benefits of Modern PBM Software

[08:01] Justin Venneri: I think I read that they were trying to stand up a new instance. Is that what you're referring to? Like having to.

Ryan Kelly: Yeah. And when it comes to a cloud native architecture like JUDI has, there's not a standing up of a new instance. The way that the infrastructure is defined is you can just create it with a single command. We can create a new instance of JUDI in a fully automated fashion by running a single command. The instance will stand up, all of the resources will be provisioned. If there are any backups to be restored, we can restore those backups. And unfortunately, these legacy platforms don't have that available to them.

[08:35] Justin Venneri: Yeah, it's fascinating. And security is obviously on everyone's mind, not just because of Change, but just in general, the attacks on health systems and others. And funny timing that I had sent you the invitation for the podcast, and I think AT&T's cell network was down for that entire morning. So, I think heightened security awareness, protocols, policies, etc., are definitely top of mind. Any other suggestions for peers out there or others in and around the healthcare space regarding securing their networks?

Ryan Kelly: Yeah, I think on the AT&T side, that's perhaps even a little bit of a different matter. That's a more core kind of fundamental networking component. And when you look at the service provided by Change Healthcare, when I go in my web browser and I put in the address to cap-rx.com, that goes through a globally distributed and highly resilient network of domain name servers to route my traffic to the correct location, has security, has encryption, if you want it. Why do we need a technology like a switch? What value, truly, what value is a switch providing in this equation when all you need to know where to send a claim is the bin and PCN number printed on a member's card? The switch doesn't add any additional value.  

In this scenario, we could have avoided this entire situation. I mean, Change Healthcare handles hundreds of millions of transactions every year, and to be down for any extended period of time certainly has a massive impact on patient care and on people's lives. And for what? We could have avoided this with a better designed solution and a better designed system.

[10:20] Justin Venneri: Got it. And just a kind of fundamental management question. As I mentioned earlier, JUDI launched in 2021, correct?

Ryan Kelly: Correct.

[10:31] Justin Venneri: The quote unquote “tail end” of the pandemic there – how have you found managing a distributed workforce? I welcome your insights on that experience.

Ryan Kelly: Yeah, to some extent, we've always been a somewhat remote organization, and when the pandemic hit, we managed to make a very seamless transition to fully remote work. Many of our workflows were already digital. We're, as an organization, very heavy users of Slack. Our tools that we use to do our job day in and day out, especially JUDI, were available to the workforce in a distributed fashion, and of course, in a secure fashion. We had taken the time and had the foresight to make the management of user devices and other aspects of our IT operation automated. So, making the jump, the transition to a remote workforce for us was relatively natural and relatively easy at that time as well.  

We started to experience significant growth in my team and, of course, in the business. It was an interesting time because we already had the structure in place to support remote work. We could take the best people from anywhere in the entire country to come and work for us. So, I think it was relatively painless, although certainly an adjustment and a shift from the in-office setting that most of us experienced pre pandemic.

[11:57] Justin Venneri: Okay. And maybe switching back to something you said earlier, Ryan, about integration and scalability and integration. It reminds me of Dr. Budhrani when I was speaking to him, Sunil, our Chief Innovation and Medical Officer. He was explaining how in value-based care, the reason it hasn't kind of come to be in the way that everybody hoped it would is because the data out there isn't really integrated. Everything is still very siloed across the continuum of care. How are the things we're doing, and just the things that you're seeing in the market, kind of accelerating the push toward that value-based framework? Where systems are integrated, they talk to each other, data is shared, and then action can be taken based upon the analysis of that data.

Ryan Kelly: Yeah. And there is a lot of talk about value-based care and integration and interoperability, and all of it's just not true. Nothing from a technology perspective is where it needs to be to make any of that a reality. If we truly want value-based care, if we want to make value-based care something that we can actually operationalize, we need full integration of all the data to be able to understand whether or not, for example, a drug treatment had the intended outcome and effect. To get at that data today is practically impossible. And what we are doing as an organization to help realize that dream is we are building the first Unified Claims Platform. And what that means is we will be integrating into JUDI the capability to process medical claims and dental claims, and vision claims and other kinds of claims based on other kinds of standards, so that for the very first time, all of the data – from a payment perspective, at least -- will live in a single platform and in a single place and be able to be leveraged and utilized, not just in a value-based sense, but even in a more transactional, claim-based sense.  

Why do we make somebody go through the process of a prior authorization if we already have a paid medical claim that indicates the condition that they have is appropriate for this therapy? It's madness because other people do it because they don't have access to the data. We will be able, for the very first time, to perform this and I think this right here is the very first step towards actually operationalizing value-based care in the United States.

[14:35] Justin Venneri: Okay, so I recall when we spoke about our Surescripts’s kind of integration and point of care access to the members data to see what's on their formulary or what drugs are covered. Is that just a piece of the step in terms of getting the data in front of the physician? And then do you think there's going to be a lot of training or other things required, or would this all be so fluid that it's right at everybody's fingertips and it kind of facilitates the improvement in care that would come from having fully integrated systems?

Ryan Kelly: There's definitely kind of a future look, a future play perhaps. And looking at the actual provider, what they do and their workflow and how that operates today, being in the EHR, being in the point-of-sale system more directly integrated, having more access to that data certainly would be incredible. But I think at least in the near term, what we really hope to do and truly hope to achieve is reducing the amount of friction for both providers and patients at the point of sale. Right? That's one of the goals of a Unified Claims Platform, and not just at the point of sale, but at the physician's office, and in payment and in billing, etc.  

And two, to your earlier point or earlier discussion, to be able to actually operationalize value-based care, to be able to pay perhaps a bonus to the pharmacy or to the physician, or maybe even get a higher rebate from a pharmaceutical manufacturer, or a full price concession for drugs that did not work or did not have the intended outcome. For the very first time, we'll be able to achieve these things, but I think it is a bit of an unexplored, untapped territory there on the provider side.

[16:15] Justin Venneri: And then what are one or two things that you're most excited about technology wise or health tech innovation wise, as you look out and around what's going on in the ecosystem right now?

Ryan Kelly: Yeah. The thing that I'm most excited about, near term anyway, is AI. I mean, there's been a lot of talk about large language models, and I think at least elevating the profile of AI is an important first step. I remember when I got started in healthcare and we discussed having our platform in the cloud and people said to us, “That's crazy. You can't put healthcare data in the cloud. That's not safe, that's not secure, that's never going to work.” And I think elevating the profile of AI, getting it in more people's minds really is going to be a great first step to actually being able to use it in some of these more sensitive settings. And I know that other people have the same idea: use AI. And for us, we want to use it as a tool to help support our team, to help support our clinicians, to help support our operations, to help people be more efficient. Obviously, using AI in an ethical manner, in an effective manner, making sure that patients continue to receive the best care and the best customer service is extremely, extremely important to myself, to AJ, and to the whole organization. But we want to be able to tap into that efficiency that we believe that AI will be able to provide. So, we've got a number of projects, both on the prior authorization as well as the customer care side, that will help utilize AI to tap into some of those efficiencies that we see.

[17:51] Justin Venneri: I have kind of a fun question here, because we know, obviously, JUDI is the name of our enterprise health platform, and then we have PAT for the prior authorization tool. How does the team come up with the names on the product management side of things?

Ryan Kelly: Yeah, I think the team's number one strategy is to pick a name that infuriates me most. It's one of those things where it's like, while the name has grown on me, while JUDI has grown on me, while PAT has grown on me, I'm not so big into the names. Maybe that's just a little bit of my thing. But the team will pick a name, and if they can rally consensus behind it and ultimately get it into AJ's ear and get him out there selling it, that's really how the name comes to stick. And I will admit I was skeptical at first of JUDI, but like I said, the name has grown on me.

[18:41] Justin Venneri: All right. And then one more question that I ask everybody. What is the most astonishing thing you've seen over your career? Building technology solutions in the pharmacy benefit space that you can share, of course. Tell us a good story.

Ryan Kelly: Oh, man. The most astonishing thing. There's so many things. So many things. Now, at this point, I think I've kind of become numb to this, but I'm going to take an example of working with legacy technology vendors. And still to this day, most of the data that we receive, most of the data that we transact with our trading partners still in cobalt, fixed width, signed over punch format. This is a format that should have been dead 30 years ago and yet still persists to this day. This, I would say, is even worse than the continued use, the continued preference, perhaps, for utilizing faxes. Fax is completely insane in this day and age, but I think it's almost worse that nobody has bothered to modernize any of their systems and they're still stuck in the 1970s with these cobalt platforms. I think that, and this is something that's like literally day in and day out that I think about. Sometimes you're numb to it and sometimes you're just like, I cannot believe this is still a mundane for you, Justin.

Justin Venneri: No, I thought you were going to say Excel, frankly

Ryan Kelly: Excel is the third one in line, for sure. I mean, the fact that we still use Excel to do pretty much everything is pretty mind blowing, but maybe it just says that Excel is a great tool. I don't know.

Justin Venneri: Yeah, that could be it, right? It could be it. Well, Ryan, thanks so much for sharing your thoughts with us today. We'll share some links to JUDI and our technology-related content in the show notes. We look forward to having you back on.

Ryan Kelly: Great. Thanks so much, Justin.

If you would like to learn more about Capital Rx’s full-service PBM or PBA solutions, including our clinical programs, CLICK HERE to get in touch with our team.

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