Caresyntax CEO Dennis Kogan wants to introduce value based care to the operating room. It's a tall order but Caresyntax thinks they have a formula to benefit the patient, provider and payer.
Kogan's parents are surgeons from the former Soviet Union, which gave him a foundational perspective. He studied technology and then business at Carnegie Mellon and Harvard Business School. One of his key takeaways is that quality and efficiency are highly related.
Unlike many healthcare entrepreneurs I interview, Dennis's company is active all over the world. There are geographic differences, but they're not as profound as I imagined.
The episode explores the impact of AI, including generative AI, on value-based care and the potential for surgical Accountable Care Organizations to more effectively manage quality and total cost of care. It also covers the challenges of entrepreneurship in the healthcare sector, referencing insights from Ben Horowitz's "The Hard Thing About Hard Things," and discusses Caresyntax's efforts to leverage AI in clinical decision-making to transform healthcare delivery.
Host David E. Williams is president of healthcare strategy consulting firm Health Business Group. Produced by Dafna Williams.
Caresyntax CEO Dennis Kogan wants to introduce value based care to the operating room. It's a tall order but Caresyntax thinks they have a formula to benefit the patient, provider and payer.
Kogan's parents are surgeons from the former Soviet Union, which gave him a foundational perspective. He studied technology and then business at Carnegie Mellon and Harvard Business School. One of his key takeaways is that quality and efficiency are highly related.
Unlike many healthcare entrepreneurs I interview, Dennis's company is active all over the world. There are geographic differences, but they're not as profound as I imagined.
The episode explores the impact of AI, including generative AI, on value-based care and the potential for surgical Accountable Care Organizations to more effectively manage quality and total cost of care. It also covers the challenges of entrepreneurship in the healthcare sector, referencing insights from Ben Horowitz's "The Hard Thing About Hard Things," and discusses Caresyntax's efforts to leverage AI in clinical decision-making to transform healthcare delivery.
Host David E. Williams is president of healthcare strategy consulting firm Health Business Group. Produced by Dafna Williams.
0:00:01 - David Williams
Surgery consumes a big slice of the healthcare dollar and often makes the difference between life and death, yet it's been largely untouched by value-based care. Today's guest, Caresyntax co-founder and CEO, Dennis Kogan, believes the time is ripe to develop accountable care organizations for surgical procedures and interventions. Is he right? Hi everyone, I'm David Williams, president of strategy consulting firm Health Business Group and host of the Health Biz Podcast, a weekly show where I interview top healthcare leaders about their lives and careers. If you like this show, please subscribe and leave a review. Dennis Kogan, ceo of Caresyntax, welcome to the Health Biz Podcast. Thank you, david. I want to hear about what you're doing now, but before that, I want to hear about how you got to where you are and would love to hear about what your childhood was like any influences from your childhood that have stuck with you in your career.
0:01:09 - Dennis Kogan
Plenty, plenty. Yeah, no, I've been born into a family of surgeons three generations I think, going back to 19th century. I was one of the exceptions to our lineal preference and actually went into the technical realm. So I spent my formative years at Carnegie Mellon University getting an information systems degree and then ended up getting an MBA at Harvard Business School. But it's in those early days, you know, as I was training to be an engineer, having physicians and being a CMU, having a lot of exposure to robotics and security innovation, that I started sort of thinking through a little bit some of the applications of technology to healthcare. And of course my dad was a helpful thought partner and I think you know, from then on it kind of continued being on my mind.
As I was pursuing a career in consulting, I worked as a data scientist in a very specialized consulting company, helping healthcare businesses launch products and sort of price them. I got to know the industry of healthcare from a business perspective so that you know sort of introduced a little bit of the demand and the pain points and how technology could further fit in. And then at HBS I met my co-founder, who's equally passionate about healthcare and surgery as well, and eventually we started this business together. Started this business together. So, as you can see, it was, in a way, not surprising, right, having this background, with family and tech upbringing converging that seems very logical and I'm happy I did that.
0:02:55 - David Williams
Now, did you get a hard time from your family when you're studying engineering in college? Are they worried that wasn't a pre-med, that you've fallen off the track, or what was the feeling?
0:03:05 - Dennis Kogan
you know it wasn't I mean, so I I have, I'm a third culture kid, so my, I'm a, you know I was born into the former soviet union so we immigrated. So you know the the background of my family and surgeons in the former soviet union were not exactly the same. It's not the same occupation. It was not for them and so they, they, as I was growing up, I think you know, they, they, they never pushed me in that direction, you know. And so I think there was a lot of appreciation for the clinical side and patient care, but it was a tough job to be a surgeon then for them. So I think they appreciated that I'm leaning into technology. You know this was I was born in 1984. So this was in, you know, in the 90s, where I first got my exposure in school to dial up, and I leaned into that and they loved me doing that. And I think they just let me forge my own path.
0:03:54 - David Williams
Sounds good. What did you think about HBS?
0:04:01 - Dennis Kogan
I'm an alum from earlier on. It was difficult, it was thought-provoking, Having an engineering background and data science background, as you remember. I think having that forum daily to discuss complex matters was an interesting exposure. But I learned a lot and, of course, got exposure to some amazing professors and people and it certainly helped me succeed in entrepreneurship as well.
0:04:22 - David Williams
Helped me succeed in entrepreneurship as well, my roommate first year was a MIT chemical engineer. He'd worked at DuPont, very smart guy. We had our first class, first take-home test in tech, ops, technology and operations management. I remember I had come out of consulting. The whole thing was about whether they needed to replace this piece of capital equipment in the factory. I saw the whole thing was about whether they needed to replace this piece of capital equipment in the factory.
And I saw the first page. It said the VP of engineering or whatever, said it was a no brainer Anyway. So I knew okay, well, that's a red herring and for sure the answer is no. So I already knew the answer Anyway. So I went through it, boom, boom, boom, I nailed it Anyway. So he spent like all night on it and then he's kind of the conclusion that there's not enough information here in order to give the answer. And I think it's because you know he is coming from a chemical factory where, like, if you don't have enough information, like you don't make that because it could explode, but whereas consulting is more like, yeah, I could see where this is going. So it was actually very interesting even for me to see that.
0:05:24 - Dennis Kogan
Yeah, for sure. And interestingly you mentioned that class, my professor was Francis Fry, who later on went on to Uber, if you remember, to be their first chief culture officer. So we had a lot of interesting discussions and operations around culture and building things, which was very helpful for me as I was building my own team also in Caresyntax. So all in all, it was a fantastic experience, very important.
0:05:49 - David Williams
Good, all right. So for Caresyntax itself. So it sounds like obviously you were kind of like born ready to start on something in this area. You met your co-founder in B-School, but what were the origins of the company? Did you know you wanted to found a company? How did it come about?
0:06:13 - Dennis Kogan
Well, we knew enough about surgery from personal background and kind of the research through education, that this is a huge area and there was a lot of importance to surgery, you know, based on the number of patients that undergo surgery, but also in terms of the business aspects, right? So Europe or US, you know, most hospitals depend on surgery as a key driver of profitability and real budget fulfillment, right? And at the same time, there's still a ton of variability, right? So if you go back to what we learned in Tom right and think about Toyota continuous improvement and variability in production theory, right, you know, for various reasons, surgery hasn't undergone a lot of the change and technological enablement that makes industrial settings so safe and effective. It was very obvious. So, when you combine that you know lag and adoption of key technologies, and then the size of the opportunity and still problems that you know many outcomes face, it was a very fundamental realization that there is a big unserved need, you know. And then, of course, the personal connection and my partner's family also has links to acute care and my parents being surgeons. I think that helped. So I think the combination of those two made it very natural. Of course, the journey has been full of its own twists and turns, but it was one of those entrepreneurial founding stories where you marry your own passion for things with a real problem.
0:07:48 - David Williams
And so how did you first get some of a foothold? Because obviously these tools and techniques, technologies are useful elsewhere, but healthcare is sort of its own beast. Surgeons have gotten to do sort of whatever they want and it hasn't really been a fit. So how did you get a foothold and get customers?
0:08:10 - Dennis Kogan
Yeah, I mean, our foothold was actually inside the operating room itself. So I mean, we always had this long reaching business plan of becoming a broader platform for improving outcomes in surgery through technology and data. But the starting point was very pragmatic. You know, we thought about, you know, the real problems that surgeons had at that time and that was still, you know, having lack of, you know, automation and lack of ability to quickly access information and access, you know, certain digital features real time in their workflow. So we entered, you know, the market by being kind of one of the first innovative integrators of operating rooms. So we helped create smart ORs.
In the same way we have smart living rooms now and, you know, maybe that was very specific to enabling some additional productive time for surgeons, but emotionally and practically that was very appreciated. And so having that product, that A, was very, very needed by surgeons and connected to their real hands-on part of the episode where they're actually doing the intervention, was very important. And then, practically spoken, we've also, besides kind of commercial zero to one relationship with new customers, we've also partnered and even acquired a small startup early on with existing customer base. So there's a lot of you know, there's a lot of stuff we learned in business school in terms of entrepreneurship through acquisition and married into organic kind of venture model that we also deployed and again it's a combination of tapping into like real demand that was that had low friction at the time in terms of buying and using existing partnerships and existing companies in the landscape to try to accelerate.
0:10:13 - David Williams
It's interesting, you know, going back to what you said about the OR and the workflow, how the OR itself and the economics there and kind of the time management can be key to getting new technologies in. I know, when you know, minimally invasive surgery started. Actually, one of the things that made it hard was that it ruined the budgets of the operating rooms. You know they all had more supplies and things and they're like, hey, this is driving up costs.
0:10:49 - Dennis Kogan
So we had to do these broader models to show, like what's the overall impact and things like throughput, you know, in the operating room and what's a lot of stuff going on before, during and after surgery.
So, and that's kind of part of the value of Care Syntex, right, I mean, historically, surgery and innovation in surgery has really focused on tools and instruments for surgeons. Right, we've been very clinically enhancing the hands of the surgeons with new gamma knives, with the robotic systems, the hands of the surgeons with new gamma knives, with the robotic systems, and I think that really helps because a surgeon surely is responsible for the real intense part of the intervention. But there's a whole episode. There's a preoperative preparation, there's risk gratifications and decisions are made about how to conduct that procedure. There's recuperations and intensive care after that. So at the end of the day, actually a lot of decisions throughout the entire episode. A lot of data points, a lot of workflows are being activated and are in play to create that outcome. Horizontal integration of all that data and digitization of these workflows was not embarked on before and CareSyntex has built its success and its platform around being that aggregator and integrator, because it's a sum of these parts, enhanced, that creates an improvement.
0:12:06 - David Williams
So you talk about predictive analytics for surgery. What are the sort of things that you bring to bear, and how does that enhance value for the surgeon or for others?
0:12:20 - Dennis Kogan
Well, if we touch on predictive analytics, it's really helping the surgeons you know do what they're already doing, because every surgeon is projecting and predicting an outcome and trying to pick the right techniques and trying to stratify risk of each patient. The problem is, of course, especially post-pandemic just the volumes of patients. You know we have aging population. Most surgeries happen after a certain age threshold and flat graduation rate. I mean, there's not so many new surgeons coming up. You just have a lot of cognitive burden, right. So if you're trying to stratify, okay, is this a low, mid or high risk patient, very specific to that type of procedure that has been to sort of be done in people's heads? We are able to bring this to suggestive metrics that can allow the surgeon to weigh that with a bit of a visual cue. It's still a decision of the surgeon whether to consider that truly low risk or truly high risk, but just being able to automate some of these calculators that people have been literally doing in their head is of massive help as the volumes are rising. So that's an example.
Preoperative risk stratification is one. Same can happen post-operatively as people leave the operating room. Is this a patient that should be discharged or is this a patient that needs to be kept overnight. A lot of metrics are very tailored to what happens during the procedure and, historically, a lot of players who are more enterprise-wide we're talking about electronic medical records they can, for sure, take a stab and do a good job in cohorting populations, but once it gets to the real episode and what happens within and needing to make more actionable, real-time decision, it's very hard for them. That's where we step in.
0:14:14 - David Williams
Now I understand that Caresyntax has a value proposition not just for the surgeons, but also for those that are running the hospital or the surgery center, and then for payers as well. How is it that you have value to all three of those groups that are not always they're rarely aligned.
0:14:33 - Dennis Kogan
That's right. Yeah, one of our early supporters, another former dean of our business school, Steve Wheelwright. He was also an operations guru. He always tells us quality equals efficiency, right, I mean, nothing that's not efficient can be high quality, right.
And so, with respect to supporting clinical decisions, part of the success here is in smooth clinical operations.
So, for perioperative staff, automating administrative tasks, being able to help match complexity with the right infrastructure, all these things create better outcomes. And so you could see how providing analytics that can support not only clinical tasks for surgeons but also capacity management tasks for the perioperative staff, you know makes our platform very important for the operational leadership. And then, if you kind of roll this logic up and combine operating and clinical paradigms and put dollars on it, so make them financial right With access to cost data or claims data, you know it becomes very important for the C-suite because it really translates to, you know, sustainability, total cost of care. And that's actually the bridge that also brings the external partners here. Caresyntax works with providers, but we also work extensively with insurance companies because, you know, payers, especially those who collaborate with providers more actively, are very interested in a mutual set of wins around total cost of care, meaning providing same or better quality at a lower cost, and so everything bubbles up from these decisions that happen at the point of care and we're able to provide that full hierarchy.
0:16:28 - David Williams
In a way, I think you've already started to answer my next question by talking about how quality is defined by efficiency, but I noticed that, unlike a lot of companies at your stage, Caresyntax actually operates in a lot of countries around the world, whereas usually the value proposition in the US healthcare system is different from what it is elsewhere. So how does it, you know, does the value proposition differ in different markets around the world and, if so, how?
0:16:59 - Dennis Kogan
It's a great question, david, look, I mean, let me be clear. You know priorities may differ, but the goal of improving care for patients is universal right, so surgeons in.
France and surgeons in the US get into this occupation for the right reason they want to heal patients, and so there's an over. You know there's a uniting interest in safety and in higher quality. Right, divergence happens in reimbursement, in models of the business models around healthcare. Right In the US there's a melting pot of value-based care models, very different. There's like a large for-profit sector. Right, there's not-for-profit with its own. There's academic sector. In Europe there's probably more government involvement, more academic segmentation, and so the difference here creates slight preference for, for example, focusing on safety and clinical quality in Europe, while in the US, given presence of for-profit, there's maybe more interest in throughput.
Again, for us, as I said, efficiency, throughput equals success and quality. So we appreciate these two pillars. You lean a little bit more on one and one content and you lean a little bit more on the other one and the other. But everybody wants to leverage the data and everybody wants to do the right thing for the patient. So at the end of the day, whether it's the first thing we do, we all end in the same place with customers on both sides of the day. Whether it's the first thing we do, we all end in the same place with customers on both sides of the pond.
0:18:40 - David Williams
Yeah, you mentioned, there's a lot of different flavors or melting pot of value-based care in the US, and one of the things that's striking is that value-based care is often targeting primary care with a lot of metrics on what they're doing, and although primary care certainly has responsibility for a lot of what goes on, I mean it's a tiny portion of where the actual dollar is, but it seems like that's where a lot of the focus is. Now you've talked about the concept of a surgical ACO or accountable care organization. Usually within an ACO that might have specialists included, but they usually paid fee for service, so it's not really that different. What is this concept of a surgical ACO and can it work?
0:19:24 - Dennis Kogan
That's a good question. I think it can work. I think it's working in pockets right. At the end of the day, it's a model and you know I had to learn it as well as I, you know, when I came back to the US from building the business in Europe. It's a mechanism for bringing together all the stakeholders to work on quality and total cost of care.
Right, the reason why surgery was, you know, lagging versus primary care is because of everything we discussed. Right, it's tucked away in facilities. It's very multimodal, multivariate. There's a lot of engagement with the operations of the hospitals. I think it's difficult for insurance companies or anybody in between who is convening to kind of get their arms around all the improvement levers. You can see why CareSyntex is very confident about doing this because, you know we have this DNA of being very close to surgeons, close to the workflows. You know we have this DNA of being very close to surgeons, close to the workflows, understanding the data very objectively and working with physicians. So, you know, I feel like we're up for the task to bring together these, you know, couple of worlds.
There is a lot of interest and there's a lot more focus on specialty care and value based care models Right. I think the bundle payment program has been a success. I mean, there's a lot that can be done to make it even sharper and easier for physicians to adopt. Right. At the end of the day, the more data that's used from the workflow, the better the stratification of different risk cohorts we can provide, the easier it is for providers to say you know what, like, I'm okay with a capitated model here because I know I can produce high quality output at the right cost. So we're all going to win here. So that transparency that we bring which happens only if you're right there with them very granularly is the secret sauce, and so for us, we're very excited about it. Obviously, it's a tremendous challenge to bring together these arrangements. We are still a technology company, but we are working with a lot of passionate, value-based organizations and even have investors who are also excited about it, like Optum and others.
0:21:28 - David Williams
So, speaking about technology, one technology that's getting a lot of attention across healthcare and across the entire economy at the moment is AI, and particularly generative AI, and I'm wondering how AI fits in to surgery and then to your world specifically.
0:21:49 - Dennis Kogan
Great question and extremely exciting times, right, it's all real. Right, there's some hype always, but the progress is palpable, right, and so we think about it in two different ways One very pragmatic, one tougher and strategic. The pragmatic way we use AI is to support discovery and extraction of information. At the end of the day, a big chunk of our value proposition is to bring these disparate data feeds and make the discovery of insights from these combined data sets as easy as possible. So I always quote Google. They invented search algorithms that make it easy to discover things, also in images and videos. Ai can help with that in clinical content as well. We can bring surgical videos and operational data together. But for busy physicians or busy administrators, how can they fast forward to the things that matter? And AI and generative AI has a lot to offer there, and that's also helpful to us because it helps us make our solution more scalable. So that's kind of pragmatic, short-term things. We're already doing this.
Where we're getting into more and more is real strategic proprietary value in terms of supporting clinical decision making.
We talked about predictive analytics from predictive to prescriptive, that's where AI takes place. You can push towards use cases where this risk stratification becomes more and more advanced and becomes more and more real time. You know, part of our value proposition, of our product portfolio, is having the ability to inject AI directly into the workflow of physicians. So, for example, inside the operating room. You know we are able to, if that algorithm becomes mature enough, you know, to put it right there in the OR during the procedure. And so not only we're kind of developing some of those that are more, I would say, generalizable across multiple procedure times, but we're also very eager to serve as a distribution channel and a channel for best-of-class AI-first clinical companies to really put their algorithms in front of physicians. So I think that's our role, not only to develop it and inject it but also serve as that orchestration layer into that type of intervention, and we're very excited about it. It's going to take a bit of time for the more advanced use cases, but once it happens it'll move the needle.
0:24:29 - David Williams
I want to congratulate you on being named to the 2024 Fierce Healthcare Fierce 15 list. Does that mean you're one of the most ferocious companies and most ferocious entrepreneurs in healthcare?
0:25:14 - Dennis Kogan
no-transcript, kind of from a capital markets perspective. You know we're going to be at the Milken Institute conference in May. We were in Davos in January, so these things we're extremely proud of because that platform and that visibility allows us to, you know, to propagate the message of improving surgery. You know, you know many folks just aren't aware of the opportunity and potential to drive outcomes to a next level and you know all these achievements we view as a, as the next level of communication effectively. So very proud and thankful for the, for these awards.
0:25:56 - David Williams
My final question for you, Dennis, is whether you've read any good books lately. If there's anything that you would recommend or recommend that we avoid, yeah, I wish.
0:26:08 - Dennis Kogan
I wish for more time for reading, but I am actually currently rereading Ben Horowitz's Hard Thing About Hard Things. I don't know if you've read that book between the quotes from Gangster Rep.
I think there's a lot of fundamental insight about the grit and perseverance that's needed to build world-class businesses perseverance that's needed to build world-class businesses. You know, healthcare is an important sector, but it's not without its difficulties in terms of embedding innovation quickly, especially I'll make an emphasis on the word of pace right. It's a big industry with its own set of guardrails that make innovation mission critical and hence not so fast. Rails that make innovation mission critical and hence not so fast.
So, rereading this book, I'm getting a lot of you know motivation and appreciation for entrepreneurship overall and I recommend that book. I think you know both Mark and Ben have forged an incredible journey and are very successful.
0:27:12 - David Williams
You know, I think that is probably the number one most recommended book on the show. It sometimes surprises me because it's not a brand new book and it actually, you know, the lessons are drawn from sort of a relatively short time period in something that seems, you know, almost ancient to me, but it seems to have really hit the mark with people and it definitely, you know, has some pieces for an entrepreneur. You look at companies and say, well, that was really successful. You come from surgeons, you went to business school, you started this thing. It's successful, great. But there's some really deep and dark and difficult moments along the way for everybody and that book tends to resonate with entrepreneurs.
0:27:52 - Dennis Kogan
It's a no BS kind of description of it, right, and it's industry agnostic, I would say. I mean there's some, you know, lean towards enterprise B2B type complexity, but still it's very enjoyable and a must read for anybody who's trying to create change in any industry.
0:28:10 - David Williams
Great Well. Dennis Kogan, co-founder and CEO of Caresyntax, thank you for joining me today on the Health Biz Podcast.
0:28:18 - Dennis Kogan
Thank you very much, david, it's a pleasure.
0:28:21 - David Williams
You've been listening to the Health Biz Podcast with me, David Williams, president of Health Business Group. I conduct in-depth interviews with leaders in healthcare, business and policy. If you like what you hear, go ahead and subscribe on your favorite service. While you're at it, go ahead and subscribe on your second and third favorite services as well. There's more good stuff to come and you won't want to miss an episode. If your organization is seeking strategy consulting services in healthcare, check out our website, healthbusinessgroupcom.