Rasu Shrestha, Chief Innovation Officer, UPMC, Chapter 1

We’ve all heard the expression, ‘don’t put all your eggs in one basket,’ and in any industry like healthcare where costs are skyrocketing, it seems like sound advice. But if you strongly believe that the basket — in this case, innovation — is the future, perhaps it’s time to rethink it, particularly if your organization has invested so much time and resources in this area.

For years, UPMC has worked to build a foundation for innovation that focuses on “substance backed by academic and scientific rigor to create products that are effective,” says Rasu Shrestha, who holds dual roles as Chief Innovation Officer at UPMC and Executive VP of UPMC Enterprises. In this interview, he talks about how the organization is leveraging its innovation arm to develop better care models, the ‘how’ and the ‘why’ when it comes to acting as one strategic group, and the ultimate goal of making technology “as invisible as possible.” Shrestha also discusses what it will take to improve interoperability, and why he’s excited about where the industry is headed.

Chapter 1

• About UPMC
• Balancing the “yin and yang” of being a provider and payer
• New care models
• Innovation using Silicon Valley methodologies
• “Rethinking the paradigm” of clinical tools
• Reducing waste in rev cycle & supply chain
• Dual leadership roles: “My role is to build bridges.”
• Creating a cohesive strategy — “It’s the how and the why.”

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Bold Statements

We’re able to put our money where our mouth is. We’re investing into companies, startups, and talent, and bringing in methodologies that Silicon Valley has used to push their innovations forward: agile development, methodologies, and human-centered design.

How do we take some of the greatest research work and some really cool, innovative scientific work that’s going at the bench side, and bring it to the bedside? Whether it’s around immune transplant therapy or a number of different areas, we’re pushing that forward in ways we had not done before.

It’s not just about a cool app that we’ll upload to the app store and make available for downloads; it’s about changing business paradigms and saying that the future of healthcare is moving away from brick-and-mortar hospitals to patients’ homes and even the smartphone in their pockets. What does that future look like?

Our approach is more of a speedboat than a large ship or Titanic, for that matter. It’s being nimble and agile around not just how and what we focus on, but also the specifics of how we get to these results.

Gamble:  I think the best way to start is for you to give an overview of your top priorities as Chief Innovation Officer at UPMC.

Shrestha:  I’ll start first with the backdrop. UPMC is a payer-provider organization with $17 billion in annual revenue, 80,000 employees and about 40 hospitals on the provider side, and on the payer side, a network of about 3.5 million member lives covered. It’s a fairly large organization.

What’s interesting about where UPMC is today — as we position ourselves from an innovation perspective for the healthcare of tomorrow — is the yin and yang between the payer and the provider organization. That, in large part, is where we’re trying to capitalize — the makeup and the dynamics of how providers and payers need to work much more cohesively together as we look at innovations around precision medicine or population health. And so we’re taking the power of data across not just clinical systems, but end users and consumers, marrying that with claims data, and looking at how we manage and shift risk across health systems, across the payer-provider yin and yang.

Coming up with these newer care models is essentially what we’re doing. From a high level, that’s how we look at the evolving landscape of healthcare, and based on that, how we make our decisions as to where we focus, how we actually innovate, and where we’re taking the ship.

Gamble:  Right. And like you said, UPMC is uniquely positioned being payer/provider organization, which is something we’re starting to see become a bit more common.

Shrestha:  It is, and that’s encouraging. If we look at healthcare more broadly in the United States right now and at all of the successes we’ve had, there have been some remarkable innovations we’ve seen pop up in the last many decades, but there are also challenges we have as a nation, one of which is escalating costs. It’s a $3.5 to $3.7 trillion industry. Outcomes are still, in large part, questionable. We still have a lot of challenges around even some of the basics of interoperability. And when we look at all of that, we’re betting on the fact that the future of healthcare is one with tightly integrated payer-provider systems. If we’re able to get it right, that will really define how care needs to move forward.

What’s unique about UPMC is not just that we’re a payer-provider system, but a) how tightly integrated we are, b), the fact that we’re also fairly large — in fact, one of the largest academic medical training programs in the country — and c) the fact that we have UMPC enterprises, which is where I park my car every morning. It’s our innovation and entrepreneurship arm of UPMC, and one where over the past few years, we’ve been able to finesse the way we’re leveraging the rest of UPMC as a living lab. We’re able to put our money where our mouth is. We’re investing into companies, startups, and talent, and bringing in methodologies that, in the last several years at least, Silicon Valley has used to push their innovations forward: agile development, methodologies, and human-centered design.

And that’s allowing us to really take a step back, look at the blueprint of where we believe healthcare needs to move forward and say, what are the right bets? How do we algorithmize the specifics of these new care models and move away from some of the buzzwords that exist out there in the healthcare industry today? How do we look at the space of innovation and really focus in on substance that’s backed by academic and scientific rigor, but also an appetite to put good money behind it and a discipline around agility, and create products that are sticky and effective?

Gamble:  In terms of what UPMC Enterprises is focused on, I imagine it’s hard to categorize, because otherwise it’s just so big — all the problems and issues that healthcare is trying to solve through innovation.

Shrestha:  Absolutely. As we’ve continued to evolve our model at UPMC, our focus areas have evolved with it. Focus is really important, because there are, as you alluded to, so many challenges/opportunities in healthcare today, and so we’ve tried to hone in on the specifics of our strengths and attributes at UPMC — the secret sauce that we bring to the table in the many different facets of care. Essentially, we’re focused on a number of different areas.

One is around translational science. In this area, we’re saying, how do we take some of the greatest research work and some really cool, innovative scientific work that’s going at the bench side, and bring it to the bedside? Whether it’s around immune transplant therapy or a number of different areas, we’re pushing that forward in ways we had not done in healthcare before.

The other area of focus is more a broader portfolio around digital health, and within that are four key areas. One is clinical tools — how do we bring forth these digital assets and make the lives of clinicians easier and much more streamlined? In the last three decades we’ve been moving from analog to digital, and in large part it’s been implementing clinical information systems and EMRs. And they’re fine, at least the intent that we had in implementing them, but we’re trying to rethink that paradigm and say, how do we make the lives of clinicians more easier and streamlined, and how do we bring the focus back on the patient that we’re trying to treat?

The next is population health where we, as a payer-provider system, are looking at the broader landscape. It’s managing the larger population of patients, risk-stratifying the patient populations across zip codes, across geographies, and across disease patterns, and really getting at a level of finesse and intelligently managing populations in ways that we’ve not been able to do before.

Thirdly, we’re focused around the consumer. And it’s not just about a cool app that we’ll upload to the app store and make available for downloads; it’s about changing business paradigms and saying that the future of healthcare is moving away from brick-and-mortar hospitals to patients’ homes and even the smartphone in their pockets. What does that future look like? How do we enable that level of, not just consumer empowerment, but shared decision-making and the many facets of enabling that level of coordinated care through and through?

Last, but not least, is infrastructure and business services. This is where we’re looking at back office functions and areas where, in healthcare, we’ve traditionally had a lot of waste: revenue cycle management, supply chain management. We’re trying to bring in innovative methodologies and artificial intelligence — capabilities we’ve had access to only recently, but where we, as a large health system, know where there are a lot of areas for improvement, and we’re bringing those to fruition.

Gamble:  Right. So there are a lot of areas that need focus, but that’s the reality of healthcare. Having leadership positions roles both with UPMC and UPMC Enterprises, how are you able to marry those two roles?

Shrestha:  Think that’s a really important question. For an organization like ours — and for many others as well, I think having that level of focus is important. And yes, it’s broad, but at the same time it defines the specifics of what you’re doing and what you’re not doing.

But in addition to the what, it’s also the how. That goes back to your question about my role across the organization, and how I then work with other leaders and executives and doers and believers across a health system as large as ours. And so we’ve decided, first and foremost, as a large and coherent executive team across UPMC, that innovation is the future. This is what we’re doing together. And it’s not any one person or any one group. It really is a collective effort across the board; it’s us betting on the fact that this is the future of healthcare — not just at UPMC, but across the industry. It’s a big bet that we’re making. We’re putting all of our chips in just one basket. And with that, we have strong support from the CEO across the board in the efforts that we’re doing.

My role in many ways is to build bridges, and so as I’m charged with innovation at UPMC, I work closely with my peers across the organization, and we then continue to build additional bridges, whether it’s across the health system or the health plan, which is arguably the most successful startup we have at UPMC. It started 20 years ago, really as an experiment — today it’s an almost $8 billion empire with 3.5 million lives covered. With my background as a clinician, and I’m able to relate to the specific clinical changes, and also converse with my clinical colleagues in ways that are meaningful and impactful.

There’s a lot of leaning in. For example, our CIO [Ed McCallister] and his entire team work very closely with specifics of what we’re trying to push forward at UPMC Enterprises. And so there’s a very coherent set of methodologies in the ‘how’ of what we’re pushing forward.

Equally important to all of this is also the ‘why.’ That’s where we come together and say, the ‘why’ in all of this is really around that consumer and that experience, whether it’s for clinicians or for the patients at large. There is an imperative for us to make sure that we’re not just improving that incrementally, but exponentially moving things to the next level and challenging the status quo in ways that we’ve not been able to do in healthcare. Our approach is more of a speedboat than a large ship or Titanic, for that matter. It’s being nimble and agile around not just how and what we focus on, but also the specifics of how we get to these results, goals and outcomes. That’s really important, and that’s how we come together as a team at UPMC to achieve all of that.

Chapter 2