Q&A with CDO Aaron Martin, Part 1: “We’re Trying to Simply Using Digital Technology.”

When Aaron Martin told his boss that he was leaving Amazon to pursue the role of SVP of Strategy and Innovation for a health system, the reaction was pure confusion. In fact, it took a good half-hour for Martin to convince his boss of the opportunity healthcare offered. By the time he was done talking, he had made his point.

And although this was seven years ago — before Amazon had any interest in healthcare — the draw remains the same: to leverage digital technology to improve consumer engagement, and to help realize the promise of AI. Recently, healthsystemCIO spoke with Martin about what he believes healthcare can learn from other industries, how he is able to marry the dual roles of Chief Digital Officer of Providence and Managing General Partner at Providence Ventures, and the benefits of having digital and marketing under the same umbrella. Martin also discusses the “rigorous process” Providence utilizes to identify the right digital opportunities and purse them, the keys to developing a consistent online relationship with consumers, and the three stages technologists go through when entering healthcare.

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Key Takeaways

• In addition to being Chief Digital Officer, Martin also oversees marketing and is managing general partner with Providence Ventures, the organization’s innovation arm.
• As interactions move from offline to online, having digital and marketing under the same umbrella is a smart move. “It’s such a close and related set of issues.”
• One of the key objectives for CDOs is to “make the entire experience much more seamless,” and make it easier for patients – especialy those with complex diseases – to navigate health systems.
• Part of the “rigorous process” Providence leverages to identify the right digital opportunities is to first ensure that it’s not already in the organization’s portfolio, which happens through collaboration and communication.
• By spinning out companies formed within Providence Ventures, the organization is able to “punch above our weight in innovation” by obtaining more financial support.

Q&A with Aaron Martin, Part 1

Gamble:  Let’s start by talking about your roles as Chief Digital Officer at Providence and Managing General Partner with Providence Ventures. How are you able to marry those roles, and what are your key core objectives right now?

Martin:  There are three parts to what I do. I run Providence Ventures, as you had mentioned, and I’m the chief digital officer of the health system. With anything that’s consumer or patient facing, from a digital perspective, my team owns and guides the development of those platforms, whereas [EVP and CIO] BJ Moore oversees infrastructure, EMR, data and security. And then anything that’s caregiver-facing kind of rolls up to him. That’s how the two roles shake out.

The third part of what I do is marketing; that also reports up to me. With the exception of Ventures, the combination of marketing and digital is pretty standard outside of healthcare, where entities are trying to move their relationships from largely offline to online. That’s the role of the chief digital officer. The reason why marketing and digital are pulled together is that it’s such a close and related set of issues, and so it makes sense for the two organizations to report to the same individual or office.

If you look outside of healthcare, it depends on the amount of spend and the nature of the industry. If you look at big consumer companies, typically, the chief digital officer reports to the chief marketing officer. On the other hand, when it’s more technical and e-commerce based, and when there’s a lot of transactions and digital engagement that might happen, it’s typically the reverse. And so in this case, the chief marketing officer reports to me.

My role is to transform our largely offline, analog relationships with consumers and patients to digital, and make the entire experience much more seamless and easier to navigate across a very complex health system. We have 120,000 caregivers. We’re in a lot of markets, and we’re very horizontally integrated. If you’re a patient with a complex disease seeking multiple services across multiple specialties, that navigation and engagement is very complicated. We’re trying to simplify that using digital technology.

 

Gamble:  That’s an interesting about marketing reporting to digital. It’s not something we’ve seen a lot of in healthcare, where the chief digital officer is still new.

Martin:  It is. That said, I’m happy to not feel so alone anymore. We’re seeing a lot of the health systems hire chief digital officers because they recognize the need for it. It’s getting to be a bigger club, thankfully.

 

Gamble:  What are some of the objectives you’re working on Providence Ventures?

Martin:  It goes back to the three aspects of what I do, and how they all connect. Providence Ventures is a $300 million venture fund, with 22 active portfolio companies. We’ve been very successful so far, and a big part of that is the innovation model we’ve adopted. To give you an idea, 4 (soon to be 5) of the 22 portfolio companies now have unicorn status, meaning they received evaluations exceeding $1 billion.

In terms of how it all fits together, we the ventures fund and the digital team; a lot of what they do is maintain and build websites and apps. We also have a pretty solid incubation process — which is unusual for a health system — primarily because we’re based out of Seattle. We have 120 software engineers and product folks, most of whom, like me, are from places like Amazon and Microsoft. They build new technologies and create new companies, and we spin them out as we identify these new opportunities. Basically, it all starts off with our digital strategy team, which works with our clinical and operations folks to identify needle-moving opportunities in healthcare that might be helped by digital. We work with these folks to stack-rank and prioritize those in terms of the clinical and economic impact on our health system, as well as other criteria.

 

Going Public with Goals

This past year, because of all the disruption that COVID caused, we detailed our experience and made it available to the public for the first time. We published 14 white papers outlining where we suspect Covid-19 is going to take us in terms of digital opportunities. For that, we interviewed about 100 executives from across the industry, including 75 from our own health system.

This is fairly typical. We do this every single year, but this time we published it. It gives you an idea of how much we go through to identify the list of things to do.  Then we take it through a pretty rigorous process, which demonstrates how all of these different parts of the organization work together.

 

Providence Venture’s Innovation Model

Step one is, if we already have a solution to the problem in our existing portfolio, we use that. We work with BJ’s team to say, ‘We have this problem. Is there something we already own that can solve it?’ We’re Epic’s second largest customer, and we have a strategic relationship with Microsoft. And so if we don’t have it already, we go find it. That’s where Providence Ventures comes in. Providence Ventures goes out into the market and finds what we call best-of-breed solutions. Twenty of those 22 are companies that, after a lot of evaluation, we’ll work together on a dual pilot. Those are companies that just have absolutely crushed a specific problem.

 

Spotlight Innovation #1: Xealth

If we don’t have it and we can’t find it in the market, then we’ll build it. If we build it, we build it for the purposes of commercialization. We’ve spun out two companies so far. The first one is Xealth, a company that allows users to prescribe anything that is not a pharmaceutical as if it were a pharmaceutical, directly from the EMR.

For example, instead of having a physician prescribe atorvastatin and you go pick it up at the local drugstore, the physicians can prescribe directly the digital app, content and services from their EMR, and the patient just picks it up from our Providence app. They can download it. They can watch video. They can order something off of Amazon — whatever has been recommended by the physician. It’s like SureScripts for everything except prescriptions.

That’s the first thing we spun out. Xealth has actually raised $22 million; they most recently got an investment from Cerner, and they have 10 other health systems as customers.

 

Spotlight Innovation #2: Wildflower Health

The second was Wildflower Health — that was sort of a hybrid. We built the product internally and sold it to Wildflower, which was doing something similar in the payer and provider realm. It’s a platform that helps women navigate pregnancy. We’re Wildflower Health’s biggest health system customer. Their biggest payer customer is United Health, and their biggest employer customer is Apple. So they’re doing really well.

 

Spotlight Innovation #3: DexCare

The third one is a company called DexCare, which we’re about to spin out. It’s an e-commerce platform for healthcare designed to aggregate consumer demand. It helps them navigate to the right venue of care, and it does load balancing on the back end to make sure that once we send them to the right place for care, that there’s actually somebody there to see them.

These are the three spin-outs we’ve done. The reason we go to all this trouble is that it allows us to punch way above our weight in innovation. I’ve got about 120 software engineers and product folks, but I don’t have 10,000, and so I can’t support the same road map of innovation indefinitely.

At some point, priorities will switch and I’ll have to change them. By setting these up as separate companies, we’re able to get more funding behind them and really make sure the roadmap of innovation is going to be executed upon. With Xealth, for instance, we had four people working on the problem when they were internal. Now they have about 46 people. It gives us this huge leverage. Plus, we own a piece of the company once they’ve spun out, and so we benefit from that as well. That’s the innovation model that we use.

Part 2