Partner Perspective: To Meet Tomorrow’s Challenges & Stay Competitive, Health Systems Must Master Identity

Faced with shrinking margins in the face of competitive headwinds, health systems must start being more consumer friendly. And one of the main ways to do that, says Verato CEO Clay Ritchey, is leveraging data to better customize outreach, resulting in better service.

Bold Statements

… in a world where you’re starting to see more and more shared risk, your tolerance for inaccurate patient data and not having a universal identity becomes less and less, because now this is actually impacting both patient quality of care but also your ability to drive efficient top-line revenue and bottom-line results for your health system.

… what we’re really seeing as the holy grail here is being able to create relationships between a patient and the provider community that’s delivering care to them or coordinating care around that patient. So being able to identify providers accurately, being able to understand the provider-to-provider relationship or the provider-to-patient relationship is critical to really being able to really coordinate care across both physical and digital channels.

I think the best strategy in that scenario is to focus more on how you’re helping drive better outcomes at lower costs and higher value to your health system for growth. The mistake that people could be making would be to try to make this just an infrastructure problem around how to make my IT system work better, as opposed to how it’s going to actually connect to the business goals and strategies of a health system.

Anthony: Welcome to healthsystemCIO’s Partner Perspective interview series. I’m Anthony Guerra, founder and editor in chief. Today we’re talking with Clay Ritchey, CEO at Verato. Clay, thanks for joining me today.

Clay: Oh, you’re welcome. It’s great to be with you, Anthony.

Anthony: Clay, let’s start out with a little bit about your organization and your role.

Clay: I’m the CEO of Verato, and at Verato we are the identity experts for healthcare. Our mission is really single focus, we want to enable better care everywhere by solving the problem that drives everything else, knowing who is who. This elusive question of how do I really take advantage of all of the opportunity and potential in digital healthcare if I don’t know the basic idea of who that data belongs to; identity? We built a healthcare master data management platform that really creates an enterprise view of identity across all the disparate health systems across the enterprise which allows us to have that single source of truth.

Anthony: Clay, how would you describe the condition in healthcare as far as this goes? You’re going to have a huge spectrum of abilities. You’re going to have people that are really struggling, have no sophisticated tools. You’re going to have people with sophisticated tools, some using them to their fullest extent and well, some perhaps not so much. So what is the state on the ground today if you can give me any general overview?

Clay: So I think if you look at the complexity of the healthcare ecosystem, it’s only getting more and more complex, especially in a world where we have care that’s being delivered in multiple channels. Before Covid, we were relying on care being delivered mostly in person, inpatient or outpatient or in a clinic, something in the control of a health system provider. But coming through the pandemic and coming out of the pandemic, one of the transformations that’s happened is the whole idea of virtual care.

And you have consumerism happening in healthcare, so what that means is you’ve got consumers that are looking to engage and consume healthcare through both virtual means and physical means. And that has really created an even more complex ecosystem with respect to the number of data silos that that patient data is sitting in, providing a fragmented view of that person. And what we see the challenge as is how do you take all those fragments and create one holistic view, a longitudinal view of that person across all those different ways they’re engaging?

And the old way of doing this was necessary but not sufficient. We’ve got a lot of clinical systems that had an EMPI embedded in them and they maybe are doing a reasonable job of managing the identity with respect to the patient that’s being charted or being managed in that system, but as you start going across systems, you need to have an enterprise view of identity. You’ve got to get it out of the individual clinical system view into one enterprise view, and that’s where Verato spends all our time and energy, helping provide that view. And then if you look at some of the key drivers of why now do you need enterprise view? We’re seeing a lot of health systems that are looking at datacenters that they’ve invested millions of dollars in over the years, those datacenters now are getting close to the time when they have to have all that hardware replaced, so it’s really creating this opportunity, this massive rush if you will, to the cloud.

Because if you’re a CIO and you’re thinking about spending millions of dollars on replacing hardware in an on-prem datacenter, you’ve got to be scratching your head thinking, ‘why aren’t I moving all that to the cloud for much lower costs, ease of access?’ So anytime you’re starting to move things to the cloud, that’s where you start seeing things like cloud data warehousing come into effect, and again, now you’ve got all these fragmented views that you need to bring together to have one view of a person across all of that data that’s flowing to the cloud across those disparate systems, and that’s where we come into play and help out.

And lastly, I would say we’re seeing a huge push towards really embracing digital consumerism and CRM as a differentiator for health systems as they’re thinking about growth, and how do you really show your patients that you understand them, that you know them, you anticipate their needs? So we’re seeing health systems really starting to implement much more sophisticated CRM solutions, which also requires knowing who is who in each of those consumer touchpoints. Marrying that with also the patient information that you have so you can truly understand the patient, change their behavior, and help them grow with you, their needs across their lifetime. And this more sophisticated world of both moving to the cloud and consumerism, you need to have an enterprise system that brings it all together.

Anthony: Very good. So you talked about the old way was EMPI, which was application-specific, right? It would manage it within the application but not across applications. So for those that don’t have a sophisticated tool and have relied on application-specific EMPIs, how are they doing it? Are they using Excel spreadsheets? How are they getting by without a tool?

Clay: Well, oftentimes they’re not, they’re getting it wrong. So if you look at a lot of the data, you’d see out there anywhere between 10 to upwards of 18% of patients in those types of systems are being misidentified. Once in a while it means something really dangerous like you’re going to bring two different people’s records together into one. But oftentimes what it really means is that in order to make sure that doesn’t happen – if we’re getting to wrong 10-18% of the time – that we’re just having a plethora of additional records out there that belong to the same person, and that now provides us a fractional view of the person I talked about earlier.

So that’s one problem they have within the system. And then as they try to combine those fractional views across all the multiple databases that they have, that problem even compounds further. So what you end up getting then is a fractional view of a person at any point in time and then you’re not in a position to really be able to trust and act on that information because it’s not a holistic complete 360 degree longitudinal view of everything you know about that person.

Anthony: And I would imagine that that work of merging those records is extremely manual.

Clay: Yes, that’s a great point. In many health systems there’s armies of data stewards that are constantly faced every day with trying to understand, is this the same person or not? Should I merge these records? Should I de-dupe these records or unmerge them? That takes a lot of energy and time and wasted resource, while at the same time it’s not timely. If you had a patient that was just admitted and you charted that patient under the wrong record, you don’t want to wait until you make a clinical error in a surgical procedure before you get that right. So the manual processes of trying to fix this in today’s volume and scale are just impossible, if you will, to meet the task.

Anthony: Right, and you’re saying there are other trends that are pushing everyone in a direction that makes it more and more difficult to operate in that old world, such as, I think what you’re talking about is they want to upgrade the infrastructure because you want to get away from having technical debt that opens you up to security problems, right? So you say, ‘All right, if we have on-prem infrastructure and now’s the time for investment, maybe we don’t want to do that, maybe we want to go to the cloud. We don’t want to just bring our silos to the cloud, right, because then we’re still siloed in the cloud.’

So we’ve got to solve this problem. We want to integrate CRM. We want to be providing care from different venues. Everything is pushing us in a direction where identity becomes more and more important and more and more difficult to manage without a tool, correct?

Clay: That’s correct, and there’s a lot of major market forces. In addition to that dynamic you just mentioned, you also have this thought that, look, fee-for-service versus shared risk and fee-for-value, we know we’re on a journey and we’re seeing more and more capitated care every day across health systems, we’re seeing health systems also become providers. And in a world where you’re starting to see more and more shared risk, your tolerance for inaccurate patient data and not having a universal identity becomes less and less, because now this is actually impacting both patient quality of care but also your ability to drive efficient top-line revenue and bottom-line results for your health system.

Anthony: So it’s a problem, it’s a problem people need to do something about, it opens you up to all sorts of bad stuff. It holds you back from growing as a health system, providing the care, dealing with consumerism, you really need to get your arms around identity. Very important, it opens you up to a lot of risk, so we’ve established that.

I understand you’ve got an arrangement that you’ve entered into with CLEAR, so let’s talk a little bit about that. You’re running the business, what was your driver as the CEO to establish this partnership?

Clay: A couple things. So first of all, we started seeing our customers coming to us and asking us about digital front door capabilities and how we can help them better manage the digital front door work that they’re doing in order to build up, to have a digital identity that they can trust and verify as they’re starting to think about how they engage that consumer at the various physical and virtual touchpoints. And at the same time, we saw CLEAR being one of those vendors that many of our customers were starting to talk to.

And it’s a trusted brand, so if you’re going through the airports you’re seeing it, if you go to a stadium event you’re seeing CLEAR there, and we thought it was really just a perfect marriage between their wonderful brand around a digital identity from a consumer perspective and then Verato’s strong brand around this trusted identity platform that helps really drive interoperability across all these disparate data sources on the back end. So it really looked like a very good marriage, if you will, where we can bring their best-of-breed technology with our best-of-breed technology and really start creating that end-to-end identity platform that our consumers and providers need.

Anthony: What does this consist of, this partnership? Is it an agreement that facilitates you working together? Is there some technological integration that’s going on behind the scenes? What’s the nitty-gritty of what’s happening here?

Clay: So you can expect, if you’re a health system or thinking about really revolutionizing your digital front door capabilities and your identity capabilities, you can expect a seamless integrated solution between CLEAR and Verato, such that you can leverage the CLEAR technology on the front end to be able to identity-proof any person either physically knocking on your door or virtually on your virtual front doors.

You can easily identity-proof them leveraging CLEAR’s technology, verify who they are, and then now have that universal CLEAR identity be mapped to the Verato user virtual identity that now allows you to have a bridge between that identity on the front door and all of the data systems behind the scenes in the backend of your system, so that you can now have that complete longitudinal view of that trusted identity on the front end mapped to all of the data that’s associated with that identity on the back end. That’s really what this partnership brings, and so it’s integration and it’s the ability to work with two folks, two vendors in CLEAR and Verato, that are leaders in this space to solve this problem in a holistic way.

Anthony: All right, very good. Let’s talk a little bit more about identity. I think we focused a lot on patients but there are a lot of identities that a health system has to manage beyond just patients. Tell me a little bit about that.

Clay: Yes, so what we’ve really learned is that solving patient identity is critical, and it absolutely is the thing that drives everything else, but it’s not just the patient identity, it’s also the consumer identity. I said earlier that, look, 10 years ago 80-90% of us had a primary care physician who would direct and navigate our care into a health system. Now if you’re a millennial or younger, only about 25% of that population has a primary care physician. They’re all going to the internet and they’re all looking for the internet to help navigate and drive their care.

So we have to be able to meet that population where they want to be met with respect to digital tools and identity tools that helps them engage you in the way they want to engage you. And in order to do that you have to know that person, you have to show them you know them, you need to anticipate their needs, you need to meet them where they are. So thinking differently about a consumer versus a patient, we’re learning there’s a lot of things we can do to make sure you have a complete view of wherever that person is on their journey, consuming and also receiving care.

And then also of course if you’re a consumer of healthcare, you’re also a member, you’re a member of a payer probably, so we need to be able to understand what are the needs? What are your demographics with respect to being a member? And then finally, what we’re really seeing as the holy grail here is being able to create relationships between a patient and the provider community that’s delivering care to them or coordinating care around that patient. So being able to identify providers accurately, being able to understand the provider-to-provider relationship or the provider-to-patient relationship is critical to really being able to really coordinate care across both physical and digital channels.

And that’s really what we see when we talk about an enterprise identity platform, is being able to understand the identities of all the stakeholders delivering care across that care journey and being able to also understand the relationships between those people. For example, you might be a caretaker and you might be in a household of somebody who’s receiving care, and you also might be a physician who’s part of a care team delivering care with a patient, and that physician also is part of a larger practice, so he has the rights to be affiliated and to practice in various health systems. So understanding all those dynamics really enables a health system to coordinate care in a way that they haven’t been able to do in the past, and allows the consumer to be able to also direct care in a way they haven’t been able to do in the past.

One thing we can’t forget here is one of these drivers coming at us like a freight train, Anthony, is that a few years ago the 21st Century Cures bill was passed, and inside that bill was a regulation around information blocking. And what that bill said is that effective in October of last year, health systems had to make it easy for patients or consumers to direct their health information to be shared with whomever they wanted it to be shared with. And now a year later beyond that deadline, we also now have enforcement by the OCR just now coming out. In fact, last quarter the OCR defined a million dollars per incident fine for the healthcare technology vendors that aren’t enabling easy transfer and sharing of data. Here in the fourth quarter of this year we expect to see similar penalties for providers.

So we’re starting to see this carrot and stick coming together where not only are providers needing to be able to make it easy for consumers to direct access to their health information, give consent, direct where it goes at a granular level just to help to deliver better care for that patient, but also now because regulations are adding a stiff penalty if you don’t comply. So I think that those things coming together are really creating this perfect storm for identity just being more critical than ever.

Anthony: Okay, so it’s a perfect storm, it’s more critical than ever. Who from a health system is typically coming to you first, is it the CIO? Is it the CISO? I know some health systems if they’re on the smaller side may not have a CISO, they may have a very security-savvy CIO, but in general are you being approached from a patient engagement position or from a security position from the health system?

Clay: I think it’s both. I think that on one hand when you’ve got these large IT projects that are driven by moving data from on-prem to the cloud, that tends to be more of a CISO and/or the chief data officer or chief digital officer coming to us and saying, “As we’re doing this we now see all this fragmented data. We just don’t want to move one problem here and put the same problem there, we want to fix it while we work to get there.” They really appreciate the fact that we’ve got relationships with Amazon Web Services and with Google’s Cloud to make that easy for them to migrate, and also we have partnerships with folks like Snowflake that allows them to manage their data model and integrate with their data model. That becomes more of an infrastructure investment, ‘we’re investing this money to go do that,’ and an identity data management platform is critical to that infrastructure.

But sometimes though, if you don’t have that type of major initiative happening, you’ve got folks that are coming more from the business side. They’re recognizing that their inability to grow in the way that they want to grow is being harmed because they don’t understand the basic concept of identity across all of the disparate systems. They want to be able to better attract and retain that consumer who’s now shopping online and not just going to their primary care physician to be navigated, or maybe going into their urgent care. Think about all the pop-ups that are happening in urgent care today. It used to be you’d go into the emergency room at your hospital and that would put you into the med service floors or right into the health system.

So I think we’re seeing a lot of chief marketing officers, chief strategy officers, and chief digital officers really understanding that in order to drive growth, and profitable growth – while they’re shifting business models from fee-for-service to fee-for-value – there is a need for identity; and being able to understand that identity serves all of those masters equally well. That’s really functioning as the business case justification for doing this, and doing it now.

Most enlightened CEOs I’m talking to are realizing that they have to become better at marketing and engaging their patient populations so that they don’t lose them to, literally pick a major platform, you can go through virtual care and engage with pretty much any major world class health brand online. In order to combat that, you just have to be better at doing all of these consumer-type workflows, and you can’t do any of that without understanding identity both on the front end and on the back end.

Anthony: So if I’m an individual, if I’m an executive at a health system and we don’t have a tool, and I see reasons why we need one and I’m a proponent of going to the market and selecting a tool, do you think it’s possible there’s some challenges there getting this to the top of the list for different reasons? What’s their best strategy? If I’m a proponent in a health system and I want to get funds dedicated towards finding a solution in this area, what’s your advice for their best strategy for getting that done?

Clay: Well, I think the best strategy in that scenario is to focus more on how you’re helping drive better outcomes at lower costs and higher value to your health system for growth. The mistake that people could be making would be to try to make this just an infrastructure problem around how to make my IT system work better as opposed to how it’s going to actually connect to the business goals and strategies of a health system. And as I mentioned earlier, we can no longer just expect our growth to come because we built a great brand for ourselves, we need to go out and we need to curate experiences for our patients. We need to understand all the touchpoints, all the data around them so that we can take care of them and deliver better outcomes at lower costs and at higher profit margins.

I don’t think profit’s a bad word these days. Coming out of Covid, we’re seeing health systems facing challenges that may be the biggest challenge we ever see in our lifetime. It was always a very low-margin business, with increase in delivery costs, with labor shortages, with an overall unattractive mix shift of services that are being provided to patients, health systems today are much more focused on how do you grow and grow in the right way? And I think that tying these identity problems to those type of key initiatives is the answer on how you get funding for them.

Anthony: All right, very good. For people who have tools, how do they optimize them?

Clay: Well, I think one of the great things about the way we built our tool is that we use a technology called referential matching that we’ve invented, that doesn’t use algorithmic and training of algorithms in order to really begin matching identity resolution right and accurate. So the good news about that is there’s not a lot of preparation ahead of time to come in and learn and work with us, our tools are really based on our experience, and 75% of the US population is identified uniquely in Verato in the past 12 months, we’re well equipped to manage a lot of that.

I think that this question of automation you’re getting at more comes to me around the idea of, as you’re thinking about your overall architecture and all of the different data sources that you’re trying to bring together to help drive actionable information, what’s that next best action you’re trying to do to either grow revenue or decrease costs or improve an outcome? I think in order to optimize your data around those types of questions and goals, you have to start first with getting clean data, and you can’t get clean data without first starting with identity and getting the identities right.

So what we typically sometimes are asked is, “I’m getting ready to do an Epic implementation, we’re going to come see you after we do that.” Or, “I’m getting ready to go and acquire a large health system, this project should come after that.” And we try to tell them, “No, as you think about this, this is the time to do an identity platform and get it right so that whenever you do that acquisition it’s going to be clean data that you’re bringing in. When you do that Epic implementation it’s going to be clean data that you’re starting with and you’re maintaining it and keeping it clean throughout the life of that implementation.”

So I think that’s the other advice I would give, is don’t put identity on the back end, but instead understand it’s one of these seminal things you have to do first. And if you get that right first, then all these other investments you’re going to make are going to be home runs, they’re going to be much more likely to be successful and optimized because you don’t have all that tech debt you mentioned earlier. You’re not fixing all these things on the back end, you’re fixing them upfront.

Anthony: That’s really interesting, So there’s no reason to wait.

Clay: That’s right. Look, we talk about being able to connect, being able to connect all these data sources, it’s a commodity these days. We’ve got some great partnerships with organizations like Redox for example, who is a wonderful partner of ours, so literally we can take real time and batch feeds from pretty much any data source you can think of, and because of that there’s no reason to wait. In fact, the sooner you get that data flowing so that you can then be able to manage that patient identity and all the things that are critical about that patient identity, essentially that allows then the whole ecosystem to work that you’re building and evolving from a go-forward perspective.

Anthony: All right, Clay, that’s about all we have time for today. Fantastic discussion. It’s a lot of stuff to think about, a lot of good go-forward advice for people, so I really appreciate it.

Clay: Thank you, Anthony. I enjoyed our time today.