The Vetting Process: How Astrana Thinks about Potential Partnerships across its Organization
The next part of my conversation with Awell and Astrana focused a bit more on Astrana, their model, and how they view the world as a scaled - and scaling - VBC player. The VBC tech stack is a bit of a black box, and I wanted to understand how Astrana thinks about partnerships and build vs. buy decisions with potential vendors, so I asked Brandon… how does Astrana vet potential partners?
And his answer held a common thread: "Know where your core competencies lie, and solve for flexibility."
Because Astrana takes on full risk and gets most of the premium dollar (85%-90%) in working with payors, Astrana considers itself top of the funnel for all patient care. That means Astrana is the one making all of the decisions on tech stack and does its best to understand who or what is the expert in care delivery or other core competencies involved with value-based care (e.g., transitional care management), providing their doctors and clinicians with the best tooling possible.
Specifically calling out Awell, Astrana was planning on building its own clinical workflow tool prior to learning about Awell's solution. But Brandon realized it was already built - and built well by Awell, with validation from other Awell partners both in the U.S. and at several hospitals abroad.
Astrana could integrate Awell into its stack faster and accelerate its ability to perform clinical workflows - especially with non-clinical, non-technical folks - then iterate on those care plans in a more nimble fashion.
The low code or no code environment was a game changer. Awell provides infrastructure. It's not the tech that sets you apart - it's the care flows you build on there - much better place to build engineering resources
Astrana also partners in this way with other companies. For instance, its recent partnership with Elation - and others - that hold tremendous value for Astrana but things like EHRs aren't in their wheelhouse and they're more than happy to admit to that fact.
From a capital project perspective, building out things that have already been built and are actively doing a good job is not Astrana's MO or in their shareholders' best interest. Shareholders don't want Astrana to build tech internally. They want to see Astrana scaling to new markets like Nevada and partnering with new physicians to deliver excellent risk-based care.
As an interesting analogy, technology companies would never build their own cloud servers. Instead they work with AWS or Azure:
- "As an organization whether you're VC backed or public or whatever, if you went to your shareholders and said you're going to install servers in your basement, they'd say you were crazy."
Beyond the tech stack, the same partnership strategy rings true in care delivery. Astrana knows it's not the experts in kidney care or cardiology, and they want to work with the best, high quality physicians or practices partners to deliver that care more quickly into the hands of their patients
The Divergence in Partnership Strategy
Over time we've seen 2 diverging strategies emerge - companies who want to custom build every part of their ecosystem - and then people who are very proud to stitch together vendors.
The common thread throughout our conversation was…there's a good balance where you know what you're good at and what you're bad at. Someone like Awell strikes the right balance because it's creating infrastructure that isn't going to differentiate a care delivery services organization itself, but the actual implementation provides flexibility. They're a SaaS provider that gives you leniency & isn't opinionated. As a value-based care player like Astrana, you need infrastructure flexible enough to bend to the populations and local markets you're serving. This type of infrastructure helps you scale to diverse local markets and populations. More on that in a sec.
There's an important inflexion point in the industry in late 2024. Care is evolving and is of course multimodal - complexity of care delivery is increasing and you need to be more flexible as an enabler providing key infrastructure for care teams and physicians. E.g. - 'this population needs more at-home care or more text messaging, etc.'
Finally, CIOs are fed up with point solutions - and you're going to see hospitals and other enterprise players shifting from 20 point solutions to platform-based solutions over time.
Solving for Scalability in Value-Based Care
One brewing problem in VBC I wanted to ask Brandon, Thomas, and Rik was a simple question around growth: How do you scale VBC effectively?
For instance - we've seen certain models work amazingly in specific markets, but as those players try and scale beyond that first market, things break or don't work as well. So how can you create a scalable care delivery risk-bearing organization in healthcare in 2024 across multiple local markets that are not homogenous by any stretch?
In case you missed the section above, the answer lies in model flexibility. So what does flexibility look like in practice?
- Figure out parts of the process that can be codified and standardize-able across communities.
- Give physician leaders the ability to interface in the way that they want - because every physician is different.
- Understand what else needs to be modular or configurable from there.
- Recognize that local markets vary drastically. They are not homogenous
Solving the local market problem in value-based care is difficult. It's even harder to scale a homogenous VBC model across different, diverse local markets. For instance, even Coastal California is quite different from Central California, despite being close in proximity, and different methods of care delivery or touchpoints are needed depending on the population. At its core, community level, you need to understand how care is delivered.
Many VBC players today (you can name the marquee examples) have fallen short due to the simple fact that they have been very dogmatic and rigid about how their care model needs to be implemented, and therefore over indexed on their existing care model rather than iterating. For instance - staffing ratios, type of care, site of care, size of clinic - many think a successful model looks the same everywhere. But your model needs room for fluidity and iteration.
We've seen successful VBC companies across the US that present great results in their core markets. It's really only when they fill up their coffers with investor money and start to scale to other markets where they run into trouble.
If you consider a hypothetical world in which you took all of these VBC peers that have really struggled and there wasn't some existential investor pressure to land and expand their base business beyond their existing core markets, you probably don't get into the mess we're in today with some of those players.
In fact if you had just rolled up all of those disparate players in the markets they excelled in, you'd probably have a nice little holding company and would be doing quite a bit better than we see today.
Ironically, one of the most successful value-based care companies at scale - whether by intent or accident; we'll never know - is Optum. Optum runs its aligned practices in this way, where they haven't really deeply integrated them into the business. The fragmentation and diversification of Optum's provider portfolio - and the disparate care teams and care modalities therein - has in no small way allowed Optum to become the juggernaut it is today.
How Astrana Built a Collaborative Company Culture
Another underrated aspect of any organization is how culture is implemented from the top down. I was really curious to understand how Brandon and leadership at every level helps Astrana achieve success for its partner physicians and ultimately patients.
How has Astrana built a company culture where there's such a great need for collaboration, communication, and desire to learn?
Brandon gave me some great responses, which I've summarized below:
- They're underdogs - they've hired folks that appreciate this underdog, underrated chip-on-your shoulder mentality, and they're also not afraid to think when appropriate from a first principles perspective about healthcare. Leadership holds a healthy blend between physicians as well as folks that are newer to the space that tackle problems from various viewpoints.
- They're confident to ask why something is the way it is or why they can't do it a different way. Brandon himself even asks 'dumb' or seemingly 'simple' questions in company-wide Slack channels. If your CEO is leading the way and setting that example, it instills a company culture of intellectual curiosity.
- They understand Founder mode means getting your hands dirty with things - understanding the details and what various parties are responsible for - and then updating your mental model of how you view the world constantly with new information.
- They want to move fast, but not break things. Healthcare is a highly regulated industry with real lives at stake. Balancing for moving fast, but not breaking anything sacrosanct (and putting in appropriate guardrails) is top of mind for Astrana.
- Finally, Astrana is a mission-driven company with the goal of providing excellent patient care, and do so in culturally competent ways (highlighted by their recent partnership with SCAN).
What's Next for Awell and Astrana?
As CareOps and the organizations involved in the movement evolve, they'll continue to iterate and hold a mindset of continuous improvement. Ultimately Awell wants to push the envelope forward in care delivery, answering the following question to iterate and make a better product:
- How can we promote more organizations to be more nimble and think about constant evolution based on the nuances of the patient populations or communities they're serving so that Awell's product becomes more valuable?
From Awell's perspective, if its version within a particular organization stays on v1 and never iterates or improves on feedback from patients and providers, Awell's product becomes less valuable.
It's almost a network effect in a way.
At the end of the day, as quality and consumer-oriented approaches to patient care start to differentiate value-based care players, the only long-term sustainable competitive advantage is to learn faster than your peers.
Right now, it takes on average 17 years between publication of medical journals and widespread adoption of that evidence. Rik and Thomas made it very clear that it's part of Awell's mission to drive down those 17 years to 17 months or even 17 days - and create global learnings and best practices for all clinical workflows.
Eventually, as companies working on the same problem or disease states experiment on flows, the flows - independently - tend to converge as best practices emerge, which is pretty cool. At scale, Awell finds that one flow for a particular use case tends to be better than all of the others. And so as companies experiment with solutions like Awell's, we'll start to see innovation incrementally improve, and get a little faster…and a little faster…until deployments for new workflows take days rather than half a year, and move functionally closer to software. As this takes place and organizations collaborate further on tools like Awell's, we'll see patient care continue to improve.
It may sound like a bit 'pie in the sky' esque from someone who is an optimist and wants to move the needle in healthcare, but we are closer than ever to this future after seeing the level of innovation, excitement, and passion from founders in just getting back from the HLTH conference in Vegas. Yes, I'm drinking the Kool-aid, and why not?
Over time, Awell and others are developing proprietary datasets - libraries of care plans or workflows. In the long term, this translates into better healthcare for all of us.
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