EPISODE 79

Affordable Primary Care Everywhere - Eren Bali, CEO and Co-Founder of Carbon Health

12-01-2020

As a child in rural southeastern Turkey, Eren Bali knew that people died needlessly for lack of access to healthcare. This explains his passion for making affordable healthcare available to everyone, the mission of his successful start-up Carbon Health. Bali and his team took a fresh look at every aspect of primary care delivery with an eye toward efficiency for both patients and providers, and built a new process from the ground up. Patients book appointments and onboard themselves using a mobile app, increasing their convenience and reducing the administrative workload. Mobile clinics in multiple locations handle routine needs using nurses or medical assistants, with physicians joining appointments via video as needed. AI predicts diagnostic tests needed before appointments so clinicians can discuss results when the patient comes in for their visit. Carbon leveraged these and other innovations during COVID, becoming a sought-after provider of testing and other services. This year’s 800% growth rate may not be an aberration as the company plans to grow to 1,500 locations in the next several years. Join Bali and host Shiv Gaglani as they dive into the emergence of “omni-channel care”, his mission to protect providers from unnecessary administrative work, and why 98% of the job offers Carbon makes to clinicians are accepted.

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Transcript

SHIV GAGLANI: Hi, I am Shiv Gaglani, and today on Raise the Line, I'm really happy to be joined by Eren Bali, who's the co-founder and CEO of Carbon Health. We were actually introduced not because of Carbon Health, but by Rob Hutter at Learn Capital, because Eren also is the co-founder of Udemy, which is a household name by now, but in case you haven't heard about it, it's helped over 40,000,000 learners upskill, and has definitely seen a lot of tailwinds because of it. We're here to talk to Eren about Carbon Health, and how they're revolutionizing primary care. And I've had the great fortune to get to know Eren over the past few months, in both the context of Udemy and Carbon. So Eren, thanks for taking the time to be with us today.

EREN BALI: Thank you for inviting me Shiv. I was looking forward to joining your podcast.

SHIV GAGLANI: Awesome. So can you tell us a bit more about your background, how you got into, first Udemy, and then also starting Carbon Health? And I know also you hail from Turkey, so we'd love to hear and give our audience a sense of how you've been so prolific with your startups.

EREN BALI:  Of course. So I grew up with a lot of passion for education and healthcare. I think the source of it is my upbringing. I was born in a southeast part of Turkey, and growing up it was a very rural area, kind of the mountains. The two things that you would probably be most looking for is education and healthcare, because most teachers would not want to go work there. So we had only one teacher for the entire school. She would literally have to just switch between classes. Most teachers would actually quit their job instead of going there, working there. Healthcare was similarly inaccessible, so very rarely we would have any kind of physician available in that region, so that obviously caused a lot of people to die, because of a lack of healthcare access. 

So I was fortunate enough to be able to get out of there. So I heard this talk that there's so much talent everywhere in the world – it’s actually fairly uniformly distributed -- but the access points, and opportunities are fairly unevenly distributed. So growing up from this region, and me getting lucky and finding myself in a position where I can do things like starting companies, I knew that I wanted to do things in the education and healthcare space. I started two companies as you know. Their mission is actually very similar. My mission at Udemy was making world-class education accessible to everyone and that was a situation where we knew that we can virtually educate people. My basic idea was, eventually when people learn something, it almost always will be online.

And I know that online education does not completely level the playing field, but at least it gives an opportunity for people who are behind to catch up, which is what happened for me. I caught up because my oldest sister was going to college and my parents bought her a computer, and over the summer I found access to a bunch of mathematics resources including Internet Relay Chat channels where people would go to discuss math problems, and just by teaching myself mathematics from those channels I ended up winning a gold medal in Turkey's National Math Olympiads and that really triggered the change that brought me here. So I think similarly, we thought if somebody can learn a basic skill, and you can make that accessible to most people, all of a sudden it might actually trigger a series of changes, to get that person to the care that she deserves.

So those are the basics at Udemy, and we thought a marketplace where you can learn from any expert around the globe will be the most effective way of doing this. And in 2016, Udemy was going really well, so I decided to tackle my second passion, which was healthcare. But this time it was a very different situation, because in healthcare you need a physical access plan, you need clinics. It's a little more complicated as a business. So after a couple of iterations, we realized to really provide very high quality care at a low enough cost so that everybody can afford it, we have to bring down the operational costs to a minimum. 

That meant we have to optimize every single aspect of care delivery. So we decided to just own the clinics, the technology stack, the people, everything together, so that things can be run in a very efficient manner. And that's what we really have nailed. We have nailed the formula and operating system, so that a very high quality care of can be provided at a fairly low cost, so that this type of access point can be available, affordable to the entire population.
 

SHIV GAGLANI: That's incredible, and I'm curious. pre-COVID, what were some of the innovations you all have made to be able to lower the operational cost of providing primary care?
 

EREN BALI: I think the central innovation was approaching care delivery from first principles. Before we even knew exactly how things would work and where would we get some savings, we opened a small clinic, physically inside the office, where engineers, designers, doctors are literally working next to each other. So you could actually see patients coming in and out and I made it forbidden to even look at third-party healthcare software. So literally, you couldn't look at an EHR or some practice measures somebody else made, because I knew that they were extremely inefficient and because this is a complicated problem, you would actually be tempted to bring their historical baggage to our system. To me, that was the biggest innovation, and we approached everything from onboarding the patients, to scheduling from the ground up. 

The two high-level guidelines were, on the patients' side, it was obvious to us that patients want to do pretty much everything from their phone. They would want to sign up from their phones, schedule their appointments, look at their medical records, get their care plan. That's the device that you always have next to you. So we made it extremely mobile app centric, and also we removed all the administrative work there. There's really no administrative work that a customer support person has to deal with, or front desk person has to deal with. You just download the application, onboard yourself, book an appointment, and you show up in the clinic, as easy as that. You're not filling out forms, you're not calling people to schedule. We just automated everything that can be automated on the patient side.

On the provider's side, the guideline was the doctors should not be spending even a second of their time on a piece of work which is not hardcore medical decision-making. All of the billing work, filling your prescription in a pharmacy -- for us it's just redundant work for doctors. So we automated as much as we could. And we use a lot of AI to also streamline the work they have to do, which is decision-making, but it's through to a straightforward decision-making. A patient comes in and we collect most of their information ahead of the time. We ask the first four, five minutes to do the questions that the doctor will be asking you ahead of the time so doctors don't have to spend time, waste time asking those questions.

When you have the data, then we can even predict what kind of diagnostic orders doctors will be making. We do some of those orders ahead of the time and we get the results, so then by the time the doctor is in the room with you, we have even the preliminary diagnostic results. So it is not just one small thing. It's just really looking at every single thing, from the perspective of how could this be the most efficient, the most friendly that it could ever be. Even something as simple as deciding how long each appointment should be. We have a system which predicts how long it will actually be, from the historical data. For example, a 65-year-old man with four chronic conditions and 20-year-old woman who just is a five-minute visit, they don't have to be booked for the same length appointment. So these are small things here and there, but collectively they make a massive difference in the efficiency of the whole system.

SHIV GAGLANI: That's really fascinating. And as you were talking about starting from first principles and looking at every single piece of the operation, and where you can gain the inches, and together then score the touchdown, it reminds me of Elon Musk. In order to make space travel 10 times cheaper, he started from the ground up, from first principles. And instead of bringing in a third-party radio system, which would have a markup with the manufacturer and increase the costs, it was just ground-up production. Going into COVID, what are some of the major changes that both Carbon and Udemy have had to make, or seen as a result of COVID?

EREN BALI: As for Udemy, the whole company ran into remote working, so that they don't crowd at the offices, and the company scaled very fast in that time frame. I would say we were empathetic to the reality that a lot of companies had to be in cost-saving mode. So we essentially tried to help as much as we can on the cost savings side to our customers. But Carbon was obviously much more of a drastic change, because in February, our system that collects information ahead of time actually flagged people coming directly from Wuhan, China to our clinics with COVID-like symptoms. So we were actually aware that problem is already on our doorsteps, and we started remotely monitoring patients, because there was no accessibility of testing.

And one of those patients that we were monitoring ended up in the ER, and then he tested positive at the ER, and he was recognized as the first community spread patient, because he did not have any travel history or known contact. So I think that we were aware of this problem probably earlier, in the sense that we just knew it's going to be a massive problem. So shifted everything in March to fighting COVID because it was obvious to us that this would dominate the health care delivery space in the near term. We've maybe done 10 things which we were the first in the country in this response. I'm not going to spend time going through all of them, but we attacked this problem both from the technology side and also the services side.

On technology side, we built the largest database of all testing centers. We built a match so that everybody can find testing locations around the country. And even more importantly, we had tested 300,000 people. So we published the first large scale, open clinical data centre for COVID. For all those patients who got tested, we published their lab results, symptomology, history, all the relevant information. A lot of researchers have been using our data feed to model the risk factors. And it is the only large-scale public database. It's actually not easy to do this exactly, because you have to preserve the privacy of individuals, but still maintain the quality of the data. We are writing a white paper about how we were able to put some noise in the data, so that you couldn't identify any single patient, but then the oral data was still kept.

On the services side, the three things that we prioritized was one, access points for testing. We wanted to do all we can. We attacked this problem from testing people in our clinics. There were also pop-up clinics, that I would love to talk more about. We built the first mobile testing center, which went to underserved communities and we built an onsite testing course, which went to places like nursing homes, or other high-risk employers to test everybody routinely. We also partnered with local governments like San Francisco City, Los Angeles County, and we have some state partnerships like Hawaii and Arizona right now, actually a couple more are coming online.

So we did all we can do in terms of being an access point and collectively I think, we were testing roughly 10% of all the people that CVS was testing. CVS is a company 1000 times our size just to compare. So I think we've made substantial contribution to the testing front. But the other thing that we were really aware of was that companies needed help, needed more comprehensive solutions between education, training, also checking their symptoms, testing access points and lastly, when somebody does test positive, which eventually happens, how to get those patients back to their full health. It has been essentially five to 10 different initiatives at the same time, but that was a result of the fact that we just decided to put all of our resources into this problem in the near term.

SHIV GAGLANI: That's pretty incredible how many things you all did. Can you give a sense of the size and scope of Carbon Health at this point? How many clinics, how many employees, how many patients do you see? You mentioned the CVS comparison. I don't even know how old that company is, but at least 100 years probably, and so, it's amazing how a four-year old company like Carbon has been able to do what you did. I think it's obviously a result of the operational efficiencies you guys have created and the people you've hired. We'd love to a bit more about Carbon and your scope.

EREN BALI: Sure. In the summer of last year, I think we had seven clinics. Right now we have 21. Those are just in the physical locations. And I think we started the year with 100 people, maybe 130 people total, between clinics and the headquarters. We should be around the 700-750 range right now. We are hoping to hire another 1000 people in the next three to four months. So this is because of growth in the clinics, on site task forces, partnerships with airlines, sports teams, a lot of movie studios and things like that, so things have been growing really fast there. At the end of the day, what we do is healthcare access points. So somebody needs some sort of help. It could be more traditional visits. It could be COVID-related work, maybe getting tested. 

But as you highlighted, the reason that we capture such a large market share in this process, is because the government had set up the CARES Act for how much they are willing to pay for the services and most organizations cannot operate under those constrictions. So that's why they have to charge out of pocket. They can only capture some maybe premium segment of customers Because we're so efficient at operationalizing everything, we are able to do things at a frequency of patients that nobody else could do.  For example, every state has reporting requirements. We have all of them fully integrated into our system and we have integrations with labs so that we don't have to look at the lab results from faxes because of all of this automation.

Our only bottleneck is how much work we can do, how many people we can hire. Overall as a business, we have grown around 800% this year and I think it looks like next year is going to be a very comparable growth process. It's been big, and I didn't think this was going to be good like this, because I was just assuming COVID means people don't want to come to clinics and everything. So we were expecting a tough year for ourselves. But in the same time, we decided that if there's a health problem that is devastating the country, we just cannot sit behind and try to just save costs and just protect ourselves. We have a job to do in this process. For the first couple of months the things we were doing were all extremely helpful for the community, but did not really help commercially. We did this out of just the thought that this is needed. But then all of a sudden, we realized that eventually things could be scaled and there were budgets for it, as long as you can be efficient enough.

SHIV GAGLANI:
Certainly. Basically being that infrastructure for lab testing is obviously very needed. What are some of the lasting changes you think COVID will have not only on Carbon, but also the U.S. healthcare system? And where do you see Carbon in five years, now that you've had this 800% growth this year? When you close your eyes and think about 2025, where do you see Carbon playing?

EREN BALI: I think the biggest change that you'll see is the concept that we call omni-channel care. In the past each care provider was either a clinic-based company, or maybe a telemedicine company. They had their options and the patients had to meet the provider wherever the provider operates. I think now it's going to flip. The providers will have to meet the patients where they need help, whether this is virtual clinics or maybe onsite at their employers. The reality is patients don't want to have 10 different providers with 10 different modalities. They want the same provider to be accessible everywhere. The reason I think this is a permanent change is because, especially when the quarantine first started, I think 60% of all visits became telemedicine based which meant every single provider in this country -- from the dermatologists to neurologists, to even a lot of mental health professionals who had never done telemedicine -- had to start doing telemedicine. Now what they're realizing is it actually works quite often. For certain specialties, it might work 70% of the time. Sometimes it's going to work 20% of the time, but they all realize that there's room for telemedicine to be a part of their normal care process. I think going forward most providers, will be duly available on this. Essentially, they will be more flexible about what healthcare means, because whether it's a video call or a clinic visit, they're all care. Care is care. I'm guessing eventually you'll even consider asynchronous forms of getting care, also care. So the omni-channel care concept is actually going to be very big.  

We’ve developed one modality in this process. We realized that among primary care services, the percentage that can be done fully virtually is probably 20- 25%. I keep hearing people quoting 70-80%. Those numbers are wrong. Because of COVID, we realized that a lot of time what the patient needs is not the doctor. It is actually more diagnostic things or maybe some medication administration. It's all the things that the nursing staff does. So observing this, we created this new modality where we have actual containers, or sometimes maybe trailers where the nursing staff or a medical assistant is available in person, but the clinicians are available over video. This way, we can share one full-time clinician among multiple access points, but the access points can still do things like lab testing, COVID testing, maybe if they need to administer a vaccine, they can still do all those other things.

Patients love it because it's even faster than their normal clinic visit, but it's also efficient for us. This is an extremely strong, extremely effective labor utilization because the biggest cost of any healthcare delivery service typically is the doctor and we can share this cost across multiple locations. I think this has been a great innovation. Again, interestingly we’ve been the first ones to really do this on scale, but this is definitely here to stay.

SHIV GAGLANI:
That is fascinating. I actually didn't know you guys were doing that, but I totally agree that scope of practice is changing. So super fascinating. I’m excited to see where that goes. I know we're coming up on time, so I guess my last two questions…one is, we have an audience at Osmosis of millions of current and future healthcare professionals, many of whom Carbon may eventually employ, especially the way you guys are scaling. What advice would you give to someone considering a career in healthcare right now, and what's your pitch to them to join Carbon?

EREN BALI:
So we have grown very fast, and I think maybe I didn’t answer one of your previous questions about growth. In five years, Carbon is planning to have 1,500 locations across the country probably in 50 or 60 different cities at that point, maybe even more. So we are growing very fast. In the last one year we had 98% acceptance rates of our employment our offers because Carbon's whole mission is about making great care accessible to the entire population. We built this company from the ground up to create more healthcare, to increase access points, to level the playing field a little bit. 

So what we have seen is that the nurse practitioners, physician assistants, physicians, nurses, medical assistants -- they all really appreciate the way that, when we talk about our mission, we actually mean it. We actually go to these locations where we believe healthcare should be going to. And the innovations like pop-up clinics, they're not coming out of nowhere. They're coming out of the necessity that, in a rural area, it's not easy to put in a full-time clinician. The population density is too low. But these pop-up clinics, for example, can be the bridge to solve this problem. So I think if they will want to be a part of creating more healthcare equity in this country, Carbon Health is going to become the place they will love working. And also on the other side, we are a hardcore technology company. We care about optimizing every step so that they don't have to waste time in less valuable tasks. I'm not saying we are perfect on that front, but everyday, we are trying to improve our platform so their time can be used to help patients instead of just pushing paperwork.
 

SHIV GAGLANI: That's fascinating. Again, I think knowing a lot of physicians and training a lot of them, that would be very welcomed. Is there anything else that you'd like to share with our audience before we let you go for today?

EREN BALI: I think we probably covered most things, but as I mentioned, I think our whole company is really a team of physicians, other healthcare professionals, designers, engineers coming together. So we don't have all the answers, but we would love to just figure it out with people who join us.

SHIV GAGLANI: Awesome. Well, I encourage all of our audience members to check out Carbon and learn more, because the way Eren is growing the company, there's a good chance you may be applying to work at one of their clinics. So Eren, thanks so much for taking the time to be with us today, and all the work that you do at both Udemy and Carbon.

EREN BALI:
Sure, thank you very much. This was a great conversation.

SHIV GAGLANI:
Awesome, and with that, I'm Shiv Gaglani. Thank you to our audience for checking out today's show, and remember to do your part to flatten the curve and Raise the Line, since we're all in this together. Take care.