The Digital Patient Ep. 73: Mike McSherry: Spinning a Digital Health Company out of a Health System and Building the Operating System for Prescribing Digital Health Apps

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On this episode of "The Digital Patient" podcast, hosts Alan Sardana & Dr. Joshua Liu speak with Mike McSherry, Co-founder & CEO of Xealth about "Spinning a Digital Health Company out of a Health System and Building the Operating System for Prescribing Digital Health Apps". Click the play button to listen or read the show notes below.
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Audio:

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Video:

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Guest(s):

• Mike McSherry (@McScary), Co-founder & CEO at Xealth
• Dr. Joshua Liu (@joshuapliu), Co-founder & CEO at SeamlessMD

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‍Episode 73 - Show Notes:

[0:00] Introducing Mike McSherry, Co-founder & CEO of Xealth;

[2:15] How Mr. McSherry got involved with healthcare after exiting Swype–a touchscreen keyboard originally designed to support those with disabilities, which sold to Nuance in 2011– by joining the board of a local hospital system and meeting the CEO of Providence who invited Mr. McSherry and his original team to join Providence as their Entrepreneurs-in-Residence to look into solving problems in healthcare;

[4:50] How Mr. McSherry landed on Xealth after cycling through 70 ideas–mostly related to preventative care–and discovering that the free market dynamics and incentive structures that work in other markets do not apply in healthcare;

[7:50] Why Xealth took roughly 9 months to germinate as it was important to Mr. McSherry and his team that they solve a universal problem rather than a localized problem and how Mr. McSherry pre-negotiated the terms of their spin-out from Providence;

[12:59] Why Mr. McSherry believes he and his founding team were lucky to work with Providence Health Care because of their network of health systems that regularly collaborate to formulate strategies, which helped the team regularly meet with CIOs and C-Suite executives from other health systems;

[18:43] How Mr. McSherry has worked with the same founding team for over two decades and how they foster a mission-oriented culture that values camaraderie by being transparent about decisions and starting with default trust–following an ‘innocent until proven guilty’ modus operandi;

[23:07] Why Mr. McSherry believes health systems must invest in a digitally-enabled future or risk becoming safety-net facilities due to external pressures from payers and budding tech companies, and why he believes Xealth is indispensable for its ability to aggregate digital health tools, streamlining integration, patient segmentation, and analytics to drive behavioral change and adoption of technology;

[29:45] Why Mr. McSherry believes Xealth’s biggest competitor is stasis–hospital systems carrying an ‘if it aint broke, don’t fix it’ attitude–and how FOMO is the greatest motivator;

[33:03] Why Mr. McSherry is passionate about technology for its ability to reduce friction in healthcare around logistics such as appointment scheduling and remote patient monitoring, which can drastically enhance the consumer experience for patients;

[40:30] How Xealth has completed over 10 million prescribed events to date, including 95% automated prescriptions within a workflow, and how the platform uses data to garner specific insights such as understanding patient adoption which can increase from 30% to 90% when a physician has a conversation with the patient about the tool prior to prescribing it;

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Fast 5 / Lightning Round:

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1. What is your favorite book or book you’ve gifted the most?
   “Freedom’s Forge” by Arthur L. Herman
   
   

2. How has an apparent failure set you up for greater success?
   One of my previous companies had raised $400 million and eventually went bankrupt. I learned a lot from this experience.
   
   
3. Would you rather have Super strength, super speed, or the ability to read people’s minds?
   Mind-reading.
   
   

4. What is something in healthcare you believe that others might find insane?
   “Sometimes providers don’t have the patient’s best interests in mind… And it’s due to incentive models.”
   
   

5. COVID-19 lockdown related – what is 1 hobby or activity you’ve gotten into since the pandemic?
   “Running! I’m going to do the San Diego marathon in 2 weeks.”