Doug
Very excited to be joined by the founders of Red Sky Health to talk about what it is our services enable, why we came about and the value of bringing AI into the insurance claims world to drive better outcomes for providers. Founders – please tell me about yourselves.
Carter
I am in the business of healthcare where I own medical practices and billing companies and that's pretty much what I do.
Dean
I'm the co-founder and CEO of Red Sky Health and I have led technology companies like Red Sky Health from startup through acquisition and IPO.
Dalton
Co-founder of Red Sky Health along with Dean and Carter. I've spent my entire career in technology, enterprise technology, and sales and built solutions for various companies in different verticals such as finance and healthcare and now in health insurance claims.
Doug
As you can tell, we've got a pretty strong leadership team here and the founders. I think it's always good to understand the genesis of where a company comes about, what drove the need. So, Carter, what inspired you to help create and contribute to Red Sky Health? And how did you identify the problems you wanted to solve for healthcare providers?
Carter
What happened was, being in the business of healthcare and owning both medical practices and billing companies, denial is extremely systemic. So I felt the pain on both ends from both the provider side as a business and both on the billing side as a business. But what really hit the point hard was that we had a couple in one of our practices that got sent a bill, a very hefty bill for a hospital bill that actually was denied.
When a claim gets denied, you send it to the patient as a bill. But it shouldn't have been denied. It was actually done incorrectly, the billing, and it should have been paid. The provider should have been paid. The patient should have never gotten the bill in the first place. It caused a lot of issues and it made me think.
This is a huge, huge problem. Nobody has been able to solve it. I don't care what anybody says. They have not. It only gets worse. I’ve known Dalton for a while and we decided to get Dean involved and put our heads together and try to figure this one out.
Doug
I like the human touch behind that and there's a good reason behind this. So Dalton, anything you wanted to add?
Dalton
I was talking to Carter a couple years ago, iterating the idea in our head, what originally started out as something that could solve problems for his businesses, which medical practices. And we said to ourselves,, this can help the entire industry. And fundamentally speaking, it's not about just getting the denial paid. It's about everything that leads ultimately to better healthcare for patients, if the system works smoother.
Doug
Dean, you spent a lot of time in the early part of Red Sky Health helping to drive fundraising, working with the investors. You drove this because you saw the opportunity that Red Sky Health could bring, not just financially, but to help people. When was a pivotal moment for you early on when you said, you know what, our solution can really make a difference for both providers and patients?
Dean
When Dalton and Carter first came to me, I had to wrap my arms around health insurance denials. I first thought this was a small problem. When I really investigated it, I learned there's actually four and half trillion dollars of claims submitted every year to the health insurance carriers in this country. And on average, 15 % of those claims are denied.
Those denials are mostly due to clerical and administrative errors and mistakes in the claims. So it's actually a huge, huge problem. And I looked at the problem along with Dalton and Carter and others to see what solutions have been provided in the past and none of the solutions worked. They've tried call centers in the United States to call the insurance companies. They've tried call centers in India, a lower cost area to try to call the insurance companies. Rules-based products that would apply rules to these claims. None of these things worked and it became clear to us that using AI, which is great at looking at patterns and huge data sets and adjusting accordingly, was the way to solve this very difficult, long-standing, intractable problem.
Carter
I'll add to that - we tried to outsource, I’m of Indian background, so we outsource to the area that I'm from, which is the billing capital of the world. They didn't really understand, a lot of them didn't understand, so we started to explore the idea of rules-based engines. What really put that out to pasture was COVID. Because when COVID happened, rules changed very quickly, rules changed very quickly back, and it was constantly changing by different payers. And you can have any rule base you want, but if you're changing it every year and COVID's happening in real time, it just didn't work out. This was before anyone knew what Chat GPT was. We decided that we were going to go through the data that we had and start using real time data to figure out what the fixes were.
Doug
You talk about making mistakes being made and rules changing. I think that's one of the superpowers that Red Sky Health has because it can pull from those data. It can update as policy changes, it begins to eliminate or least prevent the majority of mistakes being made from the billing standpoint. A lot of power there.
Dalton, when we look at what we're doing with Red Sky Health and what you've done in the technology world, what are some of the values and guiding principles that drive you and the team as we build technology for this complex healthcare technology system?
Dalton
It is for effective health care. You can find the best health care in the world in the US. Howver, I feel that it's a chaotic system and. It's not easy for your average person to get good health care. And I looked at it from the point of view of companies like health insurance carriers and health insurance providers, they're all trying their best for their own interests. That’s the reason that when Carter brought this to me, my goal, what is important to me, is that patients need to get the best healthcare possible. And it's not about enriching health insurance carriers or making sure that doctors provide expensive treatments. It's making sure that the system works well. And - that services are paid for and that ultimately the patients don't get bothered for bills that should be paid. That that's what drove me.
Doug
Obviously we're in this business to make money as a company, but we're also in this business to do something for people. Dean, anything you want to add to this?
Dean
Yes, absolutely, Doug. We're in business not only to make money, but we're in business to do good. And what drives me and a lot of the engineers and other people that work for Red Sky Health is that if we can put in place a system that allows those group practices, clinics and hospitals to collect more of the dollars from insurance companies that they're supposed to be collecting for the medical services rendered, they can in turn offer better health care, which is a great value to everybody. That's a little bit of a guiding light that drives me and many other people at Red Sky Health.
Carter
Let me add to that - it's a very important point that Dean brought up. Let me give you a scenario, if a primary care doctor is not getting accurately paid for the services that they've done anyway, the care could falter. For example, a doctor might feel that he must see 40 patients in a day, and rush his time to make a certain amount of revenue to pay his bills. But if he was accurately paid and efficiently paid for the services that he did, he could give better care by giving quality time. He doesn't have to feel rushed for lack of a better phrase. And at the same time, if the patient is getting billed for something they should not be getting billed, they suffer. So it's an entire trickle-down effect and a circle effect that affects the entire healthcare system. We're basically cleaning up those gaps.
Doug
You just nailed Red Sky Health's value proposition. Carter, one of the things you talked about was the challenges you had in trying to get billing processes supported, et cetera. When you look at barriers to innovation in health care, whether it's communication, technology, what are some of those, and how does Red Sky Health help us to get past those?
Carter
The main barrier is there's a lot of legacy systems. There's a lot of different systems out there. Luckily, we have data formatted in ways that we can actually traverse it properly. And at the same time, we are in the age where AI is blowing up. Even though we started this before anybody was in the AI world, our technical teams figured out ways to make sure that we can actually properly traverse the data and come up with accurate recommendations. That's the key to Red Sky Health. We don't tell you what to do. We tell you what to do exactly for that claim to get that claim fixed. That's the difference between us and them. And, this makes the process more effective for our clients, and thus get the claim paid.
So there's a lot of battles with different systems and different technologies out there, but putting it into one cohesive system that we can bring in to our AI models and then give back accurate actions for the providers to get paid properly is really what we are very proud of.
Doug
Looking ahead, as Red Sky Health continues to succeed, Dalton - what is your vision for how Red Sky Health's work is going to change the healthcare experience for the two groups we care the most about, providers and patients?
Dalton
The way I look at it is on the on the on the health insurance carrier side, the health insurance carriers have been using AI for a little while now. And they use it for processing claims. And you wonder why? Why isn't AI being used more on the health care provider side on the patient side? It's like walking into a casino and playing against the house. The house always has that slight advantage. Because they're the ones who are making the rules and they get the percentages for them. so healthcare providers have always had to be reactive to what they're doing. Now, AI totally changes the picture to this. AI speeds up the reaction providers have for the carriers. In a recent report, two thirds of denials never even get resubmitted. You don't have a chance of getting them corrected and paid for. And this is where we're changing the odds here.
Doug
Dean, as we wrap up, any last thoughts you have on the vision for the change we're going to bring?
Dean
By getting providers, whether they're in group practices, clinics or at hospitals, to be able to collect the money that they rightfully deserve, we can right some of the wrongs in the healthcare business. Allow them to offer better care, allow them to operate their practices and clinics and hospitals in a way that's financially stable.
What we've seen in the recent past is that it's very difficult to operate a practice. Many of them are losing money, if not just marginally profitable. You used to have hospitals. There's no such thing anymore as a hospital. There's only a group of hospitals because the regional hospital of yesterday wasn't collecting enough revenue to stay afloat. As a result, they've been rolled up and they've been accumulated by larger entities and now you have groups of hospitals.
So this is our mission. We want to make healthcare a better place and be able to let providers offer better care by letting them collect more of the revenue that they rightfully deserve.
Carter
To sum up what Dean and Dalton said, we're in the business of leveling the playing field. The insurance carriers and the payers have AI. They're the ones that write the checks. They're the ones that reject the claims. If the playing field is level and the providers are properly getting paid, right, they benefit, then they give better care. The patients benefit, as I said before. So we formed this business out of the pain point that we live every single day. We live this, we wanted to solve a pain point and AI happened to flourish at the same time. We're leveling the playing field so that the providers get paid, the patients don't have to pay when they don't need to pay and care is ultimately given and its better care. And I think it's time the providers side of the business have the proper tools in order to make it effective. That's what we deliver.
Doug
Spectacular. This has been great as we’ve shared some insights, not just on the founders themselves, but behind the mission for Red Sky Health. The next step is these are problems you need to solve for your organization, the best thing - get a demo with us. Everybody who has seen our demo says, "Yes, that makes sense. I need to do this!"
We're here to change how healthcare is handled in real time, solving problems, and making a difference for the providers and the patients.
Founders, I really appreciate your time. Carter, Dalton, and Dean, thank you.
