Steve Lefar Interview

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Steve-PictureSteve Lefar is the CEO of Applied Pathways. Steve was formerly the President and CEO of Sg2, a market leader in providing analytics to providers which was acquired by MedAssets in 2015. Prior to Sg2, he was the President of MediRegs, a pioneer in SAAS applications and content for the healthcare compliance space that was acquired by WoltersKluwer. He currently is a Board Member of Enlitic and an Advisor to Evive Health. Steve also sits on the Board of the Juvenile Diabetes Foundation of Chicago, the Aptakisic-Tripp School District, and on the editorial board of the Society of Corporate Compliance and Ethics.

How has your long and illustrious career in HCIT framed your perspective on the opportunity for Applied Pathways?

For my entire 25 years in the industry, the challenge of exploding costs, mixed quality, and limited access for far too many people has been an issue.  Despite well-intentioned industry leaders, many massive investments in a variety of “disruptive and innovative” technologies have actually complicated workflow, solidified silos and not fixed the root causes of poor quality and cost – all tied to variance and a lack of use of evidence and outcomes based standards which will carry over to precision medicine.  My greatest concern is growing health disparities that are a threat to the stability and success of our country.

While we have made great strides, healthcare, in contrast to every other industry, has been resistant to viewing quality as at least partly driven by variance in process that drives sub-optimal outcomes and unnecessary costs. Healthcare leaders, particularly those in large integrated health systems and the payer community are now embracing it. It’s what we call “Putting Best Practice into Practice”

There is a great deal of attention being paid to the role of technology in improving healthcare delivery effectiveness. How is Applied Pathways contributing to this?

We need we need to shift our thinking and make sure as an industry we are not trying to automate flawed processes and approaches with “whiz bang” technology. To some extent, that is what Meaningful Use unintentionally enabled.  Applied Pathways’ technology tools and software solutions allow healthcare organizations to leverage the best available evidence, customize it for their own local or customer specific needs and standardize clinical and operational processes quickly and efficiently, without consuming costly and scarce engineering resources or multithreaded development cycles with analysts. They can use our tools to implement an expert or even machine learning-driven rules system that guides their clinical care process and allows them to achieve their desired results of better outcomes and lower costs.

I’m incredibly optimistic at the wave of innovation but am concerned, having been through the year 2000 bubble, that far too many health care venture capital “tourists,” CEOs and pundits are hyping the next “disruptive technology” that will fix everything in the next six months if only everyone would adopt it. Healthcare does adopt things slowly and, while painful at times for those of us running companies, there are some good reasons for it. The most important being that adopting new approaches that are half proven, or not at all proven, can kill people.  One of the reasons I love working with HEP is that they have been around healthcare for many decades and know what it takes to succeed in healthcare.

What is next on the horizon for Applied Pathways?

We have learned much from our clients like Mayo, AIM, American College of Cardiology and McKesson and will continue to focus on large scale commercialization of our software and tools. We are committed to moving the industry forward and even providing our authoring software to Qualified Provider Led Entities (under the new MACRA legislation) to support this effort.  While there is a lot of opportunity for Applied Pathways within all segments of healthcare – payers, providers, technology vendors (who can white label our software), pharma and health services organizations we are focused on supporting use cases in primary care access and care coordination, utilization and appropriate use management and advanced scheduling/referrals. As the shift toward value-based care intensifies and the volume of information available to inform clinical care explodes, organizations will increasingly need software tools like ours to manage complexity and reduce variance in their clinical care practices or they won’t be viable.

What do you do for fun outside of the office?

This is my third time working with founders to commercialize their vision and it is fun!  Building companies for me is like an artist working with his or her canvas. That said, being in nature for significant periods daily (no matter the weather) keeps me grounded and those around me a lot happier. My family and I love to hike, ski, bike and spend parts of the winter and summer seeking out those adventures.  Being amongst glaciers in British Columbia (what’s left of them) and vast nature is humbling and I do my best thinking in the woods. I also practice yoga several times a week.

Catapult Health Raises $10 Million in Series B Funding

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Catapult Health announced the completion of a $10M Series B financing which includes a significant investment by a new partner, UCHealth. Catapult Health’s existing investors also participated in the round, including founders Deborah and David Michel, Chief Technology Officer, Jeffrey O. Smith, Ph.D., and Series A investor Health Enterprise Partners. The company will use the funds to accelerate its rapid national customer growth and expand its team of board certified nurse practitioners who conduct Catapult’s onsite health evaluations. Read more.

Launching a Payer Venture and Innovation Group: Options and Trade-Offs By Ezra Mehlman

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Spurred by the migration to new payment methodologies and a rapidly evolving competitive landscape, many managed care companies have launched venture and innovation programs. This article provides a high-level evaluation of the universe of model options accessible to payers who are interested in such programs.

The past five years have been a time of great uncertainty for health plan executives. Continued pressure on medical loss ratios, the migration to new payment methodologies, a rapidly consolidating competitive landscape, and sweeping uncertainties surrounding the individual market have combined to form a perfect storm, rendering the status quo untenable. In this frenzied environment of dwindling margins and regulatory confusion, managed care companies have begun to find new growth opportunities by experimenting with investment and innovation programs, or accelerators.1(superscript?)

Based on earlier work,2(superscript?) this article provides a high-level evaluation of the universe of model options accessible to payers who are interested in launching such programs. It draws on the perspectives of a number of nationally renowned experts in the field from several organizations at the forefront of innovation. One such organization is Horizon Blue Cross Blue Shield (BCBS) of New Jersey. Minal Patel, Senior Vice President and Chief Strategy Officer of Horizon, offers the following perspective: “Given the pace of innovation spurred by the Affordable Care Act and the flow of capital, Horizon recognized the need to work closely with entrepreneurs who are building capabilities required for us to continue to fulfill our mission which is to provide access to high quality, affordable healthcare with superior member experience (the triple aim). As such, we clearly defined those capabilities that we need to succeed and then began to socialize these needs with all entities that are in the ‘deal flow.’ Clearly articulating what these needs are must be a foundational task for any strategic investment arm so that we may efficiently source deals that fit our needs and more importantly, quickly decide upon which deals we will pass.”

Goals of Strategic Healthcare Investing

Payers generally seek to achieve 4 principal goals when considering whether to undertake investment and innovation opportunities (Figure 1):

  1. Financial returns. Many organizations establish investment initiatives to drive financial returns. By taking equity stakes in early- and growth-stage companies and growing revenue through customer relationships, payers can generate new sources of income that are not subject to the reimbursement pressures affecting the core business of reimbursing medical care.
  1. Operations improvement. Innovation programs offer payers a means to identify a pipeline of promising companies that can help them upgrade operations, reduce medical costs, improve outcomes, and expand access to care.
  1. Brand enhancement. Investment programs can serve as vehicles to enhance brand integrity in an increasingly competitive landscape through differentiation and expansion of market reach.
  1. Foster innovation. Perhaps most significant, commercializing new ideas enables organizations to cultivate an innovation- focused culture. Rob Coppedge, president of Direct Health Solutions at Cambia, describes his organization’s multi-pronged objectives in operating a strategic investing program: “Cambia views strategic investing as a tactic to advance its corporate mission to create an economically sustainable healthcare system organized around the consumer. We are not investing to prop up the current, broken healthcare system…. So while financial return is expected from each investment, we also look closely at the impact our companies are having on the transformation of the healthcare experience for consumers.”

Please read the entirety of the article at