From India to IKS Health (ft. Sachin Gupta)

Thanks for tuning to Digital Voices podcast, where we chat digital transformation challenges and opportunities across healthcare and life sciences. And now, your host, Ed Marx. Hey, everyone. Welcome to another edition of Digital Voices. So excited because we have one of the greatest healthcare CEOs with us today, Sachin Gupta. Sachin, welcome to Digital Voices.

Totally delighted to be here, Ed. I don't know if I'm deserving of that kind of an introduction, but I certainly appreciate it.

No, you're amazing. We've had a chance to get together and obviously your company, you're the CEO of IKS Health, just amazing as I learned more about it. In fact, that's when we first met in person was at the annual IKS Health conference. And it was just amazing. And just the feedback I heard from all your customers and also the prospects that were there, And then when you spoke, everyone was so in listening mode, you know, about what you had to share. And, and then you could just tell it was like almost like a family experience. So I was so happy to be part of it and learn more about you, learn more about IKS Health. So that's definitely the first time we met. But Sachin, the, the most important question I have for you in our podcast is what kind of songs are on your playlist? Like what kind of music do you like to listen to?

Oh, that's a great question. Uh, and I'm, I'm a bit all over the place. Often the music I'm listening to is the one influenced by my 17-year-old who's about to go to college soon. And so most of it I don't necessarily understand. But on a more serious note, I don't know. I mean, I don't know if there's a genre that I can point to specifically. I enjoy jazz in general. If you were looking for a song, I don't know. I care about songs that speak to the world issues. So, as quirky as that might sound, something like Another Day in Paradise or Heal the World, I go to those kind of songs periodically and just get inspired by them.

Yeah, no, I hear you. And I'm a jazz connoisseur myself. What about life message or mantra? Are there some words or quotes that you live by that speak to you?

Well, there's one quote that I think for, I don't know, I can't explain to myself why it has stayed with me for the longest. Time. I think I first heard it when I was 7 or 8 years old, Ed, to be honest. And I'm approaching 50 now. And it goes, the heights by great men, which there's a gender bias here that I don't like. So it should be the heights by great humans reached and kept were not attained by sudden flight, but they, while their companions slept, were toiling upwards in the night. And I don't know for what reason it has stayed with me. It certainly is not a statement that one should sleep less. That's not the intent, as you can imagine, but it's constantly stayed with me for the rest of my life. And the way I summarize and what I take away from it is that one should just constantly try to be a better version of themselves than they are, than they were yesterday. And that better version of yourself comes through real work that you put in every day, not through some happenstance and some philosophy. It's the force that you have to put in and the overcoming of the inertia that naturally comes about as we grow older in life. And so I think you do a terrific job of it, and that's sort of how I think about it.

I love that. I'm going to look that one up. It's so eloquent as well. That's great. Yeah, we're creating a playlist. We have a playlist for the music. On Spotify, we're creating one for all the great words of wisdom that all of our guests share. So, thank you so much. So, let's talk about you for a second. Like, who are you? What's your story? Where were you born? You know, that sort of thing.

Who is Satya? Yeah. Yeah. You know, in many ways, I'm the American dream, if somebody would call it that. I certainly feel it that way because I was born in India, in Mumbai, which is the financial capital of India, and was actually conceived to be adopted into another part of the family. So I was born in Mumbai and then I was taken away to New Delhi where my adopted parents live. And I was brought up in New Delhi not knowing I was an adopted child, which was an important aspect of my life. And I found out at the, in my early teens, which messed me up a little bit, which I, which shouldn't have in hindsight because only later did I come to realize that I was super privileged in that I had 4 parents, not 2.

Yeah.

But at that age, I don't think I handled it well. Any which way, as I grew up, I think I was fairly good academically, but also really good from a sporting perspective. I was blessed with tremendous hand-eye coordination. So I think kind of was a decent all-rounder.

Yeah.

Although in so many aspects, I feel I could have done better given the kind of access and facilities I was afforded, even though I grew up middle class. And then I went on to engineering school. Did my engineering in computer science in India at a good university, in the University of Pune. Then got a job right out of engineering school to a company in the Bay Area that was building, back in that day, rules-based artificial intelligence. This is in the late '90s, building rules-based artificial intelligence. Today, I would not even characterize it as artificial intelligence, but at that time it was because we were writing dynamic rules. And so that's where I began. I was mostly behind the computer and sort of in a geeky mode until I was invited by the CEO of that company, which was publicly traded to, you know, they would invite all the geeks to come out and talk every Friday, somehow get us out of our holes. And so I was making one such presentation then on the internet of all things. It's almost like an Al Gore story. I will not say I was the founder of the internet, but nevertheless, I felt like I made that presentation and the CEO of that company said, I think you'll be as good in front of people as you are behind the computer. We're starting an operation in Paris, in France, European operation. Why don't you go be the solutions engineer or the sales engineer as a part of the biz dev team? And that was like, I was 23 and single and the guy's saying, go live in Paris. I was like, okay. And so I go get to live in Europe and first in Paris, then Copenhagen, then London a little bit. And that's where I learned how to deal with true cultural diversity, how to blend into cultures and adapt. I also learned the business side of things. I was purely a technologist at that point. And then one thing led to another. Eventually that company sold off. I went to work for another outsourcing company in the US after I moved back to the US 3 years later. And in that company that I went to work to, it was a publicly traded company in the in Boston, they had me run the US healthcare vertical for them. And that's where I cut my teeth into healthcare. So I'm still a very early student in healthcare. I began only in 2001 in healthcare. And 24 years later, still learning. There's so much to do. And in that stint at this company called Lionbridge, I really learned the fact that the US healthcare industry is the most important industry in the greatest economy, in the greatest country in the world. And yet there is so much to be done to get healthcare to where it needs to be. And inspired by the learnings of the scale and the level of opportunity in US healthcare, eventually I launched IKS in late 2006. And part of it also was embedded in the fact that in India growing up, if you were really bright, you became a doctor. If you were half bright, you became an engineer. Otherwise, you became nothing.

Okay.

And so I wasn't bright enough to be a doctor, so I became an engineer. So there was always this reverence towards physicians. And there was also this general notion, which by the way, I still have in spite of what people say about millennial physicians and all that. I still think being a caregiver is the most noble profession in the world. And I don't know that I would say that only of physicians. I hope they don't get offended if I were to say that that's also true of nurses.

Yes.

Or other caregivers. And I felt like if there is something we could do to enable that tradition-led, caregiver-led transformation of healthcare to sustainability, that would be a pretty exciting mission to embark on. And if I could create such a mission at the confluence of what I had been trained in, which is technology and the effective use of globalization, as I had learned it over the years, to combine technology effectively with humans, That would be a fun mission to be on. And that's what led to the genesis of IKS. And we've been at it 18 years and still feel like a startup.

Yeah, no, that's awesome. But I can't let you go on the sports thing. So I'm curious and probably the audience is as well. Was it cricket or what particular sports were you heads into?

I was generally good at plenty of sports. Cricket was certainly one of them. And I played at the school and college level, but The sport that most of my American friends tend to laugh at that I was really good at, that I was rated at, at a national level, was a sport called table tennis. And most people regard table tennis as not really a sport here in America, right? I mean, my friends would make fun of what you were like a beer pong champion. I was like, what is beer pong? Right? And so, yes, that was my primary sport that I played seriously at a very competitive level. And honestly, I will say that it actually influenced a lot of my philosophy in life because I do believe that sport builds character in a very, very profound way that often academic success alone does not. And that ability to get beat up and stand up again and compete the next day and the next day, I think is a massive character-building exercise for life. Not just for any particular phase of life. And so I think it had a profound influence on my life.

Yeah, no, that's great. And do you still play? Do you have a table at your home?

Yeah, well, I don't play table tennis as much now, but I have picked up other racket sports ever since that I do play more seriously. Badminton being one of them. Again, not a very popular sport in America, but emerging strongly. And I've found a lot of people in Dallas that I can engage with, including a coach that I hit with. Lately, I've picked up Pickleball, which is, I'm told, the fastest growing sport in America, perhaps in the world. And I'm kind of enjoying it.

Yeah, no, that's great. I love all those sports as well. I love table tennis. There was a time our living room was purposely empty. And in that living room, when you walked into the house, you'd see a table tennis.

Wow. That's unique. Amazing.

For several years, it was a lot of fun. Our kids just loved it. That's great. So Out of all those things that happened that you just described, what do you think is the most pivotal moment in life that fundamentally changed your trajectory?

I mean, you described— You know, actually the one moment that I didn't describe is probably the one that was the most pivotal. And it's for 2 reasons. I'll describe it. One is, of course, the most pivotal moment was this, that I was in my first year of engineering school and I met this woman who later went on to become my wife.

Yes.

And we have now been married. We've known each other, we've been dating each other for 30 years. We still feel like we're dating, but we've been married for 22 years. And I say that she was the most profound pivotal point in my life because I felt like this spirit that I am trying to imbibe, and I have imbibed for the most part of this constant quest for improvement every day. That spirit got ignited in me again after my childhood, after I met my wife. She, meeting her somehow wanted me to be the best version of myself every day. I go through peaks and valleys of how hard I work at that, but there is a constant to it that I can't deny. And I think that's all her.

Yeah, no, I love that. That's great. I don't want to rank answers by any of our guests, but that's the best one. So, I love that and I can definitely relate to that. Yeah. So, what really impressed me on IKS Health, and this is by no means an infomercial or commercial, but I love this tagline. I don't know if you invented it or not, but it just gets straight to the point. And, I actually have stolen it. I have to confess, I've stolen it and use it myself. But, it's like going from chore to core. I think if there's one statement that symbolizes what you're doing, that might be it. But tell us more about the mission and vision of IKS Health and how you're making that happen.

Yeah. Thank you for asking. And look, I think first of all, I believe that given we are spending nearly 20% of GDP on healthcare and the healthcare expenditure is growing faster than our normal GDP expense, and given that our population is aging and people are going to need more and more care. Lifestyles are still becoming more and more sedentary, even as there is so much awareness of fitness and wellness and healthspan now. I feel like 90% of cost of care in America today, outside of end-of-life care, comes from chronic illness, diabetes, COPD, congestive heart failure. In a world where that is driving your cost of care and is the biggest driver of disease, outside of end-of-life care, to be in that reactive hospital-centric system that we were originally in is unsustainable. You cannot manage chronic disease from the hospital setting and try to impact cost of care and quality of care. So our idea was we will have to transform to a physician-led and patient-centric care delivery system from a reactive hospital-centric care delivery system. The physician-led system is a great idea, but at the time when we were getting started, the physician market was 950,000-odd physicians across the country. 65% of them were in groups of 5 or less. We felt like as this transformation comes about and people realize how important, again, the physician-patient relationship is, how important the ambulatory setting is, that market would consolidate rapidly. As that physician market consolidates rapidly into one, hospitals and health systems starting to buy physician practices and employing the doctors again. lot of private equity money would float into the physician market because it was a market of $1.5 trillion growing at 6%, 7%. As those consolidations would manifest, the idea would be to create a physician-led proactive care delivery model. And in order to do that, you have no way to do that in a world where physicians are spending, what is it, nearly 50% of their time on non-patient care, non-discretionary tasks. Also, our realization was when such an entrepreneurial sort of cottage industry led by very bright leaders comes together and consolidates into an industrial-grade enterprise, there is this sort of redefinition of what I call this core versus chore equation.

Yeah.

And the smart enterprise and the smart people say, if we have to move to physician-led healthcare, physicians and their care teams have to focus on the core, which is patient care and patient experience, and everything else becomes an ever-expanding chore that should be delegated to some entity or platform that can do these chores better, cheaper, faster at scale.

Yeah.

And we decided we wanted to be that platform to enable this physician-led transformation so that we could delegate all the chores. And that's what we started to build 18 years ago. And over a series of realizations, because our genetics were about You know, I'm an engineer by training. My first instinct was I'll just write technology to eliminate everything. You've been in technology all your life, of course, in addition to being in management. And in healthcare, I realized because of the fragmented nature of the workflows, various issues, somehow we engineers had written technology to make providers less productive versus making them more productive. And so if we were going to write technology, I was very clear, it has to truly eliminate that those chore tasks. In order to do that, I realized that tech needs to be combined with a human in the loop to truly delegate those tasks effectively. That's where we combined, and the human in the loop was very difficult to scale stateside. So we said going global with the human in the loop, combining it effectively with technology to provide one seamless solution would be the answer. That's what we started to build. And as we started to, and we didn't build this entire platform in one go. Initially, we started to pick up more back-office administrative tasks. But because we are so close to our clients and we build in partnership with them, they taught us over a period of time that many of them were living in what I call point solution hell.

Yeah.

What do I mean by point solution hell is there are 18 chores that we've identified that form this now what we call the care enablement platform. And most of our clients were in a world where they had 15 vendors to whom they were delegating these 18 chores. That's my meaning of a point solution. Hell, there is no way in a situation like that you could hold anybody accountable for any outcome. And we said, in the end, people will start to realize that the value of the whole is much greater than the sum of the individual parts. And as the buying behavior matured, people will look for this. I call this almost the new fabric of enabling effective care delivery. And that is really what I think we've built over these last 18-odd years. is this new fabric that allows providers, their care teams, even their administrative teams to focus on things that truly move the needle. And everything else, we are happy to be humble delegators of everything else. We're almost like the plumbing in the background. And the plumbing is not so important until it breaks.

Right.

But the reality is, if it doesn't work, it causes all sorts of Yeah, I love that.

And, you know, when I was speaking to some of your customers, another thing that sort of touched me was you're actually putting your money where your mouth is, as they often say. Because I often, when I was a CIO or a buyer, I always challenged our vendors and our partners to say, look, if you really believe that, then show us by partnering with us. And you're actually doing that with with a couple of pretty large organizations. Can you talk a little bit about that approach where you're making an investment because you know the return is going to be there?

Yeah. I started this conversation by saying I'm sort of a product of the American dream. If you look at the journey of my life, I came from nothing in India to where God has given me the chance to build something meaningful and make an impact. One of the byproducts of that impact was what feels like to most people some decent financial success we achieved over the years. We never raised any institutional capital. We bootstrapped the company in addition to some very early angel funding. And we had the good fortune of being able to scale the business through our internal accruals and take the company public last year. As we took the company public, it was also like a bit of a punctuation mark in the journey that forced me to think about, we've gotten here, but are we really on a track to make the impact in the physician-led transformation of healthcare? And when I examined that more carefully, 3 big trends came out. First, when you look at the physician aggregation trends over the last 20 years, yes, there's been aggregation, but has that aggregation truly moved the needle in reducing cost of care, improving quality of care, and improving access to care? The truly intellectual, honest answer, barring some exceptions, is Not really.

Right.

Second, we all thought value-based care was the holy grail answer to solving all of our cost and quality challenges. Well, guess what? We got stuck in Medicare Advantage, which is great as a construct, but in basically increasing our premiums through RAF optimization and risk capture versus building the true total cost of care management infrastructure that could move the needle in cost and quality. Now with version 28, Suddenly, the kibosh has come on being able to optimize premiums. And now we're all scrambling to say, oh, what about total cost of care management infrastructure? So value-based care hasn't quite lived up to its fundamental promise that we all thought it would be. And then the third trend was what you were kind of referring to, which is healthcare IT, which is a community that we are very much a part of, I feel has delivered much less value than it has promised. to providers. There's so much dissonance between the value healthcare IT creates for itself versus what it creates for provider organizations. Why do I say that? Look at well-run healthcare IT companies. Margins are fairly good, 25%, 30%. Provider margins, low single digits. Valuations, healthcare IT, $45 billion invested over the last 4 years at an average valuation of 60 times earnings.

Yeah.

If there are earnings at all. Provider valuations, If there is investment, at its peak, it was in the high teens. It's back to the low teens, if that much anyways. And third, if you survey healthcare executives, provider executives, they'll say, man, I don't know that my healthcare IT investments gave me what I was supposed to get. So I felt like I don't want to be one of those healthcare IT vendors that lives with that dissonance.

Yeah.

And the way to overcome that dissonance between us and the community that we are here to serve was if we said, if we could attach our outcomes to their outcomes. And one of the manifests of attaching our outcomes to theirs, the highest upstream manifest is where we actually invest balance sheet capital into those enterprises to drive their growth. In the process, bring our platform that enables their growth at scale.

Yeah.

But then through that capital, demonstrate our commitment to truly enabling healthcare provider success. And so that's really this sort of what we're now calling IKS 3.0, and we need to find a better name for it. But it's sort of our evolution of being a pure enabler of care delivery enterprises to now starting to go upstream and deeply partner with them in creating a model that is truly accountable. Because once we have capital invested in those entities, Then we are as aligned as we can get in driving the success of our platform versus promising and leaving them with a platform that they have to figure out its success.

Yeah, no, I love it. I was like, where were you when I was a CIO? I definitely would have grabbed onto that. That's true partnership. And I was able to do that one time in my career, and it really was a demonstrable difference in performance for both. For both sides. Everyone won, especially the patients and the clinicians.

I will say, Ed, though, that as we are doing this, in a moment of candor, I'll share that I go through moments of intense self-doubt because a lot of naysayers in the country say, you've got a flourishing business as a technology company. Why are you going upstream and investing in provider businesses that are low margin? Their costs are increasing faster than their revenue. And I'm like, but that's why we exist is to make those businesses viable and to demonstrate Good medicine can be good economics at decent margins when enabled in the right way. And so I will say that one of my biggest predicaments right now is, and we'll only know the right answer in hindsight, right? 8, 10 years from now, we'll say, wow, that was bold, courageous, and successful. Or some might say that was bold, courageous, and foolhardy. What an idiot. He screwed up a good thing. I hope it's not the latter, but— It's certainly something that we're fiercely committed to, even as one is going through the self-doubt.

Yeah. No, I think it's the right thing. Absolutely. And usually when you do the right thing, it's rewarded through some sort of spiritual construct I can't explain. So, this is super fascinating, but in our last couple minutes, I want to know a little bit on the leadership side, because obviously you're a great leader. So, where do you go when your creativity is feeling drained or the motivation or whatever? Is there something you do to sort of refresh yourself?

That's a good one, Ed. I mean, mine is a bit more simple in that if I go play some sport intensely for an hour, I get pretty damn refreshed and I can come back pretty hard. The other place where I find it to be rather grounding and sometimes very refreshing is just chatting with my wife and now even our 17-year-old. The 17-year-old keeps me very humble and grounded. because she lets me have it all the time. The wife, though, I will say, is sometimes my answers to my most difficult problems, which often tend to be around human dynamics more than anything else. One of my biggest learnings as a leader, you know, today we are a 13,000-people company worldwide, is I severely underestimated how much leaders have to spend time on human dynamics.

Yes.

As you scale, even though you're scaling a technology company, which is an AI-first agenda, and we're doing all of that agentic stuff. So, I will say that certainly sport as a recreation, but often my wife gives me the most profound answers to my most complex issues, which are around human dynamics. And then the 17-year-old keeps you grounded.

Yeah. Yeah. I did have the opportunity to meet your wife as well. A very lovely human also.

Thank you.

So your 17-year-old's about to graduate. You're, you've been asked to be the speaker. What, what are the one or two things that you're going to tell your 17-year-old and all of her peers, uh, on life? Like, well, how to best, you know, prepare or succeed in life? What, what's your final words of wisdom?

Wow. I don't know that I have that much wisdom, but I will say somehow, if you can, don't waste time because that's the one thing that slips Yes. And never comes back, right? That's the most finite, irreplaceable, I don't know what to call it, commodity object in our life, right? And we can never bring it back. So make the most of it, whatever it is you choose to do, make the most of it. Don't be half-assed. Use your time well. And then the second is perhaps don't take yourself too seriously.

Yeah.

Yeah.

I love that. Sage wisdom. Sachin, this has been an amazing conversation. Really love it. Wish we had more time. We talked about everything from how we first met, music, spent a lot of time on the differentiation of IKS Health and how it came to be. And then we ended up with a lot of leadership insights from you. And also to reestablish, we need to make sure we acknowledge the great partnership we have with our spouses. I think that came through loud and clear and how helpful they can be to us as we help one another through this journey of life and all the pieces of it. What did we miss, or is there anything you want to double down on? I'll give you the last word.

I don't know that we missed anything significant. I will just say that I feel very fortunate to be on this mission where I think we are genuinely trying to do good and be good for it, and in the process, It gives me the opportunity to learn from so many brilliant people, including people like yourself. And so I feel in spite of the daily drama that we go through, I'm generally in a very blessed position. And that's why I started with saying I'm sort of the American dream. And I feel that every day in spite of all the distractions and frustrations. So thank you. I really enjoyed this conversation. You have a brave—

Thank you.

Bringing like true emotions out in people. And I really appreciate doing this with you.

Sachin Gupta, thank you for being our guest on Digital Voices.

Thank you, Ed. Be well. Thank you for listening to Digital Voices podcast with Ed Marx.

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