Revolutionizing Healthcare with AI (ft Marco DeMello)

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, Ed here. Welcome to another edition of Digital Voices. Thank you for making us top 10 on Apple Podcasts as of this time of recording. We really appreciate everyone listening. And as always, there's no commercials, there's no ads, there's no sponsors. It's just pure content. And today I have my friend Marco DeMello. Marco, welcome to Digital Voices.

Thank you, Ed. Glad to be here.

Yeah, this is gonna be fun. We first met through a mutual friend of ours and someone who I had worked with for many years. And so he's like, oh, you gotta meet this interesting CEO. And I'm always loving to meet CEOs and entrepreneurs and people that have done some pretty amazing things in their career. And you certainly fit that bill. So Marco, we're super happy to have you. With us. And the very first question we always ask are, what are the songs on your playlist? What kind of music do you like to listen to?

So I really love music. I have kind of an eclectic taste, uh, you know, classic rock like Queen, Bon Jovi, and Journey. And then also EDM. I love house and electronic music, you know, DVLM, Dimitri Vegas, and like Mike, I'm a huge fan of them. And obviously classical music, which is the best music ever invented and ever created. And so I'm a huge fan of Mozart and Beethoven and Tchaikovsky. Those are like my favorites. But, you know, I I go everywhere with classical music, which I really, really love. Yeah.

Now we're gonna jump ahead a little bit 'cause I just wanna come back to the music, and I know that you're from a different country, so share with us what country you're from because I wanna come back to some of the music of your country.

Yeah, absolutely. I grew up in Brazil. I was born and raised in Rio de Janeiro, so I grew up listening to a lot of samba and bossa nova, which I also love, which I unfortunately neglected to mention on my eclectic sort of like playlist. But yes, my brother's a musician. He lives in New York. He recorded bossa nova with the greatest of all time and has a studio today in Manhattan. So, I grew up influenced by music and really became very enamored with it and it kind of drives my way of thinking and it helps me concentrate and helps me focus a lot. But yes, so growing up in Brazil was interesting and going to technology, in Brazil in the late '70s when I was still a kid was very interesting and very difficult. And there's where Star Wars comes in. So I was hugely influenced by George Lucas and Lucasfilm and sort of the whole universe kind of drove me into the study of physics and math and technology. And I started coding when I was 9 years old and became passionate about you know, logic and coding and math and never looked back. So I've been sort of addicted to the world of technology and coding, in particular in physics since then, forever.

No, I love that. That's super interesting. And I am also a big bossa nova fan and samba. And so that's why I was asking, it was like, I was hoping you'd mention some of my heroes of the day. And I'll have to look up your brother's place when I get back out to New York, because I would love to hear some of that music.

When you're in town, let me know. I'll hook you up. He'll take you into the studios and show you. He recorded with Jean Gilberto, Bebel Gilberto, to, you know, all of the greatest. And it's got this huge hit. He has Grammy Awards and, and, and so on and so forth. It's, it's really interesting.

Wow. Yeah, that, that's pretty cool. I, I don't know. I think my fascination with that era and that music probably came from my dad, right? Listening to Sinatra and some of the jazz, you know, from America. And of course then Stan Getz goes down to Brazil, hooks up with some of those musicians you mentioned. Bossa nova is created. Um, it, it's just amazing music. I, I, I love it so much. So that's pretty cool. So how'd you make your way to the United States?

So it's interesting. I graduated from computer science and my dream, because of all the influence of American culture and the fact that I love coding and that technology was really at the time US, that was it. There was nowhere else to go. So I applied and I was approved to a scholarship at MIT and I went to Boston to live with my sister who was already living in Boston at the time and to go to MIT for my postgrad. And what happened was a sequence of events that I ended up getting offered a job job at a technology consulting firm, a British firm in Massachusetts at the time. I joined that firm while I was getting my postgrad at MIT. And one thing led to another, I ended up creating a proprietary JPEG protocol for the 1996 Olympic Games in Atlanta to allow for the first time fans and athletes to communicate over a camera on dial-up internet. So that proprietary JPEG protocol that never existed before allowed fans and athletes to communicate in the villa with dial-up internet. And it was a huge hit. It was— I saw an interview by the Boston Globe. It got a lot of coverage of that project. And Microsoft called me, literally found me. And then they made me an offer I couldn't refuse. And then that was the beginning of my real career in technology was when I joined Bill Gates in Redmond and Microsoft and crew in 1996. And that's when I had the opportunity to effectively right off the bat, 2 weeks into the job, given the challenge of creating free email for the whole world. And that was what Bill Gates asked me to do. I wanted to go offer a solution on Microsoft technology, free email for the planet. And I was, first answer I gave him was like, well, I can do that, but not on Microsoft technology, which got me fired on my first meeting. But, you know, I wasn't actually fired because he didn't let me be fired. So I was told to solve the problem then and come up with a proposal. And the proposal was the acquisition and the restructuring and relaunching of Hotmail, which was my first project at Microsoft, which I launched in February of 1997. And I ran until it became the ubiquitous internet service, the first ubiquitous internet service on the planet, when internet was still largely dialed up.

Yeah.

And we had to solve a litany of very, very hard challenges to make Hotmail what it became, this ubiquitous email system for free for the first time, including cryptography challenges. We had to invent cryptography protocols that didn't exist for the login screen. We had to create hardware that didn't didn't exist. We had to run some Microsystem servers at Microsoft. It was like total anathema, and we had to do it. And so we did everything that we had to do. It was a huge success, and I learned a lot and ended up with 36 patents under my name in the United States as a result of the work we did in Hotmail and Windows security, which ended up helping also a lot of intelligence services, which I can't name, both in the US and abroad. And so there are a lot of interesting stories under that. It's something we may talk about at some events that were quite peculiar. But, you know, Microsoft was the best learning experience, those 10 years, I could possibly ever have hoped for. And, you know, Bill Gates paid for my citizenship, he paid for my MBA, and he rewarded me handsomely for all the successes that we drove in that company. So, I'm eternally grateful to him.

Yeah, no, I know it's pretty spectacular. I know you've done other remarkable things since then. So, I want to take us up to lifemed.ai, which You and I have connected over previously. So you get this great education, you take on these very complex challenges. And so with LifeMed AI, maybe the most complex challenges to date. Tell us a little bit about your company and the challenge that you're taking on.

Yeah. So LifeMed is an interesting thing. So it's an AI company that was built from the ground up. We started this 3 and a half years ago. And the whole purpose of this company is to help hospital systems get paid for their claims and to help balance the playing field between providers of healthcare and payers of healthcare. So today there's this huge disparity where hospitals are literally going bankrupt left and right in the United States because they can't get paid. Doctors and hospitals and practitioners and hospital systems are simply not getting paid. The denial rates by AI systems on the insurance side, algorithmic denials, have skyrocketed since COVID And there has been no response, no structured response by the hospital system, the provider. So that's what DeepClaim, our AI system inside LifeMed AI, which is a neural network built from scratch on traditional machine learning systems. It does not use generative. It's a traditional machine learning neural network using contextual AI to do deep analysis of payer behavior with every single hospital we engage with. And then we effectively interface with their system, with the DMR systems, with the clearinghouse systems, 2 points of interface. And we start working for the hospitals. And lo and behold, we start getting them paid exactly what they need to get paid by reversing the algorithmic denials from the payers, all the Byzantine mechanisms they use and they hide inside denials. Our AI can find it all. It can shine a light on all those denials and reverse them very quickly. So to give an example, we have clients today They used to get paid in 30, 60, 90 days after fighting payers over and over and over. We get the same claim paid in 8 days. 8 days. Our AI can get payment back to the hospitals in 8 to 9 days on average, whereas usually it would take 30, 60, 90 days, or sometimes never. They simply will never get paid for their claim. So we are taking on the challenge of balancing the healthcare system and eliminating waste and increasing efficiency. So everybody gets paid what they need to pay, not a cent more, not a cent less, but yes, they do get paid. And all the waste that's in the system gets eliminated because you don't need to have so many people touching a medical claim. The AI is perfectly capable of adjudicating these systems, these claims, and getting people paid what they need to get paid and not a cent more or less. And so it is a job for an AI. It's no longer a job for humans. And I think it's high time that Companies like ours would show up and solve this problem for good, permanently.

Yeah, no, it's super interesting because as a board member of some hospitals, I see that, I hear about this all the time. And then, you know, I was in the C-suite of other hospitals prior to these board positions. And this was always, you know, a source of great frustration was, you know, providing great care to members and patients and then not getting paid. And sometimes, yeah, it was definitely our fault because we didn't, have a clean claim of some sort, but other times it just felt like, you know, there was some sort of unfair advantage going on. So this sort of levels that playing field. It sounds pretty remarkable. Have you had some customers to date and how has their experience been?

Yeah, we have. We have, you know, several dozen customers already. In fact, in the first year that we've been into production and growing very, very fast, recovered tens and tens of millions of dollars to our hospital clients, our average impact on hospital revenue grows from— goes from 16% to 27% on average more revenue. Let that sink in for a second. A hospital making 16% to 27% more money than they were making on average is the difference between going bankrupt and being profitable.

Yeah.

And so it is a huge impact. And sometimes when I say, pull these numbers, people say, this is impossible. You're just tripping. This is complete BS. There's no way. And I'm like, okay. Let us do an analysis for you, and we will integrate with your system. We will run for you for free. We won't charge you a dime for 90 days. At the end of 90 days, you tell me if the impact we quoted is true or not. And if it is, you start paying us. And if not, we'll go away and there's no contract. That's how we play. We're basically telling clients, we're here to make you money. And if we are not a net positive, I don't want to get paid. So we're all in. We're all in with you. If we don't have a net positive impact on your revenue, I don't want to get paid because hospitals can't bear any more cost. So we will not be a cost. We're here to be a net positive. Give me 90 days to show you how much my AI can improve your revenue. And at the end of 90 days, you make a decision. And you tell me if it's worth it to keep the system or not. And if it's not, there's no contract. There's no obligation. There's no cost to you. So it's that simple. And that's how we're able to secure customers and grow. And this year, 2025, for us is all about growth, growth, growth, and solving this problem. There's 435 rural hospitals in America about to go bankrupt. That's a travesty and it's a tragedy. We're going to prevent that. We're going to work with the government, with these state governors. We're going to work directly. We're creating a coalition of these hospitals and we're going to prevent that from happening because there's no need for that to happen. It's just waste and inefficiencies and greed in a system that can be eliminated by putting AI in there like ours that's going to level the playing field and get people paid what they're due, full stop.

All right. So Marco, so it sounds You know, pretty amazing, too good to be true type of thing. How do you think the payers, if, if it's true that there's some nefarious players and they purposely try to delay payment, things like that, what do you think their response would be if suddenly their, their hospitals that are submitting these claims and they've had their way with them are suddenly much more efficient? Do you think the payers will respond in some way?

It's interesting. That question is an excellent question. So first of all, the payers went all in. with their algorithmic denial systems and adjudication systems, right? And the party was awesome until now. But now, how do they backpedal from all that and turn off all the systems that have been making them so much in terms of denials, right? Now, our AI is able to convince their AI to pay. And what are they going to do, turn off their systems and say, yeah, that was a bad idea, let's go back to doing this manually? No, they can't afford to do that. Second, payers are limited by 15% maximum profit margin by law. So they're regulated to 15% profit maximum. And so in essence, they're in a situation where there's nothing they can do. They have to pay what's supposed to be paid. There's a lot of games that are played here, shell companies to divert profits elsewhere, blah, blah, blah. But at the end of the day, turning their systems off because our AI is very capable of convincing their systems to pay is no longer an option. Backing off from this is going to be more painful than actually paying what they're supposed to pay, which by law they have to pay anyway. It's a bit of a, like, you know, damned if you do, damned if you don't. I don't think they have an answer to this.

Yeah.

No, that's super interesting. It's gonna be really interesting to watch. We'll put in the show notes, 'cause I'm sure people will be super interested about the product and just seeing, you know, maybe checking back with you in a few months and just seeing how things are going. It's super interesting. Now, Marco, you're an incredibly successful individual. If you were going back to Rio and back to your high school and giving the commencement speech, what's one or two things you would exhort the young people about for the future, you know, in terms of leadership or career, those sort Well, those are very difficult questions, but also very good to make you reflect upon your own history.

And I would say, first of all, ideas are plentiful, but execution is the key to success. So learn the difference between focus and randomization and stick to focus and learn discipline in execution. Point number 1. And point number 2, hire always people that are smarter than you. And, and then be their partner. I never had an employee in my companies. I don't have employees. I have partners. I have people that work with me, not for me. And I provide leadership by giving them vision. So if you're building a business, you want to be an entrepreneur, understand that rule number one is understand, is knowing how to articulate your vision clearly and communicate very, very openly and clearly to your partners and people that are working with you to build that dream into a success and then treat them as such every single day. Listen to them, hear them and listen to them and take their feedback and act on that feedback because people don't need a boss. They need a leader. And being a leader is vastly different than being a boss. And I never wanted to be and never would be a boss. I like to, I like being a leader, being seen as a leader and working as a leader, but only with people who recognize that and are capable of giving that feedback and telling me openly, like, I disagree and this is why, and this is stupid and this is why, and let's do this way and then do it So empower those people that are smarter than you to be their best, and your dreams will become reality. But if you insist on being sort of like a bit of king of a fiefdom or building a little empire, that's not how you succeed. You don't succeed by ordering people around. You succeed by inspiring people and leading them to do their best work. At the end of the day, that's what it is. And that's what I've learned the hard way.

Yeah, Marco, I asked you for 1 or 2 things. I think you just gave us like 9 or 10. It's good. Sorry. It's just stream of consciousness, just No, no, I was furiously taking notes. This is why people— this is why we're number 9 in podcasts. So it's all good. Yeah. What is— you just mentioned, you know, the hard way. Did you have a failure along the way? And if you did, what did you learn from the failure?

I learned that you can only be betrayed by the people you trust. And in my case, I was betrayed by an investor. And it was a very hard lesson on how to handle investors and capital raising and the actual motivations of investors when they put money into your business. And this is something I never expected to be an issue. Frankly, I did not expect— didn't see this coming from 10,000 miles away. And we were sabotaged by our own investor, believe it or not. So it was very ugly and it was very painful. It was a very hard phase that I had to go through. It was a very hard lesson. But now I know better and I know exactly how to protect my partners and my teams and my companies. From that kind of situation. And I encourage every entrepreneur to be extremely cautious about raising capital and how and when and why you do it and who you do it from and understand their motivations very deeply because this can come back to bite you big time.

Yeah, that's very profound. So you have all this success, you do a lot of great things, have great teams. How do you recharge and refresh? So what do you do like for downtime to just, you know, sort of peace out?

I am an avid scuba diver and I travel the world with my professional camera rig underwater photography, which is my hobby, filming and photographing pelagic underwater life. So my hobby is being underwater in the quiet of the ocean and in total silence and filming and watching life underwater on the planet that should be called Planet Water, not Planet Earth, which is 75% ocean. And so if you want to see alien life, don't look at the stars, just dive. You're going to find plenty of aliens underwater. It's a festival of the most beautiful, diverse, and crazily challenging to understand life forms. And that's my passion. I love diving, and I think I will die underwater.

What is your favorite dive? If someone's listening and they're like, oh, I want to do some diving, where would you recommend?

Having a favorite, it's very difficult. I would say if I had to pick one spot, definitely the Maldives would be where you have the most concentration of pelagic life in the shortest amount of days you need to cover From sharks to whale sharks to dolphins to manta rays to spotted rays to barracudas, everything you can possibly imagine of diversity and volume and quantity and schools of fish of great color. So the Maldives is amazing. In terms of coral life, definitely the Red Sea. The Red Sea in Egypt where I went diving in Dahab and Sharm el-Sheikh was for coral life was absolutely the richest, the most beautiful. But, you know, Bahamas right here in the coast of Florida, it's a very close second. I mean, I think my best shark dives and my best shark encounters were in the Bahamas. I went into a blue hole with 2,000 bull sharks. And literally, I was there by myself with 2,000 bull sharks filming them for 5 minutes, went out of the blue hole alive in one piece. And even the guy, the divemaster, refused to go into the hole because he knew what was in there. I went in and came back alive, and the guy was shaking his head going, Like, you're nuts. And then, and I have this film and I, and I watch it all the time because it was so beautiful, so peaceful. And they didn't want to eat me. They just wanted to swim around and it was fine.

Yeah. Next time we're together, Marco, you have to show me some of, some of the videos. It sounds really intriguing and, and that sounds pretty cool. So we covered a lot of ground here, everything from bossa nova and samba to the way you grew up and how you got into Star Wars being sort of a catalyst to getting into technology, how you made your way to the United States and MIT, and then had these great opportunities, including at Microsoft and doing a lot of invention and then building various startups, being part of various groups, doing really good things. Then you left us with a lot of ideas around leadership. We went in depth into life med AI, specifically about helping hospitals maximize their claims and having a fighting chance against payers. Is there something we missed or anything you want to double down on? I'll give you the last word.

Well, I would say for sure we have a very serious crisis in healthcare in the United States today. It's 18% of our GDP. It's $8 trillion a year. It is an endemic disaster that needs fixing. And I think today we have the wherewithal, we have the technology to solve this problem and to reduce this waste and to make healthcare better, more affordable, more accessible to everyone. At the end of the day, it's about saving more lives. It's giving doctors and nurses and hospitals more beds, to treat more people and not having to waste time thinking about whether they're going to get paid. Hospitals shouldn't be worrying about payroll. They should be worrying about saving lives. And so I want to double down on this deep passion I have as a citizen and as a person to solve this problem, to attack this problem from the top down, working with the federal government, working with every hospital system we touch to really address this holistically and solve this problem once and for all. This is unacceptable that in 2025, the number one richest country in the world has a sick, broken system that doesn't work for almost anyone and the way it should be. And it's not the way it doesn't need to be. Everybody thinks it is this way because it's always been this way. No, no, no. This is fixable, imminently fixable. And we're here to work on fixing that. And I'm proud to be doing this, to be moving the needle. I don't need to work anymore. I work because I believe in this mission and in this work that I'm doing.

Hey, Marco, I appreciate your passion. I appreciate your articulation of a problem and how to solve it, but I also appreciate you as a person and all the leadership gifts that you left us with. Thank you for being a guest on Digital Voices.

It's been my pleasure, Ed. Very nice talking to you.

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