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PODCASTS/HEALTH PLANS/TECH: Interview with Stan Nowak, CEO of Silverlink

Here’s the transcript of my interview with Stan Nowak of Silverlink. The original audio is here.

Matthew Holt:  Hi, it’s Mathew Holt of THCB and I’m back with another podcast. And this time I am talking with Stan Nowak, who is the CEO and President of Silverlink. You may not be familiar with Silverlink; they are a company that relatively new and relatively small. But they have a big client base doing, primarily outbound automated phone calls. We spend a lot of time on THCB talking about the Internet, the web, Health 2.0, and all these kind of new ways that people are using computer technology to communicate with each other. But what we obviously we don’t realize, well we do realize but don’t think much about it, is that in healthcare; a lot of the activity is in phone calls. And there is a big market in trying to do the phone call better and to gain more information from that.So, I chatted with Stan a couple of week back and I thought it would be interesting have him on a podcast because Silverlink has introduced some new initiatives. But they also have been doing a lot of stuff that probably is not familiar with people. It has sort of been under the radar, both in terms of working for PBMs if you have Medicare Part D and working with many health plans. So, first off, Stan, good afternoon. How are you doing?

Stan Nowak:  Thank you very much Matthew. I am doing quite well today.

Matthew:
Quite, quite well. Stan lives in Boston, so he is not doing as well as
those of us on the west coast. That is just a THCB impression. So Stan,
given that I am a mere dumb blogger, but I’d never heard of Silverlink,
I suspect that you fly somewhere under the radar. And perhaps
interviews like this are hoping to sort of poke your head up a little
bit about it. But you very much are involved with kind of something
that seems to be sort of in the guts or the plumbing of healthcare
organizations, people don’t think much about, which is helping
automated phone calls. So just, tell us a little bit about that
business and what Silverlink does and brings to your customers in that
business.

Stan:
Absolutely. Yeah, Silverlink is in the business of providing automated
voice solutions, exclusively for the healthcare industry. And as we
mentioned the other day, we enable our customers to proactive deliver
and hit the client and personalized interactive phone calls that are
automated, but are recorded in a human voice and navigated by the call
recipients voice. And they tend to be, across the experience that we
have had over the past five years, much more effective than letters,
email. Often much more effective than the web. And clearly a lot more
affordable than using live call center agents. So for a certain
category of communication activities that health plans and pharmacy
benefit managers and DME suppliers undertake, this is a very effective
way to reach out proactively with a personalized message and get very
high response rates around a range of problem sets. And the problem
sets are similar to the ones you are seeing and talking a lot about
with respect to the web, you know, content development that has been
going on for the past several years.And as you well know, with
the migration of healthcare toward a consumer model, as many folks have
said by now, you can squint a little bit and see healthcare going from
a B‑B business model to a B‑C business model over the next few years.
And that creates a great deal of urgency for members and patients to
make decisions that impact them financially and that have, obviously,
many other implications from a quality standpoint. So our business is
really helping members navigate a complex healthcare system.

And
for the past five years for, as you point out, seven of the ten largest
health plans in the country, and many, many other companies in the
healthcare area, we’ve been helping them do about a 100 different types
of things that all have the common theme of either trying to drive
behavior, whether it’s medication compliance or enrolling in a
particular type Medicare Type D plan. Or getting a mammogram screening,
or whether it is collecting data from members, or educating them. There
are a lot of education programs around. You know, “what is the Medicare
Part D benefit for seniors.”  So, we have been doing that for about
five years, and again, the problem sets are the same problems that are
being addressed by many media. It just turns out that with the
demographic of healthcare consumption, just as one point, seniors are
13% of the population and consume about 42% of the drugs. You know,
this is a population that is becoming more adept at new media and web
and email. You know, it is certainly very effective to contact them by
the phone.

Matthew:
No argument from me on that one. If you look at user rates of the web,
for those over 65, they are dramatically lower than in the working age
population, and that has always been the case. So, let’s get down to
the sort of nitty gritty. I am a, let’s say I am a Medicare Part D
potential recipient, or I am a retiree with a PBM administered benefit
or whatever. I am sitting at home and the phone goes, I pick it up,
what happens next?

Stan:
Immediately, you don’t hear any of the day that people typically
associate and find offensive with calls. Immediately when you pick up
the phone, it says, a recorded human voice says, ‘Hello, this is USA
Care with a call for Matthew Holt, is this Matthew?’ And you say yes or
no. So immediately, first of all, what you see on the Caller ID, this
is your healthcare, in many cases your managed care company calling
you. That is what appears on the Caller ID. When you pick up the phone
it starts speaking to you. It mentions your name and then we
authenticate who we are speaking to. So we may say, ‘Is this Matthew
Holt? Yes or no. For your protection and privacy would you please say
the last four digits of your Social Security Number? One, two, three,
four.’ And then we deliver the body of the message once we have reached
you, you’ve answered, acknowledged that you are who you are
authenticated, then the body of the message. Whether it’s ‘according to
our records your prescription for Lipitor is about to expire, would you
like to refill it now?’ Or whether it’s, ‘we understand, based on our
records, we understand that you are on the drug Vioxx, you may have
heard the drug has been recalled earlier today.’ You know, those kinds
of things.So, and then you answer, you could answer a series of
questions. We could be doing a health risk assessment where we ask you
questions about family histories and things like that. And your answers
are recorded and based on your answers we might as you a different
question or transfer your call to a live call center agent, or if it
was a clinical program you might say something about your blood
pressure that would lead us to send an email to a nurse care manager at
a disease management company.

Matthew:
Right. OK, so you are heading down a series of paths here. So just on
the basic mechanics, did the responses come back, is it mostly voice
recognition or is it mostly people hitting a one, two, or three? You
know, press one for this, and press two for that.

Stan:  It’s all voice recognition.

Matthew:
So, it is all. Speaking of somebody whose accent doesn’t get fully
understood by every single voice automation system that I speak to in
this country, I don’t know why. [laughing]

Let’s ask two sort of obvious questions, first is for the voice
recognition: how many people… How does it deal with different
accents, different languages, and all that kind of stuff? And then
there is a macro question which is what response rates do you get to
people who A, actually acknowledge and pick up the phone and put in
their information or identify themselves and then B, make it all the
way through the calls. Those are two different questions.

Stan:
Yes, absolutely. And I think the issues with voice recognition, first
of all, I said it is exclusively voice recognition but there are
defaults. So if the system doesn’t understand you, it will ask you to
repeat and then we will in fact default to DTMF or pushbutton. You
know, press one if you meant to say five and two if you, you know.

So, you default to numeric inputs. So, the first question… The way
you get voice recognition accuracy, and I’m not going to tell you that
if you speak a paragraph voice recognition will pick that up and
accurately transcribe that into data. That’s not; we are not there yet
with voice recognition. What we are doing is asking a series of
question and limiting the number of answers we are listening for. And
that dramatically improves the accuracy of voice recognition as a
technology. So if there are five potential answers we might list those
answers and you are going to be saying one of them or other.

Matthew:
I’m with you, so you are bringing that in from Nuance or some other
vendor I assume is actually a part of the technology that drives that
part I assume.

Stan:
Absolutely, we embed best‑of‑breed voice recognition technologies and
there are also text to speech technologies that take data from your
doctor’s name and read it in the call for example. So that’s sort of
the first answer, is that… given the way that you structure these
calls, the voice recognition aspect can be extremely accurate with
very, very low error rates.

The
second question is really the more important one which is response
rates. And that’s really what… when people are balancing the types of
modes of communications they have to drive behavior, educate or capture
data from populations, they have to think very hard about what’s the
response rate. They also have to think about the core attributes, is it
HIPAA‑compliant, is it a pro‑active mode of communication? Is it
digital? Is it cost‑effective?But with respect to your question
about response rates, that was something that surprises, pleasantly
surprises, all of our clients when they start using the programs. So
for example, if you’re doing… you care about a few things, you care
about response rates, who listens and who does what you’re asking them
to do on the phone call, but the more important question is who takes
action based on the information you’re delivering? So for example, in a
Medicare population for a simple call which was a flu shot reminder,
and flu shots as you know are important for many members of the
population, but what people want to know is 1, the time to get it, 2,
should I get it and 3, where can I get one based on my address? So what
we do are calls that explain and use… and I know you know Don Kemper
and the Healthwise organization… we have a partnership with
Healthwise where we are delivering clinical content, peer‑reviewed
content that is Healthwise certified about the benefits of the flu
shot, why you should get it, answering questions about it, and when we
reach out, to say, a Medicare population and we’ll have a reach rate of
73%, or in the 70s, a very high reach rate, based on both the outbound
phone call and then people who call us back to get the message, than
they would have received if we had have reached them on the phone.And
then the question is how many go and subsequently get the flu shot
itself, so in a… and we get various data back from our clients, in
populations we’ve seen as much as 40% of the people who are reached
with that kind of call go out and get the flu shot, which is a very
high response rate. I’d say our response rates… you know, we do a
hundred different things, response rates vary based on the type of
message we’re delivering and who we’re delivering it for… and we get
response rates from 5% to 80%, so there’s a fairly wide range, it’s not
a simple answer but the response rates are typically much higher than
alternative modes and much faster. You get the response within two or
three days rather than waiting six weeks for 15% of your surveys to
come back.

Matthew:
I’m with you. So… do you happen to have, maybe an unfair question,
but you say there was a 40% of people who actually went out and got the
flu shot, do you have an idea what the control group was for the other
people in the health plan that didn’t get the call? Have you done any
work like that?

Stan:
We do that… we have various levels of success in tracking those
measurements with our populations and we do that, and we have some data
typically they’re measuring what is the cost of the alternative mode of
communicating and so for our flu shot reminder we’ll have a client tell
us that it was as effective as using humans and saved them 65% of the
cost. For health risk assessments it was two times as effective as
their alternative mode of delivering those health risk assessments and
it was 50% less cost. So results data is somewhat spotty, we do get it
and our customers are consistently achieving higher results faster in
digital form and doing it at a fraction of the cost and in a fraction
of the time.

Matthew:
Sounds good. So that kind of leads me to the next point which I think
is the business model. You’re going after people who are harder to get
other ways, it’s cheaper, faster, easier… you’re basically
introducing the option to a customer of both doing something they
either weren’t doing very well or were doing very expensively and doing
it cheaper, and getting some good results out of it. So that’s nice.
But I guess the unexplored opportunity here is the disease
management/outreach/outbound customer service of any kind for health
plans has basically been done a) not very well, that’s a quiet thing we
shouldn’t be mentioning too loudly, but b) being concentrated in a very
small number of people. I’m a typical health plan member jumping from
health plan to health plan, have typically crappy experience with them
when I actually need something from them, have to deal with claims or
whatever: there are a lot of errors that go on in that process and
that’s very typical I’m afraid for most health plans.But more
importantly is that other than getting an email maybe once a month from
my health plan, and by the way I still get emails from the health plan
a I left a year ago interestingly [laughs], I’ve been getting
nothing…well my new one did communicate with me recently to tell me
my credit card was about to expire, so I guess they care about the
right things [laughs] But other than that I don’t hear a whole lot from
them and you can argue back and forth whether people want to hear from
their health plan or whether they want to hear from their provider
groups but the answer is there’s probably things that even an
overweight, middle‑aged male like me should be hearing about, and
should be engaged with, about health that we’re not, that if you can
get there cheaply, may actually have some impact down the road.So
I guess the question is, I assume when you say you’re going to the
disease management, you’ve done this thing with Healthwise about
diabetes, and that that’s the group below the waterline in the iceberg
group that you think are the ones who you can get at. So tell me a bit
about, if I’m going in the right direction here, and also give me some
of the specifics about what you’re intending to do with the new
diabetes program.

Stan:  Right, well there are a couple of points here and I know you’re familiar with the predictive modeling world.

Matthew:  Familiar is a strong word, but I’ve heard about it… [laughs]

Stan:
But increasingly we’re hearing more about population health management
rather than disease specific management and the perennial challenge is
not only how do you deal with your high cost populations which you are
typically best going to do with nurses and care managers on the phone
with patients. But increasingly people are concerned about the at‑risk
populations, the people who are not high‑risk now, not high‑risk and
high‑cost, but at risk to becoming high risk and high cost and in the
diabetes world you’ve got 21, 22 million people with diabetes and
you’ve got about 54 million people who are in this at risk category.So
the real question is with those kinds of populations suffering from
chronic disease or at risk for suffering from chronic disease, when you
think about the population of nurse care managers available in industry
to care for those folks on the phone, the numbers don’t… there is a
nursing shortage and there is not enough capacity in the nursing and
care management world to effectively care for them, never mind
considering costs.So there are two issues here, one is how do
you most effectively deal with the high risk, and the challenge there
is effectively utilizing your high value clinical resources: nurse care
managers often. And then the other question is, how do you keep people
from becoming high risk that are at risk, and to date there’s not a lot
that’s done there, maybe letters are sent. And predictive modeling
allows you to know who these people are and identify the populations,
but the perennial problem is, there’s no cost effective delivery
mechanism to get people to take action or to care for themselves or to
avoid the events that occur that turn them into high risk populations.So
what we’ve done in disease management and are continuing to do is build
a life cycle of engagement with the disease management… with a
population, and map the types of communications we deliver both to the
workflow of the nurse care manager as to trying to engage the coach and
monitor the health of the patients that they manage, and also the life
cycle that a patient goes through the course of a year, provide them
with educational resources and measurements so that we can monitor and
track their behavior and their progress over time.

So,
essentially, that’s really it. We’re working with the nurse care
manager for the high‑risk populations. For the at‑risk populations,
there are programs that are delivered to those populations that are
educational in nature, to keep them from becoming high‑risk.

Matthew:
But you’re also gathering some data on the phone from those populations
while you’re doing that. Obviously, you can measure that, yes, somebody
sat through a lecture on the phone, or an explanation on the phone
about eating better, taking exercise, drinking less, or whatever the
‘behave better’ lecture is. But also, you’re taking measurements from
medium to high‑risk people on the phone, as well? Are you asking them
to put in measurements around blood sugar, hemoglobin levels, that sort
of stuff?

Stan:
Yes. Absolutely. Those kinds of readings and measurements, reporting
them on the phone, and comparing them to what they said last time and
identifying increases or when measurements are moving in the wrong
direction. Based on those clinical increases, we may be taking action
on the phone, transferring them to a nurse at that point in the call if
we see measurements going in the wrong direction. We may be emailing a
specific care manager who is assigned to that patient, to provide them
with information that they will then use to follow up with that
patient. That’s exactly the type of thing we’re doing to monitor and
help manage that population.

Matthew:
Which leads us to another issue, which I think is much more complex. I
think, as this type of activity grows…and we’ll discuss in a minute
whether it’s in the best interest of health plans to be doing this type
of thing in the first place, to become disease managers. That’s a
bigger argument.
But for the ones that are
going down this path, I have a separate article I call "The Yin and the
Yang of Health Plans", which is that they have all these smart, medical
directors inside who want to do all this better healthcare management.
Then they also have a bunch of actuaries who want to get rid of all the
sick people and have no interest in being better healthcare
managers.[both laugh] But, given that you’re on the side of the angels
and working with the folks who are trying to do the right thing in
terms of the better disease management. They’ve got this other problem,
which is that there are other sources of that data.I’m
thinking, just on the health plan end, that some health plans now are
picking up data from lab tests other avenues. Some of them, not a lot,
but some of them are now starting to work with either provider groups
or directly using interventions directly in the home—things like
collecting data from visiting nurses or they might have an automated
tool like Health Hero or equivalent.

Stan:  Health Hero, yeah. Sure.

Matthew:
So there’s other data coming in the same kind of vein. Then, of course,
there’s people going to the web (there aren’t many, but there are some)
and inputting their own information into their own peer chart or a
place the health plan may have access to. As we go down the path, this
data from different sources is going to become a bigger issue. Is this
something you’ve run into yet? If so, how do you think health plans are
dealing with this? Are they going to throw up their hands and give it
up and say, "We’re going to have to have a separate organization that
is our data cruncher." Is that were you guys are going to end up? You
not only have the outreach part, but you’re also collecting the data.
So, give me a sense about how you think about data integration of all
this stuff that’s out there is going to happen.

Stan:
Well, I think that clearly, the more and more accurate data you have
access to, the smarter you can make the interaction. Just think about
the sort of information you’d want your nurse to have access to when
they’re on the phone to a high‑risk patient. You’d want access to any
and all information that’s relevant to that patient’s care, and as
up‑to‑date as it can possibly be. The same holds true for an automated
phone call. Our interactive phone calls can be highly sophisticated,
and can bring in data. It can bring in numeric data. It can bring in
your doctor’s name, the clinic you went to, and the date of your next
appointment. All of these things, this data that can be brought in and
discussed in the phone call. Clearly, the more information you have
access to, the more intelligent the call can be. We are firmly in the
world that everybody else lives in, which is that data is an imperfect
place right now. It will be for many, many years. In the meantime,
we’re doing as well as we can with our clients in terms of their access
to data. We can’t be better than their ability to provide, or provide
access to, the most real‑time, up‑to‑date data on these patients. But
we can be as good. We can take whatever they have access to, and build
that into more intelligent, sophisticated dialogues with patients that
are more relevant to them.

Matthew:
So, you’re kind of at the mercy of what your clients have. Is the
majority of the data that you’re integrating into current calls; is
that coming from a claims system, or some kind of scrubbed CRM system?
And, give me a state of the industry, as to how good that data is. If
it’s getting to you in the right place, it’s a decent assumption that
it could go to other places, like personal health records and other
kinds of consumer front‑end applications. I’d be interested in hearing
where you think the world is, in terms of data integration between all
those different silos and health plans.
I don’t want to insult your client. [laughs] But I like the idea that they know where they are.

Stan:
My sense of the situation is that, obviously, it varies by plan. I
think generally, we are young in that area, of having very timely
information that’s available in a centralized place, in order to take
action based on it. I think we’re young, in that area. That’s going to
be an evolutionary space for the next several years. To get much more
detailed about that, I’m certainly not the one who is highly qualified
to comment on that in my organization.

Matthew:
You’re suggesting that CEO is not the guy who stays up with the Access
database until four in the morning trying to figure it out [both laugh]
Yeah, I can believe that. It’s good to be the king, sometimes.

Stan:  [laughs]

Matthew:
Well, moving on from that, let me just nudge you one more about a part
of that. Do you think that is a core element of what Silverlink does?
Because I’m dealing with some companies that are dealing with health
plans and are trying to figure out front‑end integration of websites
and back‑end integration of data. I’ve done some work, over time,
in the back‑end integration of data from different sources like the
health plans, the drug plans, and elsewhere. It’s always, as you said,
dealing with data is always a mess. You get the impression that some
businesses, not necessarily in healthcare, but outside our business,
there are some industries which have now really figured this stuff out.
They are now able to move to a data‑centric view of the customer, which
can be moved into the other applications it needs. They have all the
flexibility and can do that at a lower cost than they’ve done before.
They’re making money out of the ability to do that because they start
figuring out different ways to serve their customers and generate more
revenue out of it. We’ve been talking about this in healthcare for
awhile. Do you see that as a business that Silverlink would ever be in?
You kind of are around the edges of it now, but is that something that
you may actually get in, given that you’ve got all these capabilities
of introducing data within your system as it is? Or do you think that’s
something you’re going to stay away from?

Stan:
I absolutely think that data management is something that is part of
our business. Clearly, if you step back and think of the larger context
here, the real goal is to deliver the right information to the right
person at the right time. I was saying that for some time before I
realized that Don Kemper had said that 25 years ago.

Matthew:
[laughs] I think Keynes said something about how every genius is
actually parroting the writings of some defunct economist, and Don
isn’t quite defunct.

Stan:
[laughs] So, I thought it was quite clever until I realized I’d just
taken it from his book. Really, when you think about the challenge that
specifically, health plans have, health plans have a credibility gap
with consumers. No one is claiming that health plans have redefined
consumer delight. However, it is a major industry challenge for health
plans to assert a position of trust and redefine the way healthcare
consumers think about those organizations. In my view, and not only my
view, one of the ways they will reestablish a reputation with consumers
is by taking information that’s both required of, important to, urgent
to an individual at a time when they’re making decisions and offer
credible information and guidance to that individual at that time.So,
to me that is looking at an event in the claim system that says, "OK,
this person has had this kind of a diagnosis, and that means they’re
probably asking these types of questions about treatment." Now, I think
we’re a long way from the health plan telling you what treatment to
pursue, but we’re not a long way from the health plan saying, "We
understand that you have recently been diagnosed with this. You may be
trying to find information about the following subjects. Let us tell
you what the information resources are that are available to you, among
others, as you explore the options that you need to be thinking about
right now."So, obviously that requires a high degree of data
integration and it’s real‑time. But, clearly health plans have access
to the source of information that can allow them to time their delivery
of information and decision support to an individual at a very
important time. I think it’s critical that they take advantage of that
asset to both help people do this navigation, it’s becoming more urgent
to them and there are more decisions and risk associated. But use what
information assets they have to time those communications. And again,
redefine a relationship of trust with the consumer. I do think
integration is part of our job. It’s part of healthcare’s job. And it
will help healthcare, specifically the managed component of healthcare,
redefine their relationship, which is a priority for managed care. And
you are absolutely starting to see companies recognize what they have
to do to get there.

Matthew:
That leads us on to a segway, a little bit, into where you think your
business is going, because you obviously rationally take a look at the
world and think, "Who’s got the biggest problem with outreach, and who
has the most data and can do something about it?" Health plans are a
great place to start. You told me when we spoke the other day, the
Silverlink, it started with a different idea to where it was going to
be focusing? I think you mentioned it was, I’m blanking on that. Was
that going to be in the home?

Stan:  Yeah.

Matthew:
Anyway, the upshot is that one of those things, speaking as someone who
is not a great fan of the current setup of how HSAs and CDHPs have been
marketed, but is a great fan of improving the experience the consumer
has with the healthcare system. It doesn’t matter to me, or I think to
most consumers, whether you’re getting your information and your
services from a private health plan, Medicare, the government, or the
NHS in the UK, or a provider group direct, or a big provider
organization, whatever. You want to be treated like a human being and
you want to have good information in a timely way, and you want good
customer service from whomever you’re dealing with.Any
organization of any kind that’s delivering healthcare services of any
kind has got to wrestle with that. As we said, I think across the
board, whether it’s private, public, here or everywhere else, they’ve
all done a piss‑poor job. Things like Silverlink are helping; they’ve
sort of bridged that gap a bit. So, having said that, you’re obviously
focused on the health plan market at the moment. Do you see
opportunities elsewhere? How far are you down the path, talking about
providers, talking about international, talking about taking this
technology or service to other areas?

Stan:
We certainly work with the managed care complex, and within that I
consider the PBM area, the specialty pharmacy area. We also work in the
medical supply world and a few other sectors of healthcare. Again,
exclusively healthcare, and the common theme being those people who
have to manage populations in the home and are interested in their
behavior and education, and all that kind of thing. We are exclusively
within healthcare because of the number of issues: clearly with this
transformation from B to B and B to C that’s going on right now, and
whether it’s a cause or effect, the commercial models and the plan
structure that are creating incentives and urgency for individuals to
better understand their healthcare and better manage their healthcare
consumption. The opportunity area in this world is perhaps not
limitless, but certainly there’s a tremendous amount of headroom in the
marketplace.To that extent we are interacting with providers.
And integrated delivery systems, certainly. Our issues are really just
making sure that, again, as you point out, a common theme is anyone who
is interested in driving behavior, capturing data, or education
populations, regardless of whether they’re a managed‑care organization
or a large clinic. People who have large populations are potential
customers. Silverlink, the core innovation is that we’ve removed the
barrier to utilizing this technology. We’ve allowed people to build
call programs to call a thousand people to drive specific types of
behavior. That’s economic, and it’s able to be set up in hours, as
opposed to traditionally set up over several weeks and you need special
software developers to do it.So, we built the company around a
concept which drove us to have a very intuitive way to build
interactive dialogs that can be extremely sophisticated but can be
built and delivers to a small population. There really isn’t a limit to
the types of people that we can work with within the healthcare
industry. We’ve five years‑old, so we’re still very early as a company;
we’re an emerging‑growth company at this point. We see the opportunity
as almost limitless in this market.

Matthew:
I’m sort of listening between the lines of what you’re saying. Does
that mean that you think that the health‑care PBM managed care has got
a lot more opportunity with Silverlink without you having to go much
outside that for the time being? You’re not saying you’re shutting
yourself off, but I think that was what I was hearing. So, am I right?

Stan:
That is absolutely the case. I think what’s important for folks to
understand is, people talk about consumerism and consumer healthcare,
and people make the mistake of thinking that CDHP or consumer‑directed
health plans are consumer healthcare. In fact, that’s a plan type, but
that’s a very group product. Employers choose a CDHP plan and then they
put their employees into it. The more intensive consumer experience,
and MacKenzie did a paper recently on this, when you look at the
Medicare plans, the Medicare Part D plans that have come out, those are
truly consumer products. Individuals signing up as individuals. They
can walk out the door at the end of the year, and walk to the plan next
door. I think that’s really been a wake‑up call to the industry with
tens of millions of people in this new consumer health‑care product.
It’s exposed the cracks in the consumer delivery services for health
plans. It’s created an entirely new range of education around what it
means to interact with a high‑consuming population with a relatively
complex plan.That’s a couple of years old. We’re very early in
having the lessons of what consumer, business, and healthcare means to
health‑care companies. Because of that, we’re really at the beginning
of what I think is going to be a dramatic change in the way the health
plan complex interacts with consumers and we’re very early in that. So,
I think the opportunity right now is really massive in that area as we
undergo this transformation.

Matthew:
And I think that is dead right because the more you put the onus of
certainly plan selection, but even things like the selection between
benefits, this, that and the other onto consumers, let alone people
start thinking about ones who are sick or may be sick. You have a huge
amount more discussions and choices. And people at the moment again,
that is done very, very poorly. And you are in a great segment there.

The
last question where I let you talk a little bit about the company. Are
you hearing from your customers the desire that you should also be
representing them with, kind of, other modes of getting at their
customer? Obviously you are in some extent competing with mail, and
email, and web based platforms. Are they saying to you, ‘Wouldn’t it be
great if we can have a one stop shop and you could provide the web
stuff as well” or do you not hear that… Are you pretty much satisfied
to be best in class at what you are doing at the moment?

Stan:
Well, I think what we do at the moment, the automated interactive calls
and the information systems around that, is something that clients
certainly don’t have a competency in, and don’t have staff currently
doing. Every one of our clients has a significant web infrastructure;
they have made large investments there. They have tried email
initiatives. And some of those are obviously successful and ongoing for
certain populations where they have the email addresses, and where they
are not delivering protected health information in emails. So what we
have really started by doing… Is delivering something that they just
didn’t have the competency or didn’t have the infrastructure in house,
to do in any scalable, high quality way. And, but your point is well
taken. As we develop more and more information around what is the best
way to drive behaviors to populations. And as populations require
information more than having information pushed to them, you know, as
there’s more urgency around information, you think about your mode of
communication a little differently. Because there will be a pull for
the information rather than a push.Right now we are still a
little bit in that push mode because the interests are more heavily on
the side of the provider of information than on the consumer of
information. I think that is changing, I think it will change in the
next few years. And that allows you to think a little more broadly
about the modes. Something we are absolutely thinking about and a lot
of the core intelligence that Silverlink builds about how behaviors are
best driven, is mode agnostic. So, yeah, I think you will see as we
move into the next few years, that Silverlink will provide the current
disciplines but will be more mode agnostic over time.

Matthew:
Well, that is interesting. So, just to wrap up Stan, give me a couple
of data points as to where you guys are in your development as a
company. You mentioned last time you had around 80 people and awhile
back you raised around $14 million in venture capital. Give me a sense
of your growth rate, any numbers you can tell me about, kind of, you
mentioned some numbers around clients. I am just trying to get a sense
of where you guys are in that kind of growth cycle and what you are
looking towards.

Stan:  Oh, absolutely. We have actually have a little over 60 people now but we are growing at 80%.

Matthew:
Sorry, I got my numbers mixed up then. I’m reading what I wrote down
last time and as most people know, I was writing down what you said,
that doesn’t mean it’s correct. [laughing]

Stan:
But we, you know, in ’06 we grew about 80% over ’05. We have been
around for a little over five years now. And we have about 45 and 50
customers. And those are really in the five segments that we talked
about: disease management, manage care, pharmacy benefit management,
and durable medical equipment or medical supply. And, so the pace of
growth of the company is obviously a, we are a high growth company. We
have, we are doing over 100 different things for health plans and all
the segments of our marketplace. And that grows continually, so it
really is an unlimited, you know, the problems statement of ‘when you
need to drive behavior, capture data, or educate populations’ you can
imagine how broad that problem statement is. So, obviously we are
continuing on a very high growth path.And I think the wind at
our back is the trend toward consumerism and the transformation of
health plans, or the healthcare system from B‑B to B‑C. And those are
sort of the macro trends, and in the meantime I think we are also
seeing with respect to automated voice communications, people have been
somewhat resistant to that over the past five years. And we had to do a
lot of missionary work in the early days. Today, there is much, much
less resistance. I think based on the fact that there’s been a
tremendous amount of operating success across many, many programs
across large populations. So we have called, we call tens of millions
of people a year on behalf of our clients. And it’s continually driving
high impact, and very high quality results. And people are not
complaining about these calls. They think about healthcare calls very
differently than they think about telemarketing calls. And that is
really critical. And frankly people do pick up the phone when their
health plan calls. They generally see that information as having much
greater importance to them than other types of calls they might receive
at home.

Matthew:
I think you are right. And especially given the amount we get called
these days on Election Day. I am always called on Election Day by about
27 famous politicians and the only issue is I’m a mail voter so I’ve
already voted two weeks before. [laughter]

Stan:  Well, you know what? I’m in Boston. We are expected to vote more than once of course. [laughing]

Matthew:  Well, I guess with coming to Chicago you couldn’t believe it even more. [laughing]

Matthew:  And finally, when did you raise that last VC round? When was that?

Stan:
We raised money last spring. We have done three rounds of venture
investment. And we are not looking for; we are not looking for more
investment. We are in a… We are high growth but we are also not
looking for more private investment at this point.

Matthew:
Well, I am just being cynical here because you can’t say this as the
CEO, but I can. But usually when there’s VC guys giving you some money
at some point they want it back for some reason. I don’t know, actually
they want more back. [laughing]
And that
typically means at some point that there is what’s called a liquidity
event one way or the other. I won’t ask you how close you are to that,
but…

Stan:  It is unusual, our guys said, ‘Here is the money. You know, keep it.’

Matthew:  Yeah, keep it.

Stan:  I thought it was unusual too.

Matthew:
Well, there was that guy in 1990 who took like $27 million from VC for
a fake company that had a fake video screen or something, I forget what
it was. He had “The Who” play at a big party in Las Vegas for him and
all the rest of it. And awhile later they noticed that there was no
technology, there was no company, and woops. But that kind of stuff
isn’t happening quite as much anymore sadly—probably happily, actually.
[laughing]

Stan:
You know, I’ve got, I think what’s… I am fortunate, I have very high
quality venture investors who see and share our view that we are at the
beginning of something that is very, very big. And that has tremendous
potential over the next several years. And, so we’re here and we’re
building a great company.

Matthew:
That’s great. And then finally of course, the last question I have the
ask you is you raised this before we went on, before the recorder was
on, is that, you now have, I’ll give you 15 seconds to defend Reggie
Herzlinger, Michael Porter, and Clayton Christensen and any other
Harvard Business School graduates who I may have defamed on THCB at any
stage.[laughing]
You don’t have to answer this.

Stan:
I think that all I will say is you are welcome on behalf of the
institution that provided the solutions to the healthcare issue.
[laughing]

Matthew:  You mean on behalf of Stanford? [laughing]

Matthew:
All right, OK. I have been talking with Stan Nowak, who is the
President and CEO of Silverlink Company doing automated voice outreach,
mostly on behalf of health plans. And we had an interesting
conversation about the current status of his company and the future
likelihood for more automated voice calls coming from healthcare
organizations. And I suspect the answer is there will be a lot more and
you can all be expecting to get one when you are sitting at home
watching TV or having dinner anytime soon. So Stan, thank you very much
for your time. It was nice talking with you.

Stan:  Thank you so much Mathew.

Matthew:  All right, take care now. Good bye.

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