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Becker’s Healthcare Podcast
Dr. Stephen K. Klasko, MD, MBA, Executive in Residence at General Catalyst
00:31:04
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- [00:01]
Scott Becker
This is Scott Becker with the Becker's Healthcare Podcast. Thrilled today to be joined by one of the most interesting people in healthcare who's having and has had a remarkable leadership career. We're joined today by Dr. Steven Klasko. Dr. Klasko currently serves as an executive in residence at General Catalyst in Silicon Valley. But he sort of has made his name in. He's a physician by background. He has served as CEO of two incredibly successful systems, the last one being the Jefferson Health System, where they grew under his leadership from a relatively small system to one of the great, great large systems in the country. He's had an incredible impact. We're going to talk to him today about AI, what's real, what's not real, what's working, what's not working, and sort of some of his thoughts on sort of this divide between health systems and, and sometimes the technology companies are trying to serve our systems. Dr. Klasko, can you take a moment and just tell us what are you most interested in now? What are you most focused on currently?
- [01:08]
Dr. Steven Klasko
So, first of all, Scott, it's great, great, great to be talking to you again. And I just want to say, just as a background, that I loved the last Becker's article about the old math and what's wrong with it. So what I'm concentrating on in my sort of horse whisper between the traditional health care ecosystem where I give most of my talks and where I work now in Silicon Valley and the folks that are really trying to transform that is trying to bring those two worlds together and really look at things that, that are transformative. I just, just real quickly, before I started at Jefferson, I was thinking about the math thing. I gave a talk in Aspen and the speaker before me was Austan Goolsbee, President Obama's Head of Council Economic Advisors. And he said the two things you don't want to be running this is in 2013, for the next 10 years, because the math doesn't work and the leaders are clueless are academics and healthcare. I was a second speaker and I said, damn, I just took a job in academic healthcare, so obviously don't listen to anything I'm saying. So. So I think the things I'm most excited about are the ones that are really looking at transforming what have been intractable problems. And some of that is around payer provider alignment. And you folks have talked a lot about that. A general catalyst. We have company called Certify, which is revolutionizing how docs and insurers can get together in that way. As far as having the docs be certified instead of eight weeks or six months into three days. We have a company that's looking at preos and prioros and really trying to solve that and not have us blame each other. So I think that's one thing that I'm really excited about. The second thing I'm really excited about is really looking at the real health inequities in areas like clinical research. At the end of the day, if you are in mid Florida and you have a lot of money and you need a phase 1b clinical trial, you know, you can, you can fly out to Houston, you can fly to New York, but if you don't have a lot of money, you're probably not getting that trial. And that's not because your oncologist isn't great. It's because you don't have the infrastructure. Ken Frazier and I, the former CEO of Merck, are both on a board, a company called Paradigm, which is literally again transforming that not only just the United States, but globally. And then the third is one that you folks have talked a lot about. It's, that's really, really advanced in almost a scary way is the whole conversational AI pieces, things like Hippocratic AI and ellipsis, both of which I work with. But Rachel the AI nurse and getting back to your article about the workforce, making sure that folks aren't scared of that because it's getting so darn good, but also recognizing it's what nurses have always said, look, let me get back to what I went to nursing school or medical school for and make sure that that's the case. And then the last one is I had been on the advisory board of IBM Watson when they were going to replace radiologists, which was a joke and IBM Watson got sold for parts. Now we're working with companies like aidoc, which actually came out of Sheba Medical center in Israel where I also work and now is one of the GC invested companies. But aid doc is saying, hey, radiologists are great, ER docs are great, but they're right 95% of the time. We're going to have conversations with them in a way that lets us get them from 95% to 0 defects and we might learn stuff from them as we move along. So those are just four examples of non incremental changes that in my current role I get to pick and choose who I want to hang out with and things that I think will really, really make a difference. In that math that you talked about.
- [05:08]
Scott Becker
In talking about this issue on the oncology Side I feel like you and I must be constantly running into colleagues and friends and people that can't get into a clinical trial. We're having trouble getting matched into clinical trial and for a million different reasons. Can you talk a little bit about that? Because that seems to be, I don't know if it's a certain age that we are where we see so many people that have life threatening cancer diagnosis trying to get into ultimately, yeah, a clinical trial and you know, it's just that hope that they could do so and that seems so challenging to connect to the right one, the right people, the right situation. Any thoughts there, Dr. Klasko?
- [05:51]
Dr. Steven Klasko
Yeah, well, you know, I think we were like a lot of things, we were sort of stuck in the 90s or we are sort of stuck in the 90s, you know, with a very layered system to get into a clinical trial. Right. So you know, Jefferson has a comprehensive cancer center and we would say, gosh, we need to find, we're working with a pharmaceutical company to find 50 people with this kind of cancer and this autoimmune disease because we have a phase 1b clinical trial for pancreatic cancer. Let's say literally every different health system has different ways of getting through the IRB and different ways of matching people. We're really in the pre Internet era in some ways of how we deal with that. And meanwhile so many of the pharma companies and so many of the great comprehensive centers are stuck in their own vertical mode. What Paradigm is doing, just as an example, is basically working with pharma, some of the great cancer centers and then also places like Florida cancer specialists, which are like 180 community oncologists in rural Florida and say, hey, you know, the whole idea is to get as many people on these clinical trials as quickly, as inexpensively as we can. And has literally taken things that might take six months down to six days. And you know, it's a little bit like the layers that we see when we talk about GLP1s in the United States where we talk about PBMs and the different things to get your GLP1. That's same kind of things happen in clinical research and paradigm using some AI and some partners, creative partnerships are really breaking through that. So the fact that, you know, Ken Frazier was the CEO of Merck and myself, that was the CEO of an academic medical center with a comprehensive cancer center and Hemantanasia is the CEO of General Catalyst, are all on that board are the kind of things that can.
- [07:55]
Scott Becker
Create that kind of transformation I mean, that's an amazing. That's an amazing.
- [08:01]
Dr. Steven Klasko
Yeah. The former CEO of American Cancer Society just joined that board also, which brings a whole nother.
- [08:08]
Scott Becker
And take a moment about the sort of the Voice efforts, the Hippocratic AIs of the world, those types of efforts. What does that look like and where does that fit into healthcare systems and at what point will that have an impact on doctor shortages and so forth. You mentioned the radiology issue 20 years ago. We thought we fixed the radiology issue through telehealth, teleradiology and people thought for sure that was going to be fixed entirely through machines reading stuff. And it's not been the case. We're now again short radiologists and interventional radiologists. What is the long term vision for the Hippocratic AIs of the world and those types of companies that are doing voice in place of nurses or doctors for communication? What does that look like?
- [09:03]
Dr. Steven Klasko
First of all, in two very different ways, Hippocratic AI and Ellipsis Health are both companies I'm working with. But the technology, Scott, has literally over six months, even just gone crazy as far as how good it is. Rachel, the AI nurse and Hippocratics, Hippocratics portfolio literally can go through with one of their customers when the temperature went up to 110, go through everybody over age 75 who's got chronic diseases and call every one of them. And by the way, can literally get to the point of, you know, the patient might say, well, I was thinking of taking my, my granddaughter to Chipotle because it's her birthday today. And Rachel will immediately say, you know, it might not be the best plan today. It's 110 degrees, by the way, you have diabetes. And Chipotle might not be the best option because, you know, because of that. And here's four restaurants close to you that you could consider. I mean, that's how good it's gotten. Ellipsis is a very different company that started in mental health with voice biomarker technologies that could go and literally determine who was going to get more anxious and more depressed and now is literally being able to evaluate voice at a very, very different level for a variety of predictive roles in healthcare. And then there's a third mental health company called Noroflow and here's really an interesting fact that about 35%, and they wrote this up of people who have committed suicide have seen their primary care doc within the last six months. So this is another predictive model around who's getting worse in the mental health piece. So literally, I think it's going to be a huge positive for nursing workforce shortages and doctor workforce shortages. As long as we can get over ourselves. Right? I mean, and you know, we're trying to work the American Nursing association and find the right field goal, the right amount of regulations, so Rachel isn't doing the wrong things. And I think the same thing is true when we talk about what AI can do with docs. What I love about AI Doc is it will allow there to be less dots overall because it can complement what the humans are doing, but it's not replacing what the humans are doing.
- [11:36]
Scott Becker
No. Exactly where do you see? You and I started the discussion with talk about shortages and challenges, and you need to know somebody to find somebody to find the right specialist. Is there any hope in the future or is our country sort of going to be stuck with, we've only got a million Doctors, we got 340 million people, and we're no longer to get care from doctors like we used to? What does that look like to you over the longer run? Are we dumbing down the labor force while trying to replace some of it with technology tools? I mean, can we. That doesn't seem to be a complete answer, but where do you see this?
- [12:16]
Dr. Steven Klasko
So, Scott, one of the things that you've really pushed and I have also, is we keep talking about the problems. At one of the last Becker's meetings, I did that quote from Jason Kidd. Went to Dallas Mavericks, and they were 24 and 52. And he said, I'm going to turn this team around 360 degrees. I laugh because I've been going to conferences for 40 years and we talk about the same problems. I think the key is the answers to the question you're asking are in our grasp. We just haven't wanted to do that. In your article about the math not working, Molly brings up the fact that we have this shortage of primary care docs. Well, of course that's the case because we pay our orthopedic surgeons and dermatologists and neurosurgeons, in some cases, 10, 15 times what we pay our primary care docs. But we want our primary care docs to be the quarterback for the system. As, as, as my head of primary care said at Jefferson, you want me to be the quarterback, but you pay me like the kicker. So, you know, and, and why is that? It's. It's based on a legacy system that, you know, literally cutting out a small mole is worth a few thousand dollars, but talking it to a Doc to talking to a patient for an hour might only be worth a few hundred dollars. So some of this is how we pay our docs. Some of this is looking at innovative ways of loan forgiveness for folks that go into primary care like almost every other country does. So we love to talk about the problem and we don't look globally at how other folks have solved that. In that same article Molly wrote, she said we're last as far as access. Okay, that's great. But we, we haven't looked at what other countries do, like loan forgiveness for primary care docs, like not having a 15 to 1 ratio of specialists versus primary care. And since CMS is our major pair, a lot of that gets solved. But none of that is in the big beautiful bill or in even some of the make American healthy again or frankly, in what the previous administration talked about. So we love to go around the edges, complain about what's wrong, but don't want to do the disruptive things that might affect somebody.
- [14:51]
Scott Becker
And what are those? I mean, right now there's all these studies. One of the ones that Molly said in the articles were 70,000 primary care short. Primary care physicians. Other people say 200,000 short. It just seems like an endless trek to get there when only producing 8,000 or 10,000 primary care doctors a year. That will never get there. So it almost feels like you almost give up and resort to primary care being done by PAs, nurse practitioners, technology and so forth, and put the money in specialist. I just don't know if there's. I don't have a good answer on it. And I wonder if you have a better thought on that. You know, can you really reverse the trend of how short we are? Primary care physicians? You know, I worry, as we all do in my primary care physicians, physician retires. Who am I going to find? Who's going to do it? Am I going to have a relationship with that person? I have to pay concierge for it. But it just seems like that, that. It almost seems like that battle has been lost already. And that may seem so negative. But we better have a specialist, because when you need brain surgery, you better have somebody. How do you view that, Dr. Glasgow?
- [15:49]
Dr. Steven Klasko
So I believe the solution is there. It's a matter of wanting to do it. So just as we're stuck in the 90s and things like clinical research, the American Association Medical Colleges is really stuck in the 90s as to how we look at medical school expansion. We've expanded medical schools, which is good, but, you know, Caribbean medical schools literally can can expand almost unlimited. If I wanted to expand my medical school at Jefferson or at University of South Florida, both of which I was, I was the leader of, have to do it in triplicate. It takes a long time to get, you know, that approved. Meanwhile, in the same AAMC meeting, we'll talk about the physician shortage. And then three, three agenda items later will be all the things you have to do if you want to increase your complement. That's number one. Number two, you know, as I mentioned, you know, there are things that we could do to incent folks to into primary care. The fact is that when I went to medical school, which was, believe it or not, in the 70s, there weren't that people wanted to go into dermatology. There are a lot more people going into primary care today. When I was at Jefferson, we have thousands of people applying to my dermatology residencies and only a few hundred apply because people graduating from a dermatology Residency will make 7, $800,000 a year. People graduating from primary care residency may make a couple hundred thousand dollars a year. They're both leaving with $250,000 worth of debt. So literally the kind of people that are going to primary care are people where that either, you know, finances don't matter or, or frankly, folks that just want to be able to get into an American residency. If you literally said anybody that's going to get into, go into primary care will forgive their loans, and if you said, if you're going to do a primary care residency, we're willing to pay you much more than if you're doing a dermatology residency, because we know when you get out, you'll, you'll be, you'll be making it up and you can, you can pay off those loans. But the acgme, the residency credit bosses, oh no, we have to pay everybody the same. All those things are stuck in a very, very, very old model.
- [18:06]
Scott Becker
You know, pick up on this point about, you know, how should we pick medical school candidates? Who gets in traditionally, lots of MCOTs, scores, grades, stuff like that. Not a lot of emphasis on empathy and compassion. The flip side is sometimes people, people feel we go the other direction very far. We totally disregard scores and grades and then we have people that don't pass the boards do some other things. Where is the right balance? How do you figure out who gets into medical school? We have such a limited amount of spots and residency spots.
- [18:37]
Dr. Steven Klasko
So, Scott, I think, you know, one of the things that I've really, really spent a good part of my research Life on is looking at what the position of the future needs to be and why we still accept medical students based on being able to memorize the Krebs cycle. And we're amazed doctors aren't more empathetic and creative. And the answer to that is to recognize that you need both. When I got my MBA at Wharton, Wharton had been the most comm. Basically quantitative mba. Everybody was a bachelor's in finance from Harvard or Yale. And they said, that's not the new leaders. The new leaders are going to need social skills, they're going to need leadership skills. So they basically segmented their class. A third were going to be those people and they'll go into hedge funds or whatever. Third are going to be people like me, which at that time was a chair for an OBGYN department at a community hospital. And a third will be, you know, a different kind of folks based on different criteria. We need to do the same thing. The fact is, at University of South Florida, I started 56 students of our 300 students that we chose based on self awareness skills and cultural competence. And at the end of the day they had reached the minimums for their science. But that's the way they were chosen. And here's what's so interesting about Scott. You know, one of the things we did was we took them to an art museum. We asked them, what do you see? There's a woman in a white dress, guy in a black turtleneck and a snake. It was an abstract picture, picture telling you. And well, it's telling me there's a woman in white dress, guy in a black turtleneck and a snake. Another applicant would tell the story and you might say, Steve, why does that matter? I've delivered about 1800 babies in my clinical career. It's pretty easy delivering unscheduled down. It's pretty easy delivering a normal 8 pound baby to a normal 28 year old. It's incredibly difficult delivering an unscheduled down syndrome baby. That first question will be, Doctor, what does it mean? That first applicant will talk about the 21st chromosome. The second applicant will talk about what does it mean? Means what does it mean in my image of a perfect baby? And we'll say, we'll get you again with other babies that are, that are beautiful like this and have you understand how to, how to parent this baby. The reason that's important is there will be a robot next to me, Scott, within three years that will be able to take a picture of that baby and be better than any doctor that's Memorized the prep cycle. So the question is, how do we start to segment our medical school classes? So we're getting some of those four zero amazing med cat folks that are probably going to physician science and research, but other folks that are just going to be great docs and use those tools and then we have to fundamentally change the curriculum. So we're not just doing biochemistry, anatomy, microbiology the first two years, but talking about some of the technologies, AI, etc, talking about health equity, talking about quality and financing. All things that literally get underserved in medical schools.
- [21:43]
Scott Becker
Yeah, no, I think this concept of segmenting and it really gets into a complicated issue of how you segmenting. You know, it's, it's the old adage, there used to be all these insults thrown at primary care physicians. Oh, they were this type of med student. They were that type of med student. So you end up with all this complications, you start to segment. And it doesn't mean we shouldn't do it, but it certainly creates all kinds of additional issues even if they're worth digging into.
- [22:08]
Dr. Steven Klasko
Yeah, and look, it's not easy, but the fact is if you start with what we're doing now is literally drastically underperforming and if you start with the fact that curricula and selection processes have incrementally changed while technology and our need for reducing health gaps and our need for workforce has literally geometrically changed than to not do some of those pilots like we did at usf. I always tell people when I think about obstetrics, we have Star wars technology for individual patients, but we're still stuck in a Fred Flintstone healthcare delivery and academic system. And that's because we haven't kept up with the technology. And by the way, in the current world I'm in which we should talk about, there's some of the same problems because in the current world we're still stuck, I think in a little bit of point solution world because what I hear from health system CEOs all the time is hey, we're tired of putting all the Lego pieces together for the point solutions, Steve, of the companies that you're representing. And I think having those folks look differently also of how they consolidate and actually create platforms becomes a whole really important piece for the future.
- [23:36]
Scott Becker
But this is a critical issue because from a point solution perspective you have this great divide that you've, you've nailed. Again, the entrepreneur is so great and create a brilliant point solution, but a health system doesn't want to deal with 5,000 different point solutions. So you've got that challenge for sure. More and more they want to deal with consolidators of those point solutions. And that's a lot of what General Catalyst and others end up ultimately doing. Because you just can't, a system just can't deal with too many different points. You can't deal with too many vendors. But you know, I, I've worked in several different settings as a lawyer at, at a large firm, as a business founder and entrepreneur. And you have this fascinating situation where certain skills that work in the first three years of law, for example, first three years of law, we need the four points, the people that are just brilliant and go through lots of stuff and get it analyzed really well and really intellectually after several years, it's great mix of people that can do that, but also manage people that could also talk and connect dots, not just be a great student, but be multifaceted in a med school. It sounds like you're talking about the same thing. It's just not the physician scientist, which might be the high GPA, high MedCap, MCAT person, but it also ought to be the person that could do multiple different things that, that could also deal with people. They can also be empathetic and compassionate. And it's so fascinating as we evolved to the same spot ultimately in the law practice and business practice, where it wasn't necessarily the valedictorian, it was somebody less of the valedictorian with great people skills and great connectivity skills that ended up being the long term, really most important people at some of these big organizations. And it's a fascinating perspective. Dr. Gus, can we turn it back to you? Sorry about that.
- [25:20]
Dr. Steven Klasko
No, that's great. And I think you're right. Look, if I was still president of the university or CEO of a health system, one of the things that I would do is I would have, you know, we have our clerkships for, for third year medical students and fourth year medical students. I would, I would have a clerkship at a Microsoft or a General catalyst or an A16Z, you know, and I would have a, I would have a clerkship literally around simulation. You know, we have all these simulations for folks. One place I work with the Sheba Medical center, they do reverse simulations where they actually have patients grade the doctors based on a simulated piece and then they do the same thing with the faculty. The technology exists for us to change the way we look at things, even quality. Scott, you know, I'm a private pilot and every two years I have to get my technical competence assessed. There's no doctor in the United States that has objectively gotten their technical competence assessed if they're my age, within the last 35 years, you know, and it's not. The technology doesn't exist. We have simulators, we could do it. We just haven't had the will to do it. And so, so many of these things, we haven't taken advantage of the technology that exists. But if I was still president, I would literally have every medical student do a clerkship and start that communication with the folks that are out there, the 28 year olds that are developing AI companies so they understand what we're dealing with, we understand what they're doing. That's what health assurance tried to do and I think is now doing it, you know, with, with the health insurance partners. When Hemant and I wrote the book on healthcare, A Manifesto for Health Assurance, it started with a latte in, in Palo Alto that we were just sort of kidding around of. You know, boy, it would be really great if a Silicon Valley entrepreneur and a CEO of an academic medical center had a baby. You know, what would that look like? Because we both come from, from different pieces. And one of the things I'm most excess, I'm most excited about what from my Jefferson time is we sort of created that baby. Our tagline was we're a 200 year old academic medical center thinking like a startup company. We had somebody from gc, literally all my cabinet, you know, Dan Goldsmith, and I'll give you an actual example which I think anybody listening to this from our healthcare system will appreciate. We were going through a budget and my chief growth officer said Steve, could you give us a couple million dollars? We think we could do some real marketing to get a half percent market share from our, our biggest competitor, which was University of Pennsylvania. And you know, that would have been digital marketing and advertisements and all the things that don't work. And about three or four agenda items later the person from GC Tendo said oh you know, we just did this survey and 15% of people that try to get an appointment at Jefferson don't get one either because they're waiting too long on the phone or they can't get an appointment timely, etc. And it took me like a few more agenda items. I said wait, wait a second. Timeout Chuck. You want me to spend $2 million to get people to go from our competitor to us, make a call and not get an appointment 15% of the time. So instead I gave that $2 million to Dan to create a digital front door. And I said, you Know when you can get that number down to like 2%, then we'll start doing the marketing to change the market share, that kind of understanding between the two worlds instead of just being a vendee and say, oh, here's a new company. And I spend a lot of time in my current world talking about, look, you don't have to merge, but here's a way. Here's three companies that are looking at payer provider alignment. Why don't you guys talk to each other? Because it's much easier for me to go to a CEO and say here's a problem I can solve as opposed to here's one Lego piece, if you add another two, maybe you can solve.
- [29:27]
Scott Becker
No. And that's absolutely fascinating. Dr. Klasko. Amazing what you're doing. I love catching up with you. It gives me such a better sense of what's going on at this intersection of healthcare and technology at Silicon Valley. Would love to have you back on shortly to talk more about what you're seeing and what you're most excited about. I always learned a ton in talking to you and congratulations as well. I saw recently on your spouse's success, I understand she's had great success recently as well.
- [29:54]
Dr. Steven Klasko
She was the we metalmatch.com in 2003. She was the associate publisher of Vogue. So when I, when I killed her career and she moved down to Tampa with me, I was the CEO of USF and Dean. But she's now, you know, really embarking on a, as a 72 year old on a modeling and acting career. So, so, so it's been great. And Scott, it's, it's always great talking to you. My new video which, which I'll send you is I come back from 2035. I'm the chief Digital Health officer for President Taylor Swift because the Swifties have become a political party and our healthcare motto is make it tailored and make it swift. Neither of which was true in 2025. And I hope to spend the next 10 years looking at with folks like you and the rest of the bankers team how we can make health care tailored and swift.
- [30:46]
Scott Becker
That is fantastic. Regardless of one's politics. A fantastic idea. Thank you very, very much. Thank you sir. What a pleasure to talk to Dr. Glasgow.
- [30:54]
Dr. Steven Klasko
Thank you.