December 29, 2022

Episode 150: Andrew Headrick, Founder & CEO of Kavira Health

Andrew Headrick grew up in the Western suburbs of Minneapolis. He grew up in a large family with quadruplet younger siblings, which meant he spent ample time in primary care clinics and waiting rooms during his younger years. Andrew attended Middlebury College in Vermont, where he studied Economics and Chinese. He has held various roles professionally, at Medtronic, at a local hedge fund, and most recently at Piper Sandler, an investment bank, where he completed 13 healthcare transactions worth over $4.3B. It was during his time at Piper that he realized just how badly the healthcare system needed to change. Andrew founded Kavira Health in late 2020 in an effort to make everyday healthcare more convenient, more cost-effective, and more accessible to all. Kavira has been doing just that – since its inception, Kavira has had thousands of patient interactions with a 9/10 patient rating, their patients have never paid a copay, nor have their patients ever had to leave their homes to receive care.

Julian: Hey everyone. Thank you for joining the Behind Company Lines podcast. Today we have Andrew Headrick, founder and CEO of Kavira Health. Kavira is simplifying healthcare for patients. They are a full service primary care clinic providing unlimited on-demand access to their providers via virtual care and home or house visits.

Andrew, thank you so much for being on the show. I'm so excited to chat with you and especially I'm personally fascinated about, you know, anything healthcare related. Any advancements in terms. Accessibility and giving people the care that they need. So it's, it's always exciting to hear about what features or things you're enabling people to get.

But also I think one thing is, is always exciting to me is it's the red tape of healthcare, which a lot of, a lot of founders talk about the difficulties in, in a really, in a legacy kind of industry. But I think it's so exciting in terms of the solutions that people are driving. So, but before we get into all that good stuff with Kavira, what were you doing before you started the company?

Andrew: Yeah. Julian, thank you so much for having me. I'm really excited to be on the show today. So, before starting Kavira, I guess if we, we go back five years or so, I spent several years in investment banking, which is effectively advising companies on how to run their businesses on how to buy and sell other businesses and how to raise.

So while I was at Piper, which is the investment bank I was at, I was really able to take a look under the hood in the healthcare industry and, and see how these companies are thinking about strategy. Spent several years there, got really good experience which I think, you know, gave me the intellectual understanding of, of, you know, what I wanted to do next.

I left Piper and started actually a different company. It was originally called Aura than called fia. with a co-founder and the idea was to basically truck in mobile dental equipment into corporate offices, set up in, in conference rooms and provide dental care in the office. And, and the whole idea was, let's make, you know, people know that, that getting dental care is really important for us.

but it's too inconvenient, so let's make it really convenient for people. Yeah. Of course, COVID hit and corporate offices shut down and that totally put a, the, the kibosh on that business model. And so I, I actually still think that's a great business model if someone out there wants to steal it and, and is comfortable with, you know, people are being back in the office now.

But about two years ago, a little more than two years. We pivoted I, I split with my co-founder and started Kavira Health. Yeah. And that, that was, that was the lead up.  

Julian: That's incredible. And, and obviously it's, it's hard to hear that Covid kind of disrupted those business plans, but it seems like, you know, the Kavira is really taking a leap in terms of providing that, that intimate and that necessary healthcare for, for their patients.

And what's, what was the inspiration behind, obviously, you know, you're, you were learning in Piper about the, the intricacies of healthcare and, and how they run their businesses and things like that. , but that doesn't mean you needed to, to bring people healthcare. What was the inspiration behind that accessibility and, and kind of following that I guess that particular aspect of, of healthcare?

Andrew: Yeah. There were two, maybe three real big inspirations for starting Kavira. The first is I grew up in a big family. I've quadrupled younger siblings, which means uh, four kids that were born all at the exact same. and, and I'm a few years older than them, . So, so as you can imagine basically on a monthly basis, one of the five of us would inevitably get sick.

My mom would pack all five of us into the back of her super cool 1990s green Dodge Caravan. She'd drive us across town to the clinic where we'd sit in that stuffy, germ filled waiting room. We'd probably cry obnoxiously. We'd have to wait for an, an appointment that was bound to start. You know, we then get 10 minutes with a clinician who prescribes medication.

We go across town again, sit in the, the line for a pharmacy to pay for it all their copays, insurance hassles, surprise bills. Yeah, it was a huge pain in the neck and it was really expensive. So from a really young age, I've kind of internalized just how inconvenient and expensive healthcare. So that, that's the first piece.

The second piece is, like I mentioned, I, I had that healthcare, investment banking experience and that gave me the intellectual understanding to realize that all the trends in healthcare have been moving in the wrong direction. People are getting sicker, costs are going up, life expectancy is going down.

If you look at the re or we're, we're losing our relationship with our doctors. And if you look at the reasons why people are basically, talking to our doctors is too inconvenient and too expensive. And so I, I kind of got the understanding for that from an intellectual standpoint while I was at Piper, while I was at my last job.

And, and then I, I think, you know, also the, the well, well, I guess I, I grew up in a family of, of business people and entrepreneurs, so my uncle. Started and sold two healthcare companies. My brother was working at a health insurance startup in Minnesota. That, that became a unicorn. We my dad was in the v on the VC side, so I've bid around this, you know, whole environment for, for a long time.

And I was one of those weird kids that, you know, knew I wanted to start a company from the time I was you know, 12 years old or something. So, yeah. Uh, That, that's really where the inspiration came from.  

Julian: It's amazing how you knew it the whole time. And, and it sounds like along the way you were just gaining momentum and experience and I'm sure just insights into, you know, how to, to take on a challenge.

I think a. Potential founders who don't become founders, you know, they, they end up stifling themselves because a lot, a lot of times experience breathes the next piece of opportunity. And it's just, and it's just that momentum that can carries you through, through an idea in particular and helps you kind of start and, and get going.

But tell me a little bit about er, how, how are you able to, you know, give people the, the full service, primary care kind of experience, but in such an accessible way that that honesty is just completely opposite? You know, I mean, my healthcare experience, I have to go to an office and figure out my provider network and do the whole song and dance.

And, and to be honest, I haven't done a good job at it. But , how are you able to, to do that? And, and what are kind of the, the boundaries to be able to do that? I'm sure there's probably things that, you know, don't wanna allow you to be able to give people such easy access, or maybe there's not, I'm curious to hear about, about your take on that.

Andrew: Right. Yeah. I think too many people's experience. Looks a lot like my experience did 25 years ago where we had to book days, you know, sometimes weeks in advance, drive across town in that stuffy, germ filled waiting room. Appointments start late you know, copays, insurance hassles, surprise bills, high cost.

I, I think that's the norm. And so part of what is helpful here is that the healthcare industry is messed up and , and there's a somewhat low bar in terms. You know, what we're trying to improve on. So how are we providing really convenient, really affordable care? Well, we se sell our service as a subscription to employers.

Employers pay us a per employee per month fee, and in return, their employees receive unlimited, completely free access to our providers. We provide that access. Virtually through an app on the, the employee's phone. They can call, they can text us, we can set up a video chat with a provider. And then next, if and when in-person care is needed, we're actually gonna send that clinician to the home and provide care in the living room in the home.

We can do essentially anything that a typical primary or urgent care clinic can do. So we can provide rapid strep tests, rapid flu tests in-home blood draws we can even provide in-home x. . And so we're able to provide, you know, this really convenient and affordable service from a business model standpoint.

The way we we do that is we've stripped out all the access costs associated with normally receiving care. So we don't accept insurance which is, you know, a middle man that, that eats up some costs. That's able, that allows us to keep our costs a little bit lower. We don't We, we don't employ doctors.

We employ nurse practitioners who in Minnesota have full scope of, of practice and, and are able to diagnose, treat, prescribe. We don't have a physical clinic location, so. There's no overhead you know, rent, there's no lease costs. Yeah, there's no you know, no janitorial staff, no utilities, any of that.

We've taken all of that away and we're able to provide that really convenient care via, via technology, essentially.  

Julian: it's, it's amazing to see kind of stripping away and, and keeping the necessary aspects of, of, you know, the healthcare services and, and, and what you need in terms of kind of just day to day and, and, and regular healthcare.

In, in regards to the the nurse practitioner experience, I'm curious to hear about what's, what's. Experienced with the platform? Are they kind of on call? How do they get the equipment? How do they get set up and, and active? Are they working multiple jobs? What does that network look like?  

Andrew: Yeah. Our nurse practitioners are W two s. They're employees, so they're not contractors, which means when an, when a a member reaches out to us. They're gonna be talking to the same providers every time. So our providers will start to develop a relationship with patients, which allows us to provide better care. Our providers. So in the traditional care system, providers spend about half their time providing care.

They spend the other half their time essentially filling out insurance reimbursement you know, admin forms because we're not accepting insurance. That that frees up a ton of provider. It also allows them to do what they want to do, right? Yeah. They, they signed up to provide care. They didn't sign up to be filling out forms.

So and then on top of that, our providers work from home. Our, our whole team is remote, which has really been enabled by Covid. Right. So our, our team is spread out across the state of Minnesota basically, and our, our nurse practitioners are working from, they're running telehealth from their laptop.

And then if and when in-person care is needed, that's when they, you know, they close their laptop, they have two or three bags of supplies. Yeah. They'll go to the person's home and provide care in the living room. And and, and I think providers really, you know, it's not right for everyone. A lot of people like the, the feeling of working in a hospital, like, you know, the camaraderie that comes with.

You know, that, that type of care or that type of environment, but a lot of people, you know, also want to get out of the hospital. Hospitals. You're typically on your feet for, for a long time. You're working weird hours. You, there's a lot of bureaucracy and we offer something different. People get to work from home.

They get. Work normal hours and, and they they, they get to see PE patients in their homes, which is font it, it allows them to see a different side of the patient and, and perhaps provide better care because of that as well.

Julian: Ah, it's so fascinating to see, you know, the change. And one, one thing comes to mind, and I don't know if this is a challenge you face, but how do you, how do the nurse practitioners kind of stay up to date with new practices or knowledge or, or stay within?

You know, I, I don't know if there's any regulatory updates that you need to be conscious of, but how, how is educating kind of your main supply, it sounds like almost like a two-sided marketplace, right? Connecting pretty much providers with, with with patients. And how do you. the, I guess the up the updates in terms of, you know, the nurse practitioners and what they have to do, or, or is that something you don't have to think about?

Andrew: Well, it is it's much the same way that a, a traditional clinic works in that respect. So we have resources, we have tools, you know, some software that our nurse practitioners can check and they can you know, that software gives us regulatory updates. It gives us updates on. RSV is, is spreading.

It's the flu is spiking. Covid is, you know, the, the the recommendations on how to treat covid or how to think about covid spreading or changing. And, and we get those updates through our, our software platforms. We also have advisors. So we have you know, doctors on our medical advisory board who, who we can reach out to, who have, you know, some insight that, yeah, that might help us provide better.

Julian: Yeah. And in terms of just, you know, it's fascinating. After Covid, obviously people are working more remote and, and, and are less I, I feel like they're traveling more, but, but they're, they're becoming devalue their, you know, day-to-day kind of time a little bit more effectively. What, what other trends outside of, you know, dispersed from a working culture have really helped kind of get co Kavira?

The me momentum that it's, that's done recently.

Andrew: Yeah. So totally right on the Covid piece. I think our society is moving on, moving towards on demand and delivered. You can watch movies instantly on Netflix. You can get packages delivered same day, next day via Amazon Prime. You can call an Uber to come pick you up.

You can get groceries ordered, et cetera. That is finally starting to make its way to healthcare. So I think that's, you know, our society's just primed for that. We, that's how we interact with the world today. So it only makes sense that that's how, you know, moving to healthcare as well. The next is the cost of healthcare continues to rise way outpaced inflation and, and it is really starting.

You know, be burdensome for ev you know, most Americans. And so, yeah, that is helpful. In a weird obscure, you know, in a weird way for us, because our whole goal is to provide more convenient and affordable care. And so people are starting to look for these solutions that, that solve that problem of, of high healthcare prices.

And you know, I hate that, that healthcare prices continue to rise. Because of that, you know people are, are starting to turn to solutions like Kavira. I, you know, I think that the rise of telehealth is a big one. People before the pandemic in astoundingly low number of people. had used telehealth, and today basically all of us have used telehealth and, and we've all become more comfortable with receiving care that way. And so that's a, a big one as well.  

Julian: Yeah. What, what are some of the, obviously you can't do surgery at home, I just don't think it's, yeah. an effective way of, of, of treating certain illnesses, but. What are some of the other limitations that, that you've seen that either just structurally you can't necessarily do now, maybe in the future, or something that you just generally can't touch? Like, like a surgery?  

Andrew: Yeah. I mean, we're never gonna be able to provide surgery. At least you know that that's not where our focus is. In the home as mu as much as I'd like to. But, but we're constantly expanding our breadth of services. So recently we've added behavioral health as a, as a solution to our members.

We've recently added those in-home X-rays. And we're looking at other solutions that would continue to expand that, that breadth. And, and what we're looking at is basical. What do people use a lot of what can we provide virtually and in the home and what you know, what's really expensive? What are those big cost drivers where we can help individuals save money?

Julian: Yeah. Yeah. And tell, tell us a little bit now that you have, the company has been up and running for a couple years now and, and what's been great about the traction you've seen recently within this year? And, and then also what's kind of the, the excitement about next year and and, and what you have and if you have any numbers to share.

Obviously we love numbers and we love statistics. So yeah. How's the traction been? And, and what are you excited about for the new.  

Andrew: So we started Kavira, we launched the service about two years ago. We launched direct to consumer. It totally fell flat. We signed up, you know, 10 people or something. We started selling directly to businesses and, and really got stonewalled there.

We, we were able to sign up a few businesses, but most of the companies we reached out to either didn't respond or they said no. And, and, and what we learned is basically most. add benefits through their employee benefits broker. So a little about a year and a half ago we had our first meeting with an employee benefits broker.

The reception was really positive. It did take some time for us to build up credibility. You know, I was 28 at the time and had never started a healthcare company before and this is a new concept. So I think people were looking at this like, very cool. But , you know, we'll wait and see. We're not gonna be the Guinea pigs for you.

And it's really been in the last you know, year that we've, we have that credibility. We, we've been around for some time. The model is working. We have client references. Yeah. And, and it's just started to take off. We're, we're sign up, signing up more than a client a week. And we've been doing that for the last, you know, six to eight months.

It's, it's been it's been exciting and, and now the next, you know, we're on onto, what I kind of think of is the next phase. We've, we found product market fit. How do we scale? How do we continue to provide a high quality service to our, our members?  

Julian: Yeah. It's, it's incredible the different iterations to just finding, it's not even product market fit, but it's almost like the, the right partnerships to be able to kind of get you in the door and get your product adopted.

Right. Distribution. Yeah. Yeah, exactly. And do those conversations what is it that you learned about the healthcare in terms of like, the providing system that was just, I didn't know that there were healthcare benefit brokers personally, . And also how do they benefit, what's their incentive to helping, you know, you get in the door with, with the client of theirs?

Andrew: Yeah. So , I didn't really either. I didn't. , employee benefit brokers are just such an important part of the healthcare system. They're, they kind of sit in the background and, but they know which services are out there and they know what employers need. And so they're the matchmakers that decide or, or provide the recommendations of what a company should add in terms.

Health insurance or their other health benefits. And so they play a really pivotal role actually in our health system. And I, I did not realize that until you know, a year and a half ago. One of the things that I've learned is that healthcare is a unique industry in the sense that the, the consumer is often not paying for the care.

So the consumer is you. . Okay. The pay, the person paying for the care is typically their employer. Their employer is making the buying decision on behalf of the employee, and they're making it in conjunction with an employee benefits broker, typically. And what they're buying is a, you know, insurance typically, and insurance is the one that is dictating how you consume the care.

So it's a very, you know, there's kind of a web and, and navigating that web takes. Inside industry knowledge to understand how that all works and what the incentives are for, for different groups. To answer your, your last question there, the incentive for the employee benefits brokers is, is one, I think that this, what we're providing is something that employee, employers and employees desperately need.

We talked about the high costs of, of he. Again, our whole goal is to provide really convenient, really affordable, everyday healthcare. And, and that is hard to find. And so that's something that employers and employees are looking for and, and we're providing that. And so you know, that's the big incentive for the brokers is that they're, you know, basically able to provide a, a solution for their, their groups.

Julian: Amazing. And, and how do you do. Would, would a, would a company buy you in tandem with a, like say a Blue Cross Blue Shield anthem, kind of another typical provider? Or are you a replacement? Where, where is it like, cuz I'm assuming, you know, some people may need more robust healthcare. Depending on preexisting conditions and things like that Yeah.

Where they maybe need a lot of or bigger network of doctors and things like that. So Yeah. Question is, do you work in tandem? Are you a placement or where are you kind of in, in the value chain for a consumer like myself, if I'm picking benefit plans within my employer.  

Andrew: Yeah. So the, we are not health insurance. And we always highly, highly recommend that the. Does offer health insurance. So we provide that everyday care coverage. The health insurance plan will typically provide the catastrophic care care coverage. So you know, if you go to the hospital, if you, if you go to any place to consume care, that is not our team you're going to have to pay for it like you normally would.

You're gonna have to use your, your normal insurance. And so there's really three types of employers that sign up for our. The first is really small employers that don't offer health insurance already, and Kavira is effectively a, a cost effective everyday care benefit for, for those employers. The second is employers that offer a high deductible health plan.

And so the high deductible covers the catastrophic care needs. C covers the everyday care needs, and you're able to offer a fulsome benefit for a lower cost. And then the third, and this is kind of a technical. Term, but our, the third type of employer is, is what's called a self-funded employer. And basically self-funded employers bear both the risk of their population and they, they get the upside.

So if their population is healthier or if their population is not going to the doctor as much. Self-funded employers actually benefit. So self-funded employers add Kavira is effectively a cost containment strategy. .  

Julian: What's some of the biggest risks that Kavira faces today?  

Andrew: Yeah, I, I think one of them is, we're scaling right now and how do we, just making sure that we continue to execute, execute, that we continue to hire the right people, that we continue to do the right things, that we continue to make the right decisions as we grow.

I, I think that's a big one. The next is, The market that we're in, healthcare, I think has been kind of a stodgy industry for a long time, but especially with Covid, that that's changed over the last decade. And then especially with Covid, that's really changed. There's been a lot of money thrown into the industry.

There's a lot of innovative startups that are taking a crack at providing more, more affordable, more convenient. You know, a a lot of different there's a lot of different angles to come at here mm-hmm. , but people are really trying to disrupt the industry. And so it is a, a pretty hot space right now as we're all aware and com competition is, is is pretty fierce.

And so, yeah. How do we continue to stay relevant? How do we continue to make the right decisions? How do we continue to stay on top of the. So that we're doing a good job of, of providing care for our clients and, and the employees that we cover.  

Julian: And if everything goes well, what's the long-term vision for Kavira?

Andrew: Yeah, would love to. So right now we're just, we, we cover it's hard to know, but probably about half of the population in Minnesota, we could you know, they're not members today, but we could provide care to about half the population in Minnesota. So we have a fairly. Geographic reach within the state.

We'd love to continue to expand within Minnesota and, and eventually we'd love to go nationally with this. So you know, I think we've proven out that the model works in Minnesota, and let's start to bring this really convenient, really affordable care to the rest of the country. What, what, what will it take to get there?

Just continuing to about one foot in front of the other, continuing to. Continuing to do the right things and, and then I think we've, we have the right relationships. We have those distributors in place in Minnesota, and then how do we choose the right next market and the, you know, market two through five after that.

And then continuing to choose, you know, markets that, that are amenable to this new care model and distributors that, that will help us.

Julian: Amazing. A as a founder, I, I was personally, how do you kind of get through the ups and downs and, and you know, the challenging things that, that take, you know, building a company mentally it, it, I don't know if there's advice that you'd give another founder but right now I, I don't believe you have a co-founder.

So, yeah, that there's a kind of a Batman robin. Set up there with a lot of those relationships. I personally have one. I would love to think I'm the Batman, but I'm the Robin, unfortunately. . But no, but all in all, just just, you know, outta curiosity, what keeps you motivated, what keeps you reinvigorated and continuing, and honestly, what, what do you do to recharge and, and kind of, you know, stay on top of your own.

Andrew: Yeah. Well, I'd be lying if I would say it was if I was saying it was easy or not stressful. It is hard and stressful and it's a constant challenge. And I, and I think that's true of, you know, any entrepreneur or any business leader. A lot of it is, you know, just making sure that I'm taking care of myself, making sure that I'm eating well, that I'm taking care of those relationships that I have with my family and my friends.

Making sure that I, you know, go on walks and, and think through things. I, I write a lot just to make sure I get my thoughts out on paper. Try and work out when I can, cuz I, I feel way better when I do. Yeah. Uh, I listen to a lot of podcasts, a a lot of audio books and, and that I think, you know, helps.

No, I don't have a co-founder, but I think that helps me think through. And then I also, I have a lot of mentors that I, I talk to that I bounce things off, off of. You know, I, I talked about how my whole family has been in business and in the startup space, and that's been just incredibly helpful. I am really blessed there.

Julian: Yeah, it's, it's awesome. And I think a lot of founders talk about, you know, the network and, and then and the different, yeah, the different ways to just like, take your attention onto something else, just for even the, the moment to relax the mind on, on what you're working on. And it always reinvigorate maybe even a new idea or a completion of a previous idea that wasn't complete.

It was always cool quoted to ask, what strategy do you deploy? If you weren't working on Kavira, what would you be?  

Andrew: Oh man. Probably back in, in finance is, is my guess.  

Julian: Yeah. I love that. And what's particularly hard about your job day-to-day?  

Andrew: So what's weird about being an entrepreneur, I think or unique, is that you don't have a boss.

There's no manager. There's no one telling you like, this is the to-do list. This is what the plan is, this is, you know, what, what needs to get. I'm the one that, that is making that up as I go. Yeah. I need to, you know, analyze the market, talk to our our customers, talk to our members, and make sure that we're providing something that is continually valuable.

And, and then, you know, if we're not, or if there are areas that, that we can improve on, I need to be the one that is putting together that blueprint and the next steps for, for how to do something. Now that is not to say I'm, I'm not trying to take credit here. I also have an amazing team that is incredible in, in so many ways.

They, you know, they're, they're great to to also they're, you know, talking to our members and they're getting ideas and, and they're adding services and, and helping us to provide this high level of care. But I, I think that's, you know, from my point of view that that's probably the hardest is just how do. , how do I come up with those ideas for myself and then how do I, I sit down and execute them?  

Julian: Yeah. Incredible. And, and I appreciate, I know we're close to the end of the show and I always like to ask this question, not only for this next question for selfish research purposes, but also for the audience as well.

Whether it was early in your career or now, what books are people are now, even podcasts have influenced you the most?  

Andrew: Oh man. Yeah. So many good ones. So for books, My favorite book is Atomic Habits. Have read it a couple of times. You're nodding your head. Have you read Atomic Habits?  

Julian: No. No, I've, but I've heard the recommendation so many times that I'm gonna find the audio book on, on YouTube probably it's a good one.

Andrew: Yeah, the, the premise is basically that our whole life, our, our life trajectory is made up of the little habits that we have, good or bad. And so how do we make those good habits really easy and enjoyable? How do we make those bad habits really difficult and, and unenjoyable. And if you can just, you know, continue to make a little bit of progress every single day.

That really adds up. Your, your trajectory is gonna be pointed in the right direction and, and you're going to, you know, over the course of months or years or or decades of, of doing these good things and making sure that you're not doing those bad things that are setting you back you're gonna see huge progress.

And, and that's, that's been a, yeah. The, that totally changes the way that I think about the world, the way that I think about the, the things I do on a day-to-day.  

Julian: Amazing. Well, Andrew, I know we can go into so many different topics, especially within healthcare and, and building and scaling and growing, but we're, we're here at the end of the episode and I'm, I'm gonna have to do a version two of a lot of these episodes, cuz I think there's more things to discuss.

But last little bit. If, I always like to give our guests a chance to give us your plugs. You know, what are your websites, where are your LinkedIns, your Twitters, where can we get involved and, and be a part of the mission? And, and if, if I'm a, if I'm maybe a VC or, or somebody who wants to work with you, where can I, where can I reach?

Andrew: Yeah it's all Kavira Health, so K A V I R A Health you can reach us on, on our website, kavirahealth.com, LinkedIn, Kavira Health. We have an Instagram and, and Facebook as well. So yeah would would welcome any, anyone reaching out.  

Julian: Love that. Well, Andrew, I hope you enjoyed yourself and thank you again for being on the podcast.

Andrew: Thank you so much, Julian. Really enjoyed it.  

Julian: Of course.

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