Healthcare Innovation Panel: How the Midwest is Becoming Healthcare's Next Hub

Welcome to Architect Health’s The Front Door Newsletter! In this newsletter, Architect Health’s Co-founder & CEO, Sohum Shah, interviews healthcare executives, founders, and experts on healthcare innovation, digital health, and preventative care. The goal is to identify pain points in these spaces and paint visions on how to address them, inspiring decision makers at traditional healthcare organizations.

Today's podcast and newsletter on healthcare innovation features The Front Door Newsletter's exclusive, first-ever in-person panel discussion with five remarkable healthcare leaders from the Midwest and Chicago:

• Rushil Desai, CEO of Aetna Better Health of Illinois

• Ryan Fukushima, COO of Tempus Labs

• Maureen Sullivan, Former CSO & CINO of BlueCross BlueShield Association

• Brian Whorley, Founder & CEO of Paytient

• Anil Saldanha, CINO of Rush University Medical Center

Special thanks to Drive Capital, Lightbank, Wilson Sonsini, and J.P. Morgan for sponsoring our TechChicago Week event!

Interview Key Takeaways:

• State of Healthcare Today: Address rising costs, workforce challenges, and higher patient acuity by focusing on ambulatory care and integrating behavioral health for a more efficient healthcare system.

• Healthcare x AI: Leverage AI to streamline administrative processes, enhance diagnostics, and reduce disparities, making healthcare more efficient and equitable.

• Digital Health & Point-Solution Fatigue: Prioritize integrating digital health tools to create a seamless patient experience and reduce point-solution fatigue.

• The Need for Healthcare Investment: Invest in scalable innovations that solve systemic inefficiencies, drive cost savings, and align with regulations to transform care delivery.

• Transforming Chicago into a Healthcare Hub: Collaborate across sectors, tell Chicago's healthcare success stories, and leverage local talent to position the city as a leading healthcare hub.

Listen to the Podcast:

• Spotify

• Spotify for Podcasters

• Apple

Rushil Desai is the President and Chief Executive Officer for Aetna Better Health of Illinois, which is third largest managed care organization responsible for over 370,000 Medicaid members in Illinois. Rushil is the market leader responsible for leading and growing the IL Medicaid business.

Ryan Fukushima is currently COO of Tempus Labs, scaling the company into the leader in AI-enabled diagnostics for precision medicine. Ryan has built Tempus from Day 1 to its IPO, generating results for hundreds of thousands of patient cases, organized over 250 petabytes of multimodal data and has signed $1B+ in deals across 90% of all big Pharma in oncology.

Maureen Sullivan advises innovative companies, venture capital, and private equity firms in healthcare as Founder & President of Balestrand Strategic Advisors. Formerly Chief Strategy and Innovation Officer for the Blue Cross Blue Shield Association, Maureen spearheaded initiatives to create efficiency, improve service, and increase affordability across healthcare stakeholders. She led the collective efforts to develop CivicaScript for affordable generics, BHI, and GeoBlue, the Blues’ expat company.

After 12 years as a hospital administrator with Boone Health, Brian Whorley founded Paytient in 2018 to revolutionize how Americans access and afford care. Under his leadership, Paytient raised $63 million and partnered with thousands of employers and payers to ensure care for more than a million eligible members nationwide.

Anil Saldanha is the Chief Innovation Officer at RUSH. He works at the intersection of public health, community health and delivery at RUSH driving innovation using technology. His team leads the Chicago Data Hub at the Chicago Department of Public Health for disease surveillance and analytics. He supports startups and venture capital to partner with RUSH on key institutional use cases including precision medicine, health equity and analytics.

State of Healthcare Today

Sohum: We’re well into 2024. What is the current state of healthcare today in your respective industries? What has surprised you and what are some trends you are tracking?

Rushil: On the payer side, healthcare is under significant pressure—rising utilization, increasing costs, and more members with higher acuity due to delayed care during COVID. This impacts Medicaid, Medicare Advantage, and hospitals, with inpatient utilization creeping up. We're tracking cost pressures, workforce challenges, and the need to ease prior authorizations for providers. There's also a growing focus on behavioral and physical health integration, health and social needs, and CMS 1115 waivers addressing housing, food, and workforce. Member experience is crucial; telehealth and digital solutions are making care more accessible, and AI is helping members navigate the system more efficiently.

Ryan: Tempus is deeply involved in various diseases, starting with oncology but expanding into cardiology, neuropsych, and immunology. The challenge in oncology now is treatment selection—how do physicians choose the best drug for a specific patient, even if they share the same cancer? This is where Tempus steps in, supporting precision medicine by helping physicians make informed decisions to improve patient outcomes. The concept of precision medicine is expanding beyond oncology, and we’re closely monitoring how fast innovation is happening in other fields. This will determine where Tempus can add the most value moving forward.

Maureen: The legislative focus on pharmacy costs is critical, and it's one of the few truly bipartisan issues today. This ties into the cost pressures Rushil mentioned and the innovations in pharmaceuticals. The big question is how to make these innovations affordable while managing specialty pharmaceuticals differently. What happens in Washington will be crucial, especially as the focus on pharmacy costs is likely to continue, regardless of the outcome of the presidential election.

Anil: The pandemic fundamentally changed hospital operations, including at Rush. It brought me to Rush, where we dealt with immense challenges, like collaborating with CDPH on using McCormick Place as a command center and setting up a data hub for disease surveillance in Chicago. We saw COVID variants emerging in real-time and responded quickly with whole genome sequencing. Last year, we faced a migrant crisis with 30,000 people in shelters and a measles outbreak with 65 cases, showing how hospitals like Rush were on the front lines, even if it wasn't in the news. Financially during the pandemic, Rush lost more than $200 million primarily due to state halted elective surgeries during the pandemic, which hit us hard. Now, as we emerge from these crises, the healthcare system is impatient to return to pre-pandemic levels. There’s a shift to ambulatory settings, with hospitals such as Rush, UChicago and Northwestern investing heavily in new outpatient centers, reflecting the changing landscape of healthcare delivery.

Brian: the space to watch over the next several years is the ability of a population to self-pay for care. When I started Paytient six or seven years ago, there was an academic understanding that financial capability is a social determinant of health—it affects everything: which insurance plan someone chooses, when and where they seek care, and how often. Now, that awareness is becoming more bipartisan and widely felt. We're partnering with major insurers, employers, and thoughtful local partners like Aetna to help give plan members, employees, and ACA members an increased ability to pay for healthcare, making it a standard of care. With new legislation taking effect on January 1, 2025, every Part D health plan will need to offer interest-free monthly installments for out-of-pocket pharmacy expenses. This will help smooth out payments and remove friction, enabling more people to access and afford care. Personally, I think the space to watch is how financial innovation can be integrated into health plans to help people more easily cover out-of-pocket healthcare costs.

Healthcare x AI

Sohum: How do you think AI is going to impact your focus area in healthcare? How are you leveraging AI today and how would you like to leverage it tomorrow?

Rushil: We've discussed the impact of the pandemic, but alternative models in provider enablement, payment, and claims processing are also key. Prior authorizations are a hot topic, and we're using AI for automation to ease the burden on providers. This includes gold carding programs and billing assistance for those managing both commercial and government healthcare plans. We’re focused on making the system easier to navigate, especially given complex rules like the CMS two-midnight and 72-hour rules. Efficiency improvements for both member and provider experiences are top priorities.

Anil: Hospitals are intensely focused on AI, particularly in areas like AI scribing, where technology listens to physician-patient interactions and generates clinical notes. This field is still evolving, with no clear winners yet, but it’s rapidly developing. At Rush, we've implemented AI in several areas, including using the Medtronic GI Genius device for early colon cancer detection and beefing up our access center with conversational AI and interactive voice response. There's also significant potential in AI for radiology, precision medicine, and addressing Chicago's health disparities, like the "death gap" between neighborhoods. Revenue cycle management is another area ripe for AI innovation, especially with new CMS Z codes that can impact hospital revenue significantly. For startups, understanding the payer mix is critical when developing solutions, as each hospital's needs differ.

Rushil: Building on that, the integration of Z codes and risk stratification into the payer space is crucial for care coordination and impacts both quality scores and revenue. Health equity is a major focus, and identifying social determinants, like homelessness, is essential. Addressing these factors can reduce unnecessary ER visits and improve care outcomes, benefiting both hospitals and payers.

Maureen: A McKinsey report highlights the value AI can bring in revenue generation and cost savings, especially in care and utilization management. AI's potential to address health disparities is particularly exciting, as it can make advanced healthcare accessible in under-resourced communities, both in the U.S. and globally, where resources like MRI technicians may be scarce.

Brian: Having spent two decades inside hospitals, I can tell you that the care delivery process remains highly manual. The sacred relationship between patient and provider is central to all healthcare. When evaluating AI investments, it's crucial to ask if the technology helps discover or accelerate new treatments, creates capacity for providers, or removes unnecessary friction. The goal should always be to optimize the moment between patient and provider, as that’s the most critical aspect of healthcare. There's a lot of hype in the market, so focus on what truly enhances this relationship.

Digital Health & Point-solution Fatigue

Sohum: Moving on to our next topic—how has the view on digital health, telehealth apps, and virtual-first care evolved, especially pre- and post-pandemic? The concept of point solution fatigue is highly relevant, especially now. What does the future hold, and how can we address the current fatigue in digital health?

Brian: Rather than having multiple apps that manage different parts of our lives, we should focus on empowering patients to take care of themselves and their loved ones, particularly in moments that matter. We aim to provide experiences that equip people with the ability to pay for care, giving them a renewed sense of dignity. This is especially important in navigating the complex healthcare system. Thoughtful employers, insurers, and providers recognize that the ability to pay for care is a fundamental social determinant of health. By broadening access, we can ensure more people receive the care they need, and providers are fairly reimbursed. This is the first step in improving the health system for everyone.

Maureen: Point solution fatigue isn’t new, but it's becoming more pronounced. Digital health will continue to flourish, but integrating these solutions to provide a unified experience is where the focus will be. When I was with Blue Cross Blue Shield, we used various methods to help plans sort through innovations, and now we're seeing more companies work to integrate multiple solutions. This integration is essential for making it easier for companies to deliver a cohesive experience, and I expect this area will see significant action moving forward.

Anil: From a health system perspective, point solutions are unavoidable due to the inherent complexity of how hospitals and service lines are organized. Each service line, whether oncology or cardiology, often functions like an independent business with its own specific needs. While we have system-level decisions, service lines frequently source their own specific solutions. This fragmentation means that digital transformation across the entire system with just a few solutions is unlikely. However, foundational platforms like Epic for EMR and Microsoft’s cloud environment transcend these service lines. Despite the fatigue, consolidation will likely occur over time, but for now, point solutions are the norm, and it’s essential to engage with the right stakeholders.

Maureen: This challenge is not unique to health systems; health plans face similar issues. In large organizations, different departments may have varying interests and priorities, making navigation crucial when advancing solutions.

Rushil: The member experience is key in everything. Telehealth utilization has increased 14x since COVID, but now the focus is on where it makes the most sense and how to maintain that utilization. In Chicago, despite many providers and expansion opportunities, gaps and disparities remain in various neighborhoods. Digital solutions must address these gaps and promote health equity. From a payer perspective, telehealth solutions need to be provider-based to drive continuous engagement and coordinate with existing care systems. We also need to consider value-based agreements and how these solutions support quality and risk gaps, as these factors are integral to the process and CMS incentives.

Sohum: Across many discussions with healthcare leaders, it's evident that the post-pandemic era has raised the bar for digital health and telehealth. Telehealth now has the potential to be a first point of care, particularly for individuals who face barriers to accessing in-person care, such as hourly workers or those without reliable transportation. It's becoming a crucial tool in leveling the playing field in healthcare.

The Need for Healthcare Investment

Sohum: Given the long sales cycles, market education, heavy regulation, and bureaucracy in healthcare, why should investors consider investing in healthcare innovation? What opportunities should they be tracking?

Brian: Healthcare is fundamental to human society, and its importance is undeniable. Since the dawn of time, healing has been a crucial aspect of human experience. Today, we are seeing rapid expansion in the possibilities of curing and treating diseases that were once incurable. While bureaucracy in healthcare can be frustrating, it often serves a purpose. It ensures that new ideas and innovations are rigorously tested and proven effective before being widely adopted. Investors should look for innovations that not only fit within the existing framework but also have the potential to address the systemic inefficiencies and challenges in healthcare. The key is to identify these innovations before they become obvious to the mainstream, balancing patience with insight.

Ryan: As someone who transitioned from a tech background to focusing on healthcare, I've become passionate about the field. Despite its complexity and regulatory hurdles, healthcare represents one of the largest sectors in the economy, with substantial opportunities for innovation. The U.S. healthcare system alone represents a $4 trillion market, with a significant portion of that being waste. The shift from paper to electronic records was just the beginning; now we have the technology to organize and make sense of the vast amounts of unstructured data. Entrepreneurs and investors should look for opportunities that leverage this data and address inefficiencies. The arrival of technologies like AI presents new avenues for solving long standing problems in healthcare, making it an exciting field for investment.

Transforming Chicago into a Healthcare Hub

Sohum: When people think of healthcare hubs in the U.S., cities like Boston, San Francisco, and New York often come to mind. What does Chicago need to become a prominent healthcare hub? What steps should be taken by founders, operators, academics, and stakeholders?

Maureen: Philadelphia is a city similar to Chicago, striving to become a healthcare center. They had all key stakeholders involved in their health summit, including health plans, hospitals, and government officials. In Chicago, there's a need to break down silos and integrate leaders from various sectors. This conference is a great start, but it’s crucial to link these discussions with decision-makers at major institutions to drive real change.

Anil: I’m optimistic about Chicago’s potential. One major issue is marketing. Chicago has a history of groundbreaking initiatives, such as early data portals and creation of new health companies like Tempus. However, these achievements are not widely known. We need to better market our successes and foster collaboration among institutions. For instance, Rush has worked with Tempus and integrated diagnostic data from Abbott during COVID. Chicago is home to influential organizations like the American Medical Association and HIMSS. We need to highlight these contributions and market them more effectively.

Rushil: Chicago’s ecosystem is well-positioned with its diverse provider landscape and legislative progress. The city faces specific challenges, such as provider gaps in different neighborhoods, which offer opportunities for innovation. With state funding and collaborative efforts addressing these problems, there’s potential for significant impact. However, we need to better tell our story and leverage these opportunities. There’s a strong appetite for innovation in areas like maternal health and behavioral health, and a concerted effort could position Chicago as a key player in healthcare transformation.

Anil: Additionally, Chicago has pressing issues like gun violence that affect healthcare. Addressing these complex problems, such as the repeated trauma faced by gunshot victims, requires innovative solutions and a collaborative approach. This highlights the need for focused efforts to solve critical problems and demonstrate Chicago's capability to drive meaningful change in healthcare.

Ryan: As a founder who chose to build Tempus in Chicago despite skepticism, I believe the city offers unique advantages. Chicago’s geographic location provides access to top institutions like Northwestern and the University of Chicago, as well as surrounding universities. These institutions produce high-caliber talent that is often drawn to Chicago, especially if they are offered exciting opportunities. Tempus has seen success in retaining talent here because of the impact we can make with our AI-enabled diagnostics. To strengthen Chicago's position as a healthcare hub, we need more experienced founders and senior executives who are willing to build and innovate here. Additionally, Chicago needs increased capital flow, both from local and external investors. Entrepreneurs should be encouraged to think big, rather than catering to smaller, local expectations, to attract significant investment.

Architect Health is a digital health aggregator, navigator, and vendor manager that makes it easy for health plans and their members to access virtual-first care solutions. Architect optimizes health plan RFP processes in a consolidated and comprehensive platform, reducing admin burden and costs. This helps health plans realize digital health cost savings opportunities - up to a 7x ROI. Architect's Digital Health Quality Index has vetted and scored thousands of telehealth solutions on efficacy, company reliability, and health equity. Co-founders Sohum Shah and Sidd Hariharan have deep expertise working with health plans and have built care management programs and aligned technology for Humana and BlueCross BlueShield. Architect Health is backed by Drive Capital, Entrepreneurs Roundtable Accelerator (ERA), Cherrystone Angel Group, Plug and Play Ventures, Service Provider Capital, and strategic advisors.

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