HIStalk Interviews Jeremy Schwach, CEO, Bluetree Network

Jeremy Schwach is CEO of Bluetree Network of Madison, WI.

Tell me about yourself and the company.

I’m Minneapolis-St. Paul-born, so I’ve got those Midwest roots. I was born to an accountant and a microbiologist, and unfortunately, I didn’t get either of those skills, so I was forced into business. I found myself at UW, where I started my first company out of my dorm room. It was a bus company. That went pretty well and whetted my palate for the entrepreneurship journey. It didn’t really run in the family, but I had a very good support structure. I had supporting parents and they said failure was OK, which pushed me out of my comfort zone.

I got the first company running. Then I found this weird little software company out of Verona right out of UW. After a brief stint living in South Africa, I moved back to Wisconsin and started my career at Epic. I was there for about six years. After living out my non-compete at a large health system and understanding how hard it is to deliver healthcare, I jumped into this next entrepreneurial thing with co-founders and started Bluetree.

We today are about 250 or so people. We’re not that great at marketing, so people don’t know this, but we’re about 60 percent staff augmentation, specifically in the Epic space. But about 40 percent of what we do is what we call solutions, which is more around strategy. Clients come to us to ask, “We’ve got all this data coming into Epic. Can you help us make sense of it and maybe pull payer data in?” Or, “We know we can do a lot more and make our physicians more productive. Can you guys help us do that?”

Where we’re a little bit different is that we focus on Epic because we know it so well. We like to come in and help with figuring out what the plan is, the strategy, but then we get our teeth into actually getting it done. We always say that ultimately we want our result to be that we delivered something tangible that worked well for our client.

How do you differentiate yourself in that market where there are a lot of competitors?

We didn’t actually want to be a consulting company. We raised a little bit of friends and family. The problem we were trying to solve was that having worked at Epic– and about 40 percent to 50 percent of us came from Epic — we looked out in the wild and saw all of these different consultants, but there weren’t a lot of great consultants.

We thought technology could solve that, so we started as a matchmaking platform. Luckily I failed many times in life, so I knew after that didn’t work, there was still a path forward. We were trying to solve this quality problem. We built this matchmaking platform and went out to clients and said, “You can find the specific skill sets within Epic that you need. Everybody’s going to get reviewed Amazon ranking style. Pretty soon you’ll start to see who all the great people are.”

Potential clients said, “You kids know nothing. It’s a good idea. The transparency and quality problem is a real problem for us. But we’re not going to social network our way to consultants. Sometimes we need 10 people. If things are going great, we want to just pick up the phone and call you. For all those reasons, we’re not going to use your silly platform. But here’s all our needs.”

That was 2013. We learned pretty early on that the market wasn’t ready for a tech platform, but that this consulting thing could probably work. We just said, if we’re going do this like everybody else, let’s stick to our guns on the core quality piece in this area that we know really well called Epic. That was the differentiator.

With some dumb luck on timing, we grew really quickly post the big implementation boom, after everybody had Epic live and had to figure out, what do I do with this super powerful machine now that it’s up and running? Clients started saying not just, “Do you have a strong hospital billing person?” but also, “Our AR over 90 is spiking,” or, “We’ve got to figure out how to build managed care dashboards.” The questions started to change. That was the impetus for the shift to a more outcome-based strategy or solutions.

Half our company comes from the provider space, knows the business of healthcare, knows what it’s like working in a health system. Half of us come from Epic, so we know this tool really well and we’ll be able to maximize the power of it. That’s how we differentiate and have been able to continue growing over the last six years.

Sometimes hospitals only care about getting someone who holds a specific certification. How much of what you learned from your original iteration of letting customers rate their consultants did you apply to the way that you hire and place consultants at Bluetree?

It’s the big reason that we stuck around in the Epic space. We constantly have questions about, should we help Cerner clients or Meditech clients? What we found is we know the Epic space so well that we can use our network and feedback from our clients to help differentiate who’s the rock star. They say in service work that a great person is 10 times better than the median. That is precisely the reason we’ve stayed focused in the Epic niche. We feel like we’re able to differentiate that quality piece.

How has the Epic consulting market changed in the past two or three years?

Again, a lot of life is just dumb luck. Not a lot of people know this, but the only reason I picked Epic out of UW is because they were going to pay me $1,000 extra over Maytag. I very easily could be servicing Home Depots right now.

In terms of our trajectory, we found our footing in 2013 and 2014. There was still a lot of implementations, but you had some really big players that specialized in implementations. Therefore, a lot of our early clients had Epic live and were figuring out what to do next. We got a little bit lucky in that we were on the end of that wave, perhaps the downward slope, as optimization, the next level wave, took off. All of our growth is in what we call solutions. It’s managed services. It’s everybody trying to figure out, how do we do this thing much more cost effectively?

Epic is a really robust, big system. Five years ago, we weren’t seeing that a lot of clients were ready to outsource a lot of that. Now I think the opposite is happening. We see that growing pretty quickly. Then it’s all this stuff, all the buzzwords you read about. We’re on the ground working with clients to figure out, how do we make physicians — happier is not a great word — but how do we ensure that they’re able to get their work done the way that they perceive that they used to? What we’re finding on that particular front is that it’s not about squeezing in extra patients. Physicians are documenting and then going home and having dinner with their kids and then documenting again before they go to sleep. A lot of what we’re doing now is, we might not be able to squeeze in extra patients, but we can help you get more efficient. You’ve got this amazing system that frankly you’re probably not using to the best of its abilities. It’s those types of conversations that now make up the majority of what we’re doing.

What interesting things are you seeing clients do with the wealth of Epic data they’re suddenly sitting on?

Man, I wish I had a lot of cool stories. A lot of what we’re seeing is more foundational. You go live with Epic. You have a massive amount of data. As users start to get comfortable with the data, they start to ask the right questions. From there, you have to figure out, what’s the strategy so that we can iterate fast enough? A lot of our work is around that basic foundation. A lot of clients have data warehouses. They also have Caboodle. Many of them have visualization tools. A lot of our work is around the strategy of, how do we make sense of all of these tools? How do we help you iterate faster?

I don’t know if this is cool yet. I think the outcomes are going to be really cool, but even getting payer data back into the warehouses, back into Epic, is a relatively new thing. We’re seeing more and more clients start to work with payers who, perhaps not overly surprisingly, don’t all want to give up their claims data. Part of the work is figuring out how to work with the payer to get the data back, and then once it’s in Epic, that’s the opportunity to start using it. We’re seeing a lot of foundational type of stuff happening.

What are the most impactful things that you learned from working at Epic that affect how you do business now with your own company?

This perhaps isn’t controversial, but I cannot think of a place I’d rather start than Epic. We’ve grown from zero to well over 250 employees in five and a half years. I truly believe that without learning a lot of those fundamental lessons that I learned and we learned at Epic, I don’t think we would have been able to do it.

First and foremost, Epic does such a good job training their people. It’s not just training, but it’s giving people opportunity. One of the best technical people I worked with at Epic was a philosophy major. Epic just found a smart person and said, “We can use this raw talent and mold it.” I really respect that philosophy. We see some of our clients taking a similar philosophy — hire a lot of really smart people, regardless of whether they’re healthcare or not, and then introduce them to healthcare and train them on their processes and allow them to fail and learn. Epic was just so good at that.

I think the other thing they did pretty well is that the talent bar stayed high at Epic. That’s probably easy when you’re a small company, but it gets progressively harder as you grow. You have to be laser focused and deliberate about keeping that quality bar high. Epic used to say, get those A players. Get the best people. Those best people will figure anything out, regardless of the problem. Then those A players will find other A players, and you’ll be able to scale that way. You’re going to make mistakes. You’re going to hire B’s, and that is OK, but you have to fix the mistake. You have to grow those people, Because if you don’t, those B players make mistakes and hire C’s, the C’s hire other C’s, and pretty soon the A’s are looking over at the C’s and saying, “Why am I doing all this work?” and they leave.

Epic did such a good job training and was focused on giving people opportunity. Then they did a fabulous job, mostly through culture, of keeping the strong people there. I was there for about six years and it was just a remarkable experience.

Do you have any final thoughts?

Can I use this time to promote something unrelated? I don’t get a lot of opportunities. There’s a great non-profit I’m associated with called Year Up. They’re a workforce development program in about 15 cities. They’re trying to bridge the opportunity divide. There’s a lot of really talented urban, young adults who have raw talent and are looking for work. There’s a lot of companies with open, entry-level positions. They do a good job facilitating those connections. It’s about a year-long program where they’re taking these talented young adults and training them up to start a career in corporate America. There’s a big focus on finance and software development in certain regions, and there’s a push for healthcare. Northwell in New York uses Year Up interns and one of the Sutter hospitals uses them. There’s just an amazing opportunity to get really smart young people trained up in healthcare and do good while doing it.

If I get to reach any health systems that are interested, they should feel free to contact Year Up directly or reach out to me and I’ll connect them.