I think the long -term view, and we raised 44
million bucks, we're solving for that big of
a problem. The long -term view is around setting
yourself up to a sustainable arrival to profitability
that lets you solve a significant enough problem
that affects people's healthcare more so than
it does their lifestyle. And if you can do that
well, you'll get private pairs paying attention
to you. You'll get, of course, patients paying
attention to you because you're going to help
them live better. And then, of course, employers.
you know, and the path to scale for any digital
healthcare company, which is through B2B, will
also start paying attention. Hi, everyone. I'm
really excited to talk to Kareem today. I've
known Kareem for two years. I'm always impressed
by his diligent and inquisitive nature. We have
had countless discussions about healthcare. I'm
happy that I get the opportunity to share some
of them with you today. Kareem is the ex -CEO
and co -founder of MedNow. where he took MedNow
public at 150 million market cap after raising
$44 million. Thanks so much for joining me, Kareem.
Excited for this? To get started, let's dwell
a little bit into your childhood. There are things
we learned from our childhood which help us,
and there are things we have to at times unlearn
from our childhood. Just talk to me a bit about
your childhood and if you could answer the questions
I posed in that framework as well. Well, I had
a fairly I guess a child that had a lot of change
in it. I was born in Europe, and then we moved
to the Middle East, the Emirates specifically.
And I pretty much grew up there, at least until
I was about 15 before coming to Canada. And then
while I was in the Emirates, for whatever reason,
my folks They're both academics so they were
very attentive to the education that myself and
my twin sister in this case were getting. So
almost every two years we were changing schools.
So one of the notables probably about my childhood
is that I never really kept a very consistent
friend throughout it. It did eventually happen
when I went to... public schooling system for
a couple years and the friends I made in that
school are people that I still know today. I
don't know anybody from my other schools that
were, you know, just, you know, the nature of
being an Emirates is if you wanted to learn English
you have to go to a private school. So there's
not the same concept of a private school as you
would in North America. But yeah, anybody who
I would have went to school with in these in
that environment I I've totally lost contact
with so I don't know what that says about me
or what it means in terms of the context of education
But probably the one thing that was unique and
different between private and public was that
public schools were All boys or all girls just
by the nature of the country. And so there was
definitely a lot more of a camaraderie Aspect
to it. It was this idea that you know Boys will
be boys and things that you'd never really experience
as much in the co -ed environment that the private
schools, they're provided. And the other part
of it is I've always loved to put things together.
I've always been, and it's probably what inspired
me to be an engineer. So Lego and technique and
all that stuff. Also, I did a fair bit of selling
things. So I would find random things around
the house. set them up somewhere and try to sell
them. I had my little mini garage sales, which
eventually actually played into some of my entrepreneurial
itch, if you will. I've always fancied the idea
of selling something for a markup. And so even
going through university, I had a side business
on eBay. that was of the same context, just the
idea of making a product really appealing, buying
it at a great price and then selling it at a
fantastic markup, which is a lot what you get
to do in pharmacy. So, you know, kind of a full
circle moment for me for where I landed. Do you
think entrepreneurship is innate or can it be
taught? I think there's a certain aspect of it
that's innate. And then when I say innate, it's
more in terms of where you What experiences you
had growing up such your question around childhood?
I mean again my folks were academics, so they
weren't of the entrepreneurial nature but my
grandparents were mostly in trade and so I think
some aspect of that carried over into them and
Maybe that's what I picked up in terms of the
encouraging somebody to go and again You know
entrepreneurship a big part of is around selling
and having the comfort to sell things. So in
many ways, I think that I definitely picked up
from just encouragement. Yeah, that's something
you should do. I think if my folks were a little
bit more inclined to be pure academics, sort
of the traditional view of academics where just
go to school, get good grades, and that's all
you worry about. I probably would have landed
somewhere different. So that's the only aspect
of it that's innate. But the rest of it, I think,
is taught in experiences, whether it's in your
home or in your friends or eventually in your
career and your work experience. We had very
similar childhoods. I was in my 17th home by
the time I graduated high school. Yeah, it was
a lot of moving around. My parents were academics
and we moved from India when I was 16. It taught
me. how to be adaptable. It taught me to be very
comfortable with change, but it did have me missing
a sense of home and a sense of grounding. Do
you find that as well? And if so, how did you
find your sense of home and grounding? Yeah,
it's funny that the symmetry in our life is quite
shocking. I never knew that about you. Yeah,
I mean, I would say the grounding has become
was probably an issue when I was making the move
to Canada getting to know people here and having
friends that were in a lot of cases just also
immigrants like myself and so when I finally
made it to university I probably that's when
I was starting to feel a bit more stability in
my group of friends and so forth but then you
know shortly after university I was off doing
my MBA and Kingston, Ontario, and then upon returning
from there, I was on my way back to, I was on
my way back east heading to France in this case,
and I worked there for a little bit. So, yeah,
then back to Canada, but not to Toronto, to Alberta.
So there's, you know, there's always this movement
in my life throughout. And so it's not only until
very recently, when I got married, and now I
have two beautiful girls, you know, five and
three, that that sense of being grounded, I actually
find it in them. And then sort of the idea of
the purpose of being a father, if you will, to
really get that sense of security, that that's
a constant. That's very difficult to change,
you know, God forbid anything would happen, but,
you know, they're always gonna be there as long
as you're there. And I think that's probably
one of the ways that I really maintain that sort
of sense of groundedness. And then, you know,
others, I think I'm generally spiritual, so taking
the time to be grateful for what you have and
just being content with what you got. That also
creates a sense of stability and grounding that
I find quite helpful. Let's move forward in time
to starting MedNow. Talk to me about how that
idea came to you and how did you get the team
together and how did you launch the company?
So that's a very big question. I'll start with
the idea and how it came to me. So after spending
some time doing home healthcare, which was specifically
around the sale of medical devices to support
patients that have a sleep disorder called sleep
apnea, and more importantly, home oxygen, which
is the therapy of oxygen supplement to patients
that normally have a condition called chronic
obstructive pulmonary disorder, COPD, and what
really The challenge there was about bringing
these medical devices or these essentially flammable
gases that are compressed in cylinders to people's
homes, in this case all over Canada, where I
work in that business so that they can continue
to live as long as they can and maintain their
activities of daily living as well as they can.
What I was able to do after that was to join
McKesson in a strategy role. So McKesson is one
of the largest wholesalers and distributors of
pharmaceuticals in the world. I came in to primarily
support all that is retail banner programs, so
what McKesson puts out to retail pharmacies in
terms of a support program that has to do with
marketing, more principally buying the generics
that they use, marketing, and all the things
that relate to operating a pharmacy profitably.
So that was one focus of mine. The other focus
was specialty pharmacy, which is expensive drugs
that require a high -touch model of care, usually
requiring an intervention of a nurse or a case
manager and delivery to home. So there was a
certain parallel from being in the home oxygen
business to being in specialty. And then finally,
I was also quite involved in M &A activities.
Around the time McKesson bought Remedies RX,
there was the shoppers divestment of their assets
when Loblaws bought them. So I was involved in
leading some of these deals into the way they
were sold, either to members, in the case of
shoppers, members of McKesson's banner, or into
the acquisition of Remedies RX, in which case
that was the moment McKesson... officially entered
being a retail pharmacy operator and competing
with their own customers of wholesale, who at
that point were always uniquely the only consumer
of their wholesale services. So that was the
exposure I had to the community pharmacy model.
And throughout I just realized, even through
the Banner programs, there was never really much
technology. Everything was still very much in
analog mode. the pharmacist and the patient would
only be able to communicate when they're together
in the pharmacy, the pharmacist on one side of
the counter and the patient on the other. And
it's when I was really inspired to think, well,
there should be a way to to kind of advance this
to the mode of Amazon e -commerce, Uber dinners
and taxis and all the things that we started
taking for granted in terms of how everything
is available through our phone. And even at the
time, I pitched McKesson on a an app so they
can have a long -term relationship with their
patients, or specifically that their band members
can have a relationship with their patients once
they've left the pharmacy. And in the typical
large -corp notion, they liked the idea, but
they weren't willing to risk being the ones to
create it. So I decided I wanted to create it.
And that's the inspiration for MedNow. MedNow
itself didn't happen until a few years later,
two or three years later. But it was definitely
the bug and the seed that was put in my mind
at the time to recognize the opportunity there.
And what was the business model you had in mind
when developing this connection between pharmacists
and patients? So for me, it was around transforming
the pharmacy experience from being an in -person
only available on -premise and primarily in a
synchronous mode to being entirely virtual, permitting
asynchronous communication. and a real concept
of customer management in the sense of I want
to be able to see this customer throughout their
life cycle. Not just at the moment where they
pick up their drug and I'm as a pharmacist, I'm
dispensing, but from the moment they have a concern.
So MedNow had a telemedicine. function where
they would intake patients and process them to
whatever, you know, whatever the issue they might
have. A pharmacy prescription would be issued.
If the patient chooses, they can fill that right
at MedNow and then there'll be sort of a full
cycle where patient gets a prescription, goes
to our pharmacies. and then gets delivered to
them the same day for free. And then beyond that,
there was the follow up that was done via text
or video calls, which is something that most
pharmacies at the time did not have the facility
to do. And even beyond in terms of refilling
or having to see your doctor again. So there's
really just sort of a life cycle extension to
any of the customers that was totally different
than the transactional mode that patients had
experienced in retail pharmacy. That was really
the collective of the MedNow supply chain extension,
if you will, I think about it as a supply chain,
where it didn't terminate in the pharmacy interaction
where here's your white bag, read the instructions,
and call me if you need anything. So we really
wanted to create pharmacy as a healthcare hub.
And I think we succeeded in that, and MedNow
continues today with very much the same vision,
this idea of it being more of a hub for That's
a very accessible hub compared to, say, your
family doctor or your walk -in clinic to help
people navigate through what is a very complicated
journey, which is getting you health care and
a publicly funded health care system like Canada.
And how did you find your founding team? So it
was through my consulting practice that I was
essentially looking for clients. So after leaving
McKesson, I decided to go on my own and consult
in digital health. primarily around helping startups
that were targeting specialty -like medicine
or specialty -like technologies. So as an example,
I supported a company called Winterlight Labs
that had developed a way to determine your cognitive
impairment from no more than 30 seconds of speech
using a neural network that was trained based
on other patients that were scored on their cognitive
impairment. It was a very natural use of AI in
this case to just train it to determine the cognitive
impairment. Because alternative was a 30 minute
sit down with a nurse where he or she would have
to test you on things like would you know what
day it is, can you read the clock, and so forth.
So my consulting practice was heavily focused
on digital health. And in my journey to find
clients, I reached out to the president of retail
pharmacy manor at McKesson and he said well you
should talk to this guy and so that was the first
time I met with Ali Rehani and his partner Philip
Campisano and you know the three of us created
at the time MedNow as an extension first to Ali
and Philip's aggregator of pharmacies and then
eventually as a standalone body where I took
over as CEO. So it was a very interesting and
organic growth because they also haven't been
owners in pharmacy and entrepreneurs of pharmacy
could see the same opportunity that I saw while
I was at McKesson, which is there needs to be
a digital aspect to pharmacy. It's kind of a
dark age just to continue to do the same thing
as we were. Your undergrad was in applied sciences.
Why did you pick applied sciences and if you
had to do it all over again, would you pick something
else? That's a great question. I picked engineering
because I was very good at all things to do with
computer programming and I like to build things.
So I kind of put those two things together and
I thought engineering was the way to go. I have
no regrets around taking engineering as a degree
because it definitely taught me how to be very
analytical, how to take a very large problem
and split it down to small pieces and help solve
each of them separately and bring them back into
a sort of a mega solution that helps move forward.
What I probably really missed through my engineering
degree was all the time that I was trying to
figure out how EMI waves were traveling over
long power lines or you know, because computer
engineering is essentially electrical engineering
with an element of do you know how to program
microchips and you know how to program code.
That was essentially what was added on. So things
like software architecture and software engineering.
There's certainly the software engineering aspect
I really enjoyed. and some aspects of programming
chips and so forth but the electrical engineering
aspect which was a sort of a primer and a principal
part of becoming an engineer was interesting
but I've never had to use that information ever
again so for those reasons I would have wanted
to use that time instead to be focusing on learning
business and entrepreneurship and startups and
getting really exposed to the world of getting
a company going and seeing it succeed or fail
and being able to do that early on So maybe if
there was a degree that was an engineer, B .Com,
blended together, I would probably want to take
that. The alternative would have been to take
a law degree, because I think I appreciate what
law can do when it's used innovatively. In the
sense of, you know, IP law is an example of law
that kind of focuses on how to sort of channel
creativity in a way where the creators get their
rights protected and, you know, can profit off
of these. you know, the genius that their ideas
are. So something like that would have also been
probably quite interesting, because it also would
have quite likely exposed me to entrepreneurship
a little bit earlier. And did you build the product
yourself or did you hire a team? We hired a team.
So by the time I was running the development
at MedNow, I had been out of programming for
10 years or so. And not that I didn't know how
to code still. But I wanted to focus my energy
more on creating what was the MVP, including
being able to expose it to market in a certain
fashion, being able to set up the infrastructure
and the transformation of what is an on -premise
pharmacy to being a virtual pharmacy, which meant
it becomes a dark pharmacy, as in no customers
really should be walking in to get their services
on one side. And on the other side, being able
to do what I call the connectivity of a pharmacy
network, right? So our pharmacies in Toronto,
in Vancouver, in Calgary, in Halifax, Winnipeg,
Montreal, will always see Rashad as the same
person, Rashad Osmani as the same person, which
is very unlike the traditional pharmacy. When
you go to a shopper's, even if you go to the
one across the street, they won't know you. to
be the same person. So they'll have to ask you
to re -register your insurance, your address,
and all of the pertinent information for them
to be able to service you. And so if they can't
even figure out who you are or the fact that
you've already visited other shoppers, how could
they possibly be able to maintain that sort of
life cycle view of your malady, whatever it is
you're going through, so that they can... really
manage you properly, regardless of where you
are in the country. So if you're somebody who's
traveling on business, you happen to reside in
Toronto, but you have a lot of businesses in
Vancouver as an example, that person would have
found in MedNow an ultimate solution because
there was no reason why they would have to re
-educate the Vancouver pharmacy on what happened
in Toronto or vice versa. So that sort of infrastructure
play in and focusing on how to get these things
to talk. And then also the accessibility of the
pharmacy being that it had to be easy enough
to call because most people call pharmacies.
The idea of texting pharmacies, as much as it
is very convenient, was not in a standard buying
habit for a pharmacy customer. They normally
would just call the pharmacy. So again, in the
same way, I had to kind of familiarize myself
with what is a way to set up a call center that's
entirely virtual, that can have fall overs. So
when Toronto closes, Vancouver picks up and You
know that sort of thing or Halifax is the first
one up because they can catch customers at six
in the morning in Toronto time so these are the
facilities that virtual pharmacy can give That
a retail pharmacy can't and and finally central
filling which is a principal aspect of Being
able to do a virtual only pharmacy, which is
everything is delivered So logistics was always
going to be something that had to be figured
out. How do I get that? drug which if I were
to go to the pharmacy will take 15 minutes or
20 minutes to fill and be handed to me in some
acute cases like say you want an antibiotic or
something of the kind that required same day
administration basically that couldn't be that
okay you got me the prescription for an antibiotic
I'll get it to you tomorrow so the same day delivery
was a was another real logistical challenge that
I have to solve for that's why when you think
about the logistics the infrastructure, joining
pharmacies together, and all things to do with
what is a user journey that will be attractive
to a customer and marketing that user journey.
That took over most of my capacity, which necessitated
that I would have hired the development team
and even a lead to the development team so that
they can focus on making the technology work
while I kind of do all the other things that
I just listed. It sounds like you could have
done this a couple of different ways. It sounds
like what you did was a direct to consumer play,
but also a B2B play. What you could have also
done potentially, and I'm just thinking of this,
is have warehouses in a distributed fashion across
the country, but have a centralized pharmacist
or maybe three or four pharmacists to provide
the B2C. service of order creation and then fulfillment
and distribution and shipping can happen in these
decentralized warehouses. Did you think about
the two models? And then if you decided to go
on the D2C plus the B2B play, did you launch
with one pharmacy or how did you grow MedNow?
Essentially, how did you scale? Great question.
And I tell you, if I was able to do the latter,
the idea of having a small pharmacy team that
was centralized and did all the service while
the logistics were being handled in a distributed
fashion, that would have saved us a lot of grief.
The reality is in Canada, health care, as you
of course know, is provincially mandated and
funded. So that forces every health care body
which of course, as you know, to comply with
this provincial regulations. And so we wouldn't
really be able to or couldn't have a situation
where we didn't keep replicating the pharmacy
teams across every province, despite it being
true that Toronto, Vancouver were probably the
busiest pharmacies when we got started, but we
would have still needed to get a crew going in
Halifax, another in Calgary, another in Montreal,
because that was the nature of... you know, the
provincial management of our healthcare system.
You know, one of the things that we were able
to, however, do is in cases where there was a,
call it an intra -province treaty where, say,
Ontario can handle some Nova Scotia aspect of
practice of pharmacy. I'm not a pharmacist myself,
so of course, I don't want to speak to that in
any kind of detail, but the idea really is being
able to support Ontario to Nova Scotia or until
we got going, BC to Manitoba and to Alberta and
so there was just sort of the prairies and maritimes
sort of ways to get around the need to replicate
that but it was never going to be something that
you could do at scale because then there was
a need to demonstrate why you're servicing in
this case a Halifax patient out of Ontario on
a regular basis. So the replication was unavoidable.
However you know things like standard of care
that was discussed across all pharmacies, what
can we do to really improve on a diabetic's care
or improve on a hypertension patient's care and
so forth. Those were definitely opportunities
that we capitalized on because we were having
so many different great minds in pharmacy. We
have probably the best pharmacy crews in Canada
because they had to make as we did the adjustment
to the pharmacy and the way pharmacy was conducted
from in -person on -premise to being virtual
and cloud. You know that transformation was also
necessary for the pharmacist and the pharmacy
staff for them now to take orders virtually and
be able to speak to sometimes some of their patients
never see them and only talk to them on the phone
or by texting them. And so you know when you
kind of put it all together that was the reason
why the advantage of central filling per province
was still giving a lot of advantages around practice
improvement, if you will. And like, let's see
how we can make this a virtual experience that's
even better than the in -person experience. From
what I've seen, there's pharmacies doing this
for specific indications like hair loss. or Botox
or ED or things like that. And it seems like
they're targeting high margin medications and
not, you know, the moxibustion antibiotics because
there's not much money to be made there. Yeah.
But you took a different route. You were trying
to service every patient, it sounds like. Was
that a decision? How did that decision come to
be? And where Because you're almost opening pharmacies,
but you're also then bringing them customers.
What was your relationship like with the pharmacies?
Were they contractors or was it a profit share
agreement? Tell me a bit more about how you decided
how to grow this from the financial capacity.
So I'll address the last question first. And
just because it's a very short answer, we owned
and operated all of our pharmacies. So we didn't
want to get into a situation where we were creating
these partner pharmacies Some companies at the
time were trying to do the same thing but when
it's up happening is again because of the nature
of the regulation that that is around pharmacy,
there'll be things like, okay, well, who is liable
and responsible for that patient's care? Is it
you who has got the sort of interaction and relationship,
or is it the pharmacy that actually holds the
patient profile on their pharmacy management
system? And it always is gonna be the pharmacy
that has delivered the care and the owner of
the profile. And so that pharmacy now has to
be sure that it has... everything it needs like
it knows everything it needs to know around that
patient or off that patient to avoid things like
a contraindication, dispensement or anything
that would would potentially harm that patient
because they just didn't have a direct connection
to them. So we very quickly rejected that model
and said we're gonna raise the money. I raised
44 million bucks for MedNow through private and
public rounds to be able to own build and operate
all pharmacies on our own and really do everything
in terms of a supply chain from the moment of
intake via our app or website or what have you
in terms of the prescription or the medical order
all the way to its fulfillment delivery and follow
-up. So that was key for us to really be able
to be the controllers of a full customer experience.
It was a very expensive way to do things. I think
there were definitely, there's always going to
be an argument for advantages and disadvantages
to approaching it that way. Probably the only
thing I would say MedNow could have done differently
is become more regional power centers ahead of
going after the national deployment, which would
have been really, at the time, necessary because
we started really thinking about the B2B market.
So the B2B market, we started thinking about
national employers who are looking to add us
on as a preferred pharmacy. They'd much rather
have a pharmacy that can service all of their
employees, regardless of where they are in Canada,
than one that can only say, I can only do Ontario,
I can only do BC for now. And so, you know, you
kind of create an obligation, or at least a self
-selecting mechanism where only employers that
were just in Ontario or just in BC would sign
up to your preferred pharmacy network service.
So, you know, in retrospect, you know, sort of
hindsight 2020, as they say, our B2B market didn't
grow as quickly as we were expecting. There was,
you know, I'm kind of digressing here a little
bit, but I'll just take a minute because I think
you did talk about DTC versus B2B, but. When
you think about who makes the decisions inside
of an employer around workplace health or workplace
wellness for the employees, a lot of the time
it just lands into either HR or CFO office or
the financial office because or finance office
because they're the ones paying for the service
and they're the ones actually paying for all
of the drugs through the provision of these private
payer benefits. And so they are after mostly
Getting a better rate than dough rate, which
is give me something that's better on the markup
Which is usually a percentage basis that each
pharmacy charges based on who they have a relationship
with it with a payer and the dispensing fee which
is a fixed dollar amount that will change from
pharmacy to pharmacy and it's meant to to pay
for the effort of dispensements, you know above
and beyond the markup, which is where the Profit
is for a for a pharmacy and so kind of putting
it all together we We we had to convince HR and
finance that this is a great deal before convincing
them that this is actually really really good
for your employees because If we can manage your
chronic disease is better if we can get to them
to be more proactive with their health care All
of that is going to lead to things like lower
disability whether it's long -term disability
or short -term disability, it'll lead to better
productivity because people are showing up to
work well and healthy. And so they're going to
probably be more productive. And then just in
general, absenteeism is one of the other measures
of productivity in the workplace. if somebody
doesn't have to leave their office to go see
a doctor and then after seeing the doctor go
to the pharmacy and if that matter is requiring
them to if they have a specific drug that's not
generally available at every pharmacy they might
have to try drive a little bit longer to get
to it all of that was sorted because we were
able to do everything virtually and so you know
and we kind of were able to attack productivity
absenteeism and managing disability or at least
working on setting up a framework that would
normally affect all these things positively,
you know, that is a very different thought process
than how much money am I going to save on my
benefits budget. And so eventually, and another
why that's significant is private payers already
know that drug expenditure is the most significant
line on their expense list. Drugs are the most
expensive thing that our insurer pays for. And
a lot of times it's not insured by the insurer.
it's normally paid for by the employers. So in
a lot of ways, it's not really their problem.
But what they also try to do is restrict these
markups right at the point of adjudication of
the claims. They'll say, well, if you're a Sun
Life member and you come to a pharmacy, regardless
of that pharmacy, we will never pay more than
this markup. We will never pay more than the
dispensing fee. And so normally what happens
at the pharmacy level at that point is that the
pharmacist or the dispensing pharmacy would ask
for the difference from the patient. to pay out
of pocket and so you know in a lot of ways the
problem of cost was already isolated to a payer
to employer relationship and there wasn't much
more that we needed to do on it we were really
pushing for the fact that a virtual pharmacy
is better for a patient especially when you add
things like telemedicine nutrition and supplements
and all other things that met now did at the
time it does some of it today but you know at
the time in the 2020, 2021, and 2022 period,
it was a very broad service offering that had
to get scaled back a bit, just for multiple business
reasons. What would you change about Canadian
healthcare or pharmacy regulation? Well, this
is the kind of questions you get in trouble for.
What would I change? I say insist on patient
choice. We're so big on patient choice. We insist
on it in every way. if it's a choice of, a lot
of times it's a choice of pharmacy. That's something
I didn't know well because I was very close to
it. And it's one of the things that we consistently
were striving and ensuring is present on our
platform. Even though we had our own telemedicine
provision on the app, we wanted to make sure
everybody understands that they don't need to
go to MedNow for the prescription because that
would create a conflict of interest between the
two parties. So in the same way, patient choice
should be to allow somebody to have a different
say in which doctor they see and how they interact
with that doctor and whether they should pay
them or not. All these are choices that the patient
should have. And this idea that, well, let's
just address the pink elephant in the room. If
we say, well, private pay is going to cause a
brain drain. from the public side of the healthcare
system to the private side of the healthcare
system, I think that's not necessarily the consumer's
problem as much as it is the regulator's problem.
They need to put in place the measures that allow
free individuals, doctors such as yourself, to
decide where and how they want to operate and
how they integrate into the healthcare system,
the Canadian healthcare system. again, regardless
of the mechanism of how that gets managed, the
patient should have that choice. And, you know,
it's like there's one, two sides to every business
problem. There's a demand side and there's a
supply side. So the demand side could be to be
a bit more free. You create a supply problem
for sure. But then that's a problem that can
also be solved, you know, whether it's in allowing
foreign doctors to be more easily entered into
the system. being more efficient with budget
on health care provincially and federally that
you can allow the supply to, in fact, increase.
Because it's not always a question of whether
or not you're allowing a doctor to come in maybe
quicker than you would have prior. It's also
whether you should be able to pay that doctor.
And if you can't solve for that, which I find
hard to fathom, I'm not an expert in how that
budget would normally get split, then maybe the
private element and allowing somebody to, well,
if you can't cover that from tax revenue that's
been collected, maybe allow me as a customer
to pay for it because then I can all substitute
the loss of salary that this doctor today is
not going to be able to have because you can't
afford them because your budget doesn't permit
it. And so I think patient choice give patients
the choice, both in the provider and in the fashion
that you pay that provider, whether it's with
your health card that's issued by Canada or your
province or using your wallet. I think that that
choice will eventually be difficult at the very
beginning, but as it settles and the chips settle,
you'll get a different environment where, you
know, like anything, markets are inefficient
at first. they tend towards efficiency. So we
will get to an efficiency, but it has to become
inefficient first before it becomes efficient.
You think health care should be federal? I think
from a point of right access to health care,
yes, I think it should be, especially given how
small our population is relative to others around
the world. I mean, we have another complexity
in our healthcare system, which is just the broadness
of our geographic area. I mean, if you were to
keep it provincial or even worse municipal, you
might be in a position where in the same way
that actually is already the case. Certain municipalities
today, I'll give you an example that I'm very
close to. There's a little town called Georgina
that's just north of Newmarket that has approximately
45 ,000 people living in it. On the other side
of Lake Simcoe is Orillia. which has almost about
the same level of population. Orillia has a hospital,
Georgina does not. So somebody in Georgina who
is requiring urgent care needs to travel to at
least 45 minutes down to Newmarket to get to
South Lake Regional. or over to Uxbridge to Oak
Valley Health, which is another 45 minutes. And,
you know, and what it's happening is Georgina
splits the West, the people that live in Keswick
and around it go down to Newmarket and the people
that live on the East side go down to Uxbridge
and Oak Valley Health. So, you know, and that's
already in a federally managed health care system.
So I imagine if if the division of budget was
to become at, in terms of the collection of the
tax and the and the dispensing of it completely,
even at the level of municipal, it would completely
fail, because it's already failing in being democratic
and equivalent in the possibility of care for
every Canadian. It's not equivalent today. If
you were given $10 million to launch a startup
with the potential to be a unicorn today, what
would you do? It would be a supply chain. optimization
play that uses AI to shorten waiting times, connect
providers better in the healthcare space, and
make the patient experience one that's much more
coherent and cohesive with very prominent navigation
and advocacy elements that are supported using
that AI engine, where Decision support, which
is something that today AI is not allowed to
really do in terms of medical opinions, but any
decision support is better than no decision support.
I have some doctor friends that would always
tell me, like, it's not that I don't want to
see every patient. I want to see the patient
once I know what I need to know that could have
been collected by a nurse or by some other mechanism.
aka maybe a very very intelligent chatbot that
is AI powered and then I'm focusing on the aspects
that relate to what I know in my training and
my obligation to ensure this patient is getting
the best care possible also taking a lot less
time to arrive to the same conclusion therefore
allowing me to see more patients you know again
so by increasing that efficiency in the market
I'd want to be able to these doctors said I did
want to have that as as an outcome versus what
it is today, which is triage is not significantly
advanced compared to 20 years ago or 30 years
ago. And so everybody is being, everybody's a
nail and all you got is a hammer that needs to
change. So that would be, I don't even think
10 million would take you very far these days,
especially if you bring in the element of AI
and finding talent that can help you put it together.
But that would be my first inclination. My second
inclination would be much more simpler than that,
which is think about the source issue, which
is we're not able to bring doctors into the system
because of budget constraints. How can you solve
for that? What is Canada really known for? And
the plain, simple reality is around energy. And
that being a commodity that's quite valuable
and it's in a resource -rich country like Canada,
it's something that we have that others don't.
So it would be... 10 million bucks going towards
building a business that would optimize the supply
chain to allow Canada to be a better exporter
of energy. So something completely out of left
field, nothing to do with health care, but it's
about creating the revenue that this country
needs to bring up its infrastructure, to bring
up its health care, to do all of the things that
we wish our government could do today, but can't
because the only way they can do it is to increase
taxes, which they've already done, as you saw,
of course, with the capital gains tax. I think
it's really around thinking, again, it's a demand
and supply. Your demand is exceeding what you
have in terms of budget, which is the supply.
Find a way to increase the supply without alienating
your entrepreneurs and business people by raising
taxes, especially on business. So that would
be probably where I'd go, actually. I think healthcare
is much more political than it needs to be in
Canada. I think there's way too many hands in
the pot. I don't think... there is a clear leader
who really can move the needle on anything so
it ends up being this never -ending negotiation
that's very time -consuming and more importantly
very money -consuming and so we we just not likely
I don't think we'll see a conclusion on that
but energy and revenue to more revenue to government
I'd say that's probably got more legs The one
problem I see is healthcare delivery and healthcare
payment is decoupled in Canada. So you have Ministry
of Health, which essentially pays for all healthcare.
But then you have the hospitals fighting the
physicians, fighting the nursing homes, fighting
the retirement homes, fighting the community
centers. And when I say fighting, they are fighting
for the same pot of money. Exactly. You get these
different organizations as incentives are just
to maximize the money they get from the Ministry
of Health. And the Ministry of Health often just
gives the money to whoever has the loudest voice.
So there is providing good, efficient care is
nowhere in that equation. Optics are everything.
So one thought would be is the ministry should
be the pay rider. They should pay, but they should
also operate the facilities directly, not through
these middle men, for lack of a better word.
And what happens in this model is you get infinite
organizations fighting for that part of money.
So you have a lot of primary care advocacy groups,
patient advocacy groups, because it's just one
centralized part of money. I think a much more
efficient model is the pay by the model, which
is what quesa permanente is, to an extent, in
which the person paying for health care provides
it. And then they can also skirt accountability,
because the Ministry of Health skirts accountability
constantly, because they're not the ones delivering
healthcare, and they can say, per capita, we
spend enough. And it's not my problem, healthcare
isn't delivered, but it's the problem of all
these local decentralized organizations, which
makes accountability much harder because it's
distributed. There's no one vectoring. It's multiple
necks and multiple heads. Yeah. So do you think
that's by design or do you think that's just
kind of, it just happened because that's how
the dominoes fell? And does that need to be,
because no one seems to be talking about that,
the structure of healthcare delivery and payment.
I think it's, you know, the basis of value -based
healthcare, right? The pay -vider, Whoever is
paying for the care should also be the one who
cares the most, excuse the pun, about the outcomes
of that care, right? So I think that's kind of
the essential note around pay viders. It's I'm
creating value -based healthcare. I will only
put dollars into a healthcare system, or in this
case, let's bring it right down to the patient
level. I will only invest in this particular
patient. What I believe would produce the outcomes
that are positive and improve their life and
all of the very specific calories and other health
economics metrics that are out there and very
well studied and I myself actually took went
out of my way to understand health economics
and and outcomes research just to really figure
out a little quick certificate at the University
of Washington. And what that gave me is it allowed
me actually over the span of two years to understand
how the U .S. solves for that. And so there's,
you know, what you're saying makes a lot of sense.
The one thing that you need to have in Canada
to permit that model to work is to create, again,
a free market when it comes to healthcare. So
when you... Let's see how that's working out
in the US. Of course, because it's entirely a
free market there, the rich get great healthcare,
the poor don't. There's not enough of a, call
it a bottom. There's not really that safety net
that should be there to hold up all of those
people that have votes, but they're not strong
votes. They're not votes that can cause something
like the Affordable Care Act to really stand
up and create insurance that can allow every
citizen of the USA to have almost equal access
to at least urgent care, palliative care, any
of the things that we know how to solve for today.
We're not talking about people that are getting
premature organ replacements or knees and hips
and all of the fixings and really over treating
themselves because they have the money to do
so, which does exist in the US. Or we're not
talking about the other side of the spectrum
where people, when COVID came, most people that
died of COVID were black and poor. That thing
has to, that had to change, but it didn't because
there, the federal concept of healthcare doesn't
exist anywhere near the strength that federal
care exists here in Canada. So if you switch
back to the Canadian side, and you think about
what is a pay via model that would be instated
by federal government, you know, you can't help
but think about, of course, something that's
already happening like national pharma care.
And, you know, the most recent discussion around,
say, diabetics, which is which is again a sizable,
it's actually the one, it is the most spent on
or the most expensive element of medication.
And if you look at any kind of record of what
gets the most money, diabetes and diabetes drugs
are the ones that do. And so the idea of saying,
okay, National Pharmacare is now gonna make that
completely available with your health card, regardless
of where you are, but it only focused on the
drugs. It didn't think about, okay, what will
happen now as it relates to this person's life
cell modifications, their food, their exercise,
how are we going to manage to catch diabetic
feet in time, the socks, the eyes, all of the
things that a diabetic has to deal with. It's
impossible to manage that from a budget point
of view, which is... One of the things that happened
at McKesson quite often, and I had one of the
greatest bosses there, he used to be the senior
vice president of strategy there, his name is
Ravi Deshpande, and he used to say this, which
I think still holds true today, it's really easy
to cut back on the prices of generics and the
general cost of drugs, because it's a clear line
item. You can't really measure time spent by
a doctor to outcomes, like from a value -based
point of view, it's much harder to do that. For
drugs, yep, too much money, we're gonna cut it
back, we're gonna cut it back, and national pharma
care is gonna cause even more cutting back. However,
it still doesn't replace the fact that when a
pharmacy decides to say, then there are digital
pharmacies out there that now just do diabetes,
when they need to go out of their way to say,
I'm going to hire diabetes education certified
diabetes educators, which is a designation that
a pharmacist can pursue. I'll have all of the
devices. I'll have a way for it to navigate through
all that. All that can really exist in private
enterprise. For it to exist at a public pay vital
mode, which it should ideally, that's sort of
idealistically where we should land. would require
very extensive controls put in place by the government
to permit the view of healthcare to be much more
than the cost of a drug, the cost of a doctor's
fee for an interaction with a patient. But again,
measuring the outcomes and having a view to what
is the value of that interaction or that medication,
that is very difficult to do without a much more
significant take on data, being able to really
track outcomes in a much more efficient way than
we do today, which I would suggest is almost
nonexistent. There isn't very good outcomes tracking
today in Canada. I realize we're out of time.
Do you have time for one question? Yeah, absolutely.
Please. So you've raised 44 million dollars.
I think a lot of founders listening will have
lots of questions there. What is a piece of advice
you have for founders who are trying to raise
for a healthcare startup? Do things that matter.
Don't spend too much time on the fireworks. There's
a lot of things you could do with pyrotechnics
and, oh, we're going to go change the world and
do this and do that. But it's a lot of the discussion
we just had today. The problem with healthcare
is fairly simple. It's just very disconnected.
There's the total lack of navigation. people
are lost, they don't know where to go next. These
are real problems that are well documented and
you should start solving those problems before
you start thinking about all of the other lifestyle
stuff that we discussed earlier in the call,
which are great because they make money. No one
is gonna live a lot, you know, well sure you
might live a better life if you get to your vagar
sooner But at the same time it's not gonna necessarily
be a healthier life because you've forgotten
about all the other reasons why you might be
suffering from ED in this moment, right? So I
think it's really having that holistic view of
a patient and that's what med now set out to
do It's from the get -go holistic care was in
our investor pitch deck, right? So we wanted
to make sure people understood we dig, take a
generalist view of the world, which is one of
the more expensive ways to solve a problem, because
then you're trying to make room for all of the
permutations of that problem, right? Specialists,
you know, the likes of Felix, you know, when
they started in lifestyle and then they're progressing
themselves to other therapeutic areas, that's
another really good approach. And I'm really
glad to see them get into things like pressure,
blood pressure and cholesterol and all these
other important diseases. But The reality is
business likes money, investors like money, so
they're going to focus on things that are high
margin first. Do you bring, do you nationalize
even the innovation in healthcare? I think there's
some attempts to do that with things like Mars
and the Discovery District, to try and encourage
a specific kind of innovation. But at the end
of the day, I think the long -term view, and
you know, we raised 44 million bucks because
we're solving for that big of a problem, but
the long -term view is around setting yourself
up to a sustainable arrival to profitability
that lets you solve a significant enough problem
that affects people's health care more so than
it does their lifestyle and if you can do that
well you'll get private pairs paying attention
to you you'll get of course patients paying attention
to you because you're going to help them live
better and then of course employers and you know,
and the path to scale for any digital healthcare
company, which is through B2B, will also start
paying attention. But it's a long road and you
need to be ready for it. Stay focused and just
stay on task because it's very easy to burn up
our runway if you get distracted by too many
shiny balls. And, you know, we've all been there,
if you will. So that would be it. And, you know,
I wish them all the best of luck. We could use
all the help we can for Canadian healthcare.
There's so much to repair and fix. Well, thanks
so much, Kareem. This has been amazing. Thanks,
Rishad. Thank you so much for having me.