…Eliminate the ability of pharmaceutical companies to distribute using direct-to-doctor sales and direct-to-patient advertising. Prescribing choices, influenced by pharma reps, are often disconnected from patient value.
Asa part of my interview series with leaders in healthcare, I had the pleasure to interview Matt Gamache-Asselin, co-founder and CEO of Alto — a full-service, patient-centric pharmacy that connects all stakeholders in the pharmacy ecosystem through its platform. Alto’s technology cuts the admin time for physicians, insurance companies and PBMs, lowers costs for patients and improves health outcomes.
Thank you so much for doing this with us! Can you tell us a story about what brought you to this specific career path?
Growing up, I always thought I would be a doctor. I was already admitted to medical school when I had a summer internship in Silicon Valley that inspired me to consider technology and engineering as another option. I ended up deferring on med school to join a small start-up and never went back to study medicine.
The Silicon Valley ethos of creating something that changes lives really inspired me to pursue tech. What I was surprised to find, though, was how much capital — both human and financial — was being spent on ventures with no real, tangible social impactful. My Alto co-founder Jamie Karraker and I met while working at Facebook, and we wanted to find a worthy problem to solve in healthcare that would allow us to help the broader population is real impactful ways. Alto allows us to solve challenging problems for both prescribers and those who need medicine, fundamentally changing the pharmacy experience.
Can you share the most interesting story that happened to you since you began leading your company?
As Jaime and I set about learning about pharmacy, we had excellent teachers in the staff at A+G Pharmacy, a long-standing community pharmacy in the Mission neighborhood of San Francisco. We set up shop in a closet in the back of their storefront — literally, a closet — and shadowed all of their processes to find the ways that technology might provide a new approach. We were totally shocked to learn that the team still used a manual typewriter every day! We still have that typewriter — stored in it’s namesake conference room — to remind us of our beginning.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
I don’t know that this is the funniest mistake but it’s a hugely pivotal one for our founding team, and the experience that shaped Alto’s “patients come first” value. In February 2016, only a few months after the company was founded, we had a growing relationship with a major health system and were starting to see a meaningful amount of prescriptions from their oncology department. One of our pharmacists discovered a pretty big mistake while routinely checking a prescription for Oxycodone — she noticed that the prescription was actually written for Oxycontin (that’s extended release Oxycodone — a version of the painkiller that spreads the effect over a longer period of time). An unfortunately easy mistake to make with handwritten prescriptions, so she flagged the mistake, and it was fixed.
The pharmacist had an intuition that this might not be the first time this switch had happened, and an audit of past fills confirmed that, yes, we’d mistakenly filled the wrong medication before (and at an increasing dosage each month). Here’s what was happening: the patient was taking the medication, noticing a relief from pain, but a few hours later the pain would return (as expected on an immediate release dose of Oxycodone). But since the doctor expected relief for a longer period of time (as you would expect with an extended release dose of Oxycontin), he increased the dose assuming the patient just needed more.
Of bad mistakes we can make in pharmacy, this is a pretty bad one. So we asked ourselves, what’s best for the patient? Patients come first — before doctors, insurance companies, even our own business. So we told the doctor, the patient and the oncology department about our mistake, and we shared our plan to ensure this wouldn’t happen again. A few months went by, and the health system got in touch with us. Since alerting them of our mistake, the health system had done a full audit of Oxycontin & Oxycodone scripts sent to all pharmacies. It turns out this was a systemic problem happening everywhere, but no one had bothered to let them know in the past. We suggested they quickly move to e-prescribing for these drugs (instead of handwritten paper prescriptions) and change the name of the drug on the paper prescriptions to have more specific details. The paper changes went into effect quickly, and the health system finally implemented e-prescribing for those drugs last year.
A good reminder that even when we make mistakes, prioritizing patients over everyone else (even ourselves!) is the best solution.
What do you think makes your company stand out? Can you share a story?
Without a doubt, Alto Pharmacy is unique because of our focus on the patient experience. Most of us have such low expectations when it comes to going to the pharmacy — Alto’s mission is not just to reset the bar higher but to pole vault over it. “Leave No Patient Behind” is an Alto core value, and our patient care team goes above and beyond each and every day to ensure that our patients have the medications they need, at the right time, delivered to their home or workplace. On occasion, this means a team member will take a last minute delivery with them at the end of the night, dropping it off for a patient on their way home. Handling time sensitive medications like IVF cycle trigger shots has required me to jump on my motorcycle and head down to San Jose in rush-hour traffic to make sure that a patient had what she needed in time. I made it with just minutes to spare.
Patients aren’t the only ones that love Alto — physicians, nurses and clinic staff are critical to our success as well. Our first clinic partner (and still one to this day) was an OB/GYN practice here in San Francisco. In addition to their business support, they’ve helped grow the Alto family in very real ways. Their team of doctors delivered both our co-founder’s baby and one of our earliest investor’s babies! This investor actually learned about Alto because the practice referred his wife to Alto during her antenatal care.
What advice would you give to other healthcare leaders to help their team to thrive?
When entering healthcare, technology companies often start with the assumption that everything is broken. They approach the space thinking they can dismiss what’s been built previously and start over from scratch. But that’s never the right approach. The system overall is broken, certainly, but there are pieces of the system that excel at what they are designed and built to do. To succeed in healthcare today as a technology company, you need to learn from the decades of experience of the incumbents and use technology to iterate on the model that exists today.
As an example, in our space, I look at companies like Walgreens and see an organization that is really, really good at being a retail pharmacy, which is an incredibly difficult business to make money at given the margins. I look to their example and — instead of dismissing them as a dinosaur — identify the parts of their model that they do well. What are the opportunities for us at Alto to then build something new and innovative to the existing model? We are adding technology on top of learnings from past to make things better in incremental, but meaningful, ways.
Ok, thank you for that. Let’s jump to the main focus of our interview. According to this study cited by Newsweek, the US healthcare system is ranked as the worst among high income nations. This seems shocking. Can you share with us 3–5 reasons why you think the US is ranked so poorly?
I think it really boils down to one key reason: incentives. The big players in healthcare today are all doing a really good job at making money, and it’s hard to find fault given the marketplace. A good example of this is pharmacy benefit managers (PBMs). PBMs emerged to negotiate down drug prices on behalf of payors. As they keep seeking deeper discounts, pharma companies raise prices, prompting the PBMs to take a bigger cut of the discount. Both parties aren’t doing the wrong things, they’re doing what you expect them to do: chase profits. You’re left wondering “what’s the remaining incentive?”
We can argue over who’s most to blame: the private sector, pharmaceutical companies, government, and so on. But at the end of the day, the entire system’s incentives aren’t aligned properly, and you end up with a bloated cost system. The incentive should be to drive better quality of life for patients while minimizing costs.
You are a “healthcare insider”. If you had the power to make a change, can you share 5 changes that need to be made to improve the overall US healthcare system? Please share a story or example for each.
The entire drug value chain needs to be re-thought, which will be extremely hard to do. Some of our suggestions include:
- Regulatory changes to enforce cost and margin transparency across the drug value chain — transparency for plans, PBMs, prescribers, patients and pharmacies. The payors (often, employers) don’t have the expertise to track which drugs and what spend is most beneficial to the patient.
- A move away from PBMs making money on drug rebates. Today, PBMs carve out the largest rebate possible, and pharmacies are left to eke out any remaining profit possible, causing a ripple effect of higher drug prices and insurance co-pays.
- Allow patients to take advantage of rebates directly, especially in high deductible and high co-insurance plans and for uninsured patients.
- Fill the gap in care that exists between the pharmacy, the patient and the doctor. This gap could be filled by a PBM or a pharmacy, but the margins need to exist to do the work, and the technology needs to exist to make the work efficient.
- Eliminate the ability of pharmaceutical companies to distribute using direct-to-doctor sales and direct-to-patient advertising. Prescribing choices, influenced by pharma reps, are often disconnected from patient value.
Ok, its very nice to suggest changes, but what concrete steps would have to be done to actually manifest these changes? What can a) individuals, b) corporations, c) communities and d) leaders do to help?
At the end of the day, the only people or organizations who can drive change — especially change that compromises a business’ margins — will be the people who pay (that’s you and I as consumers) or the government. On the drug pricing side, no one is going to enact change without going against their core business incentives. Alto is trying to drive systematic change but we also end up having to go against our financial incentives to do so. That tension means slower change for the whole industry, and it’s hard to sustain in the long term.
Individuals should demand a better and more transparent experience. Most consumers don’t realize they have influence — tell your HR department or insurance company that your current benefits are lacking. Corporations can’t settle for the safe, status quo. There are a lot of great companies out there that are trying to do things differently, but different means riskier, especially in a corporate setting.
Communities should develop and support localized health and resource centers. The impact we’ve seen from scrappy community-based health organizations is phenomenal, but they don’t yet have a voice on the national stage to share their successes.
Finally, leaders should stop being hyper-focused on the bottom line, and realize that if they don’t quickly adapt to a more patient-centric model, someone will displace them. I think the incumbents are best positioned to be a force for good — but they haven’t wanted to take the risk.
As a mental health professional myself, I’m particularly interested in the interplay between the general healthcare system and the mental health system. Right now we have two parallel tracks mental/behavioral health and general health. What are your thoughts about this status quo? What would you suggest to improve this?
Alto’s VP of Pharmacy, Amil Patel, has a great perspective that I’ll share. He doesn’t see these as two parallel tracks at all, but as two divergent and disconnected (at best) approaches to holistic patient care. There’s a fundamental stigma towards mental health awareness, accessibility and overall patient adoption.
From youth, we’re programmed to do at least annual physicals — exams with our general practitioner to make sure we’re in relatively ‘good’ condition. Each physical wraps up with a trend line of measurements on a height and weight scale. No clinical provider ever asks you, “Tell me what’s on your mind.”
That needs to change. I can’t imagine how many patients are in desperate need of mental health coaching — which may or may not involve medication, therapy and counseling — but I think it’s absolutely important that patients feel like mental health check-ins are part of their holistic wellness and are as accessible and normal as a yearly physical.
How would you define an “excellent healthcare provider”?
Quite simply, a provider who puts their patients first. We’ve all experienced a clinic visit or healthcare issue where we or a family member felt they weren’t the first priority with their provider. Our mission at Alto is to fulfill medicine’s true purpose — to improve quality of life — for everyone who needs it. We’re in the business of delivering care and putting patients first, and our strongest clinic and provider partners share this North star.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
I’m a big fan of Kim Malone Scott’s book and philosophy called “Radical Candor.” The idea behind radical candor is that to be a good boss or manager, you have to care personally at the same time that you challenge directly. There are dozens of great pull-quotes from her book, but if I had to pick one, today, to share as a life lesson, it would be:
“If you can build a trusting relationship with people so that they feel free at work, then they’re much more likely to do the best work of their lives. But you’re not ‘getting it out of them;’ you’re creating the conditions for them to bring it out of themselves.”
- Kim Malone Scott, Radical Candor: Be a Kick-Ass Boss Without Losing Your Humanity
As we’ve worked to scale Alto, adding distribution hubs in Southern California and a second headquarters in Denver, Colorado, the reminder to build trusting relationships, especially with team members and leaders separated by geography, is particularly close to my heart. We have amazing talent here at Alto and I want every employee to not just feel like but know that they can show up empowered to do great work, be their authentic selves, and contribute meaningfully to our mission of delivering health to everyone who needs it.
Are you working on any exciting new projects now? How do you think that will help people?
“Focus on impact” guides our product and engineering teams as they look for their next project or feature. One of our key investment areas today is in automating tedious and time consuming backend administrative work that patients are often forced to navigate in trying to get access to their medications. These are things like benefits coordination, prior authorizations (essentially, an appeal to insurance) and navigating alternative therapies. Alto takes care of it all behind the scenes so that the process of getting your medications is easy, even relaxing.
Removing barriers for patients means they are more likely to fill their prescription on time and take the medication as instructed. National averages on adherence rates for first fills (prescriptions filled on time) hover between 50 and 60%. Alto’s adherence rates average 80%. This means more people are getting their medications and on a healthier path.
We’re also working to drive transparency in the pharmacy space by allowing patients to know the out-of-pocket price for medications. Sometimes, this cash price will come out cheaper than the insurance price. At a traditional pharmacy, you’re presented with one price, and one price only. Alto believes patients should have choice — not only in when their medication is delivered but in what and how they pay.
What are your favorite books, podcasts, or resources that inspire you to be a better healthcare leader? Can you explain why you like them?
I listen to a lot of audiobooks given my travel schedule. A recent favorite is In Love with the World: A Monk’s Journey Through the Bardos of Living and Dying by Yongey Mingyur Rinpoche. The book traces a Tibetan monk’s journey leaving the comfort of his monastery for a four-year wandering retreat. Many things don’t go to plan, and he documents how the challenges of living as a beggar — physical, psychological, spiritual — and a near-death experience taught him crucial lessons about living without fear.
For leadership and business guidance, my go-tos are Principles by Ray Dalio and High Output Management by Andrew S. Grove.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger.
I think we’re on the cusp of several really exciting and impactful changes in modern healthcare in America and the driving force behind all of them is the consumer — the consumer wanting more control over decisions, more transparency around options, and greater accountability for bad actors in the system. I would encourage each and every person to view their health as their single greatest personal asset and the ecosystem of services related to it as key to ensuring a strong return on investment. We should expect more of the healthcare community, not less, and we should hold all players — providers, payors, manufacturers, to a higher standard.
How can our readers follow you on social media?
Follow @altopharmacy on Twitter, Instagram and Facebook (we’ve also got some pretty great reviews on Yelp).
Thank you so much for these insights! This was so inspiring!