HIStalk Interviews Trip Hofer, CEO, Redox

Trip Hofer, MBA is CEO of Redox.

Tell me about yourself and the company.

I joined the organization in November of last year. I’ve been in healthcare for approaching 25 years now, and throughout that time, we’ve always talked about the ability to get data easily from one system to another, from A to B. A to B can be from an EMR to an EMR, from a digital health vendor to an EMR, from an EMR to a cloud, or from an ecosystem that has been built specifically in a payer environment. I’ve seen various A to Bs, but throughout my career, what seemed simple verbally and logically got complex and became undoable. That was always frustrating when trying to serve patients better. 

Especially at the time with value-based care, I thought that Redox could be interesting since it has been moving data for 10 years. Redox was primarily focused on enabling digital health vendors to interact with an EMR, to both read and write into and out of an EMR. That is incredibly important for digital health vendors and for the providers who are working with their EMR to have access to other methods for serving a patient.

The company has expanded to not only do that, but also to move data from anywhere, from point A to B. With AI and machine learning, an important need is to get usable data quickly in large volumes safely. We are at a remarkably interesting time for the company and for the industry as a whole.

How do you see interoperability evolving, specifically with FHIR APIs?

It will continue to evolve. It’s top of mind. I was at a health plan a week ago with a bunch of cloud vendors. FHIR usage is proliferating, being used and applied by any healthcare entity. That’s great. You wish it was like, “Just adopt FHIR, it will be easy, and we’ll move forward.” The fundamental challenge with healthcare data, which is unique to any other industry, is that the data is extremely messy and it continues to change. That is a symptom of workflow.

For example, follow a claim from initial generation all the way through adjudication. It goes through a ton of changes. You can call it maturations, but changes or evolutions or whatever the term you want to use through that process. It seems simple, but it gets updated, it could get rejected, more information might need to be added. It is messy. It could include the wrong diagnosis codes or the wrong name. That’s just a claim that flows through, and there’s a lot of discussion on prior authorization.

While the advent of FHIR is really important, getting data from point A to B in healthcare is difficult because it’s messy. FHIR helps with that by having a standard format that is being adopted, but it’s the workflow that makes it so complicated.

How does the company work around that messy data?

I’ve learned that the idea that you can just go buy a piece of software off the shelf and plug it in can be used for the simplest of of tasks. But getting more creative with data, or using it for other purposes — especially with large volumes of data — that’s not enough. We’re a technology company with services. We have people who work with each of our clients to make sure that the integration meets their needs. We apply use cases. What problem are we trying to solve specifically?

The beauty of Redox is that each integration implementation leverages usable technology, meaning that we don’t have to start from scratch. We have over 7,500 connections established across the country that we can leverage. Implementation can be extremely fast. The national plan that I just visited took three months. If you ask any health plan about how long a typical data integration takes, it’s not measured in months, it’s measured in years. We can  get stuff up fast, but we also apply a combination of usable technology and people who know what they’re doing because they live it daily. They help with that integration implementation and ongoing maintenance and monitoring of the technology.

What changes will 21st Century Cures and TEFCA require?

I am a fan of 21st Century Cures and TEFCA. Their general objective is to make it easier for patients to get their information. I don’t know how anyone isn’t a proponent of that. We all want it. I want it as a consumer. I want to be able to get my information as fast as possible during my care journey. It forces organizations to think about how they’re going to make that easily accessible.

The problem with TEFCA is that it’s optional. There are no incentives or penalties for organizations to adhere to TEFCA. You can if you’d like, but you don’t have to. You’ll see adoption without incentives or penalties, but not at the level there would be with a mandate. If there was going to be mandate around it, we would have to carefully think about what that means. How do you ensure that what is written and regulated or mandated is appropriate? If it’s going to be a true game-changer, especially TEFCA, you have to see incentives or penalties and take away the optionality.

We’ve seen controversy over companies using data for non-treatment purposes. How will that evolve?

That’s going to be very interesting. I’ve been following the same cases and situations and the companies that have been impacted by that. These are treatment use cases are flowing through here and ensuring what treatment means. An act like TEFCA or 21st Century Cures can be so good. But other organizations are bad actors in this environment who want to use that data for alternative purposes. You think that this is treatment, so it should be easy, but data has been leveraged for other reasons. 

When you  get into something around payment, that gets even more interesting when it comes to how people might inappropriately leverage that data. That’s the concern. I still think that those use cases should move forward and should get access, but it has to be in a way that ensures that those bad actors or actresses can’t perform the way that they want to, and that’s difficult. That’s really hard. I wouldn’t even have thought on the treatment side that you would have seen what you’ve seen, but I think I was being a little naive. 

People think about these things and figure out ways to exploit them. That’s what we have to be concerned about, especially when we get into the money side of things, beyond treatment use cases that will proliferate. How do you try your best to put measures in place to stop that from happening?

How will AI to affect your business and your customers?

It doesn’t come as any surprise that AI is discussed at every industry conference. When we talk to our clients, AI either comes up or is the focal point of the meeting. I was at one of the large cloud aggregators two weeks ago and their request of us was, we have a lot of tools that can consume information that can do some really interesting things, but we need that information in a way that we can consume it. That’s where we come in as Redox. How can we move data, and large volumes of data, securely?

I want to make sure that those two points aren’t missed. We aren’t talking about moving small amounts of data. These organizations are asking for a large amount of data, billions of transactions. We’re now moving over a billion transactions a month at Redox, and I’m thinking that by the end of the year, we will probably move up to a billion and a half per month. That’s a lot of data, and you must have a platform that can move that data. The platforms of some organizations have just not been able to do that. They can’t handle the data.

OK, you have to be able to handle data, but quickly on top of that, how can you handle it securely? Challenges around security and all the breaches are major concerns. How do you ensure that you have the security? It’s funny that when we get into AI discussions, we typically lead with how we think about moving secure data, and I had organization say that they appreciate that we talk security first because it is so top of mind.

But that’s what we do. We are an enabler. We don’t run the tools at the end of the pipe to take advantage of it. We pride ourselves on providing the data that is necessary to enable those tools. We are enabler of machine learning or of artificial intelligence, and as I continue to remind our team, we are also the enabler of value-based contracting and value-based pricing. Having been in healthcare for so long and seeing fee-for-service not work, we have to move more quickly to value-based arrangements. The only way you do that is to provide good, clean data to expedite that. That is top of mind for us as well.

When it comes to our own company, we actually just sat down and had this conversation, which is funny that you ask. I said to the team, not only how do we use AI, but if AI were to make Redox obsolete, what would that look like? The reality is that there are parts of the ecosystem where we perform — if you think about a pipe or a highway, what that looks like along the journey — where AI is very applicable, but there are other parts where it’s just not, not now at least. 

A lot of that has to do with the manual intervention based upon workflow, things that make AI something that you can’t put into that part of the ecosystem at this point. But we’re constantly looking at that, because we want to make this as efficient and effective for our customers as possible. Wherever we can leverage AI to do that, we will do that. Where it’s not leverageable, we won’t. We are truly trying to enable our end users with usable data, and if AI helps that, we will implement it, period.

Your other job as a venture partner gives you frontline exposure not only to AI, but to what companies and investors are doing and thinking. How would you characterize the health tech investment marketplace?

There’s a couple of things that will probably come as no surprise. The first is the general environment today, which really started last year or maybe a year and a half ago when venture capital money seized up and the spigot stopped flowing. There was a lot of what you would call tourist investment going on in 2022, where people who didn’t really know what they were doing in healthcare were throwing a lot of money into healthcare and into companies. It was great to receive the money if you were one of those organizations, but also now you’re feeling the effect of where it has seized up and you don’t have that money any more.

We face a lot of consolidation. In the industry where we sit, there are a lot of players where they are not 100% overlapping in what they do. There are concentric circles, but the overlap is not at 100%, meaning that there’s no real true competitor, at least in our case at Redox. Other organizations do some of what we do, but there’s no one that you would say overlap, where someone might say that they could pull Redox and and put in A and it does the exact same thing. What that suggests, if you look across the industry, is that there will be consolidation.

There will be forced consolidation, where companies will go to market because they literally run out of money and they can’t raise any more. Do they close up shop or are they able to merge with other organizations? You are going to see that. It’s a ripe time for companies to get together and start to talk, especially the companies that are in this space, these small fragmented companies, to come together. 

You’re not seeing a lot of these companies being acquired by health plans, payers, and providers like you were several years ago. The way to make yourself more enticing is to come together with somebody else and merge those capabilities that you could have if you think about ecosystem horizontally, where you add pieces to it so you become more desirable and you’re able to do more as an entity.

You will see this year that companies will come together and further their value proposition horizontally. There may be some vertically, but a lot horizontally. You’ll be able to do more across the data ecosystem because you’re bringing together different groups of people. I am 100% confident that you’ll see companies coming together, and a lot of that is a reaction to the VC marketplace, both the funding but also the acquisition, the buying of the assets by those who would behave that way.

What are the company’s priorities over the next few years?

The company has been in existence for 10 years. The vast majority of that time was establishing itself as the leader connecting digital health vendors to EMRs. In doing so, it created what I would say is a tremendous opportunity to to expand to other types of organizations outside of just EMRs and digital health vendors because of all the connections that the company made during those first, let’s say eight, years. Thousands of connections into healthcare organizations into EMRs, working with over 90 EMRs, for example, in 7,500 healthcare organizations, moving a ton of data. 

The priorities for us are moving agnostically. When a healthcare entity wants to move data from A to B, that could include the cloud, where we have relationships with the cloud aggregators. Those aggregators can then do advanced analytics for their customers. Over the next several years, a couple of years, it’s how we continue to evolve into the payer market, provider market, and life sciences market and complement what we’re doing today. What we do today, but do it for more and more entities and continue to scale. 

Then as we talked about that horizontal view of the ecosystem, how do we continue to build out capabilities, partner, or even acquire? That is the typical thing you think about as a leader, which for me, is build by partner. How do we continue to think about that and do that horizontally, so that when you come to Redox, we can do more and more for you? 

A lot of that will be driven by the ask of our clients. When one of our clients says, “I wish you could do X,”  that’s where I perk up. What would you like us to do? We consider that on our roadmaps about about how we move forward.

Our core DNA is that we enable. A lot of clients say, “You do this stuff that we just don’t want to do.” They want the data so that they can then go do something with it. We enable that. We are an enabler, and a very key enabler. We want to continue with that DNA, but enable more and more people with more and more data at a very secure and fast pace.