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This is Capitalism: Up Close, Inspired, Explained

Aug 22, 2018

Ray Hoffman introduces Kara Trott. Kara Trott does very well by her clients and very well by her clients’ employees. She’s the Founder and CEO of Quantum Health, based in Columbus, Ohio. For companies like Hertz, Dillards, and American Honda, and hospital systems like Houston Methodist, Quantum offers a remarkably personalized approach to healthcare cost containment. It is personalized in the sense that when any of Quantum’s 700,000+ members encounters a medical problem, Quantum steps in almost immediately to help guide each patient through what it calls the healthcare journey, assisting and often intervening from that point on. While using its care coordinators — known inside the company as healthcare warriors — to simplify and clarify this journey for patients, Quantum delivers markedly lower healthcare costs for clients.


Key Takeaways:

[1:15] Kara notes the savings Quantum clients see in their first year, from 5% lower claim spending. For large companies, this can be hundreds of millions of dollars. Individuals receiving healthcare conserve more of their out-of-pocket costs. It’s a win-win.

[1:41] Kara graduated from law school and worked for Bricker & Eckler, a prestigious Ohio law firm. Before law school, her undergraduate study was on politics and philosophy, particularly Marxist theory. She worked for a marketing, design, and research firm before going to law school.

[2:48] Kara had come of age during the Cold War; she thought it would be interesting to study a different way to think and look at macroeconomic matters. It gave her entrepreneur father a fit. She learned a different view but is a firm believer in the free-market system and capitalism.

[3:34] Kara’s ex-husband was one of the first Americans to go into Russia to work in 1992 as part of the USAID program after Russia opened up. He and his partners formed a food distribution system in Russia. He and Kara adopted a Russian boy.

[4:17] Kara saw in the demise of the Soviet Union that ‘command and control’ is not an effective way to govern large groups of people. You’re always better off freeing the intellectual capacity of the people and empowering them with the freedom to decide. It may take generations for Russia to find the kind of spirit we have in the U.S.

[5:24] For Kara, marketing research was finding interesting problems to study and identify solutions. Kara ran strategic projects to help companies understand what people actually do, versus what they say they do. This helps companies rethink their marketing.

[6:06] Kara didn’t feel that retail marketing was where she could make the kind of difference she wanted to make so she went to Ohio State Law School and then joined Bricker. She was assigned to the healthcare practice, which was growing. They created a consulting subsidiary to advise provider organizations.

[6:43] Kara became one of the leaders of Bricker’s consulting practice, in spite of not knowing much about healthcare at the time. She spent a lot of time with physicians and hospital administrators. Kara learned that patients are not often compliant with their doctor’s treatment plan.

[7:44] It was clear to Kara that this was a classic consumer pathway problem that she had seen solved in many other industries. She imagined a strategy for healthcare that had worked well in other industries. It started with studying the consumer journey and how things unfold, then figuring out what the critical intercept points are.

[8:25] In Kara’s retail experience, this approach had led to a 20-30% bump in market share, or same-store sales, when executed properly. She figured for healthcare, there would be an extraction of as much as 20% of the unnecessary costs. Based on what doctors and hospitals told her, there was a lot of duplication and waste in the system.

[8:59] Kara proposed a two-year research study to track people as they entered the healthcare system for a variety of reasons. Eight healthcare systems were interested in participating. They were able to triangulate the consumer's journey through their interactions with the physicians and compare it to secondary data.

[9:41] Kara’s intent was to see how the journey unfolded, what kind of support was needed at what point, and where you would house it. The firm didn’t see it leading to legal fees, so they opted out. Kara had to make a decision to put her livelihood at stake, split from the firm, and embark on a two-year study, before starting a company.

[10:43] The survey was a behavioral mapping study. Kara compares it to a study she had done for KMart about which aisles people went through within the store on a visit. Consumers of healthcare reported back to Kara, just as they had about their retail trip.

[11:22] Kara says no other company was looking at the problem from the consumer’s standpoint. Even today, she sees no one else studying the consumers’ experience. The healthcare industry doesn’t understand the consumer.
[12:05] Kara says she can’t do a single job at Quantum. So, she started with five employees and within a year there were probably 10. She bankrolled that. Quantum now has close to 800 employees and will be adding a couple hundred more between August and November.

[12:38] Quantum manages about $7 billion in claims and serves over 1 million people.

[13:07] For the first year, because of payroll, Quantum was losing about $40,000 a month. That is the element of risk in starting a company with employees.

[13:43] Quantum associates consider themselves as warriors for people going through one of the most difficult times of their life. People on a healthcare journey are seeking a safe place and if you open up that conversation, and you turn it over to them, you have no idea where that call or conversation is going to go.

[14:18] Quantum associates need to be prepared to deliver immediate expertise. They have the expertise to be able to navigate between all the different parties. Normally, when somebody’s stuck there are multiple points of failure. Quantum takes those issues on so the person going through the healthcare journey can focus on the journey.

[14:45] The Warrior Creed on the wall is a vital piece of the Quantum culture.

[15:11] It takes intent to hard-wire brand values into a culture. There are three tests to take before interviewing for a job at Quantum: the Wonderlic test, a test of “what feeds and starves you?” (similar to DISC or Myers-Brigg), and an empathy test. Few are hired from call-centers or insurance companies. Most are from service occupations.

[16:18] Quantum has translated the “I care” values into attributes and competencies that form the basis for leadership development and team development. 84% of Quantum managers and above are promoted from within. There is a strong leadership development program at Quantum Health. It’s very much a servant leader organization.

[17:13] Quantum has developed their own technology system. The system necessary to see the journey longitudinally, mine the information, see what they needed to do right away and have the expertise available didn’t exist when Quantum Health started. It aggregates data from all different sources. It’s an open system that can pull in any data.

[17:47] The biggest thing Quantum Health does differently is to mine data directly from the providers in real time when they’re seeing those patients. The system uses an expert routing approach that gets a healthcare expert on the phone to join a conversation.

[18:37] Natural Language Processing mines data and creates a consistent record of everything in the person’s healthcare journey, providing a 360-degree view, to be able to identify and queue up opportunities and ways to assist them.

[19:14] Quantum Health has been on the Inc. 5000 list of the fastest-growing small companies 11 years in a row. Fewer than 50 companies have been on it for 10 years. They are experiencing 30 to 40% annual growth.

[20:06] Quantum Health has just entered into a relationship with City of Hope to share the expertise of a few facilities with a nationwide network of doctors who don’t have access to that kind of front-line research.

[20:36] Kara talks about changes happening in the field of behavioral health for substance abuse challenges and new methodologies for musculoskeletal care. Clients are ever seeking to make their benefits simpler for employees. Quantum makes sure the patient has a comprehensive solution.

[21:42] Quantum Health is the leader in this space. Only a few carriers serve the market, but the market is huge. The clients Quantum Health carries cover over 60% of the people who receive healthcare benefits through employer-sponsored plans.

[22:07] The industry is expected to grow dramatically over the next five years. It’s being noticed as a way to create a much better experience and really support people. Not only does it help people through their journeys but it produces a powerful economic result for the client and for the individuals.

[22:36] Just an entrepreneur solving a problem. Kara Trott. This is Capitalism.


Mentioned in This Episode:

Kara Trott

Quantum Health



American Honda

Houston Methodist

Bricker & Eckler LLP

Cold War









Myers & Briggs

Inc. 5000

City of Hope

This Is Capitalism