Raising $44 million and taking Mednow public - Karim Nassar

Karim is a deep thinker and I have been lucky to have several insightful conversations with him about all things healthcare.

I am excited to share some of these with you. He previously was the CEO and co-founder of Mednow, raising $44 million and taking it public at a $150 million market cap.

Transcript

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 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 gonna help them live better.

And then, of course, employers and the path to scale for any digital health care company, which is through B2B, will also start paying attention.

Hi, everyone.

I'm really excited to talk to Karim today.

I've known Karim for two years.

I am always impressed by his diligent and inquisitive nature.

We have had countless discussions about health care.

I'm happy that I get the opportunity to share some of them with you today.

Karim 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, Karim.

Excited for this?

To get started, let's dwell a little bit into your childhood.

There are things we learn 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 childhood 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 were 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 the public school assistant for a couple of 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'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.

There was this idea that boys will be boys and things that you'd never really experience as much in the co-ed environment that the private schools there 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 and set them up somewhere and try to sell them, like 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 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 what experiences you had growing up.

So it's 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 encouraging somebody to go.

And again, entrepreneurship, a big part of it 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...

It 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 immigrants like myself.

And so when I finally made it to university, that's when I was starting to feel a little bit more stability in my group of friends and so forth.

But then, you know, shortly after university, I was off doing my MBA in Kingston, Ontario, and then upon returning from there, I was on my way back east heading to France, in this case, and I worked there for a little bit.

So then back to Canada, but not to Toronto, to Alberta.

So there was 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 little girls, you know, five and three, that sense of being grounded, I actually find it in them and 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 going to 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 health care, 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 gasses 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.

And 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.

So around the time Mckesson bought RemedyRx, 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 RemedyRx, 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 is 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 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 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 issue they might have.

A pharmacy prescription would be issued.

If the patient chooses, they can fill that right at Mednow, and then there will be sort of a full cycle where the 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 was 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.

So 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 health care 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 and primarily around helping start-ups 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, and it was a very natural use of AI in this case to just train it to determine the cognitive impairment, because the 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 sort of journey to find clients, I reached out to the president of retail pharmacy at Mckesson and he said, well, you should talk to this guy.

So that was the first time I met with Ali Rehani and his partner Philip Campisano.

And the three of us created at the time Mednow as an extension first to Ali and Philip's aggregator 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 having been owners and 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 us 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 because computer engineering is essentially electrical engineering with an element of do you know how to program microchips and do 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 that 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.

I think I appreciate what law can do when it's used innovatively.

In the sense of IP law is an example of law that focuses on how to channel creativity in a way where the creators get their rights protected and can profit off of 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 Rishad as the same person, Rishad 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 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 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, it will take 15 minutes or 20 minutes to fill and be handed to me.

In some acute cases, like you say you want an antibiotic or something of the kind that required same day administration, basically, that couldn't be that, OK, you got me the prescription for an antibiotic.

I'll get it to you tomorrow.

So the same day delivery was another real logistical challenge that I had to solve for.

And that's why when you think about the logistics, the infrastructure, joining pharmacies together, and all things to do with what is the 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 elite of 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 is, as you of course know, is provincially mandated and operated, or funded rather.

So that forces every health care body, which of course, as you know, to comply with these 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 the provincial management of our health care 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, say, 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.

That transformation was also necessary for the pharmacists 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.

So 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 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, the pharmacy is 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 the MOX or the antibiotics because there's not much money to be made there.

But you took a different route.

You were trying to service every patient, it sounds like.

How did that decision come to be?

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 happening is, again, because of the nature of the regulation 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 going to 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 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 going to 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 the 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 or I can only do BC for now.

And so 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 in retrospect, sort of hindsight is 2020, as they say, our B2B market didn't grow as quickly as we were expecting.

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, 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 door 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, with the payer, and the dispensing fee, which is a fixed dollar amount that will change from pharmacy to pharmacy.

And it's meant to pay for the effort of dispensements, you know, above and beyond the markup, which is where the profit is for a pharmacy.

And so kind of putting it all together, 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 diseases 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 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, when 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 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 the things that Mednow 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 that to get scaled back a bit just, you know, for multiple business reasons.

What would you change about Canadian health care 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.

You know, that's something I 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 in our platform.

Even though we had our own telemedicine provision on the on the app, we wanted to make sure everyone understand 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 health care system to the private side of the health care 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 health care system, the Canadian health care 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 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 choice will eventually be difficult at the very beginning, but as it settles and the chips settle, you'll get a different environment where, 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.

Do you think healthcare should be federal?

I think from a point of right access to healthcare, 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 sits north of New Market 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 New Market to get to South Lake Regional or over to Uxbridge to Oak Valley Health, which is another 45 minutes.

And what is happening is Georgina splits the West, the people that live in Keswick and around it, go down to New Market and the people that live on the East side go down to Uxbridge and Oak Valley Health.

And that's already in a federally managed health care system.

So I imagine if the division of budget was to become at terms of the collection of the tax 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, like a very, very intelligent chat bot 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.

Again, so by increasing that efficiency in the market, I'd want to be able to, these doctors said they'd want to have that 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 the left field, nothing to do with healthcare, but it's about creating the revenue that this country needs to bring up its infrastructure, to bring up its healthcare, 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.

So 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 that 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 just not likely, I don't think, we'll see a conclusion on that.

But energy and revenue, more revenue to government, I'd say that's probably got more legs.

The one problem I see is health care delivery and health care payment is decoupled in Canada.

So you have Ministry of Health, which essentially pays for all health care, 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 part 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 rider 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 health care, and they can say, per capita, we spend enough.

And it's not my problem, health care isn't delivered, but it's the problem of all these local decentralized organizations, which makes accountability much harder, because it's distributed around thousands of different states.

There's no one vectoring, it's multiple necks and multiple heads.

Yeah, so do you think that's my 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 health care delivery and payment.

I think it's, you know, the basis of value-based health care, right?

The payvider, 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 payviders.

It's I'm creating value-based health care.

I will only put dollars into a health care system, or in this case, let's bring it right down to the patient level.

I 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 CALYs and other health economics metrics that are out there and very well studied.

I myself actually went out of my way to understand health economics and outcomes research just to really figure out, did 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 US 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 health care.

So when you see how that's working out in the US., of course, because it's entirely a free market there, the rich get great health care, 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.

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.

And so that thing has to, that had to change, but it didn't because there, the federal concept of health care doesn't exist anywhere near the strength that federal care exists here in Canada.

So if we switch back to the Canadian side and you think about what is a pay-vita model that would be instated by federal government, you can't help but think about, of course, something that's already happening like national pharmacare.

And the most recent discussion around, say, diabetics, which is again sizable, it's actually the one, it is the most spent on or the most expensive element of medication 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 going to 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 very, like 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 going to cut it back.

We're going to cut it back.

And national pharma care is going to cause even more cutting back.

However, it still doesn't replace the fact that when a pharmacy decides to say, and there are digital pharmacies out there that now just do diabetes, when they 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.

You know, I'll have all of the devices.

I'll have a way for 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 the 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.

Karim, I realize we're out of time.

Do you have time for one question?

Yeah, absolutely.

Please.

So you've raised $44 million.

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 health care 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 health care 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.

But no one is going to live a, 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 going to 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 Mednow 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 did 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 nationalize even the innovation in healthcare?

I think there are 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 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 healthcare more so than it does their lifestyle.

And if you can do that well, you'll get private payers 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 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 a runway if you get distracted by too many shiny balls.

And we've all been there, if you will.

So that would be it, and 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, Karim.

This has been amazing.

Thanks, Rishad.

Thanks so much for having me.