Amanda Wilde (Host): Welcome to the Healthcare Executive Podcast, providing you with insightful commentary and development in the world of healthcare leadership. To learn more, visit ache.org. I'm your host today, Amanda Wilde.

LeanTaaS is one of ACHE's premier corporate partners, our premier corporate partners support ACHE's vision and mission to advance healthcare leadership excellence. In this podcast episode, we are joined by returning guest and founder and CEO of LeanTaaS, Mohan Giridharadas. We're focusing on leading through disruption as policy shifts and AI are reshaping healthcare operations. Mohan, welcome back to the Healthcare Executive Podcast.

Mohan Giridharadas, MBA: Thank you. It's great to be here.

Host: You have a fascinating profile. You spent a lot of time working with airlines while you worked at McKinsey. Can you talk a little bit about those experiences in terms of the type of work you did and how it informed your outlook on healthcare?

Mohan Giridharadas, MBA: Yes, a few experiences stick out. I got to spend almost a year in engine maintenance. And the sheer complexity of watching an aircraft engine get taken off the wing, disassembled into a million tiny parts, then getting routed for inspection with very sophisticated methods, blacklight to identify cracks below the surface, et cetera, and then getting reassembled into a fully functional engine, and then put back on the wing was just awe-inspiring. This along with the discipline of watching A checks, B checks, C checks, D checks that engines go through on a continuous cadence. And the focus of safety is very analogous to how I think about why and how health systems care so deeply and think so deeply about patient safety. So, that was one.

I got to also lead the McKinsey team that redid security at Atlanta Airport after 9/11. There was no TSA standing up yet. It was taking four hours to go through security, and we built queuing models, optimized the timing of metal detector lanes, figured out how to get each lane staffed correctly. And we took the waiting time down from the four hours to 30 minutes within six or eight weeks. And so, the insights of balancing supply and demand, optimizing assets, thinking about staffing, et cetera, are concepts I still think about on a daily basis as we evolve our products.

And then, the final example is I worked on route strategy for a very well-known international airline while I was in the Asia Pacific region at McKinsey. And it was fascinating to see how they thought about what they call OD pairs, origin destinations, where they predict passenger demand and that influences how many flights, how big a plane needs to be, the load factor, the yield, et cetera. And I think it still influences how we think about OR utilization, optimizing slots, et cetera. And so, airlines are fascinating for me. I got to do many other cool things like sitting in the air traffic control tower-- that's a crazy job, I would never want to do that-- wandering around the underground labyrinth of conveyor belts that handled baggage, flying a 767 flight simulator with a trained pilot. It was just amazing things. And it's given me an appreciation for healthcare and the level of skill and training it takes to do something this complicated.

Host: Right, and a holistic worldview on healthcare. Describe the kinds of disruption and policy shifts healthcare leaders are dealing with currently and what leaders should do to get ahead of them.

Mohan Giridharadas, MBA: I think it's a very unique time. Healthcare leaders are facing a near perfect storm. Cuts in research grants are putting the annual budgets of many leading academic medical centers under enormous strain. We're talking hundreds of millions of dollars of short. The impending cuts to the Medicaid program will put rural hospitals under risk. There's no doubt about that. But the problem is if policies change, that doesn't mean the rate at which patients need medical help is going to change. So, that's going to continue, which means that these patients are going to present when their condition has worsened because they're going to put it off since they can't afford it. It also means they'll present to the ED, which means the overcrowding is likely to get worse. And then, all of the tariff uncertainty and back and forth has an impact on the cost of supplies and materials, which again puts a further damper on the operating margin. So, healthcare leaders have a very, very challenging task of managing in such an environment. And as a result, the operating margins are under an enormous strain. If you look at the operating margin-to-asset ratio of healthcare compared to other asset-heavy service businesses like logistics companies or airlines, logistics are the best. They're at 9-12%. Airlines are at 5-6%. Healthcare's at 1% or 2%. So, this is the moment for healthcare leaders to do more with the assets they've got and the staff they've got because the finances don't support any alternatives.

And the reason it is now is that the Medicaid cuts will take a year to kick in, which means there's time for operating improvements and the change management to take hold, and this is the highest and best use of leadership capacity if you improve the operating margin of a hospital by $2 million or $3 million. It's the financial equivalent of growing net patient revenue by a $100 million, which is obviously a lot harder and takes a lot more time. So, that's the imperative of now.

Host: What is the role of technology in that change? Everyone's talking about AI, but let's make it real. What are some practical ways AI can actually help hospitals address today's operational and financial challenges?

Mohan Giridharadas, MBA: That's a great question. At LeanTaaS, we've been at it for over a decade. Long before it was cool to be talking about math and AI and hospital operations, we were neck deep in it. And we think that improving the operational performance of a hospital is about three things. One is improve the utilization of your most important assets: ORs, inpatient units, infusion chairs, imaging machines, et cetera. Second is optimize the allocation of the staff to the assets. An available asset without the staff is not really useful. It's like having a plane without a pilot. It's not going to go anywhere. So, you need the right staff to go with the asset. And third is to manage the flow of patients through the asset so they don't get stuck, and the asset becomes available for the next person or the next patient. We've gotten very far with math optimization as pure math. And now, we are advancing it even further with AI algorithms because we can now monitor an operational performance continuously. We can learn, we can adapt, we can absorb clinical chart data and incorporate the relevant information into recommendations that we are making. We are launching Agentic support to conduct voice-based phone calls with patients so you can prepare them for surgery and minimize the risk of last-minute cancellation. So, there's lots we can do.

At the end of the day, it boils down to stepping back and taking a higher level look at orchestration. A patient journey is dozens and dozens of steps. There are delays at every step, many last-minute fire drills of getting medical clearance tests done, et cetera. And that's what we can focus on. In a funny way, this reminds me of life before GPS, right? Because think about it, the first time we knew about a traffic jam was after we got caught in it. And the first time we thought about an alternative route was when we got stuck and had to find our way out. Now, that we have GPS in our cars and navigation on our phones, this doesn't happen anymore. We pick a route days in advance. We know when traffic is going to get bad, we get routes, et cetera. Healthcare still lives in a pre-GPS world every single day. They find themselves in the same problems and dig out of it again. What math and AI can do is help healthcare come into a post-GPS world.

Host: Many people assume the electronic health record is the system that should handle all this. Why isn't that enough?

Mohan Giridharadas, MBA: That's a multimillion-- a billion-dollar question at some level. The EHRs are fabulous data repositories and fabulous single sources of truth, so not taking away from any of that. And they've done a great thing digitizing the medical record. Their recent advancements in ambient listening, I think, are also very important because they will help with provider data entry. They will help reduce burnout. And it's very commendable that the EHRs are pushing forward in that direction.

However, EHRs are not the source of operational intelligence. They don't have context or expertise from having learned from airlines or logistics or complex fulfillment operations. Their history is a billing and compliance platform grown out of digitizing paper records. They're going to find that it's much harder math and it's much harder of an industrial engineering problem that they'd anticipated that it requires domain expertise to make operational recommendations. And the EHR support model currently is a tech support model. So, it's not meant to drive the kinds of changes they do. And operational improvements, for better or for worse, are very tangible. So, it's easy for health systems to say, "Hey, you promised my utilization would go from X to Y. It hasn't happened. What are you doing about it?" And so, that starts to make it difficult.

And finally, to drive operations, you need data that EHRs don't have that come from workforce automation systems, from device systems, from wearables, et cetera, from small community EHRs. So, they don't have all the data they need to do this. And we've got hundreds of health systems on Epic and have had it thousands of beds and hundreds of ORs since they made their big announcement about capacity management recently.

Host: You've said healthcare could learn a lot from the airline industry, especially the way they manage scarce resources. Can you describe your hub-and-spoke approach to capacity optimization and why that's so powerful for hospital operations?

Mohan Giridharadas, MBA: Sure. Let me make it come to life. Ten years ago, Delta Airlines moved 160 million passengers a year. Today, they move 200 million passengers a year. So, that's 3 million more per month. That's a lot. It's a hundred thousand more per day. If you ask, how do they do that and I were to ask you to guess, your first guess would probably be, "Hey, I bet it's more flights." And nope, there were 5,000 flights a day back then. There are 5,000 flights a day now.

So then, your second guess would be, "Oh, I'm sure they put in bigger planes." Nope. The average seats per plane, yeah, it went up a little bit, but not a lot. And the fleet size increased a little bit, but not that much. The plane's obviously not flying any faster. It's the same planes today that were flying 10 years ago.

So, what is it? They did three things that are directly relevant to healthcare. So, let me point them out. One is they started to turn the planes around much faster. They realized the only time an airline makes money is when the plane is in the air, and there's a passenger in the seat. At all other points in time, it's not making money. It's waiting to make money. And so, they turned the planes around faster. What does that mean? Turnaround time in an OR, bed turns. Just velocity matters.

The second thing they did is they got incredibly sophisticated at managing the supply and demand for seats. The complexity is staggering. An airline will let you buy tickets 300 days in the future. For every seat, for every day into the future, they have a sense for the demand for that seat. They know today how the March 1st 7:00 AM Miami, New York flight is doing. Is it ahead of plan or behind plan? Should we offer discount seats or not? They manage the inventory of that. What does that have to do with healthcare? It's managing the inventory of slots, appointment slots by day of week, by time of day, et cetera.

And the third thing they do is they run the hubs very efficiently. They don't care how a small airport runs. They care how Atlanta Airport runs. And what does it mean to run a hub better? Ten times a day, they do what's called a bank. A bank is like a surge, where normally in a 15-minute period there might be five planes landing or taking off. During a surge, it goes from five to 25. So, 25 planes will land in a 15-minute period. And when those 25 planes land, they put out 5,000 people who are now running around in the airport terminal. And 45 minutes, later there's a departure surge, so all these people can continue on their connecting flights onward to their journey. They do this 10 times a day. By getting the hubs to work faster, the volume of passengers moving through the system goes up a lot. What does that have to do with hospitals? There are only four or five hubs: ORs, inpatient beds, imaging, the ED. You get the hubs right, the flow works. That's why I believe it's relevant.

Host: Well, let's talk about now the human side of operations. Staffing shortages, turnover, burnout continue to be pain points that cause a ripple effect on patient access. So how can smarter use of AI help hospitals support and keep the staff they already have?

Mohan Giridharadas, MBA: The staffing shortages are here to stay. The staffing pressures are incredible. And there are many things I think with AI we could do. One is automate the mundane tasks. Thirty percent of what the frontline spends their time doing, a seventh grader could do. They pull a number from an EHR, they write something on a post-it note, they cut and paste from a spreadsheet. That could be automated, so getting that out of the way.

Second, help them staff right. Use AI to predict the workload, predict the skills needed, assemble the right team automatically and at scale. Think about how an airline has to assemble the right combination of pilots and flight attendants in the right number, with the right skills, at the right place, at the right time for every single flight, every single day. It takes algorithms at scale to do it. But healthcare expects unit leaders to sit with spreadsheets and decide who's showing up today, who called out sick, who didn't call out sick, and chase all of that manually. That's what happens in every unit every day.

The third is ease their cognitive burden. The frontline spends hours and hours each day chart diving in the EHR trying to find this nugget on that nugget about this person's clinical record or that person's lab results. The information should be pulled and surfaced for them automatically.

The fourth is do the math for them. Unit leaders play Tetris all day long trying to match the resources of patients to the resources they've got. I place this directly at the feet of the incorrect math built into the EHR. EHRs treat appointment as reservations of a resource. So, an imaging appointment is captured as a reservation of MRI number one for John Doe from 8:00 to 9:00. That's a fantastic way to schedule a tennis court. But it's mathematical malpractice to schedule clinical appointments that way. Things don't start on time, they don't end on time. You need lots of resources to execute a clinical appointment that have availability and constraint. It's a lot harder than just giving a tennis court to John Doe and saying, "Knock yourself out. We'll get the court back in an hour." But yet, EHRs built schedules and templates that way, as if the math doesn't matter. I could ignore gravity and keep throwing my phone up in the air, but it'll hit the ground every time. The same way the math shows up every day, and that's why we wake up to the same reality in hospital operations. The EDs are boarded, the PACUs are boarded. It's taking three hours to get a bed and their discharge delays, and that'll happen again tomorrow. That's at the core of the math. That's how we can help the staff.

Host: If you look ahead five years, what will separate the hospitals that thrive in this disruptive era from those that fall behind?

Mohan Giridharadas, MBA: I think the hospitals who accept this reality, that clinical sophistication and clinical complexity have far outpaced the operational practices that happen every day. So clinically, hospitals perform magic every day. There's nothing short of magic: genomics, proton beam therapy, robotic surgery, precision medicine. This is straight up magic, and they do it fantastically every single day.

But operationally, they deliver this magic as if we were still stuck in 1970. Their faxes, their post-it notes, their phone calls, they chase people, they cut and paste, they do mental math. As opposed to putting sophisticated tools to get it done. And so, what's happened is the clinical complexity has crept up and, the hospital operations, it's as if they haven't noticed. So, the way to make this come to life is in 1935, Delta Airlines had four flights a day out of Atlanta. Four. And so, what did excellent airport operations look like? It looked like this. "John, go take flight one. Bob, go take flight two. Hey John, your flight's running late. Go help Bob." That was excellent airport operations-- adaptive, responsive, et cetera. Today, Delta runs a thousand flights a day out of a hundred gates in Atlanta, and it makes all the departures, baggage transfers, connections happen. The John-go-here-Bob-go-there approach won't work. And that's the complexity that healthcare has to grasp that. Clinical complexity got a hundred X harder, but the operational tools only got two X better. And that's why we've got the problem we've got.

Host: And on a more personal note, you have led through plenty of disruption in your career, eras like the one we're in. How has your own perspective as a leader changed over time? What lessons do you carry forward into today's challenges?

Mohan Giridharadas, MBA: Several things. If I think about what's shaped how I approach these things, the first is I think of appreciative inquiry, meaning we all complain about missed flights and airline food. But over the years of working in airlines, I learned to take a much more appreciative view of what they do.

Consider this, tens of thousands of times every single day, airlines around the world, pack 200 people into a aluminum tube and shoot it across the sky six miles up in the air and at a speed of 500 miles an hour. And everyone comes out on one piece at the other end. That is incredible. And that requires a focus of excellence, skills, safety, et cetera. And that's analogous to what we expect in healthcare. So, it's easy to be critical. It's helpful to be critical with an appreciative eye and a focus on getting better as opposed to throwing stones. So, that was kind of one lesson.

The second is, I think, focusing on impact matters a lot in healthcare. Healthcare has been burnt by false promises and assurances of things that are on the roadmap. They're about to come soon, et cetera. Healthcare executives are rightfully jaded of this and distrustful of vendors, particularly the software and tech vendors. So, the approach we push inside our company is a proof, not promises, and show, not tell. So, we make sure we can point to proof points at other health systems that have done it. We also show we can do it instead of saying we think we are going to do it.

The third lesson is change management is hard. It's very hard. Throwing software over the wall and expecting results just doesn't work. People need to be brought along, and the reality is everyone has change-resistant and change is difficult. For example, how many times have any of us brushed our teeth with the opposite hand in the last two years? I would say zero, probably. So, a simple thing like that is hard to change. And so, you can just imagine.

I would also say, in healthcare in particular, trust matters. You can spend years building a reputation for being trustworthy and then blow it all up in one bad example of poor integrity. And so, we write all of our contracts with a guarantee that says if for whatever reason we don't deliver, we will repay. Just so that it's not a trustworthiness issue. It is, yeah, it didn't work for whatever reason, X or Y, but there is no implication that we as an organization or the individuals on the team were not trustworthy.

And then finally, I would say in this, we drive the heartbeat of our company with is innovation matters a lot. We created this category. We are the first ones who brought the sophistication of yield management and airline operations into healthcare. And now, lots of folks, including the EHRs, are saying, "Hey, we can do the same thing." So, our only way to respond to that is to just out-innovate and outpace because it is our DNA. Many of our senior leaders have spent lots of time in complex operational environments. So, it's our DNA, it's our focus. It is neither their focus nor their DNA, so innovation will matter. So, those are the kind of lessons I carry from the past into what we're doing today.

Host: You really address the human side of things as well as the mechanical side of leadership. This has been such a valuable conversation. Thank you so much for your thoughtful perspective in this in-depth, look at solutions for health system leaders facing unprecedented disruption.

Mohan Giridharadas, MBA: Thank you, Amanda. It was great to be with you.

Host: Mohan adas is founder and CEO of LeanTaaS. For more information, visit ache.org/LeanTaaS. And for more information about the American College of Healthcare executives, visit ache.org. LeanTaaS is one of ACH E'S premier corporate partners. Our premier corporate partners support ACHE'S vision and mission to advance healthcare leadership excellence. Subscribe so you won't miss an episode. And stay tuned for our next discussion. This is Healthcare Executive Podcast from the American College of Healthcare Executives.