Wednesday May 12, 2021
Dr. Jeremy Friese left a prestigious medical practice at Mayo Clinic to solve one of healthcare’s great headaches: the prior authorization process. Three years later, in December 2020, he sold his venture-backed AI technology company Verata Health to its biggest competitor, Olive, for $120 million. He brought almost the entire Verata team of around 60 with him, and took on the role of president of Olive’s Payer Market. His work to automate the administrative side of health care services continues, now with a much larger team. He’s yet to meet any of them in person or visit Olive’s Ohio headquarters. The entire acquisition transpired virtually.
Verata, which was a “Zoom company” with employees spread around the country even pre-Covid-19, saw the adoption of its software services accelerate during the pandemic. “One of the positives [out of this time] is the way our healthcare system has embraced a new way of working—the adoption of tele-health and a variety of other technologies. There’s a newfound appetite and willingness to bring in tech to solve problems.”
Although he spent nearly 20 years in radiology at Mayo Clinic, Friese initially chose medical school with the goal of “solving systemic problems.” His first exposure to the stresses of health care came as a high school sophomore in South Dakota, when his mother was diagnosed with breast cancer. “So much time and angst is wasted sharing information among physicians and with payers,” Friese says. “It causes delays and uncertainty in care, and it hasn’t gotten a whole lot better in the last 20-30 years.”
“Helping the system get better through capitalism is something I’m wired to do.”
But along the way, Friese got drawn into patient care and became an internationally recognized doctor. All the while, he took on executive roles on the business side at Mayo and earned an MBA at Harvard. With patient paperwork piling up on his desk and keeping him out of the exam room, he decided to finally take the leap and step away from practice—and his doctor’s salary— to start Verata.
“To be an entrepreneur, you have to be a little crazy,” Friese acknowledges. “But I did know that it was a massive problem that would have a massive impact.”
His work at Verata landed Friese on TCB's Tech 20 list in 2020.
Following our conversation with Friese, we go Back to the Classroom with the University of St. Thomas Opus College of Business where Daniel McLaughlin is a senior executive fellow whose research focuses on making health care work more effectively. He sheds some light on the complexities of the prior authorization process. “Throughout the country there’s been a problem of over-treatment or ineffective care.” Both ends of the spectrum add up to billions in waste, he says. “Insurance companies don’t want to pay for either so they set up a complicated system. There’s a real opportunity to use emerging tech tools to make the process easier and cheaper.”
The number of medical doctors seeking MBAs, particularly in St. Thomas’s health care business program, continues to grow, McLaughlin says. “There’s an increasing number of physicians who are so frustrated in practice, they want to figure out how to fix the healthcare system.”