DGTL Voices with Ed Marx - A Soft Landing for Patients Leaving the Hospital (ft. David Gelbard)

Episode Date: February 5, 2025

On this episode of DGTL Voices, Ed speaks with David Gelbard, CEO of Parachute Health, about the challenges and innovations in the healthcare technology space, particularly in the durable medical equipment (DME) ordering process. David shares his personal journey, the mission behind Parachute Health, and the importance of building trust in healthcare. The conversation also touches on leadership lessons, overcoming challenges as a founder, and maintaining mental health in a high-stress environment.

Thanks for tuning to Digital Voices podcast, where we chat digital transformation, challenges and opportunities across healthcare and life sciences. And now, your host, Ed Marks. Hey, it's Ed. Welcome to another edition of Digital Voices, and thank you for making us number 21 on Apple for technology. So I'm not sure why they put us in technology, but they did, which is fine. But thanks to all of our listeners, we're number 21 and our guests like David Gelbar. CEO Parachute Health. David, welcome to Digital Voices.

Thanks, I appreciate you having me. Yeah, no, this is awesome. And we're going to cover a topic that I'm not sure we covered previously on Digital Voices in five years. We were talking off record earlier. And we have over 250 episodes, which means, you know, we do over 50 a year. So we're looking at like five years, hard to believe. David, what about Parachute Health? How long have you been a company?

Well, first day, congrats on making it 21 on the Apple podcast. That's a huge achievement. Yeah. I've been working on there. I've been running Parachute for, I've been working at Parachute for about eight years. I started it over nine years ago. So I'm not an engineer nearby trade. So there was really no need for me in the initial phase.

But it was kind of up and running nine, almost 10 years ago. And where does the name Parachute come in? So it comes from the ultimate mission of the business. So my dad left the hospital, didn't get what he needed and he fell. And, you know, obviously had a fall. And we would say, what would he have liked? He would have liked to have a soft landing out of the hospital. And, you know, we call that a parachute.

So that's cool. I love that. I'm glad I asked. And before we get too much further, David, I have to also ask what songs are on your playlist. Like what kind of music do you like to listen to? I'd say my go-to generationally, like phase through phase of life has been Dave Matthews. That's been like, things are good, put it on Dave. Things are not good. Put it on Dave. It's a nice, you have a song for every kind of occasion. So for me, that's my go-to.

What about your parents or your dad? Where their music? Do you remember what music they were listening to? Like when you were growing up and did you ever come back to it? Yeah, actually, it's a great question. My dad would often have, like, Louis Armstrong or Ray Charles playing. Yeah. Or like Elvis Presley. And probably day 10, he's getting close to 90 now. And then my mom would have on repeat, Carol Simon or Rod Stewart.

Rod Stewart on repeat. Like, that is almost my day, Matties. And did you ever find yourself coming back to that at all? Like you had an inkling as a young adult. I want to listen to them Louis Armstrong or Broth Stewart. You know, when I was planning my wedding with my wife, I had some immediate go-toes, you know, some of these songs at the gate.

And, you know, I was able to impress my deep knowledge of Ron Stewart. Yeah. It was kind of fun, you know, because with my dad, you know, my parents, like Frank Sinatra type thing. And then I really got into that, like even in my 30s and 40s. And then at that time, my youngest daughter, she was, or my oldest daughter, I should say, she was probably like 18, 19, 20. She wanted to go to the concerts that I was really into, like Adam and the Ants

and some different like new wave punk artists from my age, you know, when I was her age. It was kind of fun, just hanging out together. So what about life message? Is there a particular message in life that really resonates with you that you try to live that way or any sort of mantras? Yeah. I mean, for me, there's probably one of the names of Wilson Parachute. it was going to be Olam, which means to repair the world, make it better than when you found it.

And, you know, I'd say like that to me is a driving force of what to work on that helps like inform prioritization. You can work on anything, right? Like work on parachute could solve different problems, but to solve something that helps people in their most vulnerable state, especially after being a generalist investor and seeing all these different industries, diving into health care, probably was like a personal mission, but to me, it centers me at least on around why. Why work so hard? Why solve problems? And then in that same construct, it's, you know, life short, you know, and at least while we're

here, you know, we should have an impact. I think to me that's one of the core things is what you work on, have a meeting, prepare the world, and have some impact while we're here. Yeah, I love it. So tell us a little bit about where you grew up and then and then we'll jump into sort of your career all the way leading up to CEO of parachute. Yeah, sure. I grew up in a place called Ruffling County, New York, which most people have no idea where that is, but a town called New City. And it's about 40, 50 minutes out of the city. It's on the Jersey side of New York. Huge high school, you know, 1,000, 2,000 kids per grade.

I mean, it was a massive high school. big, you know, almost big of my college. And growing up, I played a lot of baseball. Obviously, you know, went to school, Deval in school, but baseball was the thing. And I went to Emory for college, played baseball there. And my freshman year, I had a career arresting injury

where I got mono, but they didn't diagnose me correctly. It's funny. I don't tell the story often, but I'll tell you the detail. because we're, you know, former health care, right? They told me I had cat scratches disease. And I said, I haven't seen a cat in years. So how's that possible to go, we're not sure, but this is, we're confident is what you have.

Turns out I didn't have that. And they gave me the wrong treatment. Oh, man. And, you know, as I kind of reflect back on, you know, kind of what led me here to parachute, it's interesting that, you know, I kind of went through entrepreneurial ventures. in high school, college, went into the world of like investment banking, private equity, and then ultimately led to a building parachute. I kind of come back to some of these core healthcare experiences I've had throughout my life growing up.

And it was interesting how misdiagnosing and ultimately ordering the wrong care had such a profound impact. I had to drop out of the baseball team. And, yeah, it was a pretty rough moment. But, you know, ultimately recovered. Got into business, found that to be a new competitive passion. Within the realm of private equity, I mostly spent my time focused on turnarounds. So looking at the stressed or bloated businesses and helping, you know, put them on a more sustainable path, a faster growing path. And yeah, at some point, I grew up around health care.

You know, my mom's a nurse, sister's a doctor. Dad's a pharmacist. I married a chemist, you know, to kind of affecta. But I wasn't in health care and one day not great thing happened. My dad had to go for a life saving surgery, got discharged from the hospital. And, you know, everything went fine. They saved his life, got home. Ultimately, a walker was supposed to get there.

Never did. He fell on the trip from the bed to the bathroom. This thing called furniture walking. And he injured himself. So I just left me in a really frustrated state and we know what to do about it. So eventually, you know, I did enough research into the issue and tell you more about that moment. But that basically drove me to say, I want to start something that solves this problem. And that's horseshoot.

Yeah, I want to jump right into it. But first, what position did you play in baseball? I was a pitcher. Oh, wow. Okay. It's interesting. In high school, I was a pitcher in a shortstop for first base spending out if I had a pitch or not. and you were in every game in high school.

College wasn't as exciting because they said you'd have to pick one. You did either field or pitch. And I was a pitcher so I pitched, but then I had to sit out and watch the game. So I found some of the games pretty boring, and I would put a book in between my glove in the bullpen, and I would always get trouble. But I didn't realize how slow the game was at times.

When you're watching, not so I very much appreciate my parents for sitting on all those games. Yeah, right. Yeah, that's a fact. I can relate to that. So, yeah, so basically the story, and I'm sorry about your dad, but I'm glad he's fine. You mentioned he's still with us today. And sorry that you were misdiagnosed as well. And that's what happens oftentimes. We have these experiences that leads us to do something going back to your mantra to make a difference in parachute. I love that whole concept that you explained. So yeah, so tell us about what your company does now. Yeah, I'll tell you about the problem we're solving and then how he fixed it. So basically, today, facts is the predominant method of orders. And it may not be a specific fax machine, like a literal fax machine, which most people coming at college or don't even know what it looks like. It may be an electronic fax coming out of a medical record or some, you know, operational system that doctors use it. And that fax, by definition, cuts off communication, right?

Senses facts. There's no downstream. Did they get it? Right. What happened? You know, is everything okay? Did it validate all the data inside that facts? They didn't really exist.

So ultimately what happened is the discharge planner said to my dad, hey, we're going to order you home care and a walker. And the home care came. P-T, the Walker never showed up. And it also never validated that it was going to be covered by his insurance plan by Medicare. And that was a real problem. Ultimately, the issue is trust, right? Like, it's not transparent. It's not instant. It's not at that moment in time. And you don't have this feeling that it's going to actually happen. You're kind of left in this unknown, this like opaque state, where you're not sure if what you actually need to live sustainably is going to get there. That's the problem.

The problem is that no one really knows how to use their insurance card effectively. There's all these rules. There's all this data and the data all is to match. But no one really knows did it work? And will it get there? So what does parachute solve? It solves that. So at that point of discharge or order, order, like is actually the moment.

What it does is it looks at your insurance plan. and then at eight, you know, says, okay, well, what do you want order doctor for this patient? And based off of the 10, 40,000 product codes each mapped to different accessories, there are then thousands of insurance plans that you then have to navigate. And then from there, there are tens of thousands of diagnosis codes each then drive to five to 20 branching questions that all change based off of those answers. And you can just imagine this, like, many to many to many, you know, tail. And ultimately, over nine, ten years, that's been what parachute has solved for is how do you create a simple ordering experience that is, you know, less than a minute, but ultimately takes all that complexity for how do you actually

order something for a patient on their insurance card and embedded into a seamless experience in someone's medical record, integrated, or outside, depending on what's, their technical setup is. And that is what we built. And that was for building new orders. We've now launched reorders to be digital. And we're now ultimately embedding authorizations to be digital inside that flow as well to really like round out the end to end flow. But to me, that's ultimately what we built. We built a modern way to say, my patient needs this. Does the insurance cover it? Yes. Will it get there? Yes. You know, that's ultimately, thankfully, what we built. Yeah. I don't think many people may realize how fragmented and old school the whole DME durable medical equipment ordering process is and has been.

Any thoughts about why it has lagged further than healthcare tech in general? You know, we automated it right with electronic health record and physician orders and those sort of things. But DME still kind of a straggler. Why do you think that is? Well, I think that there's two aspects to this, which is there's an historical one where, you know, margins and if people are making a lot of money in a space, there's not really a drive to innovate. And what happened was a program in 2007 and not 2009 in that realm called competitive bidding that Medicare launched, where it actually cut the reimbursement by DME company. by 50%. It forced 30 to 40% of suppliers out of the market almost immediately. And their market went down to nil, essentially to negative. And there was a moment in time then where in order

for a DME company survive, they needed to figure out ways to reduce costs. And ultimately, the answer, I mean, to me, that was a watershed moment. Because if you didn't then move from facts to e-prescribing, you know, you are more of the antiquated bucket. And you now see a lot of the leaders in this market are driving e-prescribing. And like I draw the analogy often is akin to brick and mortar retail to e-commerce. Or like if 30 years ago, you didn't say, oh, e-commerce is a good idea, right? Like, oh, Amazon's like this thing or Shopify's this thing. Maybe I'll get on board or not, I think that to me was a real issue, you know, for retailers. And I think we're having a similar moment now, obviously in the medical equipment space.

But one of the things I've learned is that this problem extends far beyond medical equipment into tangential verticals. And, you know, all these faxes, whenever someone's ordering something out of a hospital, it's a nightmare. Right? I mean, four walls, the EMR solved a lot of those problems. like ethics, great, you know, very powerful systems. But it's all these like fragmented networks outside. That's a really part of think through. Yeah.

Yeah, that makes a lot of sense. And you know, what more needs to be done? So given where we are today and the great things that parachute is helping with, what more can be done? Where do you think we may be headed? I always say like you follow the order, right? all the way to me, you know, you follow the patient and experience. So, I mean, to me, new orders, a lot of clinicians adopt in mass now, the new order moment. The reorders, I think, will be the next

big one, which is a bulk of the market. And it's sad to even talk about the ban event rates that diabetes patients, COPD patients deal with by not getting their sleep machines, CPAP devices, or glucose monitors or right on time just because a document didn't get to the right place. This question tank might be the most horrific example that we're solving. But I think the next step, and you know, you kind of hear this across the country is that authorization moment at the point of care. And how do you start embedding the payer's rules into that point of care moment to note, is this going to get paid authorized or not? Or maybe. And, you know, it's helpful just to know, like they may not want to pay for something, which we have a lot of payer partners.

but I think there's a lot of benefit in telling the consumer, telling the clinician out of the gate, we're not paying for this so they can make alternative plans. And I'm excited about that because we just launched a big partnership with Optum and I think this will be really innovative. Yeah, what you're bringing up is so key because it's just like medication adherence, right? There's a lot of fragmentation and you don't know,

did your patient take the med, do they need the med, they didn't get the med? And that obviously has an impact to their overall experience, their overall health. And it's the same with DME. Did they get that CPAP? Did they get their oxygen? And you have abandoned it, right? And people give up and they don't take it. You don't know as a clinician, what's going on.

So obviously that has a negative impact on cost. It has a negative impact, most importantly, on patient safety and quality. So I can really see the importance of what you're doing. And again, I love the whole parachute. analogy, you know, about the soft landing and covering it. Because stuff's going to happen to all of us in our life. And we all, I think, would want that soft landing, not just for ourselves, but our loved ones in our community. So that's really cool. Hey, let's shift a little bit to leadership. Did anything early in your life, other than listening to Louis Armstrong and playing some baseball,

but maybe baseball is part of the answer, help prepare you for your current role, like as a CEO. Like, do you look back now as a kid or you have kids now that, and you're like, wow, that's something that actually helps me today or helps shape who I am. I'd say as a CEO, especially as a founder and a first-time founder, first-time a CEO of a business like this, there's more you don't know than you know. I'll share a couple of things, which is one, whether it was playing baseball growing up and then not making the initial varsity team in high school or getting to college and being told by all friends that, you know, you won't be able to get.

a job from, you know, this school and get to investment banking or private equity and it was the middle of the financial crisis. I just remember everyone always saying you can't do something. And then having this feeling inside of, yeah, I'm going to do it and not take no for an answer. And if that sets like a certain framework for yourself, but then you're going to push beyond the limit of, you know, probably what you're, you would naturally be capable of doing. and whether it's like just making a million phone calls, cold calling all day into investment banks asking if they want an intern or just outworking people on the baseball field

because I was a slow runner, wasn't in great shape. I threw pretty slow, but I knew that I trained enough. I'd have better control or I'd be able to develop different pitches. And I found that you could always develop an edge if you work hard enough. And just hearing you can't do something, just be continuous motivation if you have the right, you know, work ethic attached. Yeah. Those are good points. All about resilience and sort of that hustle.

What are one or two things that you learn the hard way? You know, as a founder, I'm sure starting a company, you've learned a couple of things the hard way. What are maybe one or two? And then maybe, you know, we'll flip those, you know, how other people might be. be able to learn from that experience and avoid the same hard learning. So I maybe I'll actually take the last, which is part of starting something that's new and innovative, is basically telling a lot of people that the way they've been doing it historically

doesn't really work. And, you know, you're taking a pretty controversial position out of the gate where, you know, you're such telling a lot of people, hey, you've got to change. and there develops this sort of like mindset that it's incumbent on you to push people and not really hear the pushback, but keep pushing them in the right way. Now, the way that kind of catches up to you is the business gets off the ground, the product gets hit, and you have to start figuring how to balance the signal between people wanting to push back because they don't like change

or they're pushing back because it really doesn't work. And to me, that latter point, I kind of learned a couple times the hard way with large customers where I would push back and say, hey, you know, why don't we keep using the beeper and say things in a way that I would say, you know, didn't necessarily build a relationship. I think that was the biggest learning over like a nine, 10 year run building parachute is learning how to collaborate most effectively, even amongst differences of opinion and still enabling people. people to kind of see a path forward without just having to like push them over a line. And, you know, that to me was the hardest challenge, something that nothing in my background, baseball, college, you know, investing. None of those, you know, were really aligned to that skill set. But that was, I'd say, the hardest thing to overcome. But also I'd say now what makes it really enjoyable working with people for 10 plus years, 9 10 years in the space.

Yeah, the line between humility and for lack of a better phrase, you know, arrogance, right, where you think you might know everything. And you also want feedback. Yeah, am I getting legit feedback to help the product be better for me to be better person? Or is this just people, you know, stubbornness? Yeah, that's a good one. That's something I think we're all still learning. But yeah, hopefully we're getting it better, being able to discriminate between the two.

The second one that comes of mind is progress. Like progress, incremental progress is valuable. But when you first start in those first couple of years of building a business, like in your mind you have to be perfect because the failure rate is so high. And it's hard also to make that other adjustment between now the business gets up to a certain point and you have multiple teams working and how do you just keep driving progress towards where you want to go as opposed to always trying to be perfect. Because that also creates a culture of just agitia and anxiety.

If you had to be perfect on everything, but if you could just make progress in the right direction, it just lends itself in such a more empowering capacity. Yeah, those are good. Good stuff. So, yeah, nine years now, you know, running parachute and obviously it's, you know, it was a startup and just a lot of stress and, you know, you mentioned anxiety, whatever. what do you do to like take time away and breathe? Yeah, I'll bucket them in like two big categories.

One is like the run the business, like the keep the lights on kind of work. And to me that's going to the gym, just like physically staying up and then, you know, second is mentally, you know, going to therapy, talking about problems and challenges and, you know, what I'm feeling, you know, deep down and what's ultimately the underlying cause behind a lot of the decision making or things I'm feeling. And then the third is just to medic, like, to me,

like meditation comes in all forms and sizes. For me, it's massage, like going and having my face down, doing nothing for an hour is key. Like, I think those three are my medicine. Yeah.

Being sane and clear. But I think then there's like joy. Like how do you, how do you separate from the business? And this was the hardest one to do over the years because it taking time away from work and whether it's like going on a trip or spending time with my daughter or like whatever it was like I needed to disconnect and laugh and fun and not and get my brain out of the details to have clarity and I think that both created energy and also better

decision making along the way so there's uh those are kind of my my yin yang on that no I love that It's super practical because I think sometimes people just try to tough it out or whatever, and it doesn't end well when people do that. But you just got to be practical, you know, working out the mental fitness as well and the meditation. And yeah, it is something else. Right. I did that one time where I did like a sensory deprivation experience. That was tough because like you can't feel anything.

You're kind of floating. That was super crazy. But I like the massage and the whole concept of the joy. Dave, this has been fascinating conversation. everything from, hey, we talked about the music, some old school music of our parents, but also the influence of our parents in our lives. Then we talked about you're growing up and sort of what led you to parachute. The DME process, old school, and how parachute, how you've helped it to really modernize

and digitize for transformation. And then we talk a lot about leadership, like what prepared you for your current role. You know, you talked a lot about resilience, courage to push limits about just hustling. And so with all that, what did we miss? Or is there anything you want to double down on? Yeah, I think I'm going to perish you what we're solving, kind of what keeps me in the game. I mean, for me, if I walk into Starbucks in the morning and get coffee, I slate my credit card and I look at the screen and says validating, authorizing pay. I don't have to come back two weeks later around the corner.

I don't have to go clean dishes maybe. They're not going to take my money and they're not giving me coffee. you know, when I think about the retail experience compared to the healthcare experience and what parachutes building, it's starting with ordering. But I think one of the cruxes of what we're ultimately going to solve is this feeling of trust in health care with that authorization moment. So if an order could get connected to an authorization and at that point of care, there's a moment of validating, authorizing paid. And people can feel that sense of relief that it's going to be covered at that moment of care, there's so many issues downstream that that gets rid of.

Yeah. And building trust back in the system to me is going to be like the most critical juncture. And that's the system we're building towards akin to like a toast or Shopify or visa of this market. And I'm super excited about it. I love it. Hey, super fascinating conversation, David, full of wisdom. And best of luck to you with parachute health and your family. Thanks, Ed.

And congrats again on rising in the ranks on the Apple rankings. That's super exciting. Thank you. It's guys and guests like you. Thank you for listening to Digital Voices Podcast with Ed Mark. If you enjoyed this episode, subscribe on your preferred streaming service and leave a rating and review. And most importantly, thanks again for listening.