In this episode, we chat with Paul Black, the CEO of Allscripts, which is a leading provider of healthcare information technology solutions ranging from population health management to virtual care to precision medicine to genomics to pharma data analytics and to post-acute care, among many other solutions.
Paul shares with us his focus on maximizing opportunity and the importance of continuous innovation in producing long term relevance and a strong path to growth.
He speaks to his young years where work ethic was instilled as he experienced what it was like to work on a farm. He also recounts the impressive set of folks he worked with during his IBM and Cerner years and the importance of vision.
In addition, Paul shares more foundational insights such as the five key attributes of humility, kindness, patience, gratitude and being happy.
We hope you enjoy the show.
Listen on iTunes or Google Podcasts.
RJ: Paul, thank you so much for taking the time to chat with us today. Maybe what we could do is kick off with your background. You have a very fascinating start to your career, and even before that your interest in healthcare. I think I read that as a child you had accidentally drank something which had was a very pointed experience for you which then led to your interest in the field. Can we start off at that point?
Paul: Sure, RJ, thank you very much for having me today and welcome to all the listeners, hopefully there’ll be lots of you. Yeah, the experience that you’re referring to was when I was five years old I drank some weed poison and it fundamentally had some arsenic in it. And my kidneys shut down and I was very lucky that the kid next door, who I was playing with had some peanuts, and luckily I had eaten some of those peanuts, which the peanuts actually absorbed some of the poison. But most importantly is my father was pharmacist at the University of Iowa Hospital at the time, was the Director there for some 43 years. And when he came home that evening he noticed, and I don’t know how he noticed, because I was very careful and I put the vial back up on the shelves.
And he noticed that it was not empty but that a portion of it had been drank, or was missing, which that’s a pretty attentive eye to be able to capture that. So anyway, he whisked me away to the hospital and actually he whisked me away to the veterans’ hospital, not to the University of Iowa because he had heard that the veterans had just received an artificial kidney machine. And my dad, I think, projected that potentially there was going to be a problem. He took me to the VA and I was extraordinarily lucky because that would have been in the 1963/64 timeframe and there were not a lot of artificial kidney machines populated around the country. As a matter of fact it was extraordinarily rare that there would have been one in the middle of nowhere in Iowa. And so I consider myself quite lucky to even be alive.
That’s some quick thinking by your father. And I would imagine that throughout your life you were able to, especially early childhood and young adulthood you were able to see some of the things that he was doing, and see what his interests were which helped lay some type of foundation for you. Do you see it that way or was your interest somewhat separate?
No, it absolutely was, I think that early upbringing from my mother and my father, but they both were extraordinarily hard workers. My dad, although he was a state employee he would go to work every day, early, come back for lunch. Back in those days we only had one car so we’d pick him up and then he’d come back for dinner and then we’d take him back to work. He’d go back to work after dinner every night and he would also work on Saturdays.
So he was always tinkering, he was always the – today you’d call him an entrepreneur, back then you’d call him a physicist or a scientist. And that he was always trying to invent new ways to doing things differently, and not to infer that a pharmacist was inventing any new medications of course. But just things like he invented a way to be able to do all the all the cart. He’d invented a concept around a cart and unit dose way back he was the original founder, if you will, of that construct of unit dose. I apologize here for lack of clarity. And so I was influenced by that and influenced by why is that important? Well, because people that are walking around on the floor, they’re all extraordinarily efficient and good people and they have all taken the Hippocratic Oath.
But if you have a bunch of different medications in your pockets, it’s easy potentially to make a medication error, which he was very big on trying to make everything much more safe in that environment. So I grew up with that as an entrepreneur, a tinkerer, if you will, the guy that – and I don’t want to say mad scientist, but somebody who was always thinking about how to do things differently and better. And he was that influence that was on me. And again, I don’t want to overstress the nature of the fact, even though he was a state employee, I don’t want to overexert that. But it is interesting, especially in today’s world.
That’s not something that potentially a lot of innovations would come out of just because of the way things work in the world today. So that was all, I was very proud of that and that influenced me both the work ethic as well as the work that is performed by a health [0:05:01] actually saves lives. And that’s a different calling, if you will, or that’s a different capability that you have by going to work for that type of company, versus going to work for somebody that builds railroad tires or something like that. So it’s much, much more interesting and easier to get my brain around why it was important.
And what I find really interesting is that some of the inventions, so to speak, that he was working on are almost directly relevant to some of the platform technologies that you have today. You mentioned dosing, and just maybe reminders for patients to take their medication. And this is a good segway into Allscripts, perhaps we could start there and then talk more broadly about Allscripts and the various platforms it provides.
Sure. The other thing that came out of that just interestingly was he obviously knew what to do because he was a pharmacist and he knew where to go because of he’s a healthcare person. And he sat back and said, “But the average person might not know this.” So he actually invented and set up the very first Poison Information Control line, so an 800 number way back when 800 numbers were pretty expensive. And so anybody knew in the state of Iowa could call a centralized number and say “I think somebody may have taken some medications,” especially a mom or a dad. And so he set up that Poison Information Control Center as another service to people as a result of this thing that almost cost me my life.
So just again other things that came out of that were pretty interesting. And as you say, there’s a fair amount of tangential legacy to some of the things we’re doing here at Allscripts. And so at Allscripts I thought it was important to innovate. And I think it’s important to build upon the great wonderful trust that we have established with our clients. But also in order for us to be relevant long term we have to be thinking about other things. You know, somewhat similar to my dad, I could have just put the warning label on a vial or a warning label on arsenic or something like that.
And we said not only do we do that, but I actually assumed that there were things coming out of that that are bad and let’s think about the range of options, or the range of in this case, bad outcomes. And how do we control for the bad outcomes which is what the Poison Information Control Center was all about. So I think about what we do, I think a lot about the platforms that we have around the population health management.
And that was the first one that we really worked on when I got here, of being able to connect open – and clear open connected communities. And we also have a certain amount of work now that’s become extraordinarily relevant around consumer, especially as the consumers become more engaged in their health, and especially right now with Covid, as the consumers are actually looking into their health record and then trying to find a physician that they can talk to and do that online, and do that through video versus going into a clinic or a hospital.
We’ve also done a lot of work around precision medicine. And from our perspective everybody in medicine attempts to do things in a precise way, and certainly if anybody is a blood banker or a pharmacist, understands the need to be precise and the need to make sure that you don’t have any errors in your calculations in the decimal upper ranges in chemotoxicity etc. But that also then translates over into how do I from a precision standpoint make sure that medication that’s been prescribed is actually going to be metabolized by the human that it’s been prescribed to based on the way that their body works.
And that’s why all the work around genomic sequencing and everything that’s happening in pharmacogenomics and other versions of this new diagnostic we have, which is called looking at the genotype of humans has become extraordinarily mainstream and extraordinarily interesting to me. And the work that we’re doing around the post acute care space, so what happens when people get discharged out of a hospital, where do they go? How do we know where they went? Who’s accountable for them afterwards? 25% of the people that come out of a hospital actually go to some additional care setting versus coming straight home. And how do we account for that? How do we make sure that their handoff is there and then again, how do we take care of them long term? We know where they went.
Another platform that we have is around payer and life sciences, our Veradigm business has a lot to do with the data, that becomes the [0:09:44] to all the information that we are automating today. But importantly, that data can be analyzed, structured, stored, AI put against it, but a lot of different algorithms can justify new learning around specific conditions, around specific medications that are already out there, around specific use cases that are important to both pharma and to insurance companies.
That’s a big piece of our business. What’s unique about what we do is that we have data rights to be able to do that in a lawful manner, of course. But also importantly we connect that insight that is gained as a result of the AI and other things that are done by these very large data warehouses that pharma and other organizations are in possession of. But we actually can close the loop, background, bedside of a clinic because we have not – the usage of that data in a closed loop manner. So those are the platforms that we have that – of healthcare, if not, just electronic medical records, which are very important to us. But we have, I think, under the banner of relevance, tried to do many other things that are out there to create a path of growth for the company. But importantly, allow people that have our solutions to look to us first for additional solutions for things that they are now tackling today that perhaps they were not working on five years ago.
And that’s quite a bit of breadth of technologies and solutions in the portfolio. How do you manage that portfolio? It seems like you pursue certain acquisitions, you’ve also had divestitures. As you’re thinking about the future of Allscripts what takes priority in the decision making process around portfolio management?
I think that the current value that we are doing as a group are fundamentally on two platforms inside of the company with regard to that topic. And the one platform, electronic medical record, in the historical business it represents a very substantial portion of what we have today. We are doing a lot of things around value creation. We are working on making sure we’re spending money as efficiently as we can. The research and development that we have is building interesting new innovative solutions for those clients that are out there today that have been long term clients for us. We work on bringing meta functionality inside of electronic medical records so that people don’t have to buy point solutions to do things like Emergency Room, ambulatory surgery, financial systems and radiology.
Those are all things that we have built over time and added into our solutions. And then we also wrap services around the electronic medical record to to create value for us, but also value for our clients around we’ll run your computers, we’ll do your revenue cycle. And if needed, we’ll outsource pieces or all of your entire IT organization. The other part of the business that we have, that we’ve talked about is where we are unlocking value, and in many cases we have a number of assets that sit inside of that construct, that may be worth more on the outside and certainly are worth more based on things that are happening in the marketplace when you look at a lot of transactions that have occurred over the course of the last 18 months.
We have a number of assets that are not EMR dependent, that are not Allscripts dependent, and in many cases they actually run inside of other competitors’ environments. And those solutions are growing quite nicely, those solutions are run, if you will, independently. They all have their own infrastructure, not only from an engineering standpoint, but from a hosting standpoint where most of them are cloud based, they have an executive team that’s dedicated to that. And those assets in that part of the company would fall under what I would call the value unlock specific strategy, specifically the one that I mentioned earlier, was we call that the core clinical and financial set and suite of solutions. And the one I just talked about is what we call the data analytics and care coordination suite of solutions.
And you’ve been able to, I think, accomplish such a great amount at Allscripts given your background and particularly for our audience, you have a very impressive track record starting out at IBM and then moving on to Cerner, in addition to advising with certain notable private equity firms, if I have that correctly. But would be great to hear about some of the experiences that you had previously that helped play into how you’re managing and leading at Allscripts.
Sure. Well, thank you for those compliments, my mother will be quite proud. So at least have one person will be. It all goes back, as I said earlier, your family and how you were raised and what values. And there were things that they what’s the right word, inculcate as an early child, things that matter. And you started our conversation before we started recording about being grateful. And I think those are important words. I like the words, being humble, being grateful, being kind, so having patience and being happy. And those are all five attributes that I talk to our company about, and those are all things that I learned from growing up and you learn those from a very early point in your life.
I think some of the work that I did as as a teenager, I worked on farms, I was a hired man. And you learn a lot about people by working on farms, about the people that come through that are buying cattle, or buying pigs, or the seed salesmen. You learn a lot about that because they don’t come around that often, so when they do you pay a lot of attention to them. And also that I worked for six or seven different farmers, and you learn a lot about how they work, what they do, what they value, and if you will, what then makes them tick. But clearly at the center of all that is an extraordinarily strong work ethic, and there’s not usually a lot of extra people there and so you learn how to do a lot of different things pretty quickly. You learn what a pliers is, you know what bearing wire is, you learn what happens when animals, grow, die, etc. And you learn a lot about nature. So it’s all that upbringing was extraordinarily influential to me as I think when I think about, even today, I could think of things that happen to me today that I can relate to that happened to me a long time ago. So that work ethic and that work experience were all important.
Clearly then at IBM I learned a lot about what it’s like to work for a large multinational company, back in the time they did a lot of training. Their training was unbelievably great, they taught a lot about technology, they taught a lot about software, they taught a lot about implementations, sales, engineering, all the wonderful things that you need to learn at a company of that scale and size, taught me a lot about technology, software, selling and the rest of it. That was incredibly important. It also taught me how to lead, and I spent a lot of time on leadership, so as you moved up in IBM, you had first line manager school, second line manager school and you learned a lot about how to manage and motivate people. And that to me was incredibly important.
Moving from there, I went to work for Cerner and working for two world class entrepreneurs was a treat. And working with entrepreneurs is something that’s always now been relished in my mind, because certainly at IBM the entrepreneurs were gone, if you will, or the founders were gone. And also I had a direct line experience of being at a company that when I got there was about $100 million in revenue. And when I retired in 2007, it was $1.6 billion in revenue. And everything that we did was growth oriented; everything that we did was naturally grown organically, if you will. And that was an incredible experience about how to scale, how to grow, the investments that you need to make in R&D, how to manage people in a growth environment. And how to really think about the vision of the company and the importance of having a vision really helps distinguish what you’re doing every day, but also coalesces the company around what you’re trying to accomplish.
And the vision, that’s, I think, critical, we have had guests on here before that have spoken about it. And so, thinking about the time at Cerner, because that was dramatic growth that you experienced there. What was the vision when you joined and did that vision change along the way?
What is fascinating to me about that is that there’s probably during the course of the company there were probably four different visions that occurred during the time that I was there, or the time that I was aware of. So I got there a little after, I think I was there for two-thirds of the time the company had been public, and for half the time that the company had been in business. And so everybody that was there started it, and so you could ask all those questions. But fundamentally I was told that there are basically four different levels of a vision at that time, and going back to the original S1, which to me was a pretty visionary document, because they didn’t talk about – even though they went public in 1986 with an S1.
And they didn’t talk about the fact they were a lab company, they talked about what they were going to be when they grew up. And they talked about the vision of the company. And so I learned a lot about the importance of that when I was there. And the visions didn’t they were not step changes, they were gradual increases, like the power of data, the power of a community based system versus a hospital based system, the importance of being global and the rest of it. But those were all things that I took away as, again, being extraordinarily important to how you lead the company but also that drives the mission that drives the strategy, that drives the structure, that then drives the tools and the processes that you need to have in place and all those combinations, that combination of those different elements equals results. And then we’d measure the results and we’d find out, put it on our plan, did we hit our number? And what was the trajectory, were we going up or down? And those are all extraordinarily important lessons on how to build a company.
And these days we have somewhat uncertain times, there’s certainly ups and downs every day with new news coming out. And I’m curious, leading during this time, are there certain kinds of tenets that you keep in mind as you approach decision making on a day-to-day basis?
Sure. You know, the decisions that you have to make in any of these kinds of scenarios, while this is a scenario certainly unplanned and it’s unprecedented and we’ve all heard all the different adjectives that describe it. But fundamentally you still have to make decisions and the decisions that a CEO makes is always run through three different filters. There’s a filter that looks at the investors and how they would approach or think about the decisions that you’re making. You’ve got a decision you have to do with the clients that you’re serving each and every day. And they’re always going want you to spend more on their particular issues, the particular products. And then you also have the decision algorithm, if you will, or the lens of looking at the associate.
And I think over the course of these few weeks – I’m sorry, these last five months I would say that we were able to balance all three of those. We have done a lot of work with regard to restructuring the company to make it more profitable, to make it leaner, and to take a fair amount of cost out. And that happened all during the course of this event. We also have spent a lot of time with clients in helping to innovate to get things like telemedicine out in front of them as quickly as possible, to help them with the algorithms they’re trying to understand with regarding the data that they have in order to understand the populations that they’re serving.
And how best to serve them with a brand new symptom that has not occurred in the past and how to diagnose that, how to treat it, how to isolate the patients and what happens again, as I mentioned earlier, after those people are discharged, where do they go? How do we track them etc? And the data being used by the successful organizations has been incredibly valuable. And that data comes from a strategy that we’ve had for a very long time, not only about collecting it but also allowing clients to our open architecture to have access to that data. They don’t have to ask permission for it, they have immediate access to it and they can run their algorithms around it to be able to gain value.
And then on the associate side there’s a lot of anxiety out there, there’s been a lot of concern about everything that’s happening. People are dying, people are getting sick, there’s not a known cause of the spread, there’s not a known vaccine yet. There’s not a known therapy that is effective, and we’ve seen the ebbs and flows, if you will, of the number of patients in the United States and the number of positive tests that are coming back, that creates a fair amount of anxiety for people.
So we’ve pretty much halted most travel, we have instantiated a work at home policy, which most people have done. And we have set up people around the world in order to be able to access and continue doing the work that they do. We are lucky in that we support healthcare and healthcare has still been relatively resilient on a worldwide basis healthcare is needed during the Covid crisis. And we’re also lucky in that we provide mission critical applications to healthcare, people aren’t calling us and turning things off. They’re actually calling us and asking for more work, more capability and the importance of what we do has been extenuated as a result of this pandemic.
So on the people side, what we’ve done around communications from a leadership standpoint, we communicate every week. I communicate every week, we have quarterly town halls, for results and other big matters. But every week I send out an email to try to keep the messaging consistent, to keep the messaging frequent, and to keep people from creating their own version of what’s happening in the company, or perhaps listening to somebody else who might be trying to create that version for them on my behalf. So that happens and I think that whether you’re a historian like I am, I like to read books about great leaders that have had certainly harder times than what I have experienced and certainly harder times than what we are experiencing, as hard as it all feels.
This is not world war three, it is, at a pandemic level, to certain conditions and people are suffering from it, but it’s a different type of battle that’s being waged. And when I look at the leadership, when there’s been other big major all-encompassing, affect everyone issue, the best analogy I’ve been able, and the closest analogy and I’ve been able to find is that of a war. And so if I look at great leaders, whether it’s Churchill, whether it’s Patton in some cases, certain battles, think about Abraham Lincoln, there are a lot of people that have blazed this trail a long time ago who have written, who have spoken, who have a communications drumbeat, that they felt was important to substantiate and again, that’s something to learn extensively from.
And you mentioned, and I know we’re running on time here, but maybe one last question and you must have read my mind because I was about to ask about someone who has inspired you, either personally or professionally who has really influenced how you think about leadership and how you prioritize things in life. But maybe if you could share with us maybe it’s folks you’ve already mentioned earlier in the conversation. But we’d love to hear your thoughts there.
Sure. I’ve been very lucky in that I’ve had a lot of people over my career that have inspired me or who have reached out and helped me. Starting with IBM, I worked for an African-American woman who was unbelievable in her beliefs in me, as a baby as a brand new IBM person who was struggling a bit from time to time. I didn’t necessarily understand everything that was happening and she provided the helping hand to help guide me and to build the confidence in what I was doing was the right thing to do.
Again, if you haven’t grown up, we all think about our success today, but those first few years going from working on a farm or doing what anybody does to working in a very large multinational company, there’s a lot of things you can do that can boost you up. She was awesome. I think also being at Cerner working with Neal Patterson and Cliff Illig that was absolutely a treat. There’s a lot of entrepreneurs in this world, but there’s not that many, when I said earlier, world class entrepreneurs who can really not only do the vision but also can create the operational discipline and rigor, but also can go as deep as you possibly want to go on technical issues if you want to go that way. There’s very few people that have the breadth and depth to be able to do that.
And I think a good leader has to be able to have that breadth and depth. And then at IBM I worked with so many people that were so smart. And I think what I learned about that was that you never want to be the smartest guy in the room. And so as a result of that experience at IBM again, I had many people that reached out to me to help me, but I also was a student of successful people. And there were a plethora of people at IBM that were extremely effective at what they did and how they did it and the way that they did it, that I mean, i.e. do it the right way. And that was just the code of conduct in the way that IBM company back when I was there was built and that’s how it got to be one of the most admired companies on Earth during that time, of the 80s and the 90s.
So I’ve been extremely lucky in that regard. And then at Allscripts I’m very happy to say I’ve got a number of people that I work with on a day-to-day basis, Rick Poulton, Lisa Khorey, John Sage, there’s a bunch of people that have been doing this for a long time, they’re extremely good at what they do, they’re very professional, they’re very entrepreneurial. And I again, have not had to suffer from being the smartest guy in the room ever. And it’s because I’ve always surrounded myself with people or I’ve been lucky to be part of an organization where that was the case.
Well, I think that’s a great place to end on, Paul, thank you so much again for your time, you’ve been very generous spending it with us.
Well, you’re welcome and I appreciate you taking the time to ask me some questions. I’m always able or happy to give my perspectives on things and again, I’ve been very – I think I’ve been very fortunate because of the environment that I’ve been in. And I’ve been also very fortunate because of the opportunities I’ve been given. And I think it’s just like anything else in life, once you’re given that you have to make sure that you are maximizing your opportunity. You know, I talk a lot at Allscripts about making sure that we achieve our full potential. And a lot of decisions that are made every day, and there’s a lot of strategy and vision that goes into making sure that we do that, in this industry there is a lot of things we can do to be relevant. And there’s a lot of things that we can do to create value for our clients and create value for our shareholders, and create wealth for the people that work here. And so it’s a wonderful opportunity and I have a privileged or I am privileged to be the CEO of such a great company.
Thanks Paul, appreciate it.
You got it.
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