Healthcare Rebel Alliance: Q&A with Topher Reynoso

Why did you decide to start a company in healthcare, and why this company?

This decision was made a couple of decades ago when, as an undergrad, I decided I enjoyed the legal and regulatory side of health and felt that I could be good at it. For a very brief couple of years out of law school (2009), I decided to try my hand as a first-time founder and had this idea for a product in the digital publishing space. It was mainly bred from being outraged at the price of law school textbooks. I learned a lot of amazing things from that failure; one of them was that I should stay focused on building in an industry that I'm actually passionate about for positive reasons (not out of fury alone). That's not to say that digital publishing can't be cool or fun (someone is out there loving it), but it just wasn't for me. So, everything I started since then has been in the health and insurance space.

That's why, when I decided it was time for a new adventure after Gusto, I knew I'd be in the same space and it was just a decision of "what kind of startup in the health industry?" I sat down with an amazing friend, colleague, mentor, and co-founder of mine and we mapped out a LOT of the industry. I like to look for spaces where there is a tremendous amount of regulation and confusion, areas that are convoluted where I think I can bring transparency. That's how he and I landed on our previous startup, which focused on automating ACA compliance for small and medium-sized businesses just as Obamacare was rolling out for employers. This time around, we just found ourselves coming back to this topic of off-boarding and turnover. The newer generations in the workforce have shorter tenures than previous generations. That's a big disruption for employers and in employees' lives as well. We identified moments in a person's life when they are most likely to make a bad decision in healthcare and insurance when they are most confused and have the least support. Job loss, when most Americans lose their health insurance, just kept jumping out in big bold letters. We even tried to stray from it and table it for a while; inevitably, a new topic led us back to something related to this topic. We then tried meeting with industry pros to see if they could tell us why I shouldn't build in this space. When I just kept coming back to the topic, I knew it was meant to be. When I tried actively to dissuade myself and told others what I wanted to build and had them poke holes in it, I knew it was the idea for me. Plus, I just really like mission-driven products, and the mission of "keep everyone covered" is one that resonates with me.

You went to law school and passed the bar but never practiced law. Why did you go, and why didn't you practice? Would you make the same choice again?

I started pre-med, and towards the middle of my second year in undergrad, I realized that I was working really hard not to be in the top of the class, and I wasn't having any fun while doing it. I had an undergraduate research project at the University of Washington Medical Center and was learning that I didn't enjoy the research side a whole lot either. Meanwhile, I'd been introduced to medical ethics in the philosophy department and found myself taking up more of the courses in that department because I was having so much fun. When I realized that I was above average without any effort in those courses and that I enjoyed the effort that it took to be top of the class, that was a pretty solid sign that it was time for a change. I got introduced to the ethics committee at the hospital, and that was it. I was no longer pre-med; I was a full-fledged philosophy major who wanted to focus on health. The next logical step for that, after many discussions with professors and others in the industry that I respected, was law school.

Once I was there, though, I found myself not having fun again. Perhaps it was because of all of the courses that had absolutely nothing to do with the topic I was passionate about, but also I just found that I missed building things and felt like that was an itch that wasn't going to get scratched as an attorney. Attorneys do build things, and we need good attorneys desperately, but I just missed creating products. I started hacking and learning to code in my second year, and that was it. I went to my Dean and said I was considering dropping out after my second year because I wanted to get a startup off the ground. Folks told me that was nuts, and I had a really supportive administration at the school that helped me put together an independent research study for my third year so that I could finish school while getting that startup going. I don't regret that, and I'm super grateful for the advice and help I got there.

I would definitely make that decision again. I push back when folks tell me they want to go to law school. I really try to dissuade them. I figure, if I'm able to dissuade you, then you definitely should not have gone; I don't feel bad. If, after me telling you all of the reasons why you shouldn't and why you could still accomplish what it is that you want to accomplish without law school, you still go, then you're probably right and should go. The reason I don't regret it, though, is because I really love the regulations and laws and how complex it is. That's not to say that I think it's perfect or even good, this system that we've backed ourselves into. I just mean that I enjoy the game of navigating it and making it easy for others to navigate it. Building things that take all of that complexity and make good decisions obvious and easy, that's fun for me. Having a JD is one way to get your voice heard in that pursuit. People in the room listen when the attorney tells them something. Law school also provided a really nice base for understanding those laws and regulations. So, even though I don't practice as a traditional attorney, the non-traditional route has served me well, and I don't think I'd do any of it differently.

What are the best and worst things about your job?

Easily, the best thing is the people I get to work with. I have two amazing founding engineers who I got to work with in the past, who are passionate about the space and are excited to drive the mission. Plus, they're just really great human beings with terrific perspectives, their priorities are right, and they're just brilliant at what they do. I also have an incredible PM who cares just as deeply as I do about the people we serve, and that's making it fun to get up and work each day. Surround yourself with folks who are passionate and smart, and life gets a lot easier.

The worst thing: "The waiting is the hardest part." Building is fun, sales is exhilarating, but waiting for it all to come together is rough. I know I have to be patient and just keep trucking. We'll get there, you'll see. It won't be long before every time folks leave an employer, they get a helpful email and a guided journey through the COBRA and health insurance world from Kept.

What misconceptions about compliance would you like to clear up?

I know everyone hears about the parties and the fast cars and gambling, but compliance isn't all rock and roll. Compliance has often come up as a thing that stands in the way of innovation, if you can believe it. I disagree wholeheartedly. It's about understanding the rules so you know how to operate within them while finding ways to push for change and innovation. COBRA is mostly out of date; in a post-ACA world, I feel strongly that it's no longer serving people the way it should. We did a deep dive to understand the requirements and then started exploring how we could check off all of the compliance boxes for the employer while actually serving the departing employees in a meaningful way. Our mission is to "keep everyone covered" even when they're in that disruptive moment and losing health insurance. We believe in leveraging the public safety nets like Medicaid, Medicare, and the premium tax credits on the marketplace to find something that meets everyone's budget and, ideally, provides the coverage that meets their health needs. Compliance helped me find a path to doing that. Well, I guess it is all about rock and roll.

Who else in healthcare inspires you, and why?

Uwe Reinhardt was an incredible influence for good. He had this amazing perspective as an immigrant on what was wrong with our convoluted system. His article, It’s The Prices, Stupid: Why The United States Is So Different From Other Countries, was incredible. He grilled the AMA (a constant offender) in one of my favorite of his hijinks, as described in his own words:

“Once, at a Duke University private sector conference, the entire brass of the AMA happened to be there. It was my turn at the podium and I could not resist the following stunt.

The late James Sammons, then head of the AMA, had given an interview in which he said Congress had carved Medicare to death like a turkey. I showed a slide of that quote which happened to have his picture next to it. I then showed data according to which between 1980 and 1988 constant-dollar Medicare spending on physician services per beneficiary rose 83%. Apologizing for this low number on behalf of taxpayers (the growth of 83% allegedly did not permit physicians to give the elderly adequate care), I asked the AMA people: ‘What increase would have been adequate in your view?’ So I counted out numbers (on a slide) like an auctioneer – 100%, 120% , …– but never got any takers. After +160% I left a blank spot and said: ‘Evidently 160% would not do it, so you give me the number. Is it 300%?’ Icy silence. I then had a slide quoting country-music singer Conway Twitty or whoever it was from his song: ‘I need more of you (moolah) – more, anything less would not do.’

I then I ended saying that Karen Davis and I, both then serving on the PPRC (now Medpac) would propose a budget for Medicare physician payment (the VPS), because the docs would not come to the table with a reasonable number.