In countries with significantly aging populations like Japan and parts of Western Europe, wound care is the third biggest expense to their national healthcare systems. As the population in the United States continues to age, wound care will be a very important aspect of the healthcare system.
That's why Nima Ahmadi co-founded The Wound Company, a Medical Alley-based company offering virtual-first wound care to its patients. To learn more about what virtual first means when it comes to wound care, Nima joined Frank Jaskulke on this week's Medical Alley Podcast to share The Wound Company's story.
Nima also discusses:
Tune into the conversation with Nima to learn more about The Wound Company as it looks to help a growing population of patients needing wound care.
Frank Jaskulke 01:24
Good morning, good afternoon, and good evening to everyone out there in Medical Alley. This is your host Frank Jaskulke, and this is another episode of the Medical Alley Podcast. Today we're going to be joined by an innovator and entrepreneur, someone who is working in a very important area of healthcare and bringing a newer model of care to the market. I'm so pleased to be joined today by Nima Ahmadi who's the co-founder and CEO of The Wound Company. Nima, thanks for being on today.
Nima Ahmadi 01:53
Thank you, Frank. Appreciate you having me.
Frank Jaskulke 01:55
Yeah, maybe we could start with a little bit about The Wound Company and the inspiration behind it. How'd this gets started, and what's the vision for you and for the company in wound and ostomy care?
Nima Ahmadi 02:08
We know from data that comes out of Western Europe and overseas in Japan, which are more aged societies in the United States that after cancer and diabetes, wound care is the third biggest expense to their national healthcare system. And this is shocking for a lot of people who've never really heard of wound care and don't know what wound care is. But we are in an aging society and our aging population demographically is becoming older more rapidly. Our population also has high underlying levels of metabolic disease. When you put that together, one plus one equals three. There are more wounds being generated in America than ever before, largely, although not exclusively as a consequence of aging and metabolic disease. And our healthcare system today is not only not well prepared to address the needs of wound care, but we are spending exorbitant amounts of money without the benefit of the healthcare outcomes we would expect in the setting of wound care. So by the numbers, most conservatively, there are about 13 and a half million people in the United States that are wounded by the clinical definition of wounds. And on a primary diagnosis claims bases, meaning when you look at insurance company claims or claims made to Medicare, where the wound is the first issue on the claim, not if it's number two, just where it's the first issue, we're spending about $50 billion per year. And that's going up. Now, the unfortunate thing is if you look at outcomes in wound care, they have been abysmal. Last year, the American Diabetes Association's data showed that we did 170,000 limb amputations due to diabetes, the increase over the prior decade, excuse me, 150,000. That was a 75% increase over the prior decade. And that is expected to grow in the coming next 10 years. So we're not getting what we're putting in to wound care. And there are really three reasons why, Frank, for that. Number one, experts in wound care for nurses and nurse practitioners that carry the gold standard certification in wound and ostomy care are very limited. That's one issue. The second is that these nurses and nurse practitioners are organized around hospitals. So for the most part, patients who develop wounds, their wounds get really bad, meaning that they will need massive Hail Mary, 11th and a half hour kind of interventions to try to change the course of the pathophysiology of that wound. And they go into these hospital settings where they meet the wound care expert, when the situation is already pretty bad. So there's not only a shortage in terms of the supply of labor against the demand, but that labor supply isn't well organized. And the third and one of the most deeply upsetting that is, you know, fuels our mission is that the wound care industry, the legacy establishment is not only fragmented, but has a history of over utilization, misutilization. TRhere have been fraud, waste and abuse lawsuits against some of the largest players in wound care by the Department of Justice. And it should be deeply concerning if the largest players in a space are under corporate integrity agreements. And that's because we have resorted to doing a bunch of things to patients who have wounds, not really following up, waiting for things to get bad. And when they stay bad, and patients have wounds and stay wounded, there are companies who make more money by doing more things to patients and benefiting from patients having more wounds and staying wounded. And so we really had to think, how are we going to get wound care under control and set up payment models and incentive systems that really align things for the patient and the payer? That's really what The Wound Company does. We marry anybody that has a wound to an expert who's certified in wound care. We provide continuous wound care expertise to that individual. We do work virtually and in person. We go to patients' homes, assisted living facilities, nursing homes. We stay continuously engaged, we mobilize care networks around these individuals. And we work with health plans and risk-bearing health care organizations under new payment models that actually align incentives around healing, which is basically shifting wound care towards value based care and a more technologically advanced approach.
Frank Jaskulke 06:24
Oh, wow. All right. Two things you've said towards the end of that I think, really important for our listeners. We hear in the conversations we have on the podcast and with others in the community regularly about the challenge of acute care that is delivered by specialists who they know what they're doing, but they're getting to the patients very late. And then payment models that haven't incentivize moving upstream. I think what I heard you describe but tell me if this is wrong, is that you're not just re-architecting the delivery of the care but also the incentive models, the payment structures to get things better aligned to take care of patients upstream or earlier before it becomes this critical issue in a hospital leading to amputation. Is that an accurate description?
Nima Ahmadi 07:19
Yeah, that's right. That's right. And not all wounds lead to amputations. Many wounds are wounds of the lower extremity that may put patients' mobility at risk and result in amputations. When I say lower extremity, I mean patients legs. Many other wounds can be anywhere on the body for seniors who may be bound to a nursing home bedridden, folks who are in wheelchairs, folks with neurodegenerative disabilities, they're at risk of pressure injuries, or pressure ulcers, or bad sores as they're called colloquially, and you know, then ostomy is being a very different wound where patients are evacuating stool or urine. All of these wounds are clinically very, very consequential if they're mismanaged, and can be extraordinarily expensive. And one important thing, Frank, is when we think about wounds, a wound, an opening in the patient are where their tissue has been violated because of chronic disease or surgery or trauma. It's not just about putting the patient back together, which is rocket science for folks who are certified in wound care. It's that that wound itself is the best gateway for infection. So the big cost driver is when patients get infections like sepsis, they end up in the hospital for days on very expensive IV antibiotic drip because their wound care was mismanaged. So part of the education before you get to the payment models being reimagined is understanding the sources of costs so you can design payment and care delivery models that improve outcomes clinically, and mitigate the cost drivers for the folks paying, which in the majority of wound care is our ourselves, the taxpayers.
Frank Jaskulke 08:52
Indeed, and I know one of the things that you've worked on in doing this, that your team has worked on in doing this, is operating as a virtual-first wound care company. And maybe for our listeners who aren't as familiar with that, what does it mean to be a virtual first provider? And then how does that impact the business? What are like the challenges and opportunities that The Wound Company faces taking that approach?
Nima Ahmadi 09:19
So where virtual first comes into play is that we're able to more quickly assess and intervene on wounds. So we're when we're able to connect patients virtually quickly for assessments on their wounds by an expert. We're able to design care plans earlier and can nip wounds in the bud and promote faster healing by getting involved earlier. Because our business model doesn't depend on applying numerous applications of fake skin substitutes and biologics, we don't need to wait for the wound to have failed other interventions. We can get involved early. We can define care plans virtually. We can keep a relation shift between the wound care expert like a personal wound care nurse for that patient who's able to guide them in offloading pressure from the pressure injury, getting that earlier support for the patient or their caretakers or personal care assistant, you know, there's such a network around these patients that have wounds that we can get very far and then reserve the in person visits selectively for patients where they need it. And then at that point, we've already triage and assessed so we know exactly what they need. So we are much more operationally efficient in planning that in-person work rather than a company that is going out later in the process, not knowing what they're getting into when they get out there, and then having to do multiple out visits in the field, because one has an assessment, a follow up, you know, we can just be so much more efficient with how we treat that patient, especially when days can make a big difference in wound healing. You can't go out on a Wednesday and say, Okay, I'll come back next week to do the, you know, treatment that you needed three weeks ago, right? So that's the big, you know, advantage that we get by being digital.
Frank Jaskulke 11:06
And I would have to imagine that earlier intervention, being able to get that care plan in place that also helps then, ultimately, in the outcomes, of course, but in in your ability to measure outcomes measure progress. And it's something we hear from payers and providers all the time that the difficulty of measuring outcomes of the work that is being done. How does The Wound Company approach tracking and measuring outcomes of your work?
Nima Ahmadi 11:34
So this is one of the benefits, you know, having worked with payers in the setting of diabetes prevention, getting preventative screenings done, where there are issues about attribution to the clinical outcome. Wounds are very tangible. We can measure their area, we can measure other characteristics about the wound that directly help us create a clear objective understanding of healing. Every single wound that we manage, we quantify according to over a dozen different variables. We track that very carefully. And unlike, you know, diabetes prevention or behavioral health wounds can move quickly in either direction. We can heal many wounds in less than 90 days, far ahead of the national average, and actually be able to attribute that back to ourselves, because in most cases, we're the only one doing the wound care for these patients. They may have general contractors, a whole array of care managers, home care, but when it comes to the wound care, we The Wound Company are that specialized provider solely in that swim lane so we can attribute our clinical progression that we're carefully measuring and all of these wounds.
Frank Jaskulke 12:39
Oh, interesting. And I think when I when I put together the things you're talking about, the impact of going upstream, getting the right skilled staff into the right place at the right time, I have to imagine that that helps in the operations of the health care system, if I can use that word. And we know right now that healthcare is in this very rough spot, particularly the provider community, right? Staffing issues, low to no margins is a really tough place where at the same time, demand is spiking, we know there's a need for transformation. So as you're working, say, with your provider or your payer partners, how do you see The Wound Company helping them to better manage their patient populations and make an impact on some of those macro challenges that are facing healthcare?
Nima Ahmadi 13:33
Yeah, absolutely. I think you articulated that really well. Most days to most folks who are on the frontlines of health care, it feels like the building is getting taller and taller, and their ladder is getting shorter and shorter. And in that environment, if you look at the patients in our country who are the most in need of health care, what we believe to be true is that they need primary care that's closely engaged in managing their care and delivering the care they need. That means that primary care physicians need to function as general contractors, they have to span an enormous panel of patients across all sorts of clinical conditions and comorbidities. And they need to be able to connect these patients to resources who know exactly where they fall in and can provide supplemental specialized care that's affordable, and be the drywall contractor in the case of wound care to that general contractor. We're very clear, this is what we do for these patients. And we occupied this swim lane and then we would work with you and provide you with continuous visibility to their healing while taking this entire burden of what to do about the wound off of your shoulders as a trusted partner. So we leverage that with risk bearing providers who are in various degrees of taking financial risks with the payer, including full capitated risk, and we enable them to internalize wound care and have it be a cost effective extension of their own care apparatus. So it helps to reduce their costs and make them more operationally efficient. We have a similar model for homecare and hospice organization. So as care shifts increasingly to the home, home care has become effectively that general contractor for the episode in which they're providing the care. They are facing some of the most critical staffing shortages, especially in areas of specialized nursing, so we can supplement them and help them affordably deliver the highest quality of wound care. And then that way we're enabling and making them more efficient, which is also what's different than our business compared to some other wound care companies is that we really work within the existing healthcare establishment so that they have a wound care partner and a wound care solution for their patients, that's cost effective to them and the payer.
Frank Jaskulke 15:47
Alright, that part for our listeners, especially those of our listeners, who are in the technology industry, I think that's a really important thing that Nima just shared, we've, we've heard all about this shift in payment models, right, the drive to value based care that's been going on for depending on how you measure it, 50 to 75 years, or maybe 10 to 20 years. But that then has impacts on the technology companies. And you know, Nima, at the beginning, when you said third largest and $50 billion, the thought that went through my head was how much innovation and investment we've had in very important areas of oncology and cardiovascular disease, and particularly right here in Minnesota on the cardiovascular side. Now, when I think about the broader medical technology, health technology community, I'm thinking they're going to need different technologies, different care models, different businesses to partner with their provider and payer partners. Do you guys do any work with the medical technology, the health technology community? Where does this fit in, you know, like the broader device world, for example?
Nima Ahmadi 16:56
Devices, you know, including dressings for wounds, they play a critical role in wound care. Now, it's our belief that there has been a saturation of different kinds of devices that have supported and played into some of those perverse incentive structures that exist. For example, we went from two to 90 different kinds of skin substitutes in the last decade, wherein we took off more limbs than ever before. So there is a lot of innovation in devices. Not all of that innovation is necessarily correlated to value, or incremental improvements in clinical outcomes that are meaningful to payers. So when we look at devices, we look very selectively at those devices that are now backed by strong evidence, they are not considered experimental. And we think about where they can be appropriately used. I think there are partnership opportunities with specific device companies that fit that criteria. Some of the most important wound and ostomy companies in the world have roots here in Minnesota: Coloplast, 3M, they're doing great work. I think there are opportunities for partnership to think about how we can selectively with the leaders in the field, you know, to bring more access to the devices at the right time so that they can have the biggest therapeutic value, which they're invested in. Because if you're using advanced technology when it's far down the path, you're not even able to properly evaluate that technology because the patient's wound and situation was so far gone. So if we can be successful in connecting with patients and remaining connected and knowing what kind of therapy they need when, it will also help to organize and bring clarity to this growing complex space of all of the different technologies that are available for wound ostomy care.
Frank Jaskulke 16:58
Interesting. You know, along the way, right, I think it's worth talking about for the audience. So you and your team, you're building a company from scratch. This is a new venture, not a 100 year old company. What's that been like going through that journey the last couple of years of starting up a new venture and you know, getting to this point where you all are now out in the market working with customers, helping patients? Not the long version of it, but what what have been the highlights, the lowlights for you in it?
Nima Ahmadi 19:26
I think the highlight is, you know, having started the company here and Medical Alley, attracted funding from two top tier venture capital firms in San Francisco, building this national wound care company from Minnesota which has a history of innovation in this space, a history of innovation on the provider side, the payer side. I think we've been fortunate to be rooted here. That's helped accelerate our growth. We have many patients today nationwide all across the country. At the end of this quarter, we'll be operational in all 50 states. We've seen across the entire country already in this year alone, which isn't long since we started the company. And next year, that volume is going to exponentiate. And that's been exciting. It's been exciting to see wounds that folks think cannot be healed, and driving those to healing in record time because of this model of virtual first intervention where we are able to analyze populations early, figure out who needs what kind of care, how to connect them with that expertise, and then intervene end to end. It really works. That 20, 30% all the time kind of engagement versus these acute spikes that are highly reactive, we've shown that clinical model works. And that's an exciting place to be at work where we really have this defensible evidence of the effectiveness of this clinical model and the cost savings. The challenges of starting a company, I think, to be very transparent, are that you have some very well meaning organizations that have outsized market influence. It's hard to be successful as the little guy. You depend on those kinds of entities moving and taking risks and engaging with you. Health plans in the Medicare, Medicaid space, either on a national level, a few of them have the vast majority of the individuals across the country. And on a regional level, you have select plans that have outsized positions in Medicare and Medicaid, just based on how they've sub specialized and the government contracts that exist. And then as you know, with provider organizations combining, that consolidation is not necessarily the greatest environment for a small company, because it limits the pool of folks who are going to take a risk early on something new. And that's always been a challenge. I think the second challenge is that in the course of time, after the onset of the pandemic, where we saw an explosion in digital health care and services funding, there's actually been a massive depreciation. And so that forces us to not only need to work with these organizations on an accelerated basis, but we have to do so on a really cost effective basis. Now, we've been fortunate to attract disproportionate amounts of capital and are well financed for the next few years. But we do still have to think differently about our business, given that the cost of capital has increased so much, and we are now needing to be far more efficient with far less. B ut that just puts us right there next to our healthcare customers and forces us to think creatively and collaboratively together.
Frank Jaskulke 22:29
You know, I really appreciate that kind of that balanced view of it, that the reality of the environment being challenged for everyone and that that requires you to be at the same level as your provider partners. I actually really love that perspective on it. Last question I'll ask you in wrapping up. You've got the audience that's going to be listening to this for some time. Anything you want them to know, or you want to ask them that could help the wound company reach that next stage, as we go into 2024?
Nima Ahmadi 23:02
I would just want to make sure that there's a growing appreciation for wound care in issues that uniquely or disproportionately affect the elderly. We know that our population is aging. We have to think about how do we serve the needs of an aging population and deliver care that is compassionate, that is of high quality, and that is cost effective. And we have spent a tremendous amount of our time really bringing attention that wound care is a crisis in the country today, you know. And if we can operate from a place of appreciating what it means for folks to have an opening in their skin, their most vital and largest organ and the risk that that places on their health and well being and mobility, from there, we can start to solution about how do we organize ourselves around that. I think the second thing is appreciating in each other how one organization uniquely contributes compared to the other. So we have an appreciation for organizations that are the general contractors who manage these comorbid patients. You know, we know we are not that with humility. We know what we are good at and we're looking for partners who need that specialized expertise and want to augment their own capabilities. And so I think this mutual recognition and appreciation of how we can support one another and achieving higher quality value based care is going to be really important, especially with the explosion of companies out there, many of whom are competing to be the general contractor for that patient and manage all these patients' conditions. It sometimes creates more of that struggle between these organizations than it actually results in that patient getting everything that they need from a network of specialized providers at the right time. So hopefully we can get, you know, some some clarity altogether on that.
Frank Jaskulke 24:55
Well said, and I think that is a great place to wrap it up on appreciation and on recognizing the fundamental reason we're all in this work, taking care of people that need help and hopefully doing a better today than we did it yesterday and even better tomorrow. So, Nima, thank you so much for sharing the story of the wound company and being a part of the Medical Alley community.
Nima Ahmadi 25:18
Thank you, Frank. We appreciate being part of that community. We appreciate your leadership in it.
Frank Jaskulke 25:23
Thank you. And folks, that's been another episode of the Medical Alley Podcast. If you're not already a subscriber, make sure to get over to medicalalleypodcast.org, where you can find us on Apple, Spotify, and also now on our YouTube page. And would you do me a favor? Would you share this episode with just one other person? If everyone listening let one other person know. We'd help spread the word of this important story in so many other great stories coming out of the Medical Alley community. I'd really appreciate it. Until next time, have a great day.