The following interview is a conversation we had with Cesar Herrera, CEO and Co-Founder of Yuvo Health, on our podcast Category Visionaries. You can view the full episode here: $28 Million Raised to Revolutionize Healthcare Access
Cesar Herrera
Lovely to be here. Thanks for having me.
Brett
Brent, were just joking there in the pre interview that your first name is a bit hard to say or a bit different to say. So go ahead. How do we pronounce it? Because I realized as I went through that I probably butchered it.
Cesar Herrera
No, you said it perfectly. Sr. Yeah, I do get Caesar or Cesar. Or Cesar a lot. Yeah, but it’s all sssr.
Brett
Well, Mister Herrera, thank you for being here. We’ll stick with that. Now, I’d love to begin with just a little bit more about your background and specifically when I was going through your LinkedIn. I see that your whole career has been dedicated to healthcare. So what’s the why for you? What attracted you to this space? And what made you decide to really just dedicate your life to it?
Cesar Herrera
Yeah, no, it’s a really great question, and it’s deeply personal to me. So it’s all based on my own lived experience. So I grew up as I went to the United States from the Philippines. And when I came here, the vast majority of my own childhood, were either uninsured or underinsured because of that. Then, as a result, we faced a lot of barriers to access to care. Not just myself, my family, the communities I was a part of. And in particular, were able to get access through the only way possible, which was through community health centers. And they’re amazing institutions that provide services to folks that are underinsured and uninsured. And if I didn’t have access to health centers, I don’t think I would have had access to care at all.
Cesar Herrera
It was that lived experience that really compelled me to stay in healthcare, trying to find my way of, like, how I can make impact. But the biggest part was I knew I needed to do something within the realm of healthcare because I wanted to make sure that the communities that I was a part of don’t have to suffer the barriers to care that I did. When I was growing up, when you.
Brett
Were working at all of these different companies, in the back of your head, did you have this idea that someday I’m going to go out and start a healthcare technology company? Or where did that entrepreneurial drive come from for you?
Cesar Herrera
Oh my gosh, that was definitely a journey. I never thought of myself growing up as I’m going to be this entrepreneur, mainly because I never thought that was like a reality. I didn’t have anyone that was an entrepreneur in the communities that I was a part of. It was never thought of as something that I would strive for. So I spent most of my time doing things that were kind of more in the traditional sense. I started my career in healthcare policy, then moved my way into commercial side or private sector side in terms of deploying healthcare policy.
Cesar Herrera
I think what continued to be in the forefront of my mind though, was as I was doing healthcare policy was, wow, there’s nothing here in this policy that we’re creating that is serving the communities that I care most deeply about and those communities that need access to care the most. And I think it was that lingering, nagging feeling in my head of like the work that I’m doing is not serving my ultimate purpose. Then eventually came to a head and made me say, I have to do something. There’s nothing else that I need to wait for. I just need to kind of take that risk, take that plunge and start this and operationalize this idea. Because I really did feel that if I didn’t do something, no one else would. And that was really what compelled me.
Brett
To do this and to dive in a bit more to the company. When it comes to the problem that you solve, how do you define it or how do you describe that problem?
Cesar Herrera
Yeah, the main problem is health center. Who are these amazing institutions? As I mentioned there’s 1400 of them. They serve 30 million people across the United States, predominantly underinsured and uninsured individuals, predominantly communities of color and immigrant communities. They’re not financially sustainable. They don’t get enough support from the US federal government and they need more support. They need to make more money. So that’s the underlying problem that we’re trying to solve for, is how can we make health centers more financially sustainable? And then we, and especially given my past experience, a lot of that is just coming from my understanding of healthcare policy and what opportunities are available and how can we leverage those opportunities to support health centers to make more money. In this case, it’s through a payment system called value based care.
Cesar Herrera
So how can we leverage value based care to essentially enable health centers to be more financially sustainable?
Brett
Now, I don’t want to go down the rabbit hole of healthcare terms because I think that’ll hurt my brain and hurt the audience’s term. But one that I do hear a lot is what you just said, value based care. How do you define that? Like, what does value based care mean?
Cesar Herrera
Yeah, in the simplest terms, it is pay for outcomes instead of pay for services. So in a current system, which is called fee for service providers like doctors and health systems, they get paid for every service they provide, right. Regardless of whether or not that service was would actually drive a meaningful outcome, right. So what happens there is that they’re essentially just driving more costs in the system and not necessarily incentivized to keep the person or communities healthy. They’re quite, in this fee for service world, they’re incentivized to keep people sick, right. Because that’s how they get paid is when someone is sick. In a pay for outcomes model or value based care, you’re actually incentivized to keep people healthy. Right.
Cesar Herrera
So your focus is on primary care, your focus on preventive medicine, with the understanding if that person stays healthy and their care is managed properly, then they’ll cost the system less. Right. So that’s really what the underlying mantra is associated with value based care.
Brett
You started in 2021. It gets back to the first maybe 90 days or maybe six months. Like, what were those first couple of months like for you? And what were those top priorities?
Cesar Herrera
Jeff oh my gosh. This is like trauma triggering, isn’t it? So in 2021, I think whats important too, is like when you talk about like my own journey, im not independently wealthy. I didn’t have like $3 million of friends and family round. So I was working two jobs and starting this company at the same time, right. Because I needed to make sure that I still put food on the table and support my wife and kids and my parents. So a lot of it was trying to figure out, how can I do this? All and particularly here is how was I able to prove that theres a there for investors in that are generally not super understanding of what this market is all about? And what does it mean to serve health centers in the Medicaid universe.
Cesar Herrera
So my main priority in that 1st 90 days was prove that there’s demand and there’s interest and there’s a business model for this. And the way that we did that was by engaging with a pilot partner in Scasa Health center in New York City. That’s where we launched to be able to prove out all of this model on. And that pilot partner is still one of our partners today. It’s Ryan Chelsea Clinton Health center in Hell’s Kitchen area of Manhattan Year in New York. And it’s because of them and their partnership that we’re here today.
Brett
What do you think they saw in you and the company to say, okay, we’ll take a risk? Because that’s always a risk, and that’s always something that startups struggle with, is how do you get a company to give you a shot? And I’m sure it’s especially difficult in this world of healthcare.
Cesar Herrera
Jeff, oh my gosh, it was so difficult. I would say I think the biggest part was instilling trust in them, especially when we think about health centers as well. They were born out of the social justice movement 40 years ago. They are all by regulatory requirement. They’re all not for profit 501 entities. They have to be serving underserved areas across the US, right? So then they represent their communities who are heavily exploited by systems, and they themselves have been exploited by organizations that look very similar to us for profit institutions. So we had to lean into our mission, lean into our why and engender trust in our FQHC pilot partners to ensure that they knew that were here to support them versus exploit them for a profit. So that’s baked into our entire business model, into our mission statement, into our okrs.
Cesar Herrera
It’s baked into everything that we do to ensure that we are doing right by our FQC partners. I’m just really fortunate that our partners hear that and feel that and trust that.
Brett
This show is brought to you by Front Lines Media podcast production studio that helps B2B founders launch, manage, and grow their own podcast. Now, if you’re a founder, you may be thinking, I don’t have time to host a podcast. I’ve got a company to build. Well, that’s exactly what we built our service to do. You show up and host, and we handle literally everything else. To set up a call to discuss launching your own podcast, visit Frontlines.io podcast. Now back today’s episode. When it comes to your marketing philosophy, how would you describe it?
Cesar Herrera
Our marketing philosophy? I think in terms of how we message to our FQHC partners, it is they are front and center. We are just in the background with lending our expertise and our support mechanisms to uplift and spotlight them so that they have a seat at the table. So a lot of that is really speaking to, highlighting and spotlight our FQHC partners versus us. So. And that resonates, and that kind of falls through not just in all of our marketing and our content everywhere we go. And we also do a lot of marketing support in partnership directly for our FQHC partners. Most of our marketing is actually marketing for our fqs versus marketing ourselves.
Brett
What does the competitive landscape look like?
Cesar Herrera
This one’s the unfortunate one, right? Because health centers are actually regulatorily prohibited from participating in value based care themselves. They need to have a third party partner that’s willing to take on the risk associated with value based care. So they have no choice. So they either partner with someone or they don’t participate at all. What we’ve seen, though, is that there’s actually not many third party entities that directly support health centers. Many of them support independent practices, or many of them are standing up their own primary care practices themselves, or like they’re themselves a provider. So there are very few entities out there with scale that actually directly support health centers. And by and by nature, then there are very few competitors for us because we are the ones that are solely focused in supporting health centers.
Brett
How have you seen your messaging evolve since you launched the company?
Cesar Herrera
I think the biggest part for us was in recognizing that our health center partners are stretched in all different directions, and there’s a lot of political regulatory pressure put on them, which makes it difficult for them to be able to have a common sense discussion around return on investment or capabilities. When we first started, we really pushed that the most of, here are some capabilities that we know our health center partners are not allowed to build, do not have the capacity to build. And simply by selling that story, we thought that our health center partners would be compelled to partner with us. We realized really quickly that wasn’t a compelling story, but rather speaking to the political pressures and how we can work with them to support and uplift them. So everything in our messaging really changed to align with that message.
Brett
From my conversation with many other founders, a lot of them have told me is they can really trace their success back to one or two or three really critical decisions that change the course of the company. What would you say has been the most important decision you’ve made to date? And what was that decision making? Like, our decision making process, like behind the scenes, as you made that decision?
Cesar Herrera
Oh, the biggest decision that we made early on in the company was our business and revenue model, actually. And this kind of goes in line with the capabilities spell that were talking about before. When we first started and we first went to market, it was as what is called a management services organization. We provided a set of services and our revenue model was essentially an administrative fee paid by the health centers for those set of services. What we realized very quickly was that wasn’t going to be possible because our health centers are willfully under resourced and they need access to the capital today.
Cesar Herrera
So that’s when we made this very significant pivot to be the risk bearing entity to actually take on risk under value based care to contract directly with health plans and use those contracts with health plans to actually directly funnel value based care revenue to our health center partners. And I would say it was a pretty quick realization because of the fact that our health center partners would tell us when were having conversations that they would love to participate, they would love to find ways for us to enable them, but they didn’t have the capital in order to support a partnership. And that was just such a quick decision on our parts to say, okay, well, how do we reconfigure this model so that instead of the health center paying us, we’re paying them? And that’s what’s resonated and says stuck since then.
Cesar Herrera
And quite honestly, that’s what’s put us in this trajectory that we are in today.
Brett
Can you share any numbers that highlight that trajectory that you’re on today? And I know you’re private companies, you don’t have to say anything that’s too revealing, but just anything that you can tease our audience with to demonstrate that the growth you’re seeing, they always love hearing metrics and numbers.
Cesar Herrera
Yeah, no, I get that. I’m able to share our membership. So as it relates to the work that we do with value based care, a lot of it is really a function of how many patients we are at risk for. Right. The more patients you have, the more value you’re driving into the system and to ourselves. And when we first started our pilot, we have 3000 patients that were at risk for. It was a small but very meaningful pilot for us. And some we’ve grown from 3000 to 10,000 to now nearly 40,000 patients that we’re at risk for in just two and a half year timeframe. And we’re on track to be about 80,000 next year. So we’re really excited about that growth because in the world of value based care, scale is key.
Cesar Herrera
So we’ve been able to ramp up pretty quickly within this period of time, we’re really excited to continue that growth.
Brett
If you reflect on your success, what would you say you’ve gotten right? I’m sure there’s a long list of things you’ve gotten right. Probably some things you’ve gotten wrong, maybe one or two. But if we really had to pick out like one big thing you’ve gotten right, what do you think that is.
Cesar Herrera
Always pivoting to this new business model? This is. We got this right. I’m very confident in how we’ve redesigned the model to get it right, because we’re, it is a win, win for all scenarios, right? In terms of we’re driving cost savings to the health plan, we’re driving new revenue directly to our health center partners, and we’re creating sustainability to drive the infrastructure that we at Yuval are building. And at the end of the day, too, the other win is communities are healthier and our health center partners are able to then provide more access to care to people that need it the most. And that’s the ultimate win. I don’t think that we would have been able to scale as quickly if we didn’t pivot to this model.
Brett
As I mentioned there in the intro, you’ve raised around 28 million to date. What have you learned about fundraising throughout this journey?
Cesar Herrera
Fundraising is a necessary evil. It is incredibly important in order for us to scale quickly because it’s incredibly critical capital that otherwise I would never have been able to leverage that amount of capital as quickly to support our growth. I think I certainly had, since I’m not a serial entrepreneur and this was my first ever entree into fundraising, especially as it relates to institutional investors. I have my own preconceived notions of venture capital and venture capital investors. And I think what i’ve learned is you can find your people anywhere and there is the opportunity anywhere, even in venture, to find investors that are aligned with you, not just from your business model, but your mission. And im just so thankful and proud of my cap table and the investors that I have working side by side with me.
Brett
Let’s just imagine that I’m a healthcare technology early stage tech founder and I come to you and I say, hey, what’s your number one piece of go to market advice? Based on everything you’ve learned so far, what would that advice be?
Cesar Herrera
I mean, everything should be centered on your customer, whoever that is. Make sure that you truly understand the motivations of your customer and they’re quote unquote buying decisions. Because if you don’t understand that regardless of how great your solution is, you’re not going to be able to sell it.
Brett
Final question for you. Let’s zoom out three to five years into the future. What’s the big picture vision here?
Cesar Herrera
The big picture vision for us is we have our big hearing problem. There’s an additional 20 million people in the US that need access to care that don’t have access to a health center. So our big picture is enabling us to support as many health centers across the US so that they can actually serve those additional 20 million people. Right. So, and we do that state by state, but that’s really our ultimate goal, is to be able to have this machine to support those additional 20 million people.
Brett
Amazing. This has been such a conversation. I’ve really enjoyed it. I know our audience is going to really enjoy it, and you’ve certainly turned me into a fan, and I’ll be rooting for you to execute on this vision successfully. We are up on time, so we’ll have to wrap before we do. If there’s any founders that are listening in, they feel inspired and they want to follow along with your journey. Where should they go?
Cesar Herrera
Yeah, they can go onto our website, which is www.yuvohealth.com. They can interact with all of our content there. They can sign up to our mailing list, and they can reach out to us directly too, if they have questions. So definitely reach us there.
Brett
Amazing. Thanks so much for taking the time.
Cesar Herrera
Thanks, Brett.
Brett
Keep in touch. This episode of Category Visionaries is brought to you by Front Lines Media, Silicon Valley’s leading podcast production studio. If you’re a B2B founder looking for help launching and growing your own podcast, visit Frontlines.io podcast. And for the latest episode, search for Category Visioners on your podcast platform of choice. Thanks for listening, and we’ll catch you on the next episode.
Twitter
facebook
linkedin