Six Levels Down

Todd Park, tech entrepreneur, was looking to improve prenatal care. Athenahealth. Raised millions of dollars to buy a healthcare clinic in San Diego as a proof of concept. Bob Gatewood was hired. They couldn't get insurance companies to pay them. It became a cause. We must save this practice 'cos we're the social safety net for San Diego County. They had to solve this surprising problem of getting paid by insurance companies. They needed an expert. podcast

Todd and his fellow company founders needed an expert. They toured hospitals to learn about medical billing. They learned the staggering complexity of American medical insurance. Medical billing had become so complicated that hospitals were employing a medical biller for each and every doctor.

They eventually found Sue Henderson, medical biller, who wanted to be an accountant when she grew up. After two decades of experience in medical billing, in the summer of 1999, she applied for a job with a California startup based in San Diego with an office in Boston. They interviewed her, rejected her. Then invited her to join them pitching investors on a medical billing startup.

If they could just bottle her expertise, she might make everyone rich.

Todd called his younger brother, Ed Park, a recent Harvard grad and leader of computer science club. "We pretty quickly figured out that the rules weren't written down anywhere. The only people who knew the rules were people who had actually worked in the industry and had been incredibly observant for the past five years."

Sue was struck by how much was in her head that was not in theirs. It took a few days before she figured out that they really didn't know what they were doing and sat them down to explain the basics of the accounting. She became the the product manager.

For three years, Ed would by day listen to Sue and by night try to turn what's in her head into software.

This weird new version of Athena Health now totally depends on value of one woman's expertise even though no one had seen special value in Sue Henderson or considered the stuff in her head an expertise.

In a way, this is why there's money to be made here. Up until now, no one, even Sue herself, has figured out how valuable Sue is.

"If I had asked Sue to sit in a room and write out everything you know about billing she wouldn't have been able to produce what we needed to be successful. Instead, she had a set of experiences such that when she got placed into a situation where something didn't make sense, she would immediately recognize that something was wrong and search her head to understand why it was wrong."

"It was three or four years until we got to a point where it was clear we had something that did justice to the knowledge in her head."

The contents of Sue Henderson's mind became a five billion dollar software company. And changed the US healthcare system. Doctors would never need their own medical biller. A single biller can now handle ten doctors.

Then a big health insurance company had a bizarre request: "We want to license our own billing rules from you." Their software systems were so complex they couldn't make sense of their own billing rules.

Sue Henderson saved Todd Park's first business. But more importantly, she led him to a more important big idea about where to find experts. She doesn't run the healthcare system nor hospitals. But she's got incredibly good instincts to understand what is going on, for how to make things better.

Todd Park became known as the guy who could find experts where no one else thought to look.

Healthcare.gov ... Oct 1st, 2013. The sound of a crisis. A political disaster. Todd Park came in as CTO. The people in charge didn't know. He went down five layers to the contractors. At that layer and below them, and two layers below that too, we found people who really understood parts of the problem and had ideas of what to do.

Your job as a leader is to find the person six layers down who's spent the past 20 years quietly learning things. They might not be very good at advertising themselves.

In any situation, you think it will be obvious who the expert is. It won't. We believe the people on top are the most important until we sense that we cannot afford to believe that anymore—until some crisis arrives and in order to survive you have to find someone who actually knows the answer to your question.

See other highlights. Against The Rules Podcast