Knowality, a boutique firm that specializes in accelerating market adoption for health care startups, is paving the way with innovation and knowledge. Dr. Trent Haywood, Knowality’s founder, and Haesun Chang, his business partner, combined their expertise to effect change through groundbreaking health care solutions.
Having earned both a medical and law degree, Haywood had to choose his path. “I ultimately had to decide whether to only be at the bedside or to have an impact more broadly.
“He chose the latter path, serving as the chief medical officer for Centers for Medicare and Medicaid Services (CMS) Region V, CMS deputy chief medical officer, and chief medical officer for the Blue Cross and Blue Shield Association. Currently, Haywood is chief medical officer for Zing Health and serves as an advisory board member for Paytient.
Chang’s journey to Knowality began in Bangladesh, where she witnessed a vast need in the developing world. “I believed America was leading history, creating the path for all these other countries to follow,” she says. “While in America pursuing my education to support the developing world, I learned there were many communities here that were ostracized. I didn’t need to travel out of America to make a difference.”
DOING GOOD TOGETHER
Chang and Haywood’s paths crossed at the Blue Cross Blue Shield Association.
“We saw innovation occurring in the private sector,” Haywood says. “But once these companies got into the reality of health care, they struggled with structuring their product or service in a way that would align with how health care providers or health care plans purchase such products or services. And we thought that with our unique experience, we’d be able to support that. So, we targeted those entities that had a social impact component. That whole notion of doing well by doing good for others is a way that we continue to think about Knowality as a venture services firm.
“We didn’t specifically focus on diagnostic or drugs or devices, even though we have the background that would have made that an attractive opportunity. We chose to focus on those components that make a difference in the lives of health plan members but also have that social impact component. So instead of focusing only on the capital, which is what the venture capitalists focus on, we focus on providing the services that we think help accelerate that adoption.”
Chang explains Knowality’s meaning: “You have to know your reality, which brings ‘knowality.’ So, we set our goals saying, yes, we’re going to support up-and-coming companies who might not understand how health care works or how to navigate through the health care world. We strive to be founder-friendly and work with them to figure out that nice balance so that we can bring our expertise while we grow with them on a longer term.”
“We call it venture services because while we’re not making a direct capital investment in the entrepreneurs, we are investing our resources and our expertise,” Haywood says. “There’s a limited amount of energy and time that we can spend with any founders. As a result, we are very selective about our approach. Our relationships are all designed to be multiyear. We tell anyone that we work with that we’re going to be in this relationship for at least three years, which is why we try to be founder-friendly. Traditionally, they wouldn’t be able to afford a firm like ours early in their evolution, but we structure it in a way that makes it worthwhile.”
“We’ve excelled at recognizing that it really is all about relationships,” Chang says. “We’re able to easily identify our clients’ missed opportunities and the most effective approach to reengaging with those opportunities.”
“And because a lot of this is built upon relationships, we also want to maintain a certain level of brand equity and didn’t want to do anything that we thought would tarnish or diminish the brand,” Haywood adds. “Managing that brand was critically important for us. From a challenge standpoint, we had to be able to come up with a structure and model that allowed for a substantial amount of engagement to further identify the right type of opportunities for the select entities that we want to work with.
“As a boutique firm, Knowality does not have outside financial backing. “This is us: Knowality,” Chang says. “You’ve heard the expertise that Dr. Haywood brings. He understands this place in and out, and I bring the structure to ensure the business runs smoothly and in a standardized way. We recognize the need. These entities have amazing solutions yet haven’t been able to break into the health care world.”
One of the company’s biggest challenges so far has been identifying the characteristics of Knowality’s ideal client. Using a football analogy, Haywood says that Notre Dame and Stanford have the same issue.
“You have to be able to identify the student-athletes that actually believe that you have to be both a student and an athlete,” he says. “It’s kind of like that for us, where we have to identify which entities really want to have the social impact component and not just the financial impact component. Our biggest challenge is making certain that we have the right fit for what we do well.”
“Does a client intend to better the community?” Chang asks. “Is it something that we believe we can support throughout the relationship?”
Knowality measures its success in several ways, including impact on social change and other metrics.
“Many of the metrics we follow are, for the most part, no different from others in this space,” Haywood says. “Yes, it’s high-risk, but then there’s high reward in terms of growth and valuations and things of that nature. We look at it in terms of social impact. What’s the impact that they’re having on the communities? Is it demonstrable? Can we see how many individuals they can help afford health care services? That’s critically important for us, and we want to support that impact and know that our contribution made a difference at a community level.”
Haywood appreciates that client success is often measured and demonstrated in terms of increased membership or geographic distribution of health plans, private market valuation, social impact, and the revenue generated from that impact.
Haywood and Chang are excited about some of the trends they are observing, like the ability to identify innovative solutions that aren’t your everyday, run-of-the-mill solutions and achieving specific outcomes in a different way.
“While social determinants of health have been trending, we’re starting to see a shift in how entities are addressing the problem. Entities are starting to think outside the box and become member-centric,” she says. “We’re also seeing a lot of movement in the behavioral health and women’s health setting. Given Knowality’s position on making a social impact, I would love to see a greater emphasis on not just recognizing that there is a need, but actually making it a priority to address the needs.”
Speaking of priorities, Haywood and Chang get together weekly to reflect on why they do what they do. They say it’s easy to lose sight of why they started Knowality in the first place, so they make it a priority to recenter and refocus on their goals each week.
What differentiates us is our emphasis on working with people who are going to impact our community,” Chang says. “And make the world better. It sounds cliché, but we want to sleep well knowing that we were a part of impacting the community.”