Building Heidi With Thomas Kelly: AI As A Care Partner, A Surgeon's Lessons For Building, And The Future Of Healthcare

0:00I'm wondering if your expertise as a surgeon helped with your craft as a builder. There's this term they say, which is called economy of movement. So it's basically like no wasted movements. Surges are amazing. They're like being precise, like they're putting the thread where they want to. And then it's just, yeah, it's like perfect. So I definitely, I don't know. I don't know if I hide these quite to that standard, but I have come to value how things and intention move from one action to the next.

0:35What happens when a vascular surgeon realizes instead of treating patients, he's really drowning in paperwork? My guest today decided that was no longer acceptable. Dr. Thomas Kelly is the co-founder and CEO of Heidi Health, one of the fastest growing health tech companies in the world. Heidi started by listening to real patients' visits, then drafting the clinical notes from it. And now it's expanding into the taking care of the vast but invisible work around care. The follow-ups, the calls, the scheduling. Before Heidi, Tom lived the trade-offs firsthand. He felt the cognitive overload of being a doctor.

1:14The endless tasks and the feeling that some of the most highly trained people in the world were spreading their days on drudgery, low-value work. In this conversation, we go deep on the craft of building AI for one of the most complex, regulated, and human-centric domains there is, healthcare. We talked about what doubling capacity in healthcare really means, why personalization in healthcare has to be nearly perfect, what it actually means to build AI that doctors trust, and how Heidi is rewriting the go-to-market playbook in healthcare, Winning clinicians one by one with a consumer-centric product, and then letting that adoption pull that into the system.

1:56Everybody talks about AI's potential, but this conversation is about what it actually takes to deliver it in the real world. Let's get into it.

2:10Thank you for joining me. Thanks, Tomer. Yeah, lovely to see you again. And yeah, excited. So, you know, we just talked about Heidi Health being, you know, the top startup on LinkedIn's list in Australia, but also across the world. But before we go to Heidi Health, I want to talk about you for a bit. So you started your career as a vascular surgeon well before you kind of started Heidi Health. What drew you into medicine in the first place? Yeah, I think for me, it was the experiences I had with my primary care doctor or my GP, as we call it at home. So, yeah, growing up, he was like the most eminent, knowledgeable, warm, kind person that I'd ever met.

2:50So it always felt like the best use of my talents, I guess, would be to do that for others. It's like, you know, no matter when, because especially when you're little, it's like when you feel sick, you just feel the worst. You don't know what's going on. Your parents are worried. So, you know, that freaks you out even more. I think the common thread I've realized now is like, I've always been interested in problem solving and, and like building really useful things for people or providing services. So there was some common thread that just pushed me into medicine. Yeah, but it started with my GP.

3:21I kind of want to, if you can take me back to that moment when you realize, wow, I'm spending my life's work doing paperwork, not medicine. And then, you know, did you try first to do shortcuts and templates and, you know, other things before you're like, okay, I have to solve this? I'd say in medicine, the thing I was realizing was that it was more structured and protocolized than maybe I realized going into it. Like I knew what the diagnosis was or I'd done the surgery, like the person had to recover for seven days. But trying to get them home was maybe days of administrative work, of calling people, chasing results, submitting things for billing or funding for their accommodation or you name it.

4:03And it always felt crazy to me that the doctors were the one doing it. It's like the pointiest end of the spear, the ones that are most trained at doing like very low cognitive effort, very frustrating kind of work. so yeah I think those two interests combined I think in I was a bit early in retrospect but in 2020 and 21 with Transformers some of those chat technologies were becoming really powerful and I was convincing myself I think like every doctor is going to use an AI in their practice this is certainly going to happen and why not me like I can build it so yeah that's how it started the normal thing would have been to just continue and be a residency and build your specialty but you thought and you were giving yourself some time you're like i'm gonna do this for a year and see if it works out so i was in i was in the alfred which is one of the nicest hospitals in australia really like it's the best trauma center you know i had i had like the pinnacle experience of what healthcare could be for me like what you know if i my dream state 10 years later i'd work there um and it was still i just wasn't satisfying like the way all my colleagues worked.

5:09It was like quite frustrating. Um, and, but I definitely did the bargaining, you know, there's a lot of sunk cost. Um, I, you know, got, uh, family members, my wife to answer to. So in my head, I was like, well, you know, I'm still a doctor, like worst case, you know, it's not, it's not the end of the world. Like I'll just, I'll just come back and be a junior and work my way up again. That's fine. Um, but in my heart, I felt like it was not the best use of my talents. I didn't know at the time, but maybe like this good product instinct because I didn't do comp sci and I wasn't in Silicon Valley.

5:39Like I wasn't like entrepreneur brained. Like I didn't, I didn't know about VC. I wasn't obsessed with starting a startup. I just wanted to build something useful for doctors with AI specifically. I'm wondering if your expertise as a surgeon helped with your craft as a builder, as a product builder, or do you see any parallels looking back you can connect? So my favorite surgeons were always the plastic surgeons. And there's this term they they say which is called economy of movement so it's basically like no wasted movements like your hands are in a certain position and when you go to uh grab a suture like they they do it the same way every time surgeons are amazing we'll like put it through with the exact right amount of tension and pressure they'll already be grabbing it on the other side like as soon as the the tip goes through because they know exactly where it's going to end up so they're not like just digging around and like hoping that it appears they're like being precise like they're putting the thread where they want to and then they it's just yeah it's like perfect so I definitely I don't know I don't know if I hide these quite to that standard but I have come to value um when when there is like an elegance or like a connection in like how thing how things and intention move from one action to the next and then the other part of surgery that is quite uh which definitely influences me is I guess how action-oriented surgeons are.

7:03You know, if there's, if something's bleeding or there's something you didn't expect, or you accidentally poke a hole in something that you didn't mean to, you have to be decisive and fast. And like the way to figure out what to do is to act quickly. That's definitely something that I bring to Heidi for sure. For kind of, you know, folks listening across the globe, how would you describe Heidi? Yeah, so Heidi's an AI care partner for clinicians. The reason we say care partner is there's actually quite a lot of things that Heidi can do now on behalf of clinicians. It's sort of like an extension of them.

7:37So we have Ascribe, which is the feature that has gone most viral to date. So that's where we listen into a visit, we transcribe it, and we generate clinical notes and documents and a patient summary. We also are starting to do things like calls. So following up with patients with outbound calls or also helping them schedule in with the practice. And yeah, very exciting. Like I'd say we were surprised the degree to which the adoption sort of took off in the last few years. I think it makes sense. Like it's so, it gives so much time back to clinicians. You know, sometimes they save an hour to two hours a day.

8:14We're global. So we started in Australia. We now have, I'd say like market leading presence in Canada, ANZ and the UK. And then in the US, a small but growing business across both mid-market but enterprise as well with some large, large named accounts. Yeah. Is this just the area you were most passionate about because you've seen the pain day in, day out kind of thing? I think overwhelmingly clinicians still want to be doctors. They want to do the fun bit, which is figuring out what's going on and gathering the history and delivering the plan and doing the surgery. Like these are the best parts of the job.

8:49Like the dream for me was to be that GP. So my GP didn't have a medical record. He had cue cards that he would write notes on only sometimes if it was particularly interesting. So like my lifetime was four cue cards. And the thing is, like, I get that maybe that's not as good as it could be. But actually for him, that was enough for him to be really competent. And his experience was just write a note, okay, on to the next patient, like I'm done. Like he never left a visit with debt or work that he had to go to. And so I think that's kind of the unifying vision. But I do think these models are quite jagged.

9:31They're incredibly intelligent. I'm 100 % sure a doctor with them is better than without. But also they don't quite replace the ability of the human doctor to take risk and to feel and touch the patient just yet. You started well before GPT-4 or GPT-2.5 came out. So you're kind of ahead of this new wave of AI. So I could see two reactions when you kind of know GPT-4 is coming. One reaction is, oh, shit. Like this is materially changing our strategy or what we thought would be really hard is easy. And now we're building something very different. Well, I could also see like, this is amazing. This accelerates our roadmap and now we can focus on the stuff we always wanted to focus on because we don't have to deal with this.

10:17Was this any of those or neither of those? At first, it was definitely the, oh shit, like this is so scary because, you know, like all of our technical advantage is gone. But then it became exciting because we could focus on being more of a product centric company. So what had changed for us was that we had built the business around the idea that we had this precious commodity technology that no one else could build or that it was like a very small group. But then actually, by the middle of 2023, everyone was doing the same thing. And so by the end of 2023, we actually pivoted the whole business.

10:53We changed to going product-led. We still used all our learnings. I think that's why we kind of came from behind and sort of won in all the rest of the world markets. because we knew from our data that clinicians really wanted to personalize to a very high degree. So they would be like very impressed by the initial trick of generating the note, like the magic of seeing that happen. But then very quickly that would decay into, oh, it's annoying that I have to edit more than 5 % of this note. And so personalizing to a really high degree was super, super critical. So that lent itself really naturally to a product-led model where you have a free tier, that magic moment that word of mouth driver is is free accessible like no no uh paid no credit card needed you just use it as many times as you like and then anyone that's going to become like a real user like actually activate and like consistently use the product will almost always want to create all their own templates and so that was the paid feature um and yeah so it was like a go-to-market innovation and then we we went for it and it worked like what is it for you that is like really differentiator.

12:00Yeah, you can use off the shelf. It wouldn't work. Or, you know, what others are trying to solve is this. But for us, the focus is, this is our focus. Is it the reliability? Is it the fact that I know those are my notes as a physician and not some generic notes? Is it about the accuracy, the nuances of how I write, all of the above? I'd say overwhelmingly quality within Heidi's set of features. So that means like you can create any template. You can set up your own voices. there's like high degree of personalization and Heidi should be writing within like 1 % of what you would write reliably, consistently, along with all the other engineering about like, how do you handle offline, low internet, different languages?

12:41How did that idea come to life to go directly to doctors and how does it work in practice? Is this like the Slack example of penetrating a large enterprise company? yeah uh yeah so i think it started again this is maybe the the surgeon in me so i guess it came from that instinct of that the doctors are going to use something that's going to benefit their patients and benefit them uh we always build with compliance that was one advantage of maybe starting too early so even when we made the pivot we had gdpr certification and we'd done like all this different uh regional setup so although although maybe they didn't have central approval once they shared that they were using Heidi, they would be surprised.

13:26Like we would kind of surprise them with how compliant we actually are. And then we would share, you know, our pen testing and like our different SLAs and ISO and everything else. But generally I'd say in markets where there's a lot of individual autonomy on the clinicians or departments, the motion definitely works better. So a doctor doesn't need a blessing from the IT department before they bring Heidi to help warm her? Not always. Yeah, I think it kind of depends on the setting. So I would say in large US health systems, it works the least well. So that's where they're, because you might have like 10 ,000 clinicians employed by one entity.

14:10And so the fact that a few clinicians really like Heidi, like their ability to enact influence on a CIO is like so far to touch. There's like some delta of like, if you build a product for the doctors, then you end up with what Heidi is. If you build it for the CIOs, you end up with just a different thing that is like not, it's like more compliant, but it's less useful. Do you see hospital admins starting to use Heidi and having access and tracking records? Do you see a place where patients will have access to Heidi as well? Or there will always be kind of on the auxiliary of the value and the doctors are the center.

14:47Yeah, I think it's like we have to win the hearts and minds of the doctors. That's always going to be like the, I think like anchoring. Like if we ever alienate them or do something, then we kind of lose the whole thing. However, I would say a lot of our doctors want us to have amazing experiences for their patients. Like one of the most interesting ones we've been asked for recently is can I create a clone of myself in like an AI chat? So what they mean is like they explain how certain procedures go 20 times a day, like over and over and over again. And so what they want is, can you just like learn from my sessions how I explain something and then just share it with my patients?

15:27And the answer is yes, right? Yes, yeah, exactly. It's like, yeah, we can do that. I don't know if this was kind of a more of a small study or broad, but I saw like from Heidi, like 51 % reduction in documentation time, almost 40 % improvement in note quality, 60 % decrease in after hours administration time, like just a lot of amazing stats. And are those the metrics you look at when you think about doubling the capacity of healthcare overall? So the reason capacity makes sense is it's more than just time. Like it's basically like how much health care is there that we can actually give. So if Heidi can phone a patient, schedule a call when a prescription is meant to end, gather the history about the medicine, have access to the fact sheet, ask any adverse effects and relevant questions, draft the prescription such that the clinician just ticks a button.

16:20We've actually increased capacity. Like we did the job of what the clinician would have done in the case that they had to pick up the phone and spend 15 minutes of that time. So that's 15 minutes of capacity we've given back. It's kind of like in, um, in physics, we have work. It's like, it's like power and time. Like you want how much care has been given over what period of time, if we do more care and more time giving it, that's great. Like, that's what, that's what I want us to do. So, so it incentivizes everything. Like if we make doctors' decisions better in the moment, then we like raise the quality of their care.

16:53So that's increasing capacity. If we give them more time back, that's also increasing capacity. I'm trying to like have a formula in my head, you know, going back to math background. Like, so you want like successful outcomes going up, like negative outcomes going down, divided by time of care? The amount of care you can give out, there's only like a couple of ways you can change it. You can either reduce the quality, right? So you can do less and you can think less hard and spend less time in your patients. Or you can increase the quality, but then you have less time for every single patient.

17:31So it's kind of like, I don't know, the graph breaks down at some point. But yeah, it's basically like how much care time, like CT or like care seconds or whatever, can a system deal with? I think I heard you talk about, you know, sometimes the best doctors are the ones that perceivably when they, you know, the perceived best doctors are the ones who remember how your kids' names are, like, you know, the names of your kids or, but it doesn't always, you know, it doesn't have to match with how good of a doctor they are in treating you. So is this one of those intangibles that you think about in Heidi or you're like, I don't know, I'm like pure outcomes and treatment?

18:11Yeah, no, I think it's really important. There's good evidence that bedside manner does matter for outcomes. But for outcomes. Yeah, because it's related to how much patients are willing to divulge and how much they actually will, one, engage with healthcare at all. And then also, I think it usually signals a clinician that is maybe at a higher level of cognition generally, not always. But it's like because they can balance both. They clearly know what's going on so that they can actually extend themselves into how that person's feeling and going. So I think it's both. Like you don't want to dehumanize the experience.

18:48When I was meeting you in Melbourne, it was really amazing to see all the ecosystem. And part of it felt to me that like there was a real advantage being away from Valley because you weren't caught up in, you know, what's shining your object and trying to kind of make yourself to the next panel or, you know, speaking engagement. You can really focus on that deep, deep problem. Do you see it as an advantage? and what do you see as a disadvantage being, in a way, far away from the valley? Yeah, so the advantages are definitely that you're a big fish in a small pond, at least when you're successful.

19:24So that means you get to recruit just amazing people. You know, we get people joining from Canva, from Lassian, also a lot of the kind of local offshoots, whether it's Notion or Fikma or other companies. So I think that's really great. I also think we have a unique product-led talent DNA in Australia because a lot of companies haven't been able to raise capital in the way that you could in other countries. So you just can't afford a B2B model generally because you can't raise the quantum of capital that you would need to actually launch a B2B model around the world. There's been a couple of successful companies, but it's pretty tough.

20:10So I think there are definitely advantages. I also think our experience, like obviously we've worked in like a global market. Young Australian grads have like a really good attitude. They work very hard. They often like view going to America and like seeing the world as a really exciting thing. So it's kind of like a good place to go global from, I think. Maybe the only disadvantage is that Australia as an economy is relatively small. So if you have a big, big business in Australia and you go talk to an investor in the UK or in the US, they're just going to go into your P &L and set Australia to zero in the future.

20:48Like they just don't care. They just don't think it's going to matter. And to be honest, they're kind of right. Like you do have to think about how you succeed in many markets, not just in Australia. It's never going to be big enough to get to a venture outcome that's exciting. So now future of healthcare. So if you kind of push that like 10, 15 years, what's like, you know, what are you envisioning? So what I imagine is that if I walk into a hospital, it's basically only clinical staff, like for the largest part of it, it's going to be nurses, doctors, of course, supporting teams, porters, others that like are doing all sorts of great work.

21:27But the like administrative requirement of to run that hospital has come down a lot. And the amount of engagement that patient gets on average from that health system or wherever their insurance is accepted or whatever is massively increased and basically unlimited. You probably have like an MD that is responsible for you. But then you probably as a patient can engage with Heidi or some sort of system. and for most non-acute issues, I think AI will probably get most of the way there, figuring out what's going on, reading your medical history, looking up the evidence, drafting an amazing plan for that clinician to approve.

22:08The reason I think it will happen is because it's just safer. Heidi can check in on with you every day, can connect to your aura ring or your remote physiological sensing, can detect when the diagnosis is probably wrong or it's not going to plan, and escalate in a way that as a human, I just can't. I can't simultaneously manage 10 ,000 people and check in on them every 10 minutes, but Heidi could. So I really think that on-the-edge remote patient monitoring, low-risk primary care will become largely AI-driven, still under the supervision of an MD. I think that companies will become medical devices and we should take liability for how these systems behave when we're doing that.

22:48We shouldn't just offload it to the doctor. It's not fair. It will mean that for most of the things that you go to see a doctor for, you can get great advice at almost no cost. It will be great. Then when you go to see a doctor, you're already risen above a certain degree of risk. Heidi's probably already taking a history thought about the case. You need to see someone in person. The doctor does what they always do. They'll read the Heidi summary. They'll look up the evidence. They'll see what Heidi's thinking and why they've sent them in. The human doctor will do what they do. will smudge over the jagged edges of these intelligences where they're quite bad.

23:23I do think the human side of it will become slightly more procedural oriented, so more examination oriented, more procedures, blood draws, things like that generally, and probably more mid-level providers, like more PAs and others that start to operate with these AIs to do maybe slightly more advanced care. And then Heidi's behind the scenes doing everything from the revenue cycle to negotiating with the insurers AI about like how they should be paid for a certain thing. It's like, you just got this like AI wrapping the experience, but there's like still the human doctors there, still the nurses, still all the teams that exist.

23:58They just like better utilized at what they uniquely are best at. I would have to quickly transition into a rapid fire and this, you know, just kind of off the bat, but we're, you know, what, what comes first in mind to you. What's one thing people get completely wrong about building healthcare products? The best product wins. Great. Great answer. If you could solve one product problem at Heidi right now by snapping your fingers, it doesn't have to be unique to Heidi, but just a product you would like to have tomorrow, what would that be? an amazing commissions and billing system so if we launch a new product we just like turn on a couple of things and all the billing solved so we're gonna we're gonna build heaps of platform stuff this is specifically billing for healthcare is extremely hard uh no no it's like our stripe billing like platform or like how you know different user roles like fine-grained access very very uh enterprise uh like we'd want to be enterprise ready that's that's that's the But what's a product that you did not think would be successful actually surprised you?

25:08Or the opposite? If I was successful, but was not? Okay, controversial. Grok, I was surprised. I thought it was incredibly late to the party. I didn't expect them to build anything good. And it's slowly becoming my preferred consumer AI. I just find it's hard to explain why. It's just like the best at knowing when to think, how long to spend, when to look up sources. Awesome. What's a favorite non-software, non-digital product you love? I have this titanium pen that's like milled from a single piece of titanium. That's like a fidget toy slash pen. It's like my favorite thing ever. I love it. That's awesome.

25:49And then for folks listening as like young builders aspiring to build in healthcare, what do you think they should learn? Yeah, definitely not required to be a doctor. I'd actually discourage it. I'd say it's a little bit of a waste. If you don't ever think you're going to do clinical practice, not a good use of your time. I'd say like just design partners. Like, so you just have to spend time in the environment, you know, find a doctor that's willing to have you follow them around. And then what are you building? Just be very clear who is paying for it and who's getting the value. Because in healthcare, that's where a lot of companies go to die.

26:27Like the idea is sound, but the actual economics of like how they acquire users, who's the ultimate payer, it makes it very tricky. It's the only place where you can build something useful that will just die because no one can pay for it or it's not monetizable. Super interesting. Tom, this was super insightful. It's the second time we met. I feel like I've learned even more this time and I've built a pretty big base the last time we talked. So thank you so much for the time. I very much enjoyed learning about the future of healthcare through Tom's eyes. If you're building AI for high-stakes work, these takeaways are important to keep in mind.

27:06First, your product's origin story matters because it grounds your mission. Tom didn't start with a startup dream. He started with a childhood doctor he described as the most eminent, knowledgeable, warm, kind person he ever met. Heidi is trying to get doctors back to that type of care, not replace it. Second, according to Tom, healthcare's real problem isn't getting the diagnosis right. It's the throughput. It's a capacity problem. And the reason is clear. Doctors were spending most of their time on low cognitive effort work. They were not doing patient care. They were doing paperwork care. Heidi was designed with great clarity.