Koroid is Disrupting the $17 Billion Medical Staffing Industry With A.I.
Kailash Sundaram | May 2018
Health care providers often struggle to fill shifts dropped by their employees at the last minute. Pressed for time, hospitals turn to temporary staffing agencies, which charge up to one hundred percent commission for each shift filled. These temporary staffers, however, often don’t understand a particular hospital’s standard operating procedures, leading to poorer patient outcomes.
Koroid, an AI-medical staffing platform, allows medical professionals to schedule shifts and mark their availability in advance, ensuring that hospitals don’t have to look outside to fill their staffing needs. Founded by Gustaf Axelsson, a practicing physician at Harvard Medical School, Koroid has already partnered with two major health care providers.
We spoke to Gustaf about how Koroid is disrupting the $17 billion medical staffing industry with artificial intelligence.
What was your initial inspiration for Koroid?
As a practicing physician, I noticed that emergency staffing was done poorly for a whole range of healthcare jobs, from non-clinical to clinical positions.
Let’s say I call in sick for a shift at the hospital. The hospital then needs to find someone to fill my shift. A secretary or nurse specialist cold-call individuals, and if he or she can’t find someone, passes the job on to a temporary staffing agency. The temporary staffing agency then follows the same process as the hospital, calling health care professionals it’s contracted with to fill in for my shift.
Not only is the process time and capital intensive (staffing agencies charge up to 100 percent commission); it leads to poor healthcare. The people who fill in for shifts through staffing agencies often haven’t worked at that particular hospital before and don’t understand that hospital’s standard operating procedures.
Through research, my team and I realized emergency staffing isn’t the only place where health care providers manage resources inefficiently – it happens in hiring and scheduling as well. Hospitals do too much manually and fail to collect enough data to make proactive, rather than reactive, decisions.
Technology is probably the solution to these problems.
How did you validate your problem?
The first way I validated the problem was through personal experience. As a practicing physician, I had experience working with temporary staff and understood the hospital’s difficulty in recruiting staff at the last minute.
Second, I received market validation from numerous health care providers who expressed interest in a tech-enabled staffing solution. As part of my coursework for “Innovating in Healthcare,” a Harvard Business School course, I conducted market research on the emergency staffing industry. I found that health care providers often contract out emergency staffing to temporary staffing agencies, which are very poor at managing their internal resources.
When I asked health care providers whether they would be open to testing a tech-enabled staffing solution, they all said “yes.” I then gathered a team, built an MVP, and successfully piloted with one health care provider, proving that a staffing problem existed and tech-enabled solution could solve it.
Can you walk me through your founding team’s background leading up to Koroid?
Our founding team consists of Dr. Carl Gustaf Axelsson (CEO & Founder), full-stack developer Simon Sahlen, data scientist Chinmay Shukla (CSO), and multiple developers and designers who have recently joined.
Simon and I knew each other prior to starting the Koroid journey – in fact, we are both Swedish and from the same small area of Sweden. Partnering up with Simon in the beginning was natural, and his agile technical skill set, along with my knowledge of the industry and business, has proven very beneficial to Koroid.
I reached out to Chinmay as soon as I started thinking about how AI could potentially really revolutionize what we do. Both he and I are based at Harvard, so a few Linkedin messages later we were having coffee, and eventually Chinmay joined the team. In addition, we recently brought on a designer and a few developers to keep up with the current and impending demand.
What do you think makes your management team especially capable of solving this particular problem?
Our management team is especially capable because of how well we work together and the fact that our skill sets and personalities complement each other. We understand the user pain point and have operational expertise and strong technical skills. I’m a practicing Harvard Medical School educated-physician, Jim Wallace (advisor) is the President of the AmeriPlus Health Network, and Simon Sahlen previously worked with IBM and at Tailify, an influencer marketing platform in Scandinavia.
Moreover, we’ve also built out strong networks we’re tapping to develop partnerships. Healthcare is often difficult to break into because it’s hard to get hospitals to try something new. Our networks, combined with our experience, make it easier for us to change the status quo.
How does Koroid work in a customer setting?
On the provider side, a member of the HR team logs onto either our website or smartphone application.
They upload shifts that need to be filled, find candidates available for a shift, and communicate with hospital workers. Hospital workers, on the other hand, also log onto our interface, find shifts that work for their lifestyle, and communicate their availability.
Providers and workers can manage documentation, like payroll and timesheets, through the platform. Essentially, we streamline staffing for the healthcare industry.
How do you size your target market and opportunity?
US hospitals spend 16 to 17 billion dollars annually on temporary staffing alone. We have the potential to break that market wide open, along with also involving ourselves in permanent staffing and communication.
Who would you say are your top competitors in this space, and what is your edge?
Our top competitor is New York-based Nomad Healthcare. Also founded by a neurosurgeon, Nomad functions as a tech-enabled broker. Nomad does exactly what a temporary staffing does, except through a tech-enabled matching platform. Instead of charging a commission that is lower than what current staffing companies charge, Nomad takes a five percent commission on each shift they fill. The problem with Nomad’s model is it’s very easy to copy.
Rather than filling shifts with temporary staff, which leads to poor healthcare, we’re optimizing matching between the healthcare provider and its temporary staff. This ensures that hospitals don’t have to pay commission and can keep business in-house, which leads to better healthcare for patients.
The other type of competitor is large healthcare software engineering companies like Epic Systems. Frankly, large companies in the healthcare systems space already have enough growth opportunities solving other more developed problems in the space such as organizing hospital records, building consumer facing portals, and enhancing treatment that they don’t have the need or resources to attempt to solve this problem.
What makes Koroid defensible?
We’re pursuing a data-driven approach. We have Ph.D. data scientists on our team. We’re trying to understand better than anyone else which shifts people won’t work and finding ways to automatically fill these shifts, such that there doesn’t even need to be a middleman trying to find someone to fill a shift that was dropped at the last minute.
How do you generate revenue?
We are currently exploring a number of potential revenue models. In fact, it may very well be the case that different customers will prefer different ways of paying for our service. We want to remain as flexible as we can for us long as we can.
However, we are currently pursuing a subscription-based model where providers would pay for our software on a monthly basis, similar to other software solutions, such as SAP or NetSuite.
Our product can be applied to many different settings within the healthcare industry (e.g. large hospitals, small hospitals, and clinics), as well as in other industries where there is a recurring demand for qualified, credentialed professionals to work. In fact, we are currently exploring other industries that share many features with healthcare in terms of staffing patterns.
How much customer traction are you seeing? Any particularly insightful feedback?
We finished a successful pilot with a top-tier health care provider two months ago. Now we’ve partnered with a major hospital to run another trial. We’re also working on partnering with a foreign government and entering a revenue-sharing agreement with a large IT company.
Initial feedback on our product has largely been positive. Our partners are happy they can get effective temporary staff more efficiently and for a much cheaper price. What our partners want now is more data, particularly in terms of how they can better deploy and leverage their resources. We’re now working to build metrics and gather useful, relevant data.
What is your long-term objective with Koroid?
Our objective is to be the AI-powered one-stop shop for hospitals managing their resources.
Any other message you would like to convey to our readers?
Our goal with Koroid is to show that resource-management can be as patient-centered as frontline care; that is, we want the ultimate beneficiary of improved resource management to be the patient. As a physician, my most important stakeholder is always the patient, and through providing an intelligent and cost-effective solution for staffing and resource management, I am confident that patient care will also improve.
Please reach out if you would like to discuss how good resource management can help save healthcare or if you are interested in joining us on this exciting journey.