The Hidden Cost of Big Wins in Healthcare | Amy Hay (Part 2/4)

Intro - 00:00:06: Welcome to the Biotech Startups Podcast by Excedr. Join us as we speak with first-time founders, serial entrepreneurs, and experienced investors about the challenges and triumphs of running a biotech startup from pre-seed to IPO with your host, Jon Chee.

In our last episode, Amy shared stories from her childhood in Dallas, the influence of her parents and grandparents, and how her first day at MD Anderson as a receptionist coincided with the arrival of President John Mendelsohn.

If you missed it, check out part one. In part two, Amy talks about her transition from patient advocate to administrative fellow—a coveted role MD Anderson had never awarded to an internal candidate before—and how she leveraged her ground-level understanding of patient experience and clinical operations to differentiate herself.

She shares how this fellowship opened doors to operating rooms, cleanrooms, and C-suite strategy, ultimately leading her to radiation oncology and Dr. James Cox's vision to build MD Anderson's first proton therapy center. She also recounts the story of MD Anderson's first satellite clinic in Bellaire, Texas—a "flea-bitten" facility she and her team transformed into a roaring success by meeting patients where they were, proving that convenience and compassion could coexist with world-class care.

Amy Hay - 00:01:46: And, again, kind of continuing the Anderson theme, MD Anderson still has—and at that time had—what they called administrative fellows. And these were kind of prize positions, usually two to four a year, that you could apply for after you finished your master's, and you got to spend a year working with the COO, the CFO, the really C-suite, to learn the organization from that perspective.

MD Anderson had never hired anyone in that fellowship position internally before. I was even told, "This is probably not gonna happen. You know, we usually go to the WashUs, and we go to these premier schools," which I understood. So as I was going into those interviews, I was trying to come up with how I could differentiate myself.

And I think the way that I was able to do that, thankfully, was by showing that I could take all of those experiences and apply them at a C-suite level for even greater impact. I understood what it was like to check in the basement in radiation oncology and why they didn't like being in the basement. I understood why having to wait for three hours to get your blood drawn when you have been NPO for a scan is torturous because not only had I run those clinics, but I’d also been a patient advocate and tried to help those people get through those hard times.

So I was very lucky that I was able to get one of those spots and then spent that next year working with the senior leadership of MD Anderson, not only understanding how the whole complex worked but really participating in it. Not being a bystander, but rolling up my sleeves and getting my hands dirty.

Jon Chee - 00:03:35: That's so cool. Talk about just the opportunity to be a knowledge sponge, truly drinking out of the fire hose. Like, this amount of... you can be learning on the fly. And I think something that stood out to me that you brought up is there's another company—I can't really remember who it was. It might have been Amazon, I think, but Bezos would still take customer support calls and tickets.

It's kind of that type of magic where it is so valuable to just put yourself in the shoes of other people in your organization, almost like shadowing or just putting yourself there. Because I think when you have more empathy and understanding for that role, it just makes the teamwork better together. And especially as you kind of rise in your ranks and you're starting to manage more cross-disciplinary teams, it's probably hard to manage something that you only know in the abstract versus, "I've actually been there. I know kind of what goes into it." And it just makes you a more effective leader to be able to be like—just like Bezos—"Oh, no. No. No. I've taken a support call," or "I've been in the support chat before," and it really just continues to round out one's experience.

So it's really cool that you had that and also made it the fellowship. And it sounds like that fellowship experience... Could you talk about some of the cool stuff that, as a fellow, you were able to get involved with?

Amy Hay - 00:04:57: It was quite remarkable. I had the opportunity to go spend time in the OR and to go into labs and cleanrooms where you'd never really get that opportunity to see those places. And that just... I ended up becoming very comfortable in them, which, in hindsight, I find interesting because, you know, much like you early on, before I went to college, I was sure I was gonna be a doctor until I hit organic chemistry.

Jon Chee - 00:05:22: And... and...

Amy Hay - 00:05:23: I absolutely was not gonna be a doctor. Then I still got to experience it. I still like going into ORs and watching, and I still like going into the labs and watching researchers and that sort of thing. So it really kind of opened up that Pandora's box of possibilities. And I say Pandora's box because sometimes it's the good and the bad. Right? Then you have to start making more choices. So I think as you're going down your path, the older you get, the more that you make definitive choices that lead you in a certain direction, and it's not always easy to turn back around.

So through that, I really was able to start to focus myself on, okay, what's the next job? What makes me passionate? And that led me actually to the modality of radiation oncology in cancer care.

MD Anderson had a chair who's now passed, Dr. James Cox, who became very quickly a mentor, a friend, you know, a father figure in many ways. And he had this desire to build a proton therapy center. Proton therapy—there are multiple around the globe today. At the time, the only really operating facility was in Loma Linda, California, and Massachusetts General. And we at MD Anderson, under Dr. Cox and his wife, Dr. Komaki's vision, wanted to build one for our patients in Houston.

And here comes Dr. Mendelsohn again, the president, and he says to us, "That's fantastic. Cox, hire Amy. Bring her on. Have her focus on that and completely support you. But by the way, I can't give you any money."

And I remember us sitting there and thinking, "Okay. We can do this." And I remember starting to do diligence and then being like, "Dr. Cox, do you know that's like $120 to $150,000,000?" And that was back in 2000. So that led me down, I think, the "choose your own adventure" door of: "I wanna do something hard. And I know it's gonna be hard, but it's gonna be really good if we can pull it off."

And there were two inflection points in that first job out of fellowship. One was protons, and the second was trying to see if we could deliver the excellence of MD Anderson outside of the Texas Medical Center. And this is actually where I really met—and, to this day, is one of my closest friends and mentors—Dan Fontaine. He was, at the time, the Chief Legal Officer of MD Anderson. He progressed to really be one of the senior leaders at Anderson running the organization.

But at the time, I had this wild idea with the Division of Radiation Oncology that we could open up a satellite for patients in Houston that was ten minutes away. It was in a place called Bellaire, Texas. Literally, you drive down Holcombe, and you run into it. So right down from the hospital. But it was not the Texas Medical Center. It was down the lane.

And we thought that this would be extremely valuable to patients because they could drive their cars up to the door. They could park for the course of their radiation—anywhere from four to eight weeks, six weeks. They would go in. They would see the same people every single day. They'd probably see their doctors most days, not just one day a week on weekly treat, and they would like that. They wouldn't have to pay for parking. They wouldn't have to park and walk and navigate the medical center. They would be able to take this piece of their day that they are obligated to do for the next six weeks and simplify it.

And we took this to, at the time, the MD Anderson Physician Network Board not once, not twice, but three times in order to get it approved. And my mentor-slash-friend at the time, Dan, said, "Amy, you realize this is a flea-bitten dog. It's not a great facility. It's outside the medical center." But finally, on that third round of approvals, he said, "But you wore us down. We're gonna let you do this little experiment. Come back to us when it doesn't work."

And I will tell you that we, as a team, brought up this dingy center. We selected the right doctor and the right staff, and immediately, it was a roaring success because patients loved it. They loved it. They felt like this was their little family for six to eight weeks. They didn't wanna go to the med center. And over time, that really has instilled the infrastructure today—twenty-plus years later—of MD Anderson having large satellite facilities all around the Houston Metroplex that just make it a little bit easier for patients who are having to do that every day.

So kind of pulling those two examples together, I think that it was the inspiration and the excitement around a challenge. So there's a huge challenge that if I think it's gonna be meaningful, I'm willing to do whatever it takes. If that means personally calling every patient who's scheduled for a new patient appointment in the med center in radiation and asking them nicely if they would like to be seen in Bellaire, I did it. I'd literally make cold calls because I was so committed to providing this to people that that passion allowed us to not only show it as an example but then to extrapolate it out for more and more people over time, far past me even being at the organization.

Jon Chee - 00:11:08: That's super rad, and I love how ambitious, kind of out-of-the-box initiatives, extra persistence, and wearing people down is a viable strategy. It's like if you're persistent, you can get there.

And a question for you is: you started off with no budget. Like, "figure it out." I'm going to imagine once you got approval to get this thing stood up, you had to get... like, the purchase had to open in some way or maybe not. I'd love to learn, how did you stand this thing up starting from zero in a large organization?

Amy Hay - 00:11:40: Yeah. I must say, first, it was absolutely like a team effort. We had kind of like a little proton family. Dr. Cox, Dr. Komaki, my boss at the time, Micheline Tinket—she was an incredible mentor for me—and we literally functioned as a small little family unit. And we came up with a plan and started talking to people about the benefit of protons. We weren't talking about the dollars. We weren't talking about the cents. We were talking about just how this could really make a difference to patients that don't have any other options.

Pediatric patients who you know are going to survive and grow—so the harmful effects of radiation, you wanna minimize as much as possible. You wanna spare that healthy tissue. Patients with brain cancers and chondrosarcomas where the tumor or the target is so close to critical structures that you can't afford to harm them because that quality of life matters for many years.

And as we started doing that, I think one of the keys to our success was, in fact, Dr. Ritsuko Komaki, which kinda brings me to another point in the story that made a huge impact on me. Dr. Komaki grew up in Hiroshima, Japan. She was there with her family when the bomb went off. She spent her entire life devoted to trying to not make radiation a negative, but making it a positive. And she was so committed with Dr. Cox to making sure we got protons at MD Anderson for our patients. It didn't matter how, it didn't matter how long it took—we were gonna do it. You know?

And with that kind of personal passion and that message, we were able to thankfully make the right connections and start raising the right kind of money. And I say that very purposefully. We ended up developing an LLC in which we had an investment banking partner, Sanders Morris Harris at the time, and we had a general partner who was in charge of building and operating, The Styles Company—John Styles and his father, John Styles Senior, that we brought into our family, and our family became bigger.

And all of a sudden, it wasn't just business and science. It was investment banking, and it was construction, and it was management. And so as we started building this kind of consortium of believers who were just passionate about making this happen, we were able to come up with a process to go to market and raise the funds.

But then this little weird thing happened called September 11th. We had just gotten our Private Placement Memorandum done, which is this huge thick thing, and it talks all about the investments and the science. And it took months and months and months, not to mention all of the legal documents. I think we had twelve that tied all these parties together.

And we were about ready to go to market. We'd already primed the, you know, New York. We had meetings set up, and 9/11 happened. And I remember being at MD Anderson. I was with Micheline Tinket. We had walked to the park to get Starbucks. We were very excited. We finally got a Starbucks, which now sounds silly—they're on every corner—but we were very excited. And we were walking back with our Starbucks, and we looked up at the TV in the GU clinic. And we were watching the plane go into the first tower, and we didn't say a word to each other. We just kinda walked back to our office, not really understanding fully the trickle-down impact of that moment. Right? And we all have our 9/11 stories, and they're all impactful and sometimes painful. But that was a moment that we didn't really understand what that was gonna mean for what we did next.

Right? Because overnight, the markets evaporated. Capital was nowhere to be found. We were stopped in our tracks. And it was a moment where there were a few of us that were like, "Okay. Maybe... maybe we were wrong. Maybe this is the wrong path. Maybe we need to switch gears."

And we didn't. Again, we persisted. We're like, "Nope. This is important. This is just a moment in time. We're gonna rally just like we rallied as a country. We're gonna rally. But we've gotta change our approach because it's not good enough for it to be a financial investment anymore. It's gotta be bigger than that. So we need to change who we're getting money from."

So instead of looking at the big banks on Wall Street and investment PE firms, we completely shifted gears and said, "Let's look at local people who this might actually impact, who cancer impacts." And the first group that we went to was the Firefighters Pension Fund and the Police Officers Pension Fund. Because for firefighters, lung cancer is prevalent in this population because of what they do. They inherently breathe smoke. It's a carcinogen. It could lead to cancer.

And we went to them, and we explained why we were so passionate about this therapy. And we heard so many of them talk about family members, you know—their dad who was a firefighter, their son who had, even if it wasn't cancer, chronic conditions due to that. I mean, a noble service that we have to have in our world. And they liked it. They were willing, and they were able to invest in a way in which they could be proud of. They were proud to tell other people that they were investing in protons, and that center might be able to treat somebody you know in the future with lung cancer. You know? That center will make a difference to the people that we are supporting.

And so it's a really interesting time in which, at all times, we all have these... You have to kind of sit back a second, recalibrate, catch your breath, lick your wounds, and then figure out how to pivot. And in this way, I think that we pivoted toward the people, toward the passion. You know, money is important. They have to support their pension funds. Absolutely. But on the other hand, that wasn't what we were selling. We were selling the promise of making a difference. And it caught on. And we were able to raise $125,000,000 and launch the project.

So it was an incredible experience, I mean, an incredible group of people. I was just one piece in the big wheel, but I think it really did impact how I started corralling from there.

Jon Chee - 00:18:33: Wow. That's incredible. And talk about a successful pivot. Sometimes it's just... just like getting knocked off the horse, getting back up again. Because that must have been a massive gut punch. Just like, "Oh my god. Like, this could just completely... this could be gone." And you're like, "Okay. Let's go back to first principles here and figure out..." I love just like, who is directly impacted by this? And going to the source. And I love that, and I think it creates an alignment, just like a great alignment.

It's like finding that alignment that you... it seems you have found. And so you're off to the races. Like, your resource, get this thing going. Talk about just getting this thing up and running. And now was it just smooth sailing from there, or was it like...

Amy Hay - 00:19:18: Oh, no. I mean, that would be way too easy. Can't stop there. So we were able to raise the money. We started the construction. It was a point two where I actually technically left Anderson and took over the role as the Chief Operating Officer at the Proton Therapy Center for a few years just to really kind of live and breathe it. You know, I had my hard hat and my safety goggles, and we chose Hitachi as our technology partner.

So it was definitely a journey. I mean, it took three years to get it up and operational. So much sweat and hard work from everybody involved. And as we continued down, there was always some hiccup, whether it was loss of indications that were reimbursed for proton therapy or working with the government on how does proton become a standard of care in certain diseases. It's a journey. It's, in a lot of ways, very similar to researchers. There's always something. And so you have to have that almost moxie to just continue and to find the positive and to create relationships.

I do think those were years where I really saw the value of not just aligning with people, but also finding people that are not like you to align with, to surround yourself with all of your gaps. Right? I'm not a physicist. We needed a Head of Physics who was brilliant... in trying to really put together the right team of people that made everything better as one and probably worse alone. I think that's part of that alignment component, which is very much kind of a fundamental of how I negotiate deals today. It's an alignment of purpose and then an alignment of incentives. And if you can accomplish those two things, my experience has been that you've got a contract that you can put in the drawer and never look at again because everybody is doing the right thing for the right reasons and going to benefit from it.

Jon Chee - 00:21:32: Absolutely. I love that. And just hearing this, it's almost like you had an entrepreneurial journey within a larger org. So I guess the term is, like, intrapreneur.

Amy Hay - 00:21:44: Yep.

Jon Chee - 00:21:45: Like, that sounded like a startup, kind of what you just described. It does. Right? It's like, alright. You have you and your co-founder. Here's $0.

Amy Hay - 00:21:50: Yeah. Go.

Jon Chee - 00:21:52: Yeah. Go. And there's a...

Amy Hay - 00:21:53: Tomorrow.

Jon Chee - 00:21:54: Yeah. Go do your thing. Like, here's a massive... like, a massive undertaking, but you have no resources. Go figure it out. And then you even had a pivot, like, a massive pivot that, like, is a lesson also too. Like, there's always so much you can control. It's just like there are these external factors that are like... again, you're just gonna get punched in the mouth on this journey. It's not even like... everyone's journey. You're gonna get punched in the mouth at some point in time. It's really a matter of how do you handle it? Like, how are you gonna deal with that? Are you gonna let it just be a permanent setback? Or are you gonna try again?

And from there, I mean, it's... that's something too is just, like, exactly what you described is when you can find that perfect alignment of interests, purpose, and also if you could add in the kind of economic incentive too, that's when that flywheel really starts to move really quickly and you start to scale impact in a lot of ways, which is awesome to see.

And, uh, there's probably a whole 'nother podcast, but it's like, was this your first time working with regulatory bodies?

Amy Hay - 00:22:56: Yes. Oh. That was a whole new era. Right? Yeah. I mean, it was... when we first started embarking on protons, there was no code. There was no reimbursement, and that was a whole journey. I mean, that was completely new territory for me. Right? Thankfully, we were able to develop a consortium of people that had protons and people that wanted protons. And so it was also a great example of while you might think you're competitors, you're really not. There's enough out there for everybody, and the value of coming together as a consortium far outweighs any risk. But, yes, exactly. The regulatory side of it is not inconsequential. And it not only is it costly, but it really is more about the time. It's the cost of time and how that impacts you accomplishing your goal. We see that in biotech. Right? So it's not just one industry. I think it's kind of across the spectrum.

Jon Chee - 00:23:59: Yeah. And you can spend your whole life just working on regulatory and making sure that it works effectively. So, again, just the amount of learning... I'm jealous. Like, you had an... you kinda just had this opportunity to kind of get that exposure across tons and tons of domains.

And as the Proton Center was starting to really hit its stride, I can imagine, you know, it's like, "I can keep doing this forever." But as you continue in your career, I know you started to transition to different roles. So, when did you know it was time to move on from the Proton Center?

Amy Hay - 00:24:34: This is where I would also say, you know, if I could tell my 20-year-old self to be a little patient...

Jon Chee - 00:24:41: Mhmm.

Amy Hay - 00:24:41: ...that would be an invaluable piece of information. So, yeah, after we got protons up and running, it was probably about six months or so, and I found myself getting bored. It's interesting because this has actually been a personal problem for me. My entire career, once I accomplish something and we achieve that goal, one would think that you would be really excited and happy. And I actually find that the most depressing day because the question is, what's next? What are you gonna do next?

And I kind of went through a little bit of this kind of almost a little bit of a depression. Like, the center's up and running now. We've got reimbursement. People are referring. We're helping patients. We're doing good work, but I was getting bored. So one of the things that Proton still allowed me was an exposure to a much broader global health scene. And as I started to get exposed to that, I started to realize, you know what? My perspective is very US-centric, and it's very academic US-centric.

And, by the way, really only about twenty percent of cancer patients have the opportunity to go to an academic US center. You know, your top 11, if you will. Eighty percent of cancer gets taken care of in the community. So am I really making the biggest impact I can make if I'm sitting at one of the most astounding and incredible centers, but I'm only making an impact on the people that can actually come here? Right? And your average person in the community can't always access that. Not to even mention your average person in Uganda or in Japan or wherever it is—Dubai. Pick your favorite nation.

I really got passionate about the whole concept of: how do we provide access irrespective of where you live? And during that time was another big pivot point that to this day is still, I think, absolutely a cornerstone of what I do every day when I wake up, which is I got introduced to Einstein in Sao Paulo. So Hospital Albert Einstein in Sao Paulo, Brazil. And I started working with them on their cancer program. They were interested in protons, but they were also just at the fledgling [stage] as a very large acute care hospital that had oncology, but it wasn't oncology-only. It was everything.

And so I very slowly started just experiencing cancer care delivery and healthcare delivery from a different perspective outside of the US. And what I realized was that there are incredible people everywhere, and the human part of them is always trying to do good. Right? And so it's not about what your lab coat says—if you're at the number one cancer center or at the one that's not even on the list. It's about how you treat that patient and do the very best you can for them.

As I got more and more involved with Albert Einstein in Brazil, I also, at the time, got very involved with American Hospital in Istanbul, and the Koç Family Foundation and their medical school as well as other locations around the globe. But it provided exposure that I hadn't had before, and that then brought me back into the MD Anderson proper fold.

I had started to do a lot of consulting around the world and in my role as CEO of the Proton Center. And Anderson looked over and said, "Hey. Why don't you come back in and help us develop the MD Anderson Cancer Network?" which eventually was not only in the United States, but also really a global program of creating relationships and collaborations in many different forms—research, clinical delivery—but relationships in which Anderson could share its knowledge and allow that knowledge sharing to create better clinical delivery, better outcomes for patients regardless of who they were. And that's how I got back into more of the overarching cancer care and healthcare delivery system internationally.

Outro - 00:29:15: That's all for this episode of the Biotech Startups Podcast featuring Amy Hay. Join us next time for part three where Amy recounts the audacious plan to raise $125,000,000 for MD Anderson's Proton Therapy Center, how 9/11 forced a complete pivot in fundraising strategy, and why selling to firefighters' and police officers' pension funds became the key to success.

She'll also unpack what happened when she got bored after the center launched, her transition to global oncology work with the Einstein Center in Brazil, and the hard-earned lesson that what works in Houston doesn't always work in Sao Paulo or anywhere else.

If you enjoy the show, subscribe, leave a review, or share it with a friend. Thanks for listening, and see you next time. The Biotech Startups Podcast is produced by Excedr. Don't want to miss an episode? Search for the Biotech Startups Podcast wherever you get your podcasts, and click subscribe. Excedr provides research labs with equipment leases on founder-friendly terms to support paths to exceptional outcomes. To learn more, visit our website, www.excedr.com. On behalf of the team here at Excedr, thanks for listening.

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