The Journey to Autonomous Pharmacy | Randall Lipps, B.Ec. & B.A. Omnicell, CEO and Founder

This transcript was generated automatically. Its accuracy may vary.

Mike Koelzer: Randy, introduce yourself to our listeners.

Randy Lipps: I'm Randy Lips. I'm chairman, CEO and founder of OmniCell. We make medication management systems [00:01:00] to help make it easier for clinicians and patients get their

Mike Koelzer: Randy, we were talking before we got on here. I know that you're jumping over the whole USA last week, and I'm thinking that's probably customary for you.

Randy Lipps: I have a real big heart for the folks who are on the front lines trying to deal with the pressures of healthcare. Right. I just noticed the other day that. CMS, the big government who pays all the bills Medicare and Medicaid are reducing their rates, which means everyone has to figure out how to do more with less.

 There's always that constant pressure in healthcare, whether it's nurses, pharmacists or doctors, to figure out how to do more with less, so you have to go out and feel that pain. And there's nothing like finding out from what's going on in the front line to find out what the truth is.

Mike Koelzer: All right. So Randy, give our listeners a taste of what OmniCell is. it's robotics and machinery to take away some of the, mundane tasks that maybe [00:02:00] robots and computers can do better than we can 

 It allows pharmacists, technicians and the like to use their. People skills and thinking skills to help out the pharmacy world, but not be tied down to some of the more mundane things and things that, we can make more mistakes on than a robot can when we got a million things we're juggling.

Randy Lipps: Medications make this huge difference in whether people are going to get healed or not. If they get the meds and take the meds right, it's the right med prescribed, then, then good things happen. But there's a lot in the way of getting meds to the patient, so that it works.

With perfection, so you get the best outcome. So how can we take software, hardware, robotics, and a bunch of other things and take the burden of getting those medications to that patient when they need them in the form they need to take them? So it sounds easy, but it's really hard.

Particularly if a [00:03:00] patient's in a hospital, for instance, 30 percent of their meds change every day. And so you've got to be prepared to have those meds available. in a hospital, there's like, 3000 SKUs. any patient in that hospital could need one of 3000 SKUs at any moment. How are you going to make sure those are readily available, for the doctors, the clinicians, the nurses?

And then for people at home, how do you make sure that you get those meds, prescribed Right. Picked up Right. And taken correctly, which, also is sometimes a challenge. 

Mike Koelzer: My listeners hear me saying this all the time, but I know people can get worried on the left side, you got robotics taking away some of the physical stuff from pharmacists. Then on the right side, you got AI 

When you and I were growing up, I always thought that the computers were going to come into the blue collar, you know, all robots and stuff. And now here it comes down to the white collars. But I always say, look, we wake up tomorrow and the robots and [00:04:00] the AI have cancer, cured obesity, made compliance a hundred percent, and made us live to a hundred, well then maybe humans would have something to worry about.

 With robots , we might increase our lifespan from what we are, you know, 78 to It's like to be human. Don't

Randy Lipps: Yeah.

Mike Koelzer: plenty for us. let things do things to give us time to do what we do best.

Randy Lipps: I like to think about it like this. I mean, you know, you're a pharmacist. You're, you know, one of these smart guys on the planet. I'm not sure I could have even gotten into pharmacy school, trust me, so I went into engineering and stuff, but, you go through all these years. What, Mike, what did you do?

Seven years of schooling? 

Mike Koelzer: A bit back in my day. Randy, it was five. My dad was four, but now it's 

Randy Lipps: six or seven. Six. And what are you doing? You're studying science and math and could I say they're a little bit nerdy? [00:05:00] These are not your basic basket weaving glasses, they're tough glasses. And so you come out all prepared to hit the world of clinical pharmacy

Mike Koelzer: Um,

Randy Lipps: Are these drugs? on the shelves? Are they out on the hospital floors? Or they don't have much to do with that clinical training that you geared up for. So I like to think Omnicel is doing all of that work behind the scenes so that pharmacists can get out of the hospital or from out from behind the counter at the Still establishment so they can engage with patients. 'cause that's where behavior modification comes. You know, we all talk about how the pharmacist is the most trusted, healthcare person on the planet. Take that beautiful asset and get them engaged with the patient.

And what do you get? You get it. understanding you get influence and getting that patient to take the med [00:06:00] the right way. just because you give me this long thing at the pharmacy that says these are all the things you should do with your drug, it's probably not gonna happen as much as if, Mike, you're out there saying, let me come around to the counter and explain to you how this drug really works and this will help you get better.

But you gotta follow the instructions. You Gotta be in, you know, in the game on how this works. but you can't come around the counter because you're back there doing mundane things, writing reports, tracking down what shelf is low on this, what shelf is low on that.

If that was just all automated and you had everything you needed Then you could be freed up. my thought is, how can OmniCell free up these very powerful, very smart clinicians and get them engaged in a way that's at, I don't know, what do we call that? Top of the license? I hear that a lot.

 to me, it just means you're taking all of that clinical study and work and you're [00:07:00] applying it full force where it needs to be, which is, is probably either with clinical staff or with the patient, 

Mike Koelzer: Randy, you said it gets the pharmacist out, but it got me thinking I had come back into the pharmacy. I was away for a few years. wasn't in very much. And I finally came back around COVID. serendipitously during COVID. I used to read a lot of management books and things like that until I got 40.

Then I said, now the world's going to hear from me. I read enough of that stuff.

Randy Lipps: Yeah.

Mike Koelzer: I get in the pharmacy and one of my pharmacists is. Talking to a patient and it's getting a little bit loud. They're talking about insurance or something like that. they're going at it a little bit. me being the genius businessman I am, I thought, you know what? I've got to get on the side of the patient because our pharmacist is 10 feet away and he's getting a little bit hot. That was his personality. It wasn't a favorite trait I liked in him. I said, he's getting hot. She's getting hot. [00:08:00] going to do what all the books say and get on her side, physically get on her side. So I

and we're standing there both facing the counter. I'm side by side with her. I'm going to show them how this is done. I'm talking to her. And she says, Get away from me. So I'd rather have the robots go out and talk to her too, but no, I know what you mean. you gotta let pharmacists go at the top of their license, as you say. 

Randy Lipps: And you gotta get rid of those copays. That's the only thing she was arguing about. I'm sure it was about some copay that she shouldn't be paying and,

Mike Koelzer: that's

Randy Lipps: you were supposed to explain her insurance program to her, 

Mike Koelzer: yeah.

Randy Lipps: medications.

Mike Koelzer: No. it wasn't medicine. It was everything else people are hot about. 

Randy. All right. So, ten years into this or so, this baby of yours,

Randy Lipps: Yeah,

Mike Koelzer: goes public. Tell me about [00:09:00] that. and tell me about your emotions. I know if we were talking right now, you'd have to say, Mike, everything's perfect.

I love the investors and they're my favorite people and all that stuff. But now that we're like 20 years out, my emotions. Was it hard? Was everything great? Was it hard to have, you know, a boss now in the investors? how did it go down and how'd you feel about it?

Randy Lipps: That's a great question. People think that you're just so excited to go public for some reason that there's some value that's placed on the company. All of a sudden, you think your paper is worth a lot. But what happened to me was in the first 10 years. I had to go out and ask for money and get investors all the time.

So I was just pitching all the time. I had to spend half my time with the customers. Then I had to pitch money all the time. I think I got a grace of 83 million before we went [00:10:00] public. And what I felt when we finally went public, It was just a big relief that I didn't have to go out and pitch people again.

About how if they gave me the, you know, invested in my company would get to the next milestone and like I did and you still have to deliver for shareholders, but that took up so much time. And then when you're finally public, you've got different kinds of shareholders. Many shareholders, it could be anybody that could be in or out, but it wasn't that constant, money, uh, going out, you know, campaign almost.

And I was just so glad I didn't have to do that anymore. So glad. And then there are other different pressures when you go public, but

It's not the same. When you find it public, then it means you probably had to be profitable, which we were. Probably means you had to be cash flow positive, which we finally were.

Mike Koelzer: So we just put the money in the bank and I just looked at it and said, geez, I don't have to ask for any more [00:11:00] money. You had to ask people for money that tends to lean towards more personal conversations, emails, And it seems like the public, they're a little bit more faceless.

I would like that better. If there were Rocky times in the business, instead of looking at. my aunt and these people, I know rather have this, that this faceless stockholder may be mad at me, but it's kind of a nebulous thing versus having to have this personal relationship, feel the pressure. Was there any of that in there?

Randy Lipps: Well, absolutely, because a lot of things happen as a healthcare company. Even today, 35, 40 percent of our shareholders are index funds. Those are faceless. I think you want your stock to perform based on your performance, but you can't always be great, 

You know, there's capital [00:12:00] cycles in healthcare, and people can't spend as much money, so the stock kind of follows that. It's nice not to disappoint people personally, but it's also good to give them hope that, Eventually people need to update their systems or move forward and, buy the new technology because it's going to help them out a lot

kind of strangely in a way, you know, I have been, you know, public CEO for 20 plus years. There aren't many CEOs that are. CEOs for, you know, that long. Most CEOs last about five, ten 

years. So, been around a long time and not that you get used to it ever, but that I've seen about everything.

I've seen the ups, the downs, the sideways, the good economies, the bad economies, good health care, bad health care, new administrations, old 

Mike Koelzer: How does it change the dynamics of the boardroom once something goes public? Cause the way I understand it, if you own everything, you might have a board, but they're just kind of a recommending board. Then if [00:13:00] you have a board of private investors, they've got money in there.

And I suppose they have some and you're sort of. to them and then going public is a whole new situation, but I don't quite understand that. the day you went public, was there a different relationship necessity or just emotionally you had with your board or does that kind of stay the same?

Randy Lipps: Well, that's a good question . Originally, when you went public, you had the same board members, mostly. Sometimes you'd change out a board member right before you went public, but these were generally the large shareholders who had invested in you. But over time, those shareholders, those board members, are replaced by what I'd call more, interested, Board members who don't necessarily own a lot of shares

 as representatives for shareholders to act on their interest.

It's a different dynamic when somebody owns 10 percent of the companies on the [00:14:00] board and just somebody who's representing the shareholders at large. So there's a little difference there, but they feel very responsible and dutiful fiscally.fiscally. responsible to help execute what they think the shareholders would want you to do.

But the thing that you have to remember, they're all types of shareholders, their shareholders are short term, their shareholders are super long term.

Over time, those kinds of shareholders come in and out of the company. What does the shareholder want? it depends on the group of shareholders you ask, in good times, there's always shareholders to be had and bad times.

There's always different kinds of shareholders that you're thankful for that want to get involved because they want to ride out the rough days and get to the better days. I think the markets are efficient. I think there's a lot of good sides to being in public and I certainly have, I've enjoyed, I've enjoyed the 20 years of all those dynamics.

It's been good.

Mike Koelzer: , how many are on the board?

Randy Lipps: generally there's somewhere around eight to 10 people on the [00:15:00] board at one time, usually you have three committees. And each committee you'd like to have, three board members on it each. so that's at least nine. And most of those directors have to be independent, they would call it.

So I couldn't serve on the audit committee because I'm running the company. You need somebody who's not on the audit. committee or as a representative and have some financial understanding to be on the committee. So, uh, so you're able to get different people on and off the board,

Mike Koelzer: how granular do they get in the business? Is it all financial? Are they talking about what the next you should come out with? How granular is that board getting with you?

Randy Lipps: Well, I think they want you to come up with a strategy and show you how to execute the strategy. If they have questions about the strategy or how things are executing, certainly they'll ask you to get more detailed questions. I don't think they really are, driving the strategy

Mike Koelzer: Even if they had [00:16:00] some question about the strategy, they'd say, Hey, why don't you go out and get a consultant and help you think through the strategy or with all of us to help us get clarity on it. Because, 'cause I think you gotta be careful 'cause you'd have nine board members, you'd have nine different strategies probably, which would be hard. My brother owns a firm out in California. these companies hire him to go in and, you know, set some strategy and, and marketing and stuff. And I said, Tim, why the hell are they hiring you?

 Don't these people, the CMO and the CTO and all this kind of stuff, you know, it seems like they were hired. They could think of this stuff. And about all I came up with is that sometimes I hire consultants. In just so they have someone to blame, someone would say to Charlie, the CMO, it's like, Hey, Charlie, 

Randy Lipps: Uh, uh, Uh,

Mike Koelzer: I find that funny in my [00:17:00] head, it's passing the buck a little bit.

Randy Lipps: Well, it always sounds better when you say, I had this idea, but I checked it out with the consultants and they agreed with me. So it's gotta be a great idea. We paid them a lot of money, so they really gotta be good, meaning, if you didn't pay them much money, they wouldn't be very good, but if you pay them a lot of money,it would have to be a great idea.

Mike Koelzer: Years ago I was in a service group, a community service group. We met every Tuesday or something for lunch. and, we had speakers every week,

Randy Lipps: Right.

Mike Koelzer: that once a month they had to bring somebody in.

Doesn't matter who the hell it was, but they had to bring somebody in from over a hundred miles away. If you're Joe down the street, you're not as special as Joe from a 101 miles down the way.

Randy Lipps: Well, it works that way in health care too, the, uh, referring physician, the further away they are, they must be the better one, because they're further away. So,

Mike Koelzer: exactly.

Randy Lipps: That's the way we think, I mean, the person next door can't be that good, but the person that must be much, much better.

 be the way we're made or something,, [00:18:00] why don't we think that way?

Mike Koelzer: How much of that does go back evolutionary to you know, I don't know, bringing someone into the tribe who knows maybe a different plant source for medicine or something like that.

there must be something there that makes the distance special,

Randy Lipps: Well, yeah, the flakes are a little bit different on the other side of the river. So there must be special oils in there that you can't get anywhere else. 

Mike Koelzer: Yeah, exactly.

Randy Lipps: there's got to be an edge somewhere to it, you got to find the new edge. 

Mike Koelzer: I was watching a movie last night with my wife, a rom com, and I actually recommended it. So there's some bonus points for me. 

Randy Lipps: No. Go for it.

Mike Koelzer: How about that? It was called the book club and in the book club, it was a bunch of old ladies.

 We know some of them at our age, Jane Fonda and Candice Bergman. forget the other ones.

Randy Lipps: Yeah.

Mike Koelzer: The one lady was [00:19:00] sitting on a plane with this guy. she finds out later that he's a pilot 

It's that distance. You know, it's that guy that flies in from states away or country away. There's just something mysterious about them. Anyways, looking at your history, I know that you were kind of in the American airline, something or other. Did you bring anything from that into this business?

Randy Lipps: Well, what a question. Omnicell started when I had my fifth child at the NICU in UCSF San Francisco. There she was, half a day born, sitting in the NICU. Nobody knew what was wrong with her. I just sat there for about three weeks till she finally got better. What shocked me was She had a dedicated nurse. I knew all the nurses and then the nurses would come in and say, Oh, I got to go get some drugs or I got to go get something.

And I said, wait a minute. You know, Susie was on the previous shift. I'll show you where she found some. [00:20:00] So I was the logistics guy for these nurses

they all had private stuff. Stashes for stuff because there was no organized way to bring this stuff about because, you know, I wanted them to take good care of my daughter.

I said, I'll go get it for you. Take care of the kid here, you know?

And so when I worked at the airline, we had a bunch of papers and our job was for eight years, at the airline and I worked at American. People said, what did you do first, after you graduated college?

I said, well, I graduated college, went to work for America. It was a non profit organization. I just didn't know it, but it was a non-profit. I never made any money, 

Mike Koelzer: Exactly.

Randy Lipps: The one thing that we were going to do was get rid of the paper. We had paper boarding passes. paper everywhere.

So we automated everything, digitized everything to get rid of the paper to lower our cost so that we could capture the data and understand what was going on. So I worked on that my whole, you know, First [00:21:00] seven, eight years, I was an industrial engineer. And then I went to work for another travel company in California, and this is when Sarah got in the NICU.

I walk in this NICU, and every little thing that happened to Sarah, My daughter, they would take out a sheet of paper, write something on it and put it in the notebook. the notebook had to be 300 pages long

I'm going, this is the best. University Hospital in California for kids and this is the best you got?

And they had all sorts of high tech stuff hooked up to her but everything was on paper and I said there's got to be an arbitrage here somewhere. So I just went after the supply chain and pharmacy stuff that just seemed to be Easy for me, because, you think about an airline plane, it has to have all its parts in the right place or it can't fly.

If something's broken, you have to have a part to fix it. [00:22:00] If you don't have that part ready, that's a hundred million dollar asset sitting there on the ground. And it may be only a 25 part, it needs to fly off, but it won't be able to fly. The same sense of urgency And safety associated with the discipline of flying airplanes is, by the way, airplanes is, you know, we always talk about six sigma, you know, airline parts and stuff are nine sigma.

If you think about it, it's almost infinitely perfect, 

Mike Koelzer: wow. 

Randy Lipps: So I'm thinking wow, there's all this paper. There's gotta be a way to get rid of some of this stuff and make those clinicians on the front line, enjoy their job. And so I said this poor nurse, I thought, I thought, is she like a scribe?

Is that all she does for a living? Go look at instruments, get the readings and scribe them down. That's basically what she was doing most of the time.

Mike Koelzer: when you talk about the importance of airline and medical, it makes me think of the pedestal, maybe [00:23:00] medicine might be on it because like airlines, if it doesn't show up like that, and you're going to have, you know, 300. Pissed off on the

Randy Lipps: Yeah.

Mike Koelzer: They don't understand how the hell is that plane sitting there and we're sitting here and we can't fly it. That's not there in medicine. It was like, well, Dr. so and so says this or that, you know, it's all kind of whisper this 

Randy Lipps: Right.

Mike Koelzer: stand up or you can, you just can't stand up and bitch like you might the airline person up there. So it, leads me to believe that slowness in certain, Industries can progress without the natural pressure

Randy Lipps: Yeah,

Mike Koelzer: in solving it.

Randy Lipps: Yeah, I think so. I mean, how many times you've been on an airplane and say, we've got a light indicator on here that says something, and we have to send somebody over here to fix it, for all I know, most of the time, it's just the light bulb's not working. It's not, it's, it's not that the wing's gonna fall off, but you can't [00:24:00] fly it because you have to go check out the light bulb or something.

but that's how serious they are. the things that we would allow outside the variants that, that creep in to, to health care, there's just too many variants, and it's just, there's, there's too many easy things that, that pass by that shouldn't. clinicians, they want it to be right.

Everybody wants it to be right, but the system has just created these gaps is the best I can explain it. and I hope that this, you know, automation or this autonomous pharmacy, or just close all those gaps. So we don't have to wonder anymore. you push the button on Amazon and, You're pretty sure it's going to show up.

it rarely shows up late, it shows up to the right address, and it usually doesn't show up mangled or broken, and that's pretty high reliance. When you push the button, you don't start worrying, well, is it going to show up? Will it show up?

Will it be the right part? Will they pick the wrong thing? You know, it tracks it, gives you the information. So, [00:25:00] so you're, you're confident, you're confident about that. And how do we get people confident that the meds that this patient is going to need are going to show up and be ready? To administer the right way and everything's right about it, 

Mike Koelzer: yeah,

Randy Lipps: I think we need that confidence.

Mike Koelzer: I don't want to pick on the doctors or even,

the medical profession, you know, there's always like, how dare you question me? and then you start throwing, I don't know it's only like 10. fallacies and arguments that don't hold up.

one of them is not the almighty just because you have more things behind your name an argument is an argument. It's not based on your status and so on. But so long, it was like, how dare you question this? And the patients don't question and the lower medical people don't question.

And then you get this profession. of hiddenness and then it's, like you're saying, you don't know, but nobody's stepping into kind of like, what are the emperor's new clothes kind of thing. 

Randy Lipps: 

Mike Koelzer: I can see how you saw a lot [00:26:00] of that when you were with your 

Randy Lipps: yeah. 

Mike Koelzer: How long was it then Randy, between and the first, I don't know, the first dollar you made with OmniCell. What, what was that stretch?

Randy Lipps: Yeah, it was only three years. I started the company, Sarah was born in 91 and then 93 the company was incorporated and it was crazy. I got some Stanford engineers and myself, we built the first unit in my garage, just as a prototype, we actually rolled it into the ICU at Sequoia Medical in, in Redwood City, California in 1994, just as a, Prototype to see how it would work, get the feedback.

And, I, I, I finally said, well, if you like this, will you try it? Which they did. And I said, well, if you like it, would you buy it? And to my shock, they said, yes. So I sold them three systems for [00:27:00] 331, 000.

1994

We rolled those things out and they were happy. They still have them today.

Because they were my first customers, I went to their golf game. They, you know, every hospital has a golf tournament to raise money. So I always go to the golf tournament. It was just two weeks ago. I'm not a good golfer, but I'm a good fan of golf events. we supply about a third of the money for that and have a good time out there.

And it's always, it's always good. Remember where you came from and where you started.

Mike Koelzer: Alright, so Randy, what was that first product? I gotta think it's a way to organize the stuff you were seeing. that first product

Randy Lipps: first machine, we, uh, we made it out of aircraft aluminum. So it was this bright, shiny aluminum, which wasn't cheap. Probably wouldn't have cost so much money. we got this, uh, fancy touchscreen that had the, the light emitters were from [00:28:00] behind it. So when you put your finger on it, it broke the beams as it was going in.

It was state of the art at the moment.

The thing was so big, and then I put shelves on it with buttons underneath each shelf. So the idea was when you need something, you pick it up and hit the button and reorder another one. When we built it, we said, let's make it about this high.

it was over six feet high, and then we put wheels on it. So it's like six and a half, seven feet. So these, you know, nurses are all shapes and sizes, but a lot of them said, how do you expect me to get up to that top shelf?

 I'm six three. And I said, well, I have no problem getting anything off the shelf, so a

little problem in my, uh, research on the size to make it, 

So that was it.

Mike Koelzer: to choose the product, you broke the thing in the drawer or something, and then reordered it at that time. Was that kind of the

Randy Lipps: Yeah, so you open the door and underneath the shelf was a button and you say, oh, I'm taking two. So I pressed two. That solved the [00:29:00] paperwork issue. In other words, if it was a chargeable item, you didn't have to do that anymore.

The thing you worry about as a nurse is, I want to make sure I have enough on the shelf.

So if I know that I'm going to touch the shelf then it's going to be resupplied. And so nurses just, I kind of knew it was a winner because when nurses, I mean, what, 30 seconds to train them, they were off and running. We didn't need any fancy course on how it worked or how to explain it.

We were first going to use red light emitters. So that when you put your hand across the shelf, it would show up. Then back then, people thought their hands might be cut off. So we had to go to buttons underneath the shelf. But, uh, you know, you know, a bunch of Stanford guys, you know, that I was working with, they wanted to, you know, put lasers on and everything else.

But anyway, it was a lot of fun.

Mike Koelzer: Wow.

Randy Lipps: It's exciting because you'd go in and these nurses would just be happy. And I said, well, why are you happy? He said, well, not, you know, I thought like I [00:30:00] had my big survey sheet out, like we did all these surveys, like, well, they must like the color, they must like this, like that.

And it was just real simple. They just said, I just need the meds, meds or supplies that do my job. Can I find them? And there is no administration work? And then I said, well, what about this? He said, I don't care about all that. I need the tools to do my job. Once it protected their tools it kept other people out of it.

It was their supply of resources to help them do their jobs. And that's what they cared the most about. So they really bought into the system and bought into the process.

Mike Koelzer: Talking about the height of things, at our pharmacy, we had this, God bless her. I don't know if she's gone or not yet, but she was, was a punk, you know, I was a little kid and she. She seemed like she was 60. She was probably 25 or 30 but she was sort of a bigger gal. And so she had two things. She wasn't really tall. She couldn't [00:31:00] get up too high, but also she had some padding on her, so she couldn't get real low. So everything at our pharmacy was like between knee high and her neck kind of thing. 

For our listeners, Randy, I mean, some of these, I'm going to call them kids that will listen to this. you don't realize, I mean, I remember in our pharmacy, here's why I remember we did a big remodel in 96. It was

97, 98. I remember this guy, Chris came in, he was on computers and things like that. And he was talking about this thing called the web.

Randy Lipps: And I'm like, The web, what is the web? And he's like, well, it's these computers that do that. Now, Grant, you know, we have had computer stuff at our pharmacy since the mid eighties. Right.

Mike Koelzer: He was telling me about that. I said, well, should I get that address for my pharmacy? 

He's like, yeah, get it. You know, you might need it. I don't know if you'll need it, but you might as well get it. That was the mid nineties. 

forever. They don't know what 91 means for this, but you know, your stuff, it's, pre [00:32:00] internet pre

 was, five, six years before the internet came out.

Randy Lipps: Our server would have to call up each unit like a phone call, and then it clicked and it would connect like a modem, download the data and then it would call the next one up. And so you had to keep track of all the data and the patient information had to flow back and forth.

It was a round robin. calling them all up. every five minutes, get the latest. There was no internet plug on them or an ethernet plug or anything like that. So it was pretty, it was pretty basic.

Mike Koelzer: You don't need me though. Pump you up, but I got to tell you, that's advanced. It was another five, six years before the AOL disc got sent to everybody. And here you are, networking, but wiring into these things and getting the

Randy Lipps: Oh,

Mike Koelzer: That's very advanced.

Randy Lipps: I'll tell you the story. We couldn't get the modems either. Disconnect, connect on a regular basis, that eventually does not work and jam up. So we hired a bunch of three or [00:33:00] four modem consultants to help us if we could figure out how to make this work, we're going to do great.

I go into the room and I'm looking at these modem consultants Working on the modems. Finally I said, I can tell you the highest paid modem guy in the room. The chief of engineering looks over at me and says, how would you know?

And I said, well, I can point him out to you. He's right there. And he said, well, how'd you know that? I said, well, he's got hair down to his waist. He can do anything he wants. You gotta be really smart to wear it, come into a company and not care how you look and, and just

Be a brilliant guy.

And he was, he was much as the other guys. I don't know. I think he fixed our problem. I was really happy about it. I didn't care how long it was.

I wanted him to fix my problem. It was great.

Mike Koelzer: So you get that information. It comes in. I'm guessing it comes into your old, uh, IBM, I want to call it a, not even a 286 wasn't out yet, but something like that. It comes into you. What happens then? Do [00:34:00] I'm trying to think how advanced this was. So it comes to you.

And then know, there weren't APIs

I can't think, how did that get to

What was the connection after you pulled it off? It goes to the modem on your computer. How does that order it 

Randy Lipps: What we were doing was just providing what the floor demand needed? You know, we need 10 more of these, five more of these, four more of these. The first one would go to the center. PC, which I think you're right. It was probably a three, four, six, and, and they'd print out a report and say, this is how much we need.

Then they'd go to the shelf and start picking it. At that time, we didn't have inventory software inside the pharmacy that said, Oh, we're low on this. And they'd call the wholesaler. And the wholesaler would deliver like three times a day, morning, midday, and I'd say, well.

You know, tell the host I need five more of these, and they'd show up with five more, and [00:35:00] fulfill whatever they need on the floor on the next run. it was pretty basic, but what was interesting about it is, there wasn't a lot of trust between pharmacy and nursing. It was like, we sent it up there, no you didn't, you should have enough, no we don't have enough.

You know, there was just this, reasons because of the pressure of the healthcare world to deliver. when we put our system in, we found that it was a peacemaker. Nurses loved it, pharmacies loved it, and the truth of the information was right there. they weren't late in delivering and nurses knew what they had and they knew what was being used.

And so it was kind of a neat thing to see. I remember many days I used to. Have the customer come visit us and they'd bring the nursing constituents and they'd bring the pharmacy and they'd always sit on the other side of the table. And you could tell there were some, I don't know, some tension there.

Hopefully by the end of the day, we'd solve both their problems and they'd be happy about it. Healthcare is a stressful world. There's a reason to be [00:36:00] stressed, but boy, if you can make at least a few more people happy with the system, it makes us happy too.

Mike Koelzer: Randy, I got to pick on doctors again. I can't believe how much I'm picking on doctors because the listeners, if they keep on record, they know I hate attorneys. We got that out of the way of many shows ago. I don't usually talk

Randy Lipps: Sure.

Mike Koelzer: But I'm going to know again, but it starts with nurses. These nurses call our pharmacy. And, if somebody asked me something, let's say, a customer calls me, anybody calls me, Hey, Mike, we didn't get this or that from you. , though I'm a hundred percent sure, or 99. 9 percent sure my conversation is always like, Hey, golly, I thought I sent that, you know, maybe I goofed.

I'm pretty sure I did it, but. Maybe it got lost in cyberspace. So here, I'm going to send it again. And you know, if you don't see it in five minutes, let me know. Something like that. I think that's how most people do it. These nurses, oh man, these nurses call up and they're like, we sent [00:37:00] this, this and this and that, and it's not there.

 You guys, and it's like, where the hell does that come from? And I, and I figured it out my little.

Mine here, I figured it out. It goes back to earlier times that we were talking about. I think nurses get that from the doctors. I can't prove it, but I feel that the Doctors talk to the nurses this way and it's kicking the dog all the way down to the pharmacist. To your point,

Randy Lipps: Could be. I,

Mike Koelzer: and anytime that can get

Randy Lipps: I think part of it is like, Oh, I got get this patient healthy, so the doctor gives the orders, and nurses have got to get this drug to the patient, because the doctor said I got to get these

to the patient, and they don't have them, so the urgency is probably around the right place, the doctor.

but it creates tension, and it creates tension because you want people to be healed, I think. At least when I'm sitting there next to my daughter, I want her to be healed. You know, that's all I cared about. Let me push [00:38:00] a button and something happened.

Mike Koelzer: I guess that tension has to be absorbed somewhere because when you're sitting there with your daughter, there's tension building up there. And if the tension

Randy Lipps: Yeah.

Mike Koelzer: I'm blaming the doctors, but if the tension doesn't make it back to the doctor, the nurses are getting it from both ends. And sometimes pharmacy is just a valve to let them out. ,

now here's the thing, so you're talking about how this stuff came out and called the wholesaler up and so on , the next piece of technology that came out though, is the handheld ordering

type the right buttons in and you'd have to turn your phone up to it, and they had this fancy rubber thing that would go on to the voicing of the phone. And now you're like, that was high tech, man. all the sounds going over this phone.

Randy Lipps: It was crazy because phone lines in hospitals, generally, are reliable , but.

Randy Lipps: if you lost a phone or someone was cleaning behind the system and decided to plug some stuff, just cause they'd get pulled out from the wall. [00:39:00] our favorite one was the server that used to sit under the pharmacist's desk and somebody would just turn it off.

So, we decided we should put that in the IT room eventually.

Mike Koelzer: Yeah, exactly, 

Randy Lipps: But, learn along the way, right? you learn along the way.

Mike Koelzer: most valuable invention that came out along the run of OmniCell, not by you guys, but for you guys, for example, there's the internet, bigger storage on a computer, faster computers. Was there anything like that? Helped you guys jump up a little bit, or was the whole thing just a gradual climb?

Randy Lipps: Well, I'd say the biggest relief was networking in hospitals. When hospitals decided that having a network backbone that was reliable, a lot of people had them, But they weren't mission critical. So they'd fail all the time. So we're trying to put our mission critical equipment on it.

And we'd have to send in our IT [00:40:00] people to help them fix their network. But once the hospital figured out, we've got to have a network, just a ton of issues went away from us. We just put a network card in a computer and a server. And, you know, we also had RS 485 and probably nobody out there even knows what that is.

With a little, little, basic, basic, you know, protocol, communication protocol between, you can only put a little data across of it. It wasn't very big, but we were just spending tons of time trying to communicate. all over the hospital complex these systems, because everywhere these systems, you can manage meds or supplies.

And, uh, and when they finally got networks, that helped. And then, when they decided that they ought to have an IT room, you gotta remember, you know, hospitals didn't even have an IT room back then. And maybe it has telephone equipment in it, or. I don't know, a couple of computers to run admissions and [00:41:00] discharge system or something, but it was really pretty basic.

a lot of times you weren't struggling to solve an application or to create new software. You were just trying to get the system to work. In a very. in a cryptic environment they had a little network over here. some phones over here. It was always a challenge of the infrastructure.

 When we got the infrastructure ready and going, that was extremely helpful. And here's one that you probably don't even think of. To me, this, Helped a ton. every one of our kiosks or devices that were spread out all over, a hospital might have a thousand of them or five hundred of them, 

they all had these miniature spinning disk drives, you know what a disk drive is. It spins around. Eventually we said, look, when you got a thousand of them, they're just gonna break every now and then, and it's just not that reliable of a device because they're spinning.

They're on 24, seven, [00:42:00] there's heat, there's all this kind of stuff. Then they finally came out with solid state disk drives. You pull out that spinning disk drive and you throw in solid state, boom. you don't have any disk drive failures anymore. And that was a really cool thing to come along and help us.

I think eventually the cloud is going to be next, cause we're just creeping into the cloud, but cloud is what unlimited compute power is. Unlimited storage power, almost unlimited bandwidth. So you can solve problems you've never been able to solve like AI and stuff like that. it just allows you to do things.

You can't put enough memory on a computer to solve all those things. all of these cloud companies have figured that out and now the cloud is expensive. It used to be cheap and now it's, the AI is sucking up all the space out of the clouds and it's making, you know, you go to Amazon or Google and say, I want to borrow some of your cloud space and say, wow, that's pretty expensive.

[00:43:00] Maybe I ought to go build my own cloud for that amount. So anyway, that's kind of what's going on out there today. It's pretty dynamic.

Mike Koelzer: The cloud, I think a lot of people, I know I do. Because first of all, I'm glad stuff is in the cloud. Cause that network stuff's a pain in the ass. I still don't get it. You know, all the, 

Randy Lipps: Yeah.

Mike Koelzer: You know, that's hard to do.

I still don't get that. The cloud though. Because none of it's seen, you think like the cloud is like a cloud, you think it's just like molecules, just up there. And AI now, I know I was listening to Chad GPT, what's his name. But, you know, they were saying that. Part of their reason they can't

Randy Lipps: Oh,

Mike Koelzer: the cloud, we don't see it, but it truly is like just a crap load of computers and cords across the Pacific.

it's a very tangible physical thing, but not for the average person. For us, it's just

Randy Lipps: yeah,

Mike Koelzer: you know?

Randy Lipps: exactly. people [00:44:00] think because it's in a cloud, it must be insecure because it's floating up there. But, Because I've got unlimited compute power, I can make it unlimited secure. I can't do that on a server. I only have a limit, do you ever think of autonomous cars?

Like, what is that going to do for us? if I don't have to get in the car and drive anymore, and if I don't have to worry about, Getting in an accident or watching the road, I can sit there and play cards or do anything I want, but it's all being run by the cloud, 

like something called the cloud is helping this car run down the road so they don't run into anything. It gets me from point A to point B. But at some point you have to trust that the car and the cloud are going to get you there, and not fail. I guess we do it when we get on an airplane.

But being in your own car, you ever think about that, Mike, being in your own car? Like, Hey, is this thing going to get me?

Mike Koelzer: If you asked The average person, what percentile of driver are you as far as safety and respect for other drivers and keeping a cool [00:45:00] head and things like that, a hundred percent of the people think they're in the top Top 25 percentile, and it's just, it's mathematically impossible.

 So I proudly carry the flag of being in the lower 50%. I maybe could rise up if I paid attention more and wasn't goofing around or daydreaming I might even be in the bottom 25%. people say. you trust the autonomous stuff. It's like, are you kidding me? Are you kidding me? I can have 20 cameras on my car that speed 10 times or whatever faster than my nerve cells are. And you think I'm going to do better than that. Of course I want to. Autonomy. My daughter lives in Raleigh, North Carolina, so it's 12 hours away. And I talk about this all the time. I think about Randy, you know, just like you're saying, I think about, you know, going out at nine o'clock in the [00:46:00] evening with my wife and we, and we get out there and we sit down, put a movie in, some popcorn in this pod, fall asleep at midnight, and we wake up in her driveway at nine the next morning. 

Randy Lipps: Exactly,

Mike Koelzer: But here's the thing, Randy. I Guess The computers will be able to do a good job defensively. But think there's always going to be people behind the wheel their own car, because you don't really think that, but it's like, well, when would a hundred percent of the people not want to give up driving, 

Randy Lipps: as long as you have one human being out there with a steering wheel, anything can happen, there's always that wild one. I think there's seven levels of autonomous driving, you go up. And the seventh one is when they get rid of the steering wheel.

So you're saying we're going to be stuck at six. Because the steering wheel is going to still be there I don't know if you've ever, I've tried to put my car in. Autonomous driving or whatever it is, you know, more automated driving. And [00:47:00] it's scary, 

to let go, the thing decides it's going to change lanes. I said, wait a minute. I checked all the mirrors. I'm not sure I want to change lanes. So, you've got to get to the point where you can let go, otherwise you can't be autonomous. Otherwise you're fighting the automation, 

Mike Koelzer: bring up a point there about the steering wheel, because I'm thinking of these Mustangs out there, those have wheels and who's going to give that up. like for the next hundred years, you're still going to be seeing, you know, 67, Mustangs driving around.

Eventually all go away. And maybe there's some law that says you can't have steering wheels or something like that. I just don't see how that changeover will happen. I guess the computers will be smart enough to handle the few people still with steering wheels.

Randy Lipps: Or maybe they have to put the retrofit car on, you know, like back to the future. The guy had to put a retrofit thing on or something.

Can still ride your Mustang, but you got to put the automated retrofit on the kit or something, you know, 

Mike Koelzer: thing about

you and I are, roughly the same generation, 

I'm only [00:48:00] 58, but I had my first child. In 1992. So

Randy Lipps: You haven't asked me about my kids yet. You only need to ask one question about kids. How many kids do I have?

Mike Koelzer: You got five.

No, that was just the fifth kid. It was where I started OmniCell. I had five more after her, I've got ten. You've got 10 kids also.

Randy Lipps: You do not, Mike. Do you really?

Mike Koelzer: Kevin, Megan, Molly, Bryant, Aiden, Grace, Lance, Halle, Abbey. Drew,

Randy Lipps: Let's see, my tenth child is in Michigan State right now. Wow.

Mike Koelzer: Is

Randy Lipps: Engineering, of course. oldest is 40 and one and two years apart until you get to the ninth one and then it's five years apart 

Mike Koelzer: And we got five girls and five boys. What's your spread?

Randy Lipps: Seven boys and three girls.

Mike Koelzer: I've got 10 kids. My wife says she is 11. I'm not sure how that works

Randy Lipps: What is she 

Mike Koelzer: down to 14. 

Randy Lipps: You're young. You're [00:49:00] really young. 

Mike Koelzer: I don't know. 

Randy Lipps: I'm proud of you.

Mike Koelzer: Back on autonomy, Some people will say Always want a computer in charge of my jet because it's never going to go past 30 degrees. That saves you from a suicidal pilot. And some people say, no, I understand that. But I want my pilot, if something goes haywire, I want them to be able to do something like this.

All right. So driving flight, With your stuff, you being the pioneer in this, we got to ask about pharmacy autonomy, how much of that can be autonomous and where does the discussion lie as far as how much human intervention in the autonomy.

Randy Lipps: Yeah,

That's a great question. Five years ago I stood up in front of the Hospital Association and talked about the vision of Autonomous Pharmacy and I figured if I was still alive at the end of the show we'd still be in business, but it was aspirational. And so it's not an omni cell movement.

It's really an [00:50:00] industry movement. And we said, well, can the industry understand this or do they even want this? It's really not about replacing pharmacy work. It's about giving the pharmacy work back to the pharmacist and having all the logistical work. done by robots and software 

So we asked, if this is possible for the industry, what does it mean? They went out and worked on it. Like we talked about, autonomous cars have seven. levels to get to autonomous driving. These guys being pharmacists, they want, they're, they're more concise.

They came out with five levels. in order to get to the autonomous pharmacy. But more importantly, What do you get when you get to the autonomous pharmacy? What does that look like? The industry group we put together said, it's really easy. It's like zero errors.

You're going to have no errors, so, It's pretty aspirational, but you know, zero errors. Maybe you think of zero car accidents. If you're driving a car, zero waste, we waste a lot of [00:51:00] money

right way.

And then, this next one is zero. Human touches. I think what they mean by that is, we're just trying to pick something off the shelf, make sure we have the right one. if human beings do it, occasionally you're going to pick the wrong one, if a robot does one, and by the way, it's just not a bar card reading, it weighs it, it does visual systems.

There's like five different ways to check it to make sure you have the right one . So there's three zeros. Zero medication errors, zero medication waste, and zero human touches. there's three, a hundred percents, a hundred percent regulatory compliance, 

because these poor pharmacists, I don't know, healthcare is just a big compliant thing, right? so I have to keep up with that. A hundred percent data and inventory visibility. this we realized was harder than we thought. Because you basically have to light up [00:52:00] meds wherever they are. They could be at home.

in transport. in a clinic. in a pharmacy. They could be anywhere. And so that's one of the ones we think a lot about is how do you light up these dark areas? So you can figure out where medication is. And this is really for the pharmacy. If you're successful with autonomous pharmacy , then you should be able to say that there's 100 percent time spent on clinical activities for the pharmacist.

In other words, imagine you're in your pharmacy and you never look behind you to see what's in the inventory or on the shelves. And someone walks up and says, I need this. Yeah, I got it. it just plops in front of you. You don't even have to think whether you have it, you're going to have it.

So I think it's pretty aspirational, but there are discrete steps. I think in five to seven years, we can get 90, 95 percent of this. We can get really close. 

Mike Koelzer: What do the naysayers say? The same people that say they're never gonna trust autonomous driving. What do they say about [00:53:00] automation?

Randy Lipps: they're saying, are we killing jobs of some sort? not necessarily pharmacists, but pharmacy techs, but I'd say pharmacy techs are hard to fill. and I'd also say that we really need pharmacy techs for the higher end stuff, like mixing, compounding and stuff like that. I'm not sure there's a lot of value added in going to shelves and picking stuff, sorting through things in life, and so I think I don't, I don't feel too bad about that one.

 People say it could cost a lot of money, and I said, well, I think we're wasting a lot of money,

We need to say that these systems can cost a lot of money, but until you know how much money you're going to save, they're limited resources. If you want to make sure everybody gets medications that they need, irrespective of their ability to pay, you've got to be really, really, really careful.

You know, tight with your resources you can't do that with human beings. You got to automate that piece, lot of people say, well, it's great vision, Randy, but healthcare moves, you know, a [00:54:00] little, a little bit at a time, it's not going to move there very quickly it's my nutty vision, five to seven years, what did, Bill Gates say, not much changes in two years, but in ten years, a mountain of things changes.

And so, it's about to be another five years, or ten years since this autonomous pharmacy movement started. And, I think we're going to get there,

Mike Koelzer: That's very intriguing. I know you hear about job stuff, but it's like, if one company does it well, it takes away other jobs. Let's say Amazon Pharmacy. If you get one pharmacy that does a good job of autonomy, not only is your job gone, the whole industry can be gone if other people don't catch up.

So you have to,

Randy Lipps: you know?

Mike Koelzer: to move forward as an industry. If it's going to happen in one place, it's going to happen in every place. So I think that's, I think it's, I think it's

Randy Lipps: Yeah,

Mike Koelzer: It's right on.

Randy Lipps: any pharmacy should be able to compete with Amazon or anybody else, if they have the tools. it's not like they [00:55:00] have the market locked on tools. And, you can get natural language communications. You can get a lot of different things right off the shelf and plug it in. I think the edge for the independent pharmacies is you're still there.

You're the person. I think we all have a tendency to want to deal with people, 

Mike Koelzer: you

Randy Lipps: Not entities.

Mike Koelzer: except

that lady across the counter,

Randy Lipps: Just put a sign up in your store. We only take nice people. we're not the insurance company or something like that.

Mike Koelzer: Randy, The key to this is it's going this way, you're giving people the tools to do this in their pharmacy. Where do people see some of those tools? Give us your website, I suppose is the best place for them to check it out. 

Randy Lipps: yeah, certainly, uh, omnicell. com. We have a lot of tools for both independent pharmacies and obviously big providers. If you think about all the things you're trying to accomplish, we're trying to find the biggest pain points you have at the moment and make them easy. Like our IVR, our interactive voice [00:56:00] using natural language Instead of the call going to a pharmacist to actually have to actually, is my script refill ready?

It says you're probably calling about this refill. We will let you know it's all ready. Is that what you needed to know? Yes it is. Great, well then come by and pick it up or we can deliver it for you we've found that about 90 percent of the people who call a pharmacy, hit the button to talk to a pharmacist or tech, and you put the software in and it cuts it down to 70 percent you lose 25 percent of these calls that can just naturally be answered.

It's really cool to see those kinds of things help out pharmacists.

Mike Koelzer: Golly, Randy, thanks for joining us.

 I can see why you're , a longstanding CEO, outlasting the average of, five to seven years with your time in the saddle. Keep it up. It's fun to watch you guys 

I know you have a lot going on, so I appreciate your time. Our listeners appreciate it and look forward to keeping in touch.

Randy Lipps: Thank you, Mike. I really had a [00:57:00] blast and I hope you'll invite me back. I don't think I've had such fun in a long time. Let's hang out together sometime. Take care, man.

You've been listening to the Business of Pharmacy podcast with me, your host, Mike Kelser. Please subscribe for all future episodes.