Democratizing access to value in healthcare through primary care enablement is the compass guiding us toward a future where health is a universal right, not a privilege, and where the promise of value-based care is accessible to all. It represents a fundamental shift in our approach to healthcare delivery. By prioritizing primary care and leveraging technology, we can extend the reach of healthcare services, making them more affordable and accessible to diverse populations. This approach emphasizes preventive care, early intervention, and patient education, reducing the burden on emergency rooms and hospital admissions. Ultimately, primary care enablement has the potential to transform the healthcare landscape, promoting healthier communities and improving the overall well-being of individuals while also making healthcare a more equitable and sustainable system for everyone.
Joining us this week on the Race to Value is Michael Kopko, the CEO of Pearl Health – a company that is on a mission to democratize access to value in healthcare. More than 800 primary care providers across the country partnered with Pearl to align payments with patient health and leverage emerging data and technology to achieve better outcomes more efficiently. And earlier this year, they closed on a $75M Series B funding round to bring even more capability to the health value economy, by empowering providers to transition to a more proactive care model, enabling them with a technology solution that surfaces urgent cases before they become emergent, and rewarding them for outcomes aligned with value. This is a company that you need to know about, and it is my pleasure to have Mike on the podcast this week to discuss the challenges facing our industry and how Pearl Health is accelerating the development of innovative solutions that place providers at the center of healthcare delivery and cost management.
03:30 After more than a decade of value-based care efforts, the U.S. still pays about twice as much for healthcare than any other country, despite underperforming in quality and outcomes.
04:00 How do we reach a critical mass with ACOs and other APMs to save the Medicare Trust Fund from insolvency by catalyzing care delivery transformation?
05:45 There is reason for optimism for healthcare in the long-term, e.g. R&D in the health sector, the steady march to value since Michael Porter coined the term in 2006.
07:00 The increasing adoption of Medicare APMs and value-based Medicare Advantage (see HCP-LAN APM Measurement Effort).
07:30 “The underlying infrastructure and operating system for healthcare is positioned well for value.”
07:45 More work needs to be done, e.g. Medicare negotiations with pharma companies to lower drug costs, further realignment of incentives.
08:00 Medicare cost growth has abated. (See recent NYT article: “A Huge Threat to the U.S. Budget Has Receded. And No One is Sure Why.”)
08:30 The need to balance ACO Shared Savings performance over time with the democratization of data to improve population health outcomes.
09:00 “We are starting to get the highways and freeways established for data interoperability to be very proactive in creating health value.”
09:30 “Our healthcare system has so much money that with the right capability sets and incentives, we will solve any problem as long as we have the will to do so.”
10:00 Pearl has seen 10X year-over-year growth, expanding from 10 to 29 states, since its founding in November 2020.
11:00 Technology enablement requires the harmonization of the platform with the wisdom of experienced healthcare professionals.
12:30 Michael shares key learnings in his healthcare leadership journey and how that led to the founding of Pearl Health.
14:45 The realization that the missing piece of value transformation was the enablement of PCPs to visualize and understand how to better care for patients.
15:00 “VBC is no longer a gamble when the right physicians are plugged into the right enablement partners.”
15:45 The renaissance of primary care due to value-based care and business intelligence (and how that is addressing historically high levels of PCP burnout).
16:30 Predictive analytics in primary care (e.g. future diagnosis codes, ER admissions, missed medication moments).
17:30 Aggregation of data to power an Urgency Score, which prioritizes patients in need of outreach and creates holistic, longitudinal visibility.
18:30 The overburden of primary care (e.g. it would take 21.7 hours/day for a PCP to accomplish everything that he or she is expected to do to for patient care and maintaining a business.)
20:00 The assembly line of FFS compared to the “New World of Value” and how innovation can reduce administrivia and create cost effectiveness.
22:00 Using automation to streamline patient outreach efforts.
22:30 The delayed absorption of technology into healthcare as compared to other business sectors.
23:00 “The future of automation and AI in healthcare is just beginning, and that is a reason for optimism.”
23:30 Does the MIPS program really add to population health? (JAMA article: Time and Financial Costs for Physician Practices to Participate in the Medicare Merit-based Incentive Payment System)
23:45 How ACO REACH reduces the administrative burden of MIPS. (Reach for Simplicity: How ACO REACH Makes Quality Measurement Easy)
24:30 Since FFS favors procedural intensity over cognitive care, population health suffers. And the mental health of primary care physicians suffers too.
27:00 The crucible moment for PCPs to become elite practitioners in our healthcare system!
27:30 Getting “above the visit” by combining tools and technology to succeed in VBC.
28:00 A renewal of entrepreneurship and a willingness to change your business model.
28:30 An elite segment of the PCP landscape (5-10%) with business performance that surpasses FFS, along with impacts made in community health.
29:00 Solow Growth Model – the application of technology, labor, and capital to support long-run economic growth.
29:30 The enablement sector in value-based care is not feeling the pain of capital constraints.
30:00 “People are adopting and considering value-based models more rapidly than I’ve ever seen in a decade of working with and building networks in healthcare.”
31:00 The average PCP generally earns relatively little but influences ~$10M in downstream healthcare costs.
31:30 PCPs taking fully capitated risk must get specialists contracted into VBC arrangements and that requires overcoming friction due to oligopolistic market dynamics.
33:00 Recent Atul Gawande article in The New Yorker about the Costa Rica healthcare system (improved population health and longer life expectancy through primary care enablement).
33:30 The regression equation for healthcare – advanced primary care with optimal specialty management would address 60-80% of medical costs!
34:00 The changing business model for specialists due to advancements in VBC.
35:00 The tipping of the fulcrum – alignment of primary and specialty care is progressing due to data interoperability.
36:00 Democratization of access to value due to changes in enablement and economics.
37:00 Will advanced hospital systems have a role to play in the future of value?
38:00 Innovators and disrupters will be at the leading edge in VBC because they will be more nimble, agile, and unconflicted.
39:30 15% of the insurance premium dollar goes to administration and profit. (The shift of risk to providers will lower that admin cost to 4-5% or less!)
40:00 Upstarts can create real economic value. (Just look at how AWS disrupted intensive server requirements for businesses.)
40:30 VBC enablement can be as revolutionary as cloud-based computing!
41:00 Michael’s advice to entrepreneurs: “Focus on creating value in a thesis of change.”
41:30 Other opportunities for disruption, e.g. Drug delivery and development, AI and automation, data interoperability.
42:00 Creating an escape velocity through TAM (Total Addressable Market) and Team.
43:00 ACO REACH is a gamechanger for value because it presents an opportunity for PCPs to increase and stabilize revenue with prospective payment.
44:30 Keys to success in models like ACO REACH: reducing the cost of access and improving intelligence capabilities.
45:30 “ACO REACH is a cheaper, faster path to an alignment shift.”
46:30 “Healthcare doesn’t have a data problem. The real test now is what data matters and when does it matter. How do you synthesize and distill information at the POC in a salient way that is actionable.”
47:00 Developing an urgency score, promoting the patients that are most at-risk, and surfacing interventions through a suggestion engine.
48:45 The trend towards PCPs selling their practices to larger enterprises like hospitals and PE-backed physician aggregators.
49:30 The benefit of working within a larger primary care practice (more capabilities, risk protection, negotiation leverage).
50:00 Autonomy and independence of PCPs and how that can happen in a corporatized model.
51:00 Clinical integration – “Hospitals are a key ingredient in VBC when properly applied.”
52:00 Finding a business model that is aligned morally and ethically to what one wants to contribute to the world.
53:00 “The new practice of the future will be less capital intensive with these new value-based models becoming more proliferated.”
53:30 “Culture is what everyone says it is at that moment in time. It’s an evolving organism.” (A Values-Based Culture: Principles at Pearl)
54:00 Creating a company with a strong value compass.
55:00 Transparency and Interoperability.
56:00 Recognition that you get what you pay for. (FFS rewards chronic disease. We need to realign incentives to reward health.)
57:00 Technology, Automation, and Artificial Intelligence.
58:30 The value of health equity in value-based care transformation.
59:00 How ACO REACH finally put an emphasis on the importance of equity in the value movement.
59:30 “Start where the patient is, not where the business model begins.”
60:30 Multidisciplinary care to enhance the health of communities and how capital markets are the great unlock.
61:30 “The model of providing agency to the stakeholders generating high costs is a backwards model. We need a more proactive, sentient system.”
63:00 Parting thoughts on transforming a complex system.