Welcome to APG on American Healthcare, the official podcast of America’s Physician Groups where we discuss current issues in the healthcare value movement. APG members are at the forefront of national healthcare reform, practicing at risk-based prospective payment and other population-based payment models, the very models described by federal legislation for the entire nation. Interested in learning more about APG and the value-based movement? Join us for the APG Colloquium 2020 – Answering the Call: Value-Based Care in Public Health Emergencies, an online conference, Nov. 17-19! Learn more at APG.org. And now for an inspiring and educational look at the transformation of America’s healthcare delivery system. Here’s your host, APG president and CEO Don Crane.
[00:00:36.540] Don Crane:
When I first visited with Chris Chen at his headquarters in Miami, ChenMed, a couple of years ago now, or at least over a year ago, I remember at the time walking out thinking, oh boy, this is the future of American healthcare.
I mean, I was marveling at their homegrown, specially-designed IT system, the incredible humanitarian mission associated with their care and their extraordinarily high-touch, you know, care model. So, in my podcast the other day that you’re about to hear did nothing but confirm all of those early thoughts. So. for those listeners that are groups thinking about moving into capitation and risk models and so on, take a close look. Listen. This proves concept. And for those that are wondering if the value movement is succeeding, take a close listen.
I think you’re going to love this podcast. Chris Chen, it is really a pleasure to be with you. I mean, the pretty amazing organization and pretty amazing individual. So here you are, an internist and a cardiologist and the CEO of ChenMed, a globally capitated, primary care-based, senior focused organization that’s caught the eye of the whole country. Certainly policy wonks all over Washington, D.C. have seen you. Your growth has been extraordinary, as I think I picked it up, something on the order of thirty, thirty five percent per year, year after year for ten years.
That’s pretty amazing. I think you’re in ten states. We just agree. Twenty cities or something. So clearly growing, growing, growing. And what appears to be highly successful. And I want to get to all of that and we will in a minute, Chris, but I got to talk to you about something else that has caught my eye.
So, I read your very moving article about your harrowing experience with COVID, your personal experience with COVID here in just recent weeks. So, I think this was mostly an August kind of a thing. And I just got to ask you, how are you and can you tell us just a little bit about that?
[00:02:53.730] Chris Chen, MD:
Hi, Don. I’m happy to be here and am very excited about talking about ChenMed. But you’re right, my recent COVID experience is something that really hits home. I actually just published an article entitled, “Dying in Solitary Confinement.” And, you know, that’s really what it was. You know, as a cardiologist by training, I’ve frequently been on the opposite side of the of the ICU bed. But this was the first time that I found myself, you know, sitting in the ICU for about a week.
And, you know, it’s interesting because prior to me getting COVID, I was one of those folks that thought, well, I’m pretty healthy and I don’t have any medical problems. I am in triathlon shape or triathlon race shape. So, you know, when I get on my Peloton, you know, I can usually place in the top, you know, point one to point two percentile. And in fact, that morning that I came down with it, I remember talking to my assistant saying, wow, I’m feeling pretty good and in great shape.
COVID is really allowed, you know, the COVID pandemic has allowed me to really stay home and train. And then, of course, you know, it’s haughtiness before the fall. Right? That night is when I came down with COVID and that experience was pretty traumatic. I end up losing about 60 percent of my lung capacity.
Temporarily, of course, I’m now fully recovered and really feeling blessed about that. But that experience with COVID really taught me three things. First thing is, we can all theoretically understand what it is to be a patient. However, truly experiencing it is a perspective that is in my mind was actually a really great blessing. The second thing is, you know, one of the reasons why we started ChenMed was because my father was diagnosed with cancer and we had such an uncoordinated and difficult
journey through that process. You know our family’s story actually began as a horror movie because of this cancer experience, but then ended up as a fairy tale for seniors. And so we’ll get into that shortly. But that was a huge eye-opening experience for me to also experience the uncoordinated care and the fact that I also needed an advocate during my most difficult times. And then the third thing is it just… it really humbled me because you begin to ask questions such as, you know, purpose.
You know, you begin to evaluate your relationships.
You begin to evaluate words like to what end? And so, we really had that great opportunity to do so while I was sick.
You know, while you’re just essentially, you know, fighting for your life, you know all the things that are happening on the outside. But unfortunately, you’re not able to sort of digest it all. And so, as we’ve come out and I’ve come out of the hospital and I’ve had to recover, you know, I started…I went in as a triathlete in great shape. I came out basically almost like a cripple. Took me a week just to walk down the block again. But now back to close to 100 percent, back on my Peloton and exercising, feeling a lot better with a whole new perspective. Actually, a much more complete perspective of what we’ve been talking about all along and the reason why we created ChenMed in the first place.
[00:06:39.730] Don Crane:
Well, so let’s get to that.
And, you know, I’m so glad to be able to talk to you. I mean, it’s really for those that haven’t read your article, I recommend it to them and to you. It’s a pretty amazing story. So, tell me about ChenMed. I mean, I know it to be probably have a stronger humanitarian rooting and zeal than other organizations. We’ve just talked about your family in the village and moving into a similar neighborhood together and so on.
So, it’s a really important story. So, tell us about the ChenMed family and your story.
[00:07:15.220] Chris Chen, MD:
Well, you know, so I work with my family. My father started ChenMed over 30 years ago. And, you know, it basically started on three basic pieces because we’ve had these unique experiences. I already mentioned, you know, one of those experiences is my dad had cancer. And as a family full of doctors, we had to navigate the healthcare system and really realize how uncoordinated it was. I mean, my dad at one point who was supposed to die, he ended up having, finding a large five-centimeter mass in his head.
And so, he had lymphoma. And so, we had to walk him through that. And then when he was recovering, he made a comment. He says, you know, Chris, you know, my children are doctors, my in-laws, my children in-law are doctors and my brother-in-laws are doctors. And so, what happens to the average patient out there who doesn’t have all these doctors in the family who are helping them see through some of the most difficult times in life?
And so that was one aspect that really helped to shape ChenMed. The second thing is, you know, as a family, we’ve really had the opportunity to experience poverty at its greatest. When we were young kids and we moved on to Miami, you know, we had the opportunity to experience homelessness for a short period of time. And, you know, really just at what people would think is some of the most difficult circumstances and difficult neighborhoods in America.
I mean, imagine living in Miami in some of the most challenging neighborhoods during the riots. You know, in the 80s when, you know, there was a lot of turmoil and I’m sure you’ve seen the pictures and heard the stories and we lived there during that time on Medicaid, getting food stamps. And that was a
step up from the homelessness that we experienced for some period of time. And so, as there’s this outcry about social justice that’s happening right now, we actually have the opportunity to experience that first hand.
And we actually consider that a blessing because it gives us that perspective. And the third thing is really understanding not just what it feels like to be sick and what it feels like to be underserved or underrepresented, but also trying to rediscover how to deliver care to a population in a very different way. Many of you know that, you know, California is very progressive in its thinking of value-based care in the full-risk model. Southern Florida was also going through its journey as well, and my father, when he started to take risk in South Florida, he did not know that the primary way that people were taking risk way back in the day was through patient selection.
Right? You could if you had a lot of sick patients, you could figure out ways to not have sick patients in your pool. And so, when my father first started, he ended up getting a panel of catastrophic stop-loss patients. And it was in those days, things were very incestuous. And so, he ended up being the sort of stupid risk doc that took everybody’s sick patients. So you know, so what ended up blossoming out of that was a model that was designed, a clinical model, that was designed to take really sick folks and help to make them better, so that way they could, you can lower the total cost of care through really aggressive front line care. And it’s built around a platform of tremendous coordination because that was our experience from being cancer survivors, but also extraordinarily heavy on the service side because we experienced how impersonal care can really be. Also, you know, being on the opposite side of the glass. And then we mix that with a third component, which is, we want to go into these neighborhoods where there’s a tremendous lack of not just care, but also the right kind of care.
And that really pushed us to go into underserved neighborhoods. So, if you think about what ChenMed does today, ChenMed is a primary global full-risk, primary care model. Right? That focuses on taking care of, you know, the old, the poor and the sick. And so, we go into these neighborhoods where folks are older. We go in these neighborhoods that are underrepresented. So, they’re definitely lower income. And we go in these neighborhoods where there’s a lot of chronic conditions.
And if you’ll look at the way that the U.S. system, you know, the U.S. healthcare system is actually stratified, you know, it’s usually a minority of the population that accounts for the majority of the cost. And so we didn’t know at the time when we decided to do this we did this for missional reasons because we thought it was the right thing to do.
But we later discovered that, wow, as everybody is talking about cost, you know, this is the population that actually drives a lot of the healthcare costs in this country today. And so, we almost stumbled upon a solution for these, you know, for the old, the poor, the sick. And then our biggest challenge after creating the solution was how do we scale it? And we can talk about that later on.
[00:12:47.570] Don Crane:
So, you know, we’ve hit on the words that I used in the opening global cap, you’ve used the word full-risk.
I think we talked about seniors. So, is it strictly Medicare Advantage? Are you also into original Medicare at all?
[00:13:02.000] Chris Chen, MD:
So, because we’re a global full-risk and let me just make sure that I complete that out…we are at full upside, full-downside for Part A, Part B, Part D, and we actually even do our own stop-loss at this point. So, it is a true everything all-in. There isn’t a cost out there that we would typically be carved out of. And so, and what we do is we are a downstream provider for Medicare Advantage health plans.
[00:13:36.500] Don Crane:
[00:13:37.430] – Chris Chen MD:
So, what they, so what we do is we go to these health plans. We said here’s what we want to do. We want to bring a model forth that is going to deliver what we call VIP service—which I’m happy to explain what VIP services—and that VIP service is going to not only involve great customer service, but also it’s going to drive towards delivering better health. And so, we’re talking about a preventative model. That better health is going to translate to substantially lower downstream or secondary complications, such as hospitalizations, amputations, people going on to needing dialysis.
So. we’re going to substantially improve the health of patients and then we’re going to reduce the need for these catastrophic events or the frequency of these catastrophic events. And that in turn is going to allow us to create a margin that will then go ahead and spread the model to more people. We today can only do this in a Medicare Advantage environment. We are extremely optimistic that Medicare is rolling out something very similar right through their direct U.S. primary contracting.
Now, most of our technology systems, not most of them, all of them, are designed to work very deeply with Medicare Advantage plans. But we look forward to the day that we’re able to develop the same infrastructure and the same capabilities in partnership directly with Medicare fee-for-service. So, the answer to your question today, we are Medicare Advantage only, but we’re hoping one day that we can branch off into direct Medicare contracting with the U.S. government as well.
[00:15:23.520] Don Crane:
So, primary care…is this to say that you employ all of your primary care physicians or do you also contract with them or both?
[00:15:31.910] Chris Chen, MD:
Let’s talk about our care model that developed that delivers the sort of VIP care that we talk about. The average primary care doctor in the United States takes care of about 2,300 patients.
So, each primary care doctor takes care of 2,300 patients.
In our neighborhoods, we discovered that that number is much greater, right, because we’re in underserved neighborhoods. So, it’s about 3001. Because we’re so focused on the old, the poor and the sick. Again, 30 to 50 percent of our patients are Duals. 90 percent are within 300 percent of the federal poverty line. Over 75 percent of our patients are minorities. Just to give you an idea of what the population looks like and from an acuity perspective, about three quarters of our patients have five or more major chronic conditions.
And what we do is we provide these patients with a much better physician-to-patient ratio. On average, our doctors take care of about 400 patients and what they give to these patients with this 400-to-one ratio; just to give you a frame of reference, concierge medicine right? Typically has around a 600-to-one ratio. So, we’re talking about better ratios that even concierge medicine, concierge medicine can give. And so, our patients getting 400-to-one ratio, well, what do they get?
They get a doctor that’s going to see them on average 10 to 12 times a year. They have a doctor that will give them their cell phone numbers so our doctors are available to their patients at all times. We will provide door-to-doctor personalized transportation. So, transportation will never be a barrier for their patients to come or patients to come to see their doctor. We have a whole range of what we call Tier one specialty services that are there on site.
So that way a patient can be a conversation as opposed to a fax. And what do I mean by that is the way that the healthcare system works today is a primary care doctor writes a referral and eventually that patient may or may not go follow up with that consultant. And at some point, a report gets faxed in the old days right to the doctor, the referring doctor. And that doctor may or may not read that fax.
And there’s a lack of coordination and the right hand doesn’t know what the left hand is doing. That doesn’t allow for great results. We believe that the best result is when you have people talking and working together as a team. Well, how do you work together as a team if people aren’t communicating in real time? Right? So, we put the specialists there on site. It’s easy for the patient. The patient can arrive there and it’s a comfortable environment and the patient can be a conversation.
So, we offer Tier one specialist. We offer diagnostic, you know, certain diagnostic testing, obviously lab testing and certain imaging. But we also offer onsite pharmacy service as well. What we’ve discovered is that, you know, 25 to 40 percent of the prescriptions that we write never get filled when they have to go to a pharmacy. So, you know, we are a global full-risk provider, which means if that patient doesn’t fill that prescription, you’re not going to get a great result.
We want them to be on their medications. And so, we want the doctors as a part of that. So that’s what the patient gets. And of course, we have all of these social activities; tai chi classes, cooking classes. Obviously, this is before the COVID era. Right now, we do that virtually. So, it’s a lot more interesting. But we have a whole range. It’s almost like a, you know, you go to a sort of a health club and they tell you about all the amazing classes that they have.
Well, that’s exactly what we do for our patients, as well is that we not only manage their healthcare, but we’re trying to manage their health.
[00:19:14.570] Don Crane:
Got it. Got it. Got it. So, forgive me, couple more questions on sort of the structure of the model. I mean, I love the care model, but a couple of business structure questions. So, are you delegated to pay the claims of specialists in hospitals and the like, or do you let the health plan do that?
[00:19:29.400] – Chris Chen, MD:
Right. So, I know in California, the groups there pay the claims. We do not pay the claims. What we do is the health plans pay the claims and then ultimately what we get is the service fund. So, we’re able to process all of the claims.
And, you know, we’ve developed these pretty robust technology systems.
Just to give you an example, between our data scientists and our software developers, we have about 250 of them, you know, that work for us full time. And all of our systems are.
[00:20:05.560] Don Crane:
You’re an IT company Chris. Tell me about that. No, no, I do know you have a kind of a homegrown and I don’t mean you know, I mean very sophisticated. Tell us about your IT system, practice management, EMR, where you are on analytics. It is very sophisticated, I know.
[00:20:22.030] Chris Chen, MD:
That’s right. So our healthcare model, we were trying to figure out how to scale this global full-risk model. We were very successful in South Florida. But we were told that, you know, these global full-risk models, they don’t typically scale outside of California, you know, certain parts of Texas and South Florida. And so, at a very early state, we said, well, why? Why is that? Why is that the case? Why don’t they scale?
And we discovered that there are two reasons why these models didn’t scale. The first one is you got to figure out how to scale the right culture. I would love to talk about that at some point. But the second piece is that if you had the right enablers and the right tools for them to use, we believe that our model could scale. So, at a very early state, we said let’s invest heavily in technology.
So, we did an exhaustive search and we went out there and looked for all the EMR systems and the, you know, the analytics systems. And we found there was like a number of systems that we would have to try to piece together and get to work together in order to, you know, drive delivering better health. And we didn’t find the right solution. And here’s the reason why. Every single EMR system out there, their primary customer is about enabling a fee-for-service system.
And the goal of fee-for-service is really about maximizing volume and maximizing these billable transactions. Right? Fee-for-service rewards people or rewards for doing more to patients. And what we’re trying to do is value-based care environment. We’re rewarded for doing better for patients. So let me say that again. Fee-for-service rewards for doing more for patients. Our model rewards for doing better for patients. And so, it’s a big difference.
So our electronic medical record systems isn’t about trying to maximize revenue and trying to take more action and do more procedures, you know, a higher CPT code. Our systems are specifically developed to do in many ways the opposite, which is how do I get the patient the right care they need to get the best outcome? And so, if I were to try and install a fee-for-service system, which is built on fee-for-service workflows into our model, we would be far less successful.
You’re really trying to, you know, use the wrong tool that’s designed to do almost exactly the opposite. And so, we had to create our own technology to do that. So, we have our own EMR system. So that’s one thing. The second thing is there’s all this data that comes from these health plans that is very useful; it’s all the claims data and they have all of this technology and all these tools. And there’s all these third party vendors, of course, that can help you analyze this data and try to help you figure out, you know, develop insights about how you can best take care of a population in terms of outcomes and costs.
And the problem with all of that technology is, first of all, it’s not embedded in the workflow. Right. Because you have a EMR, one side driving, trying to drive fee-for-service, you know, trying to optimize fee-for-service. You have payers on the other side trying to say, well, hold on, we don’t want you to drive costs as high as possible. We want you to deliver superior outcomes at a lower cost.
And so those two systems, they don’t talk. They don’t work together. And quite frankly, they’re designed to do exactly the opposite. And then doctors don’t like to open two different systems, right? They’re not going to say I’m going to open one system for my clinical needs, which, by the way, is designed to drive volume. And then I’m going to enter a login again. I’m going to then open up another app and then, no, what they want is while they’re seeing the patient, they want all the information.
Integrated — the population health data, the clinical, the relevant clinical information. The, you know, the cost data, the quality, they want all of that imported together at the point of care right when the physician needs it in a way that can be digested by physicians. Right. And so, we’ve had to develop that. We built a very large, robust platform for doing that. I wouldn’t be surprised if we spent ten times more on technology development than other innovative primary care groups that are out there, because we thought that this was a critical part for us, for our scale.
So that’s what we are doing now.
[00:25:13.060] Don Crane:
So, you are obviously succeeding and growing fast. Are you encountering any problems with any of your MA plans that don’t wish to give you global capitation? Some of my members are.
That’s the background on this. That’s why I ask that question.
[00:25:29.410] Chris Chen, MD:
Right. So, it would be surprising to me if we were to speak to a plan and they weren’t extremely excited about us taking global full risk. You know, I wanted to come back and I do want to answer your question, but I want to come back to this concept of transition from fee-for-service over to value-based care. You know value-based care is the future of healthcare. It’s the future of health care. I mean, we have an environment here in a fee-for-service, you know, our fee-for-service, current environment.
It’s really a broken system. You have these beautiful caregivers, these physicians, these, you know, hospital executives who go into the field and in this industry because they really want to make a difference and they want to help people and they want to make people better. And then they show up for work and they find out that their primary responsibility is to actually drive volume. It’s actually not to make people better, but it’s actually the drive volume, you know, the more heart attacks
we had the better it is. You know, I have an executive that came from a children’s hospital and they said, you know, when your burn unit’s full, you’re doing well. But you’re in a children’s hospital with a full burn unit. Right? So, there’s this massive discrepancy in, you know, why you joined and what you’re ultimately trying to accomplish. And so, you have what we talk about is we have beautiful people stuck in a very broken system. And they end up having to, they’re almost stuck serving this broken system.
It’s very difficult. I speak to a number of hospital CEOs out there and there’s this deep frustration with this is where I would love to drive things, but I’m having such a difficult time in doing that. So, you know, what we’ve discovered is that the payers, whether it be Medicare or the Medicare Advantage payers, have been a very strong proponent of driving people towards value-based care. And, from my perspective, I think it happens.
It’s happened even quicker. Fee-for-service model versus the value-based model is actually killing people. And so, we have a moral obligation to move very quickly towards value-based care.
[00:28:00.390] Don Crane:
So, I love hearing this, couldn’t agree more. Give me some advice maybe so. You know, our mission is to proliferate risk based, coordinated care across the country. And frankly, over the course of the last year, the, you know, the sort of results on that.
If you look at the Medicare Shared Savings Program and elsewhere, really the number of ACOs is roughly static and the number of patients within ACOs roughly static. It is you know, the results, I would say are well, in some instances, good.
And there’s some learnings. In a word, lackluster. So here I contrast that with the kind of success you’re having. I assume profitability, I assume. And I know in terms of quality measures, I see the growth. How do I reconcile these two things? How do we bottle you? What recommendations do you have for me or for the country to make this to accelerate this transition?
What’s so hard about it?
[00:28:59.100] Chris Chen, MD:
So, this is actually your question about, you know, have you met a plan that is, you know, resistant to giving you a global, you know, full-risk contract? And the reason why that we typically don’t see that resistance we actually get a lot of excitement is because we have a long track record of success. Right. And we should talk about why there is that long track record of success. You know, as we’ve grown, we used to be able to break even in about three years.
What we’re finding out is we’re actually able to break even now in less than three years. So, our most recent markets have broken even between two to two-and-a-half years. Right. And so, we’re actually getting more effective at it. Here’s a reason. First of all, we are very focused, OK? There are folks out there that still believe that a hybrid schizophrenic model can work. And the sooner that we realize that those that’s not really compatible with success, the sooner you’ll find success. We have essentially, not essentially, we have no fee-for-service in our environment
at all. You know, I mean, this is an important point here, because if you believe that, you can say, hey, I have, I run a large system, I’m a large provider, and what I’m going to do is for 75 percent of my patients, I’m going to use an EMR system that has workflows and I’m going to use a methodology and a philosophy of care that’s really about driving volume so I can, you know, that’s going to deliver greater revenue to the company.
And so that allows us to thrive. But then for this 25 percent of patients, I’ve got to look at population health data. I got to look at quality data. I’ve got to figure out how to do things cost effectively. I’ve got to lower the ratios. I got to be far more accessible to my patients. I’ve got to be far more nimble. I’ve got to practice a preventative care model as opposed to a non-preventative care model.
And I got to put them all in the same place? One of those is going to lose. And I’m going to tell you, people are not going to allow the fee-for-service machine to lose. We’ve seen that during the COVID era right now. You know, as hospitals, their number one concern right now is how do I get the volumes back up to where they used to be. Right. Which makes sense, because that’s the model that they’re living it. Right. And so when you try to practice schizophrenically, you will always underresource and you will not optimize for value. So that’s number one. Number two, you have to realize, you know I had this really amazing tech friend of mine. He actually designed, you know, one of the leading EMR systems out there. And he made a comment to me. He says, Chris, I believe that value-based care is a 20 percent difference than fee-for-service, but 80 percent of it is all the same for both.
But there’s about a 20 percent difference. And now he’s actually moved over into the value-based care world. And I asked him again recently, do you still feel about that 20 percent difference? And he said, no, not at all. That difference is far greater than I ever imagined. In our perspective, it’s not a 20 percent difference, it’s about a 90 percent difference. And in fact, it’s actually 180 degrees in the opposite direction.
Again, going back to that physician example, you cannot have something that’s going to facilitate, you know, if you’re a fee-for-service doctor, what do you want to do? You want to see as many patients are possible. You want to build the highest level. You want to increase downstream referrals as much as possible to the highest possible cost. Right. And, you know, and you want to document a ton, right? So, you can justify your billing and then your downstream referrals and everything else you’re doing.
Let’s talk about our doctors, right. Our doctors come in. And the first thing we do is we say, hey, tell me about your diet. Tell me about your family. I want to meet your family. I want to understand what’s driving your health. I want to spend a lot more time with you instead of seeing you twice a year, which is the average Medicare patient is seen. We’re going to see you very frequently. What we’re going to do is, you know, my documentation is really about communicating with other doctors and with yourself and creating that plan.
It’s less about trying to bill for something. And then the entire model of care is like, we may need to go to your house and see what your needs are during this COVID era. You know, we’re delivering toilet paper. You know, when it was in short supply to our patients. You can’t bill for that. And so, what kind of systems do you have in place to do that? And so, you know, that’s really that second point there is that you’ve got to have the right enablers, the right sort of support function.
Every one of our doctors has a care team. All the individual pieces of that care team, they don’t have a translatable position to the field. So, we have something called a care promoter. So, Chris, what’s a care promoter? Is it a nurse? It’s not a nurse. Is it a medical assistant? It’s not a medical assistant. What is it? It’s actually a role that we created. Right? Each care team has a care facilitator, each care team has a
care coordinator, and so each of those roles don’t translate outside.
Why? Because this team is responsible for delivering a particular outcome. They’re not responsible for showing up and drawing blood or just…you may need to draw blood, but that’s not your goal. Right? And so that type of, you know, that type of model is very, very different. Now the third piece is massively different cultures. So, there’s a huge burnout occurring in physicians. We’re hearing about it all the time. My job satisfaction is at an all-time low.
And if you take mission-driven doctors who, you know, they’re very smart, they were the top of their class, they worked really hard. And you go to them, you say, listen doc, I actually care less about your results, but I’m going to pay you for is your volume. I’m going to pay you for, you know, and I want to incentivize you for, you know, for referring downstream.
And so if you’re a better doctor and you’re better trained and you’re, you know, and you can fix people, that really, you’re not going to be rewarded for that, OK? And we’re just going to ask you to sit in this box and see as many patients as you can. That’s very tiring. It’s not very satisfying. And so people perish without purpose.
[00:35:36.960] Don Crane:
So, let’s be policymakers for a second. There’s no question that this, you know, foot on the dock and foot on the boat is bad.
But the iterative approach seems to be, you know, ensconced in stone tablets or something. So you have Medicare program and everybody’s putting their toe in the water thinking that so much of hospitals but groups. And so, they get a percentage of their mixes is in fee-for-service. A percentage is in cap. We recognize that schizophrenia. What is the playbook for what I think I’m hearing you call for, which is effectively, an overnight wholesale move from fee-for-service to value.
So, for a given group, what’s the playbook? You mean It would obviously take a significant amount of courage, but what is a group who wants to do that need to pull together? What, Chris, you and I are policymakers now, we’re both Co-Kings of Secretary of Health and Human Services or something. Do we need to have special kind of indemnity funds or grants to cause this wholesale shift to happen overnight?
I’d love to see it, but I’m probing now, Chris, on the how do we do that? Is it realistic?
[00:36:53.200] Chris Chen, MD:
So, I don’t think it can happen overnight. And I don’t think we should call for it to happen overnight. However, I don’t think it’s, I don’t think at the pace that we’re going, it really leads to success because we’re spending so much time in the schizophrenic world right now.
And one of the challenges
[00:37:10.740] Don Crane:
Do you worry that we won’t get to value, Chris? That the pace is too slow and the schizophrenia is too ingrained?
[00:37:17.670] Chris Chen, MD:
You know, I actually don’t worry that we won’t get there. I just worry that there’s going to be a lot of suffering during the process of trying to get there because you’re moving too slowly. You know, I have all these friends of mine who run healthcare companies and when we talk about what happened during COVID, the speed at which people adapted once they were forced to adapt is remarkable. Right? Just think about telehealth. A lot of these healthcare leaders out there have been trying to get folks to adopt telehealth for years.
And the adoption rate has been really, really slow. And all of a sudden a crisis hits and it literally almost happened like what? Within one or two months? Right? The analogy I typically hear is what normally would have taken a decade, took literally three months. And so it’s not overnight, but it can be done very, very quickly. And in my belief is if you challenge these amazing people that are working in a broken system or what we call beautiful people in a really ugly system, and you challenge them with driving towards a model that is about outcomes as opposed to transactions. I think they will find a way. They will find a way because that’s exactly what we did. We lived in a world where we said there is nothing else. So imagine there’s nothing else. What must we do?
And so I believe that, you know, if we can have…
[00:38:54.810] Don Crane:
But Chris, let me interrupt. You’re extraordinarily mission-driven and you talked about the background with your father and so forth. And so you guys are extraordinarily mission-driven. Others not so much so as is the case. And so they’re more, you know, financially and peculiarly interested. How do we get those to make the big change that we’re talking about, whether it takes three months, overnight, or three years, unless they’re mission-driven, are they going to see the profitability?
What’s going to induce physician groups around the country to make the change?
[00:39:31.580] Chris Chen, MD:
Well, you know, it’s interesting. There’s always going to be folks who aren’t going to be able to adapt and they don’t progress and they don’t evolve. Right. And so the answer is you cannot save everyone. In every single industry there’s disruption and during that disruption either you’re going to react to that disruption in a positive way and say, hey, we need to get there because we know this doesn’t work. It’s not sustainable.
It’s not leading to great results. The value is actually decreasing.
Well, and if those folks they’re moving out and you give them a path to move out very quickly, but you also give them a little nudge from the back side, those folks will help to lead the folks in the middle, in my opinion. And those folks in the middle are the ‘let’s wait and see’ type of folks, ok? And so, I think we are on the far…let’s call it in the far leading side of things.
We’ve already started to partner with certain large systems. And, you know, we’ve already partnered with
Ohio Health. Obviously, we’ve spent a lot of time talking to folks at Geisinger or Intermountain. So, they’re starting to move forward very rapidly. Kaiser has been on that path for quite some time. But folks are already starting to move out ahead. And giving those folks the opportunity to really be successful and showcase to everybody what, you know, what’s possible is one of the purposes why we’re on this call today is to show you, hey, this can be done right.
This can be done. And then that will inspire the middle and the middle will start to move very, you know, start to move quicker and quicker and have more courage and confidence in being able to make that shift. But also, we have the opportunity to also come alongside and potentially even partner with some of those folks in the middle right? And help them along their path, like I mentioned, we’re working together already with Ohio Health and a number of other provider groups that have called us up and said, you know, Chris, I now realize that we can’t work in a schizophrenic environment.
We should do this quicker than we than we feel comfortable doing it. But we know this is where healthcare’s going. Can you help us do that? And so there’ll be more and more of that. And then, of course, Don, there’s just going to be this incumbent group, right? That’s going to try to keep everything the same. And that happens in every single industry. And they’re just going to be left behind and they’re going to become obsolete.
And, you know, if they’re still insisting on, you know, renting out DVDs, you know, there is a path for that. And it’s unfortunately predictable. But we shouldn’t allow that group to determine the pace of evolution that is needed. Let’s just take a moment. You’re hearing all these outcries of social injustice. In New Orleans right now, in New Orleans, there are a number of non-profit health systems, ok? There is a zip code in New Orleans where the average life expectancy is 57 years old. Three miles, just three miles from that location in the same city,
you have a zip code where the average life expectancy is 83 years old. We’re talking about a greater than 20-year difference in life expectancy, and that difference is dictated by the color of your skin…what side of the water where the railroad tracks you are born on. What did your parents do for a living? Did you have one or two parents? These are all things that they’re not controllable by a person that’s born into that environment.
And what ChenMed does is ChenMed actually, we say, Chris, why are you picking on New Orleans? New Orleans is one market. In every single place we go to we are targeting those communities and it is about an 18-to-25-year difference in life expectancy. So, our current healthcare system is naturally not taking care of the people who are the most vulnerable and not doing a great job and actually helping the health of those communities. So, something has got to change.
And what’s interesting is when you speak to the people who are running those organizations, they agree with you. They agree with you because these are mission-driven people that run these organizations. They are beautiful people. The issue is they may or may not have the courage. They may or may not have the tools, and they may not may or may not have the examples of how to actually transition over to a value-based care environment.
[00:44:05.310] Don Crane:
So, but if I can interrupt, there’s a care model and then there’s a funding question. So, as soon as you have responsibility for the health of a population, all of a sudden you’ve got the incentive to take care of the issues that you can afford to. But that’s my question to you.
So, as we look at those two zip codes and you see these social determinants at play, nutrition and transportation and so forth, do you have funding that enables you…
I know you have a high touch for those that are really frail and chronic and complex, but it’s a big population and many of them don’t have adequate transportation and nutrition and other social….where does the funding come from to enable you to address that?
[00:44:50.700] Chris Chen, MD:
So, you know, back in the day when there were a global full-risk models. The way that you ran a risk model was you just got rid of your sick people. Right? You wanted to get sick people out of the risk pool. And that actually starts to look a lot more like a fee-for-service environment, right? Where basically patients lose. You know, when the population loses, you know, the care delivery wins and you don’t want that.
So that’s actually the beauty of risk adjustment right now. Obviously, it needs to be fine-tuned on an ongoing basis.
Right? But you know, what happens is, is that if you are incentivized to go into the sickest environments and make them better and you’re incentivized for going into the poorest, in the most underserved model and solving those problems, you end up creating some very beautiful solutions that are margin positive.
[00:45:43.510] Don Crane:
So, your answer to me is Don, risk adjustment is a part of the answer to the extent that the acuity population driven perhaps by social factors, creates a higher acuity. If your risk adjustment program is adequate, then that’s the source of the funding. I think I’m hearing you say that. Is that right?
[00:46:03.830] Chris Chen, MD:
Absolutely. So, you know, if you have a marathon runner or a Peloton-riding, Fitbit-wearing marathon runner that just turned sixty-five, you know, living in northern Atlanta, that’s a very different picture than somebody who lives in south Atlanta, who’s got six major chronic conditions, on Medicaid, has three generations living in their house, and they’re actually the primary caregiver. They don’t have a caregiver. They are the primary caregiver for their grandchildren or their great grandchildren and doesn’t have means for transportation. So, those two are very, very different.
And so, people say healthcare is broken. Healthcare is not broken for a certain portion of the population of the United States. Right. Granted could my care experience been better? You know, in the hospital that I went to, it was very uncoordinated but I know I got substantially better care than many people in this country. The parts of the neighborhoods that we go into one of the things that the patients tell us, they go, we’ve never had a primary care doctor before.
The emergency room was our primary care doctor. So just think about how expensive that is, right? A patient shows up the emergency room. They get, you know, the American public gets a $5,000 bill because they didn’t know what to do about their fever. Right? Or, they didn’t know what to do because they had a cough. That’s only what you would see your primary care doctor for. And then once you go see that emergency room, well, you know, their primary job is to clear out the emergency room.
So, either that person is going to get admitted and get up coded for admission or they’re going to get sent out and likely may or may not get worse without any follow-up, by the way.
[00:47:44.320] Don Crane:
Well, I was just going to, I couldn’t, I’m sorry to interrupt, but I was just thinking here, the importance of risk adjustment and MA is a risk-adjusted program. Commercial generally is not. Would you consider taking on commercial populations in those whatever distressed socioeconomic distressed neighborhoods were you to receive risk-adjusted capitation? Would that change your outlook on commercial?
[00:48:06.180] Chris Chen, MD:
Well, you know, first of all, if there is no risk adjustment, then, you know, then the primary model is really about, you know, patient selection and cost containment.
Right? Once you have that risk-adjusted dollars, that allows you to actually get into a much more preventative mode because you have the dollars up front to go and invest in that patient to then f ix their health. It takes about six to 12 months to actually improve a patient’s health. It does. And so, you’ve got to make sure they’re taking their medications. You got to fix the lifestyle challenges. You’ve got to fix a lot of these socioeconomic challenges.
It could be transportation. It could be things at the home. You got to earn trust with that patient. And so that takes an upfront investment. You cannot do that in a non-risk adjusted environment. So, if you were to give, you know, if you were to properly risk adjust, you know, that’s called higher risk populations, whether it be a commercial or a Medicaid population. Absolutely. That would make it much more attractive to go in and try to solve the woes and the challenges of those populations.
[00:49:12.970] Don Crane:
So, we’ve talked a little bit about racial injustice here. Do you see your model as being responsible for whole populations health as being a tool to address basically social injustice, institutional racism? And if so, how do you look at that?
[00:49:27.100] Chris Chen, MD:
You know, it’s interesting. Remember, we went into these neighborhoods not because we thought it was financially the best thing to do. We thought it was the right thing to do at the time, you know, and because we had experienced it ourselves. We almost stumbled upon the fact that we could substantially improve the outcomes of these populations to make them even better than some of the wealthier non-minority populations. You know, when we look at our data, we always compare our data with the average Medicare recipient.
Right? So, when we said, hey, we reduced hospitalization rates by 30 to 50 percent. We actually compare that with the average Medicare un-risk adjusted, you know, non-dual, you know, populations, the average Medicare population. So, what we’re discovering is the results that we’re getting in our neighborhood, they actually equalize or even surpass that of wealthier neighborhoods. So, it’s more recently that we discover that we are also a vehicle for tremendous, you know, for fixing and correcting social injustice and disparities in all these neighborhoods from a health perspective.
And not just healthcare but health perspective. In addition to that, we’re going into these neighborhoods, we’re giving jobs. We’re very proud of hiring people that represent the neighborhoods that we serve. And so that is something that we do as well. What we’ve also discovered is a lot of times when we open these medical centers, the areas around them start to gentrify. And so, what we see ourselves as, yes, we believe that we can be an inspirational example of what’s possible in a global full-risk model.
But we also see ourselves as being sort of a beacon of light in some of the most dark places in this country.
[00:51:21.710] Don Crane:
So, next question, we do need to wrap up here, too. So maybe this is our last, Chris. But, you know, as you address social disparities and social determinants of health, there’s also sort of lifestyle issues. So, you hear so often physicians complain about their darn patients that won’t stop smoking and they don’t eat right and so forth. And there’s a personal responsibility. So, with small panel sizes, I think it was like five hundred patients per physician
I think I heard you say or low numbers like that. Are you addressing those kinds of lifestyle issues? And if you are, how do you do it? And are you able to, I mean, are you having luck with that kind of an intervention?
[00:52:05.890] Chris Chen, MD:
Well, you know, it’s interesting. I mentioned before that one of the most important things that we had to scale out was culture. And the most important part of that culture is really the accountability piece, ok? A fee-for-service environment, if you talk to them, you say, who’s accountable for driving great results for your population, for your patients? I have a feeling you’re going to get very different answers.
And here’s typically what we hear, right? We hear ‘we’re all accountable.’ Well, anybody who’s run a business before knows that if everybody is accountable, nobody’s accountable, right? Number two, they said, well, it’s a patient, they’re responsible for it. So, if they’re really sick and they’re not doing well, it’s the patient’s fault. Because they’re not listening to us. They got in this position, you know, because of their own accord.
And that’s not, that’s certainly not a complete answer. A patient obviously has a as a part on that but certainly that’s an incomplete, you know, answer. So, we look at this and we said, well, the doctor… doesn’t the doctor, the caregivers have a role in being accountable for a patient’s health? And that is the culture that we rolled out at ChenMed. We tell every doctor, we understand there’s going to be challenges.
We understand there are social challenges. We understand that the patients have their challenges. But you’re going to be accountable for this.
[00:53:41.160] Don Crane:
So, what do you do for the doctor? You’ve probably two doctors. One says, Chris, I’d like to do that. I’ll take it on. Let me try my best. And then you get another doctor goes, oh Chris, I don’t want to be talking to them about their damn diet. I’ve been doing this for 25 years. I’ve never got a patient to lose weight. What do you do with that physician?
[00:53:59.580] Chris Chen, MD:
So, first of all, selection is really important for us. OK, we have models and AI that look at how to properly select for the right primary care physicians that work in our organization. And we’re looking for folks who are excited about taking on the challenge of making people better. So that’s the first step. Not all doctors are looking to do that. Some doctors said I’m very comfortable just showing up to work, give me my nine to five jobs, I’ll see my 30 patients.
I just want to write notes and, you know, stamp something and send people to their respective downstream, you know, specialists. And but, you know, it’s not exciting to me to, you know, take somebody from, you know, a low point of health to a high point of health. Those people typically…we will do the best job we can to weed out those physicians. Then you end up with physicians who say, no, I really want to be accountable for outcomes.
I understand that I’ve never been taught to run a team. I’ve never been taught to lead. I’ve never been taught preventative care. I’ve never been taught nutrition. You know, talk to doctors, how much nutrition training have they done? I’ve never been taught how to even teach exercise. I may not even exercise myself. Right? I don’t understand costs. I don’t even balance my own checkbook. Right? So, but we’re looking for is willingness.
And so what we do is once that doctor, we select for that doctor, we get that right mindset, then we bring him to the model. And then we enroll them in something we call ChenMed University. And it’s actually a really, really rigorous nine-month training program. When our doctors join us, we tell them we need to almost de-program all your fee-for-service training and we’re going to refocus you and teach you all of these great skills that you’re going to need to drive better health.
I mean, teaching doctors how to influence peopleis something that we never learned in medical school. In medical school, if you wrote it down on a piece of paper, you assume that the patient was going to take the pill that you gave them or if you told a patient to exercise, you actually, it’s not your problem whether or not they actually do follow through with that. And so our doctors are. Let me just give you one story and then I want to get in the last piece.
But when I first joined ChenMed, my dad said, Chris, did you know that you are a marriage counselor and you are also a nutritionist, but you can’t just give people advice.
You’re responsible for making sure they eat healthy. I said, what do you mean? Well, one is an example my father gave me. The other one is one that I dealt with. The marriage counselor piece. He said, Chris, what happens to your older gentlemen patients if, you know, if they split up from their wives? Studies have shown that their mortality skyrockets. They die very quickly. OK, so therefore maybe part of your job as a primary care physician is to make sure that there is a good, strong relationship there and then make sure that that elderly, senior, young, elderly senior gentleman doesn’t chase away his wife because that’s the number one thing that’s going to keep them alive.
But let’s talk about diet for a second. I had this patient of mine who had Class 4 heart failure, and I’m a cardiologist by training. And I put them on the best medications but at the end of the day, she was like five hundred, you know, like four, you know, big lady, about 250 pounds, five foot tall. So, I said the reason why you’re in heart failure is because your tiny little heart is pumping blood to a really big body.
And I went through her diet and she gave me she says, Chris, I eat toast in the morning. I eat, you know, a piece of turkey at lunch time, you know, at dinner time, you know, I’ll eat some fish and maybe some mashed potatoes. And I go, ok, I’m still trying to put two and two together. And then I brought her family members in. And the first thing the daughter says to me after I’ve talked to her for, like, you know, almost eight weeks, she runs over to me.
She says Dr. Chen, first of all, thank you so much. I can’t believe how often you see her. I can’t believe how much you care about her. I can’t believe that she can call you at night.
I can’t believe that we’re here talking to you about how to take care of her better. But can you help me out here? And I said, how can I help you? She said, can you please convince my mother that eating an entire bucket of chicken every night at midnight is not good for her health?
And I said, Mrs. Smith, you know, Mrs. Smith, what happens with a bucket of chicken at midnight? You never told me about that. And she goes, well, Doc, you didn’t tell me. You didn’t ask me what I ate at midnight. You just asked me what I eat for breakfast, lunch and dinner.
But now it became my responsibility to figure out how to stop her from eating a bucket of chicken every night, because at the end of the day, I’m fully responsible. So, teaching doctors that skill really critical about how to holistically care for their patients, about how to send people to people’s houses, how to take care of the patient’s health and be preventative, we have to retrain them. And the third piece is you gotta give doctors the right tools.
You must. They will do beautifully. If you select for them properly, you train them properly and you give them the right tools. And what we’ve discovered is everybody out there has got an app, but they may not be the right apps. Some of the apps are designed to really facilitate fee for service, which is exactly the opposite of what you’re trying to do here. Some of the apps, you know, they’re great for one particular thing, but they don’t work in combination with everything else.
And so, you have to find something that is essentially end to end that brings it all together for that doctor. So that way you get one beautiful picture of the patient and that’s what we try to do. We try to bring the clinical pieces together, the social pieces together, the claims pieces together, the service pieces together along with a quality data. And we bring that all together in a digestible format for that doctor to use once they’ve been selected and trained properly.
And we release them out to the world and to go after social justice, to go after better health and to do it while being margin positive. And that’s what we’re trying to do. And so that’s the reason why right now that, you know, we’re getting all these phone calls to, you know, Chris, can you at least help us think through this? Chris, can you perhaps partner with us? And the answer that we’re providing for folks these days is yes, because the results that we have are so compelling,
it is almost immoral for us not to figure out ways to really help enable people and help them grow and force that transition from a broken fee for service system into one that is delivering substantially better outcomes in terms of hospitalization rates, quality costs, patient service.
[01:01:16.540] Don Crane:
Well, Chris, I wish you the best of luck. We need you. I wish we could clone you. I hope you quintuple your size every two months. This has really been a really wonderful conversation. I’ve learned a lot. I think our audience has. And so, with that, I just got to thank you for your time. So glad you’re feeling better and you’re healthy now and look forward to seeing you soon. And we’ll continue the conversation.
So, with that, thank you very, very much, Chris.
[01:01:49.070] Chris Chen, MD:
Thanks, Don. It’s great to be here.
[01:01:51.010] Don Crane:
If you enjoyed the podcast you just heard, which I hope you did, please do me a favor: Go to the section within your podcast…it’s available on all the platforms…and rate us. Go ahead and provide an evaluation. We’d love five stars, but what we’d really like is your input. Also, please attend our Colloquium coming up
November 17 through 19. We’re going to have three days of excellent education. To attend, please just
go to our website APG.org and you’ll be able to do that readily. And finally, please stay healthy and we look forward to seeing you again.
[01:02:28.110] – Announcer:
Thanks for listening to APG on American Healthcare with your host, APG President and CEO, Don Crane. For more information about APG and transcripts of this show, visit the APG website at APG.org.