Chasing Unicorns

Typically a company comes out of stealth mode with press releases and similar corporate fanfare. I have chosen instead to do it with a personal letter. Those who know me well will not be surprised because you know that for me, the business of healthcare is very, very personal.?

Five years ago, having been in healthcare professionally, I became a “terminal” patient. As a 40-something single mother of four, I spent Labor Day weekend 2016 in a hospital bed- legally blind, dependent on an electric wheelchair, on liquid-only nutrition. The hospital ordered a transfer to hospice. Knowing the rules and regulations of healthcare, I staged a sit-in. After six days, as I knew would happen, the social worker in charge of bed utilization ordered me to just be transferred somewhere, and that led to ten months as the youngest resident in the basement of a two star skilled nursing facility.?

I honor the work that providers do every day in hospice. It just was not my time.

Over the next year, with weekly chemotherapy, including a fab round of injections born from mustard gas, I kept my sanity and purpose looking at healthcare from the patient side. I paid attention to what worked and what didn’t in communication, in patient experience, in workflow, even in hospital infections. I spoke to residents about fall prevention to get my mind off of “routine” procedures. And I looked at the empty chair in each of my doctor’s offices- the one that would have been for a spouse, caregiver or parent if I had had one there in my journey. And I promised myself:

Healthcare doesn’t have to be so hard. We don’t have to be alone. I would get better. I would make a difference.

I survived because I found my “Why.”

Fast forward through 50 surgeries, two years of hard core post-cancer recovery, learning how to walk and eat and see again... I jumped back into healthcare, advising innovation companies on reimbursement strategies and growth opportunities. Working in DSRIP- the NY state Medicaid VBC program -led to an opportunity to lead the value arm of one of the largest post-acute systems in the state.?

The pandemic magnified what is best and worst in our healthcare system.?

While healthcare heroes were making unimaginable sacrifices in the nursing homes and private homes of some of our most vulnerable populations, the system with which I had been working- along with 60% of risk entities in the U.S., pulled back from value based contracting. I found myself healthy and with a purpose, but without a gig.

During my stint at the health system, I became really excited about the potential for value based care in general and a new value based model called Direct Contracting specifically. I came to realize that when we change the financial incentives in the business of healthcare, we can radically improve the journey of all stakeholders in the entire continuum of care. When we change the financial model of how and why health providers, services and solutions are paid, we have the opportunity to give more value to all stakeholders. Patients, caregivers and communities have better health and a better experience through their care. Health systems and businesses that serve them can realize more profit. Health providers can earn more and have the tools to do more of the care that inspired them to live lives in service of others. When we change the financial model of how healthcare is paid, we change the experience and increase the outcome of one’s journey through healthcare- physical, emotional and financial.?

I had found my how.?

Let me explain:? Prior to VBC, healthcare has been paid in what is called “fee for service.” In fee for service, healthcare is a transaction of sickness. When you break an arm, the hospital, doctor, pharmacy, x-ray technician, physical therapist, etc etc are paid a fee, a price to fix your arm. Get sick, pay transactional fees for people to make it better. Everyone involved in healthcare actually makes all of their money only if there is an arm to fix, only if someone is broken. Everyone in the business of healthcare benefits only when a person becomes a patient and the patient needs a service to fix something that is wrong. There is no financial motivation for anyone to prevent you from breaking an arm; in fact, everyone is financially incentivized to keep having arms that need fixing.?

Value based contracting instead creates a financial incentive to keep you from breaking your arm. In VBC, health systems, providers and everyone in the business of healthcare is paid a flat fee for the total care of a population. It is like a gym receiving membership fees whether members come in and use the service or not. The less people come in the door, the less costs there are in running the gym, the less staff you need, the lower your utility bills, the less towels the gym has to wash. If the gym is getting paid the same amount whether you use the service or not- it’s clearly better for the gym if you just do not come.?

So with value based care, when systems and doctors make the same whether you use their service or not- the incentive is to keep you healthy. They profit financially and otherwise if a person stays at home and never breaks their arm to begin with.?

And the concept of population health is that instead of being paid for each individual patient, providers are paid to keep a panel, a group, a community of people healthier. With no transaction fee, the doctor’s office does not have to have a volume of visits in the office, s/he has the freedom to help a person on a phone call, to come to the house, to slow down and spend more time on each interaction.?

If fee for service pays more for the number of broken arms, value based care pays to keep the sidewalk safe so that the entire community does not fall and break their arms to begin with.?

Of course the “devil is in the details”. Healthcare is a super complex system. If payment does not happen from a single event- how does one determine the price? How do you define success? Once it is defined how do you measure it? Who is in the population? What does it mean to be accountable for the health and care of that population? Who is accountable for an unbroken sidewalk when there is the person who mixes the cement, one who lays the sidewalk, someone who designs the pathway, and another who decides where a tree should or not be planted to improve the experience of the walker and not create a hazard at the same time??

I admit to being a nerd. In fact, by now in my life I fully embrace my nerdom. While I am motivated and impassioned by the big picture and impact of the entire system, I find joy in the minutiae and details required to make value based contracting work. I enjoy spending hours with actuaries on benchmarks and percentages of total cost of care, loving the light bulb moment when I figure out how to pay providers more not less than fee for service and still lower the total cost of care. I like the complexity of quality measurements and compliance with the rules and regulations necessary to manage the payment, care and experience in contracting.

PropHealth, in fact, was born to manage the details- the details of contracting, operations and growth that are particular to VBC- so that providers, systems and payers can focus back on their core competencies. But I am getting ahead of myself….

So in August of 2020, I found myself super excited about the potential of value based contracting in general to be my personal vehicle and our collective vehicle for impacting better lives. I was jazzed about direct contracting in particular as a means to do that. And I was a serial entrepreneur who was “never ever ever going to do another start-up.”?

You know where this is going… I made myself a fruity adult beverage, carefully considered for at least a good few minutes, called a few friends and colleagues and said, “I know it’s crazy, but I think I’m going to start my own direct contracting entity.”?

Let me put this into context:? Direct Contracting (DCE) was one of many models put out by the Centers for Medicare and Medicaid Services (CMS) to try out different forms of alternative payment models to see what works and refine what doesn’t in moving all of healthcare from fee-for-service to value based contracting.?

In 2010, as a part of the Affordable Care Act (ACA) the Center for Medicaid and Medicare Innovation (CMMI) was created. CMMI was established to give a funded vehicle for experimentation and practice to see how value based contracting could work best to accomplish the “triple aim”- lower total cost of care, better outcomes for an entire population of patients, and a solid patient experience. It was funded to enable pilots in which CMMI could pay new entities and/or new models to tweak and perfect alternative payment models. It is a government incubator to encourage innovation and early adopters to value contracting. And some of these models could then become mainstream.

With funding of $10 Billion a decade, CMMI has tried over 40 different models. Direct Contracting was just one model, with a primary difference from most others being that instead of having shared savings or bundled payments for episodes of care, it is a capitation model. Without getting into all of the details now, a capitation model is one in which a risk bearing entity (think close relative of an insurance company) receives a percentage of the total cost of care as a monthly payment per member (PMPM)? and then is responsible for using that money wisely to cover the total health of all of its members (aka population). If? DCE spends more than the benchmark (what CMS thinks the total cost of care should be) it has to pay CMS back. If the DCE spends less, it gets to share in the windfall and keep more profit.?

So yes, dear reader, models like direct contracting financially incentivize those in healthcare to keep costs down while keeping health outcomes and patient experience up- so it incentivizes providers and systems (at least in theory- devil being in the details) to keep people healthy - suddenly those in healthcare have a real motivation to build and maintain that sidewalk.?

So essentially my “ahah” moment in August was that I would just start an insurance company doing about $100 million in revenues within 18 months.?

Each day I said that I’d give this a go, and then each day it kept moving forward. The idea became a company, first a LLC called Continuum of Care Partners, and then within months a corporation called WiseCare. A remarkable team coalesced around me- big thinkers who are true believers that we can make a real and lasting impact with a wide breadth of experience throughout healthcare. The industry support was breathtaking. We built a network of hundreds of providers, representing tens of thousands of aligned beneficiaries. Before the end of the year, we had submitted a Letter of Intent to CMS to participate in the GEO model DCE.?

There have been literally countless amazing people that have been and continue to be part of this journey- far far too many to recognize here- leaders in every facet of healthcare: doctors and nurses, patient advocates, insurance executives, government leaders, innovators… but I do want to take a moment to mention four of the finest people I have had the opportunity of sharing this journey:? David Lavietes , Paulo Machado, Dr Krishan Narasimhan and Lee Becker. It is because of people like them that I am confident that true believers will win out and their legacy will be a world of healthcare that is barely recognizable from what we see today.

Along the way, I had wanted WiseCare to both be building towards a direct contracting entity and to be using our rare depth of expertise and innovation in this space to serve other risk entities. Our leadership felt that would be too distracting, too diverse, that we had to focus.?

Late Spring CMS updated its Direct Contracting website. In the update, with no press releases or fanfare, it closed the application process for new DCEs. Overnight I found myself like someone who is really good at ordering menu items in old Latin- a world expert in essentially a dead language.?

After immediately calling anyone I knew connected to CMS (shocked calls all around, no, no-one had seen this coming), I had a pre-scheduled call that I had thought was to close much much needed funding that, well, had different outcomes. I had already been a scheduled guest on a Clubhouse chat and, being always transparently me, ended up sharing live the rug-pulled-out-from-under-me day.?

Over the next three months I entered into several contracts for an “aqui-hire” - save the team, clear the balance sheet, build the dream with someone else owning the company. A few of these went deep into due diligence with hundreds of legal documents shared.? During this time the team dispersed, to keep or try to find paying gigs. I wrote so many proposals, attended so many meetings.?

For those who have heard my personal guide to surviving almost anything- my first task always is to Show Up. (Then do the next right thing, find joy, dance often, love fiercely.) Showing up sounds pretty basic, but months like this, it is by far the hardest task.?

Every time I thought I was on empty and at a dead end, another meeting or possible avenue opened up that required me to show up. The last I was not sure if I really had to. I was, frankly, exhausted. Spent. Just about to throw in the towel. MedStartr was having a venture forum, colleagues were coming into NYC, many texts were passed, I tried to bail out multiple times. I showed up. Long story short, I was a judge during the venture forum, swapped numbers with some new people… One of those people said, “I think you should meet my boss.”?

Two days later I was on a zoom with Dr. Gunter Wessels. “I’ll be in Connecticut tomorrow, can you drop by.” Six hours of driving from other obligations later, suited up, loads of people there to meet and woo him- five minutes in the hallway changed my life.

Let me back up with a bit more picture- I am very very good at what I do. I not only understand value based contracting, but I know how to make it pay for everyone. I try to live a volitional life of meaning and purpose, to be honest and loyal, to leave people and the world a bit better because I was there. But the months preceding the hallway conversation had more than a fair share of brutal. That first call I had with who I believed was an investor and friend/colleague summed it up. This person not only had the means to keep WiseCare going, but had benefited significantly from my time and expertise. He looked me in the zoom eye, “You have my word Gail.” And that word did not turn out to mean anything.

That weekend I was sitting on a request for proposal for total management of 20,000 beneficiaries. It is not small potatoes in the world of VBC. I had not submitted, despite nine months of working towards that goal, because I thought I had no team, no resources. In that Connecticut hallway, Gunter looked me in the eye and said, “Send it in, I have your back.”?

Did I believe it? Absolutely not. Did I really really want to believe it? 100%. I submitted- we moved through semi-finalist and finalist and we have not stopped.?

I have never had a partner. I am not sure I can do justice to how life changing it is.

First, with the partnership I had funding. Instantly I didn’t have to worry about how we would pay to do things, I could focus on what we would do. I was given an instant tech stack, crafted by just brilliant minds. With one of Gunter’s many existing partnerships, LifeGuard, I could put into the hands of patients and caregivers a real app with all of the engagement I had always imagined was possible. Call Centers? No problem- but not just the call centers to build out the patient journey I had spent TWO years mapping, one of the most amazing tech teams behind it- Brent Farmer had solved decision making and personalized call interventions decades ago. Intelligent data? Check- our head of data made the IRS efficient from over 60 days to nearly instantaneous. Sales. Marketing. Check. Check.

And not only smart: kind, compassionate, giving. The team that came with the partnership are the people I really would want to be stuck on a desert island with. We’d be walking on talking on the island and they’d say, “A coconut, what could we build with that? What problem can we solve?” The people who have been just a bit more bruised by life because they are the ones who dare to continue to believe in what is possible- that good people can do great things, that the best idea will win.?

In addition to being just one of the smartest people I have ever met, Gunter’s secret power has been in building an enormous network of mutual value partnerships. An early proponent of the financial upside of value contracting, he had published and then spent years speaking around the globe on the merits of capitation that pre-dated the ACA. But the philosophy of this family of companies is to take really smart, smart, passionate founders who each have dedicated themselves to solving complex problems and filling needs within healthcare, seal the spit and handshake with a “teaming agreement” which is legal for “both parties benefit” and then support the ecosystem of innovation and profitability. Rob Hanna (the brains behind some truly staggering deals on Wall Street and the mastermind behind public-private partnerships that brought clean drinking water around the world while enabling everyone to profit from saving lives) calls it “Social Wealth.”?

Remember when I was sitting in the wheelchair refusing to die from cancer, looking at that empty chair and thinking we don’t have to be alone?

I had no idea the power, the amplification that can happen when leaders and companies join together for a shared purpose. In two months we have forged partnerships with some of the most absolutely amazing organizations. We are launching pilots of 2,000 beneficiaries each on the first of the year. We’re going onto Native American reservations and leading end-to-end care, total solutions that will not only save millions of dollars in healthcare costs, will not only immediately improve the lives of patients and caregivers and communities, will not only impact the day to day experience of people who have been virtually left behind by our healthcare system- but will show, with real solid clean data what I have always suspected to be true: when done right, value based care gives value to every single stakeholder- better medicine, better lives with sustainable, solid profit.?

I have said for some time that to succeed in the new world of healthcare, it’s going to be all about partnerships. In health systems without walls, as we see value based care becoming mandatory this decade, as we all only benefit when we take real accountability for whole populations of patients, the only companies that will be successful will be those who participate in collaborations in the entire continuum of care.?

It absolutely does not have to be so hard. Together we will do and be so much more than the sum of our parts. Join us. I caught a unicorn.?