[00:00:01] Stacey Richter: Episode 489 Part 1, "Achieving Mission, That Is a Path to Margin at a Multispecialty Practice". Today I speak with Dan Greenleaf.
[00:00:28] Stacey Richter: This show today is a continuation of our mission/margin series because I wanted to drag into my investigation here what clinical organizations are up to, especially ones that have brought in professional capital as they say.
Before I kick in here, let me just remind everyone of a few themes that we have been poking in the eyeballs in the past few months over here at Relentless Health Value.
Key Themes in Healthcare
[00:00:56] Stacey Richter: First, patients cannot afford care. Listen to the show with Mark Cuban and Cora Opsahl mentioning middle class wage stagnation. Listen to the show with Merrill Goozner. Listen to the show with Wayne Jenkins, MD.
It is a crapshoot to get medical care these days. Roll the dice and hope you don't get a bankrupting bill at the end. There's no transparency or very little for patients. No accountability or interest from many. Not all, but many take no responsibility for their financial impact on their patients or members.
And look, I am in no way speaking for the vast majority of doctors or nurses or pharmacists or PAs or even really good administrators or anybody else involved in clinical care. In fact, if you listen to the show with Dr. Komal Bajaj about how many clinicians do not actually trust their leadership will do right by patients or even the clinicians themselves, then yeah.
This is undeniably the broad stroke of this industry we all work in. Many take no responsibility for their financial impact on their patients or members. That is the first theme.
Here's the second theme. It's this motto, If you can take it, take as much as you can get. And throw in no shade, but let's just get real about that.
The Role of Corporate Healthcare
[00:02:13] Stacey Richter: Right now healthcare is an industry just like any other industry. And when I say industry, I mean the tax exempt so-caled nonprofits as much as anybody else. Said another way, corporate healthcare leaders, just like any other business leaders have every incentive to see prices go up. That is just the way commerce works. Listen to the show with Jonathan Baran, the ones with Kevin Lyons.
But what is different than most other commerce endeavors when it comes to healthcare, and Shane Cerone from Kada says this in an upcoming episode, he says, "We don't have a broken healthcare market. In many parts of the country, there is no healthcare market. The market does not exist.”
And thus prices can go up like rocket ships because self-insured employers and also public plan sponsors a lot of times, like state health plans are on the whole just such unsophisticated buyers, price elasticity is like nonexistent.
No matter how high the price, plan sponsors still contract for who's ever in the network and they and their members ante up and pay the price. Many good and maybe not so good reasons for this, not getting into them, but net net, the result is a nonmarket.
Anyone who wants to debate my corporate healthcare entities or big consolidated healthcare entities act just like any other corporate entity, read the recent Substack by Preston Alexander. Link in the show notes. It's about hospitals raising capital with bonds.
Preston Alexander wrote, "The financial design of the system has turned what should be a largely altruistic service, one designed for public good and societal benefit, and forced it to act like a financial institution".
And so with those bonds, welcome Wall Street. What do Wall Street bankers think about patient care and access and community health? Oh, they don't think about those things at all. Municipal bond returns, baby. That's it. Bonds are an investment where people who invest in them, returns are expected just like shareholders who want their dividends.
Preston Alexander wrote, "Most larger health systems carry billions (That was a B back there) in bond liabilities". It costs money to build buildings and add beds and consolidate yo, but now they are subject to the same pressures as publicly traded companies.
Interview With Dan Greenleaf
[00:04:18] Stacey Richter: So then I got my hands on Dan Greenleaf, CEO of Duly, a multispecialty group in Chicago. I was absolutely intrigued from the starting gate because Dan told me that mission can actually beget margin in his view, and he even at Duly, has private equity investors. So yeah, I was all ears.
Dan Greenleaf, who is my guest today, by the way, if you haven't figured that out, told me that because of but not limited to the trends above wildly high prices, high premiums, high deductibles, more consolidation, fewer options, scared, confused, and maybe outraged patients. Listen to the show with Peter Hayes. Dan said that given this backdrop, actually focusing on mission is a huge competitive advantage. Justina Lehman actually also said this in a show from a few years ago.
Dan told me, Dan Greenleaf, when you succeed at mission, you can get yourself decent margin these days.
Defining Mission and Its Quadrants
[00:05:43] Stacey Richter: So in this first episode, we will talk about this mission of which Dan Greenleaf speaks, and then in part 2 coming at you next week, we'll get into how that all spells margin.
Here's what I thought was super important about this whole mission margin conversation, and Mick Connor. Dr. Mick Connors in a show coming up also touches on this, to achieve mission, you really have to define what mission means.
Dr. Ben Schwartz said this too in so many words in the show from last summer.
And that doesn't mean just have a gloriously well-written webpage, and you just can't have spreadsheets of random quality metrics either. You have to treat the mission like you treat any strategic imperative. You gotta break it down and figure out how you're gonna measure what you're actually doing. Rik Renard talked about this one too.
At Duly, which Dan Greenleaf talks about in this episode, the focus is on four quadrants of mission: (1) affordability, (2) access, (3) consumer experience, and (4) quality.
In this conversation, Dan emphasizes that achieving these 4 quadrants reduces friction for patients and clinicians and leads to better care outcomes and financial stability.
To be noted with one big fat fluorescent highlighter marker is this. A big part of this mission, in almost each of these quadrants is about making prices reasonable and predictable and transparent for patients.
In today's world, that's what customer experience, must include not just like lemon water in the waiting room. That struck me the most.
And all this focus on affordability really adds up across the community. In Chicago, lower cost alternatives to hospital services can save up to $2 billion. That is also with a B. And the communities are also healthier. Crazy. Hey, make sure patients and members can afford and have access to quality healthcare and the community gets healthier. Who would've thought?
Dan Greenleaf, CEO of Duly, my guest today has been in healthcare for 30 years.
My name is Stacey Richter. This podcast is sponsored by Aventria Health Group, but I do just wanna mention that Duly so kindly offered Relentless Health Value, some financial support, which we truly, truly appreciate.
So call this episode also sponsored with an assist by Duly.
Here's my conversation with Dan Greenleaf and do come back next week for part 2 like I said earlier. Today, we talk mission. Next week we talk margin.
Dan Greenleaf, welcome to Relentless Health Value.
[00:08:13] Dan Greenleaf: Thank you, Stacey, for having me. Super excited to be talking to you today, and I think you do an unbelievable job. I mean, your podcasts are just incredible. Thank you for everything you're doing.
[00:08:25] Stacey Richter: Well, I very much appreciate you saying that, those kind words, and I also very much appreciate the opportunity to speak with you today.
So before we kick into this continuation of our mission/margin series from the independent multispecialty practice point of view, if we're thinking about what is possible when an independent multispecialty group lives up to their potential, let's start talking about mission.
[00:08:53] Dan Greenleaf: To me, and again, we talk about margin versus mission, I don't ever think they're mutually exclusive. My job, I think, fundamentally there's two things. One is to reduce friction for the patient. And the second thing is how do I reduce friction for the clinicians who care for them, so that we can create that sacred space that the two parties come together in the most optimal way.
That's when I wake up and that's what I think about every day. So, and I think the byproduct of that is obviously margin that we're able to reinvest back in the company.
[00:09:28] Stacey Richter: Let me just interject because I just kind of wanna underline what you said there. If you do mission very well, that can be a multiplier for margin, you're not saying that this is some kind of zero sum game that like for every two points of mission, you subtract two points of margin.
What you're actually saying is if you're creative, you could also view mission as a way to accelerate and to be competitively differentiated.
[00:09:53] Dan Greenleaf: Think about this, like I think there's three people who make decisions to do something when they're 18. One is, I would say the priesthood. The second one is people who go in the military. And the third one is, I think people that serve people through being a clinical care person.
And the point of bringing this up is that these individuals made vocational choices. And they did this because I describe it as a soul calling. It was a soulful decision, and part of my job is to make sure I'm helping bring that out every day.
I really feel very responsible about and how do I make their job easier so that they can care for more patients so that they can bring the best of who they are when they're interacting with the patients. And that that can be a force multiplier for the organization. So again, it goes back to this mission and margin work very well together.
[00:10:47] Stacey Richter: And you have four categories or four vectors of your mission when it comes to Duly, which is the multispecialty group that you're running. Why don't we just tee up what those four vectors are? And then I will go back and ask you each one individually.
[00:11:08] Dan Greenleaf: In the four are, affordability, access, consumer experience, and quality.
[00:11:13] Stacey Richter: Affordability, access, consumer experience, and quality.
So if I ask you to define mission, those are the four factors that you would say comprise mission. Which is really interesting because oftentimes we talk about mission and is this vague, unmeasurable vis-a-vis, not just quant, but no one, not even qual. Let's start with improve affordability.
Affordability in Healthcare
[00:11:35] Stacey Richter: And as we all know, there's financial toxicity that's out there, so being able to afford care has certainly gotten much more important lately, but what do you mean by affordability as one of your mission quadrant?
[00:11:46] Dan Greenleaf: I gotta start high here, Stacey, and talk about some macro factors first so I can make a lot of sense in why affordability matters and some of this has comes from, you know, some of the work Vivian Ho does.
So number one, we know over the last 20 years, inflation is up 61%. Wages are up, 111, premiums are 314, and family responsibilities 326.
[00:12:11] Stacey Richter: Vivian Ho goes through all these stats and what they all mean in a really stunning way. Actually, in that episode link in the show notes. But you talked about how inflation is up a fraction, a fraction of the rise in premiums and in out-of-pocket costs for families for healthcare.
While meanwhile, wages are up a fraction of inflation. So in real terms, the middle class is making less money than they used to and materially less when you also factor in the cost of healthcare getting taken out of their paychecks.
Mark Cuban actually talked about this a lot, and he called the amount getting taken out of paychecks, another tax, which is actually a bigger tax than the tax.
[00:12:48] Dan Greenleaf: The actual dollars that families now are spending from 2000 to 2024 has gone from 6,000 to $24,000. The average American makes $74,000 a year. So when you think about like, where the financial discrimination is occurring is unequivocally in the middle class and lower classes, you know, for lack a better description.
And it's disgraceful. It's disgraceful to me that we've decided as a country that we're gonna put the onus of these extreme increases in care on the middle class. So, I just wanna start there that this is this is the lens I look through.
The second thing is I wanna point out is that there are three payers and only three payers in the marketplace. There's the taxpayers, there's the employers and the unions. Everybody else is a middle person. And so as I orient myself and orient myself to discussions, those are the three groups I focus on and I also want you all to know that I'm spending $85 million myself as a self-insured employer.
So we're not only providing the care, but we're also taking on that responsibility of like making sure that we're not getting disproportionately harmed by the way the healthcare system's been set up. So starting there, and that's again the lens I look through, Stacey.
[00:14:13] Stacey Richter: We talk about this a lot on this pod. The ones, the only ones footing the healthcare bill are taxpayers, employers, unions, and patients themselves increasingly. So I'd put them on the end here.
How does all of this funnel into your affordability mission quadrant?
[00:14:31] Dan Greenleaf: So, if I think about affordability, and you and I have talked about the MRI example, we do, we have 400 MRIs a day. Think about this from, if the patient was go to a hospital system in Chicago, they're paying $4,500.
They come to Duly, it's $500. That is 400, $400 million that we save the healthcare system on just that service alone. Colonoscopies. We do 22,000 colonoscopies. They are approximately $10,000 less than it costs to have the similar service done in a hospital. That's another 220 million dollars.
And then you start looking at things just like tummy tucks, $8,500 versus $70,000. Knee replacements, $8,500 versus 65,000. Hip replacements, $8,500 versus $50,000.
And what also gets missed in this discussion is the patient responsibility piece. So this co-insurance. So something simple like an MRI, $4,500, 20% co-insurance is $900 to that family versus a hundred dollars. So that's an $800 difference.
And so Duly brings a level of affordability to Chicago marketplace. You know, we're saving the employers, the unions, and in some respects, the taxpayers, well in excess of a billion dollars. I think it's probably closer to $2 billion.
So affordability really matters in this day and age, and I'm really tired of, you know, frankly, the middle class, this financial discrimination that occurs in the middle class is a result of this lack of transparency.
So nobody understands what anything costs, and they think they're going to the best place because maybe it has a brand attached to it. And at the end of the day, their compensation is being affected by that.
[00:16:34] Stacey Richter: Yeah. And that's something that Dave Chase for one, has talked about for years. Just the stagnation of middle class wages being directly attributable to the increase in the dollars that are going to the healthcare industry. While at the same time, for example, the federal poverty limit is being calculated based on things that tend to rise at the rate of inflation, like food or gasoline.
Whereas you have this huge other that a huge proportion of wages right now are going into the healthcare industry that is rising at a wildly high rate above inflation. So I've just started to see calls lately, which basically say we have to change all this because to your exact point, you know there, there's a reason why 61% of Americans, I believe, have said that they are dealing or foregoing care due to fear of cost.
We had Merrill Goozner on who gave a great example. He's like, what is this spot on my arm? Is it melanoma? I don't know. But I do know that's gonna cost me $600 to go to the doctor to find out. So I'm just gonna wait and see, I guess. You know, I have chest pain. Am I gonna go to the doctor? I wanna think real hard about that 'cause I don't wanna bankrupt my family.
[00:17:47] Dan Greenleaf: And you look at the culprits in this, Stacey, the hospitals have increased at 256% over that same period of time. So all this consolidation that's occurred hasn't driven quality, hasn't driven access, hasn't driven affordability. All it's done is raise prices and at that same period of time. If you look at physician comp and adjust for inflation, and I think you know this, it's down 36%.
So the folks that are actually providing the care are the ones that are getting penalized.
[00:18:19] Stacey Richter: I think that we have made a very compelling rationale for why focusing on affordability really matters here. And we are talking about mission and I don't wanna, I don't wanna go off track here.
We will talk about margin and obviously, foreshadowing to the max, but I'm gonna ask you, how can you afford to do an MRI for $450 and still make money when the hospital down the street is charging 4,500, very unapologetically. Right. Or all the things that you just mentioned.
But what we're taking away from this mission is that it actually really is very mission focused to try to figure out how to charge a fair price for services rendered, especially because of the patient affordability bit here and the fact that patients are paying 20% or have these high deductibles or whatever. So if we're concerned about patient health, making care, affordable really matters. It's not some kind of like, you know, off to the side secondary consideration.
Access to Healthcare Services
[00:19:19] Stacey Richter: Which leads, I think very, it was a lovely segue into access. The second thing that you mentioned, how is that part of your mission?
[00:19:26] Dan Greenleaf: Yeah, I mean, on average our access is two days. So if you have an appointment with us and you have a follow on appointment, for example, it's two days and the hospitals in Chicago are between eight and 60 days, and on average you get into see us 20 days sooner.
And I have an example of somebody on my team, a young lady in her twenties that got diagnosed with colon cancer and then was told she wouldn't be able to see, have a follow on appointment for 60 days. So this stuff is real. And fortunately she knew somebody and she could make a call, but not everybody knows somebody.
Could you imagine getting a diagnosis for cancer and say, “Hey, we'll see you in 60 days.” Do you imagine what that would be like, you know, for the next 60 days? And so this matters. This matters a lot.
[00:20:17] Stacey Richter: This also goes back to the affordability component, a quadrant of your mission. Because what winds up happening when patients don't have access? I'll tell you what happens because this is proven. Listen to the show about emergency rooms. What winds up happening is that those patients then wind up in the emergency room, which winds up costing everybody a lot, therefore diminishing affordability. So these are not unrelated aspects here.
[00:20:41] Dan Greenleaf: And we, it's so good. We just did an Avalere study just on Medicare fee for service, and we were 25% less expensive in the hospitals. But interestingly enough, 15% fewer hospital admins in 13% fewer ER admins. So you're absolutely right that access and affordability drives lower cost.
[00:21:07] Stacey Richter: Yeah, there was a show called the, I think it's called like Primary Care and Emergency Room through Line Show, where basically I cited about 90 stats, which validate exactly what you're saying.
All right. Your third one, again, not unrelated here. These are all kind of a, yeah, you can start to see how they all fit together is consumer experience.
Enhancing Consumer Experience
[00:21:28] Dan Greenleaf: So we, we partnered with Press Ganey and we do approximately, you know, I don't know how many surveys we actually do, but we get 50,000 responses on a quarterly basis. And we use that to gauge our net promoter score. Net promoter scores are very familiar way to measure consumer experience.
Our net promoter score is 74. Anything above a 70 is world class. And so who's in that category with you? It's all these kind of amazing global brands. So think Amazon, think Starbucks, think Netflix.
Hospitals on the other hand, their average net promoter score nationwide is 46. And so again, from a consumer experience standpoint, we are far superior in the other entities in the marketplace when it comes to consumer experience.
[00:22:23] Stacey Richter: There's a difference between hospitals and clinicians who work at hospitals, and I think that's really important to point out. Like if you are talking about a specific nurse or a specific doctor, the level of trust in those individuals is generally speaking, rightfully so, most of the time very high.
But if we're talking about the organization of the hospital itself. And again, not throwing everybody in the same blanket category here, because there are hospitals and then there are these consolidated health systems that are very, very different.
But if you start looking at the patient experience from beginning to end, like after they got their bill, which was $700 higher than they thought it was gonna be, or after they couldn't figure out how to get an appointment or after they had a question and no one answered it, that's what you're talking about here where the overall net promoter score for the organization itself can be shockingly low.
And the thing that a patient is going to be considering as they're considering their care and whether they wanna do the follow up, this definitely has clinical relevance also.
[00:23:31] Dan Greenleaf: I just wanna bring up, you know, we save these families of four an average of seven to $14,000. And one of the things that we're now doing is we're educating the consumer. We're telling the consumer by coming to us and by getting care from us, not only are you gonna have a superior consumer experience, but you're also going to understand how much things cost. And we're gonna continue to do that.
[00:23:58] Stacey Richter: Okay? So this is another point of intersection in these mission quadrants. If you are less expensive, then how you make that into a competitive advantage, especially with patients these days, even if their employer is unconcerned about it and frightfully, many C-suites are wildly unconcerned.
I'll link to a post Patrick Moore put in LinkedIn the other day that was shocking. But if your prices are reasonable, then you can be transparent about said prices and educate patients on how much safer you are from a financial standpoint. You told me before that you put posters on the walls talking about prices.
And I really just wanna point out the fundamental difference in the calculus that's happening here for consumer experience then one normally hears.
So if you are in a room of executives and someone starts talking about consumer experience, what often gets brought up is like, is there lemon water in the waiting room?
But if we're really thinking about what matters in the consumer experience continuum, it's going to be stuff like bankrupting financial bombshell on the backend. The more effort put into financial transparency, the better the patient experience because they have some certainty about what is gonna happen with their financial future, which is very anxiety provoking.
So we're saying that transparency is part of the consumer experience, and then just the affordability, you said 7 to 14k less also part of the consumer experience.
Alright, we started out with four quadrants of what mission means. We talked about affordability, we talked about access, we talked about consumer experience.
Quality of Care
[00:25:29] Stacey Richter: Lastly, we've got quality here. And I think one of the things also that's just becoming very clear is how intertwined all of these things are. But let's talk specific quality now.
[00:25:40] Dan Greenleaf: We've got many examples, but these are three examples that I think are very relevant. So we do a fair amount of prostate screening. We biopsy the patient, you know, there's a surface antigen or whatever the tests are. But in 77% of the time that we do a biopsy, it's positive. The national average is 25%.
Think about that in terms of like the amount of waste and biopsies that are being done at the expense of the patient. And the fact that Duly does it right, 77% of the time the national average is 25% is remarkable.
The second one I like to point out is that hips and knees, not only do we look at quality outcomes, which are terrific, but we also get feedback from the patient.
We're interested in like the patient experience. What's it been like, what's patient reported outcomes look like? And in hips and knees we are well above the national average. In fact, you know, we've done such a good job here that we're gonna expand in the spine and pain. So patient reported outcomes.
The last one is, is I'll just share with you and there's many more, is lung screening. And what we do on the lung screening side is we do a lot of outbound calls, like it's kind of inconvenient and we don't get paid for outbound calls. Not that it matters, but we catch the patient stage one or two and not three and four, and we've been doing this for years. We have detected hundreds of early stage lung cancers.
So it's not just about affordability and about access and about consumer experience, but our quality. And you know, we've got other examples of activation campaigns that we do, and our activation campaigns are with existing patients. They focus on things like colonoscopies, mammograms, wellness visits, diabetic screenings, but we've got some remarkable stories of where we've detected breast cancer and I don't know how many cases and when the person wasn't aware of it.
And in one instance, I mean, we literally, you know, from the time that SMS message went out. to time they got put on therapy, it was 25 days. And I'm just telling nobody does it like that. So we're, we're just doing a lot of stuff in this area and we really, it's in our clinical DNA.
[00:28:03] Stacey Richter: And I really just want to underline this because we're kind of talking about this like it's a given and I really just wanna point out how much it's not because you do not run across very many groups in general of clinical organizations where you can say, define your mission, and they can come back and say, it is comprised of these four components in the way that you are doing here.
Where very focused on affordability, access, consumer experience, and quality like that is very much how we're defining mission, which is really a huge reason why I was so excited to have you on the show because it is actually so unusual.
[00:28:42] Dan Greenleaf: You know, I'll also point out like, you know, they did these healthy community evaluations and in one community page we see 40 to 50% of all the patients there, and that community's ranked one of the highest from a healthy perspective communities in the country.
So what we're doing, and again, not all zip codes are the same. We know that, but at least in the ones we're in, we're making a difference.
[00:29:06] Stacey Richter: This really ties to an episode with Dr. Ben Schwartz, where he says something about understanding your return on mission and also an upcoming episode with Shane Cerone and Sam Flanders from Kada Health.
And they say something fascinating about aligning incentives so that the hospital's goals are consistent with delivering value to the community rather than just increasing volume or prices. I mean, it's just so fundamental and so not status quo.
So Dan Greenleaf, if someone is interested in learning more about Duly, if they are in the Chicago area, especially if they're a plan sponsor, if I'm picking up what you're putting down correctly, where would you direct them for more information?
[00:29:53] Dan Greenleaf: Yeah, I think you can go to our website, duly.com. You can go to my LinkedIn page. We publish a lot of things about the organization and what we're doing, and if people wanna reach out to me, it's dan.greenleaf@duly.com.
I'd be happy to talk with people who are involved here. I've done something very similar I've shared with you. I've reached out to a few people who I've heard on the podcast, so I would certainly wanna extend that invitation as well.
Conclusion and Next Steps
[00:30:22] Stacey Richter: Okay, so today we, meaning Dan Greenleaf and I talked about mission, we talked about the four quadrants of mission: affordability, access, consumer experience, and quality.
Come back next week because what we're gonna talk about next week is how mission and margin can really be complimentary. And spoiler alert, a big piece of that is making sure physicians and other clinicians have a very real seat at the table and even an ownership stake.
What Dan Greenleaf also talks about, and this is something that Shane Cerone and Dr. Sam Flanders talk about, is just how important it is to do cost accounting to really understand what efficiency actually means.
Then lastly, I definitely grill Dan a little bit about what it is to have a capital partner and when it comes to capital partners, what the mission margin balance looks like.
So that said, see you next week.
[00:31:22] Tom Nash: Hi, this is Tom Nash, one of the RHV team members. You might recognize my voice from the podcast intro. If you love the show and you wanna show us your support, please follow us on your favorite podcast app. Sign up for the newsletter, or maybe consider making a small donation in the tip jar. Thanks so much for listening.