Ben Schwartz, MD, MBA, wrote an article recently, and yeah, he makes a really compelling point. Dr. Schwartz wrote, “Ultimately, the most successful care models are those that create value inherently. The goal isn’t simply cost arbitrage; it’s creating a sustainable system that makes value attainable. Care delivery innovation is about more than optimizing for VC [venture capital] returns or maximizing operational efficiency.”
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That mention of value and how to achieve it for real—like, actually create a care model that delivers value inherently—is a great segue to introduce the show this week. It’s a continuation of our mission/margin theme, and this week, we’re talking about the margin part of the “no margin, no mission” cliché.
So, taking this from the top, last week—and go back and listen to that show if you have not yet (and you can listen to both of these parts in no particular order; you do you)—but last week, we talked mission.
That part about value and creating value inherently? The tie-in here to mission and margin could be a value equation, really. Like, mission divided by margin is how you calculate the value delivered (less carrier spread), but that’s a whole other show with Cynthia Fisher (EP457).
So, let me introduce my guest this week, who was also my guest last week: Dan Greenleaf, CEO of Duly, which is a multispecialty group in Chicago.
So, last week Dan and I talked mission, as I said; but today we’re talking margin, which is, again, gonna be the denominator of so many value equations. Last week in that mission show, quick review (or spoiler alert, depending on the order in which you may be listening to these shows), but last week, Dan Greenleaf broke mission, Duly’s mission, into four quadrants. The four quadrants of mission being affordability, access, consumer experience, and quality.
In this conversation today, the margin conversation, Dan Greenleaf emphasizes that achieving these four quadrants reduces friction for patients and clinicians that leads to not only better care outcomes but also financial sustainability (ie, margin). Margin can therefore be a function of mission. And again, as Dr. Ben Schwartz put it, “Ultimately, the most successful care models are those that create value inherently.” So, here we go.
To be noted with one big fat fluorescent highlighter marker, a big part of this mission that comes up over and over again last week, it’s about making prices reasonable and predictable and transparent for patients.
Financial toxicity is a thing. Financial toxicity not only is clinical toxicity when so many people are delaying needed care. And look, I don’t often quote Marjorie Taylor Greene, but recently she was in the New York Times and was quoted as saying, “The cost of health care is killing people.” This is what we should be focusing on.
I just read the other day that one-third of adults in this country are currently delaying or forgoing care due to cost. One-third! Not one-third of low income or something like that. One-third of adults in this country are delaying or forgoing care due to fear of cost.
In today’s world, affordability and price transparency is part of what customer experience means—not just, like, lemon water in the waiting room. This is what struck me the most about the conversation from last week.
But wait. Does affordable for patients spell trouble when it comes to the margin part of the operation? Will an affordability mission wreak havoc on margin? Is this business model doomed? Is there even a successful care model that creates value inherently that is sustainable?
Such a good question, which is why I ask it to Dan Greenleaf right out of the gate.
So, just to sum this all up in the conversation that follows, Dan Greenleaf gets into the challenges and the strategies involved in balancing mission-driven healthcare with financial realities.
Duly’s approach to being fiscally solid includes, well, I’m just gonna say many of the same types of efficiency things to maintain and retain margin that other more mainstream health systems might deploy. But I’d say there’s a really striking difference in the why and the how. And the impact of this why and how is striking when you look at Duly’s prices and the impact it has on its overall community.
So, even though it’s using similar types of strategies, maybe, as big consolidated health systems or other organizations, the impact and what it all adds up to is, again, very, very different.
This is what I mean. At health systems, and maybe my head is just lost in a couple of anecdotal bits of evidence right now, but I just had two conversations in the past two days with physician leaders at big health systems (different ones), but both of these individuals said variations of the same theme.
And if you wanna picture the scene, picture the saddest expressions, and one of them had a martini and the other one had a big-boy glass of wine. And both of them said, Look, my organization has lost sight of patient care, but also my organization has lost sight of, like, financial goals in most parts of the organization. All I seem to do all day is play politics with a whole lot of middle managers or even senior leaders jockeying for position and having turf wars within these sprawling bureaucracies.
These are just great people who are trying so hard to do the right thing and are just struggling to find the foothold to do so within their own organizations.
So, let’s just say it was refreshing to hear Dan Greenleaf talk about an alignment of incentives and hook the margin up with the mission train in a really tight way throughout the entire organization.
And to do this really well—achieve that mission/margin alignment across the whole entire organization—Dan underscores the value of clinician involvement in leadership and having, as I just said, aligned incentives with clinical teams.
Keep in mind, this is the margin show, where clinical leadership came up and the number of doctors on their board and the level of physician ownership in the organization.
I’m highlighting that this is the margin show here because usually so-called dyad leadership with physicians in leadership roles only comes up in mission conversations, right? Like, in situations where somebody wants the doctor to be the defender of mission and the battle to keep the MBAs in check.
And I say this as the comic book stereotype, obviously. But yeah, it’s true often enough.
But then we have Dan, who is thinking about clinicians who have, again, aligned incentives across the organization so you don’t have your physician leaders day drinking while I’m sitting across from them finding myself quoting Sun Tzu The Art of War and helping them craft the perfect PowerPoint slide to weaponize a reorg.
Honestly, in my experience, there’s no better way to waste metric assloads of money than in an organization where personal power grabs start to supersede anything that smells vaguely like an organizational imperative.
And again, these just big bureaucracies at many health systems … yeah, too big not to fail at this is often the way of it.
Then lastly, I grilled Dan Greenleaf about capital partners and how to manage to achieve private equity (PE) funding, where there’s support for a model that delivers inherent value—a model that benefits both patients and providers as well as investors. And I’m saying this, keeping all of the things that Yashaswini Singh, PhD, said in that episode (EP474) about private equity a few weeks ago. Go back and listen to that.
And by the way, Dan Greenleaf in this show has roughly the same ideas as Tom X. Lee, MD (EP445), founder of One Medical and Galileo told me, and also Rushika Fernandopulle, MD (EP460), founder of Iora. Great minds think alike.
So, should figuring out how to work with PE be a topic of interest, there you go. Listen to my conversation today with Dan Greenleaf and then go back and listen to those other two shows.
Dan Greenleaf, CEO of Duly, my guest today, has been in healthcare for 30 years. He’s a six-time CEO: three public companies and has also run three companies backed by private equity and thus very aware of the many different funding mechanisms that exist in the marketplace.
This podcast is sponsored by Aventria Health Group, but I do just wanna mention that Duly offered Relentless Health Value some financial support, which we truly appreciate.
So, call this episode not only sponsored by Aventria but also Duly. And with that, here is my conversation with Dan Greenleaf.
Also mentioned in this episode are Duly Health and Care; Benjamin Schwartz, MD, MBA; Cynthia Fisher; Cristin Dickerson, MD; Yashaswini Singh, PhD; Tom X. Lee, MD; Galileo; Rushika Fernandopulle, MD; Vivian Ho, PhD; Scott Conard, MD; Stanley Schwartz, MD; Vivek Garg, MD, MBA; and Dave Chase.
You can learn more at Duly Health and Care and follow Dan on LinkedIn.
You can also email Dan at dan.greenleaf@duly.com.
Daniel E. Greenleaf is the chief executive officer of Duly Health and Care, one of the largest independent, multispecialty medical groups in the nation. Duly employs more than 1700 clinicians while serving 1.5 million patients in over 190 locations in the greater Chicago area and across the Midwest. The Duly Health and Care brand encompasses four entities—DuPage Medical Group, Quincy Medical Group, The South Bend Clinic, and a value-based care organization. Its scaled ancillary services include 6 Ambulatory Surgery Centers, 30 lab sites, 16 imaging sites, 39 physical therapy locations, and 100 infusion chairs. Its value-based care service line provides integrated care for 290,000 partial-risk and 100,000 full-risk lives (Medicare Advantage and ACO Reach).
Dan has nearly 30 years of experience leading healthcare services organizations. He is a six-time healthcare CEO, including prior roles as president and CEO of Modivcare; president and CEO of BioScrip, Inc.; chairman and CEO of Home Solutions Infusion Services; and president and CEO of Coram Specialty Services.
Dan graduated from Denison University with a bachelor of arts degree in economics (where he received the Alumni Citation—the highest honor bestowed upon a Denisonian) and holds an MBA in health administration from the University of Miami. A military veteran, he was a captain and navigator in the United States Air Force and served in Operation Desert Storm.
09:56 How does Dan achieve his mission given the realities of margin?
14:49 How Duly Health’s approach and incentives differ from other health systems.
16:04 EP466 with Vivian Ho, PhD.
16:28 EP462 with Scott Conard, MD.
16:31 Summer Shorts episode with Stan Schwartz, MD.
17:27 EP460 with Rushika Fernandopulle, MD.
17:29 EP445 with Tom X. Lee, MD.
17:30 EP407 with Vivek Garg, MD, MBA.
18:50 How having physicians on the hospital board greatly improves margin and mission.
20:04 How Dan explains his approach to his capital partners.
22:23 Fee for service vs. institutional care.
Recent past interviews:
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Dan Greenleaf (Part 1), Mark Cuban and Cora Opsahl, Kevin Lyons (Part 2), Kevin Lyons (Part 1), Dr Stan Schwartz (EP486), Dr Cristin Dickerson, Elizabeth Mitchell (Take Two: EP436), Dave Chase, Jonathan Baran (Part 2), Jonathan Baran (Part 1), Jonathan Baran (Bonus Episode)